As filed with the Securities and Exchange Commission on March 26, 1997
Registration No. 333-___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST WASHINGTON REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)
Maryland 52-1879972
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4350 East-West Highway, Suite 400
Bethesda, Maryland 20814
(301) 907-7800
(Address, including zip code, and telephone
number, including area code, of
registrant's principal executive offices)
William J. Wolfe
President and Chief Executive Officer
4350 East-West Highway, Suite 400
Bethesda, Maryland 20814
(301) 907-7800
(Name, address, including zip code, and telephone number , including area
code of agent for service of process)
Copies to:
R. Ronald Hopkinson, Esq.
Latham & Watkins
885 Third Avenue
Suite 1000
New York, New York 10022
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933 (the "Securities Act"), other than securities offered
only in connection with dividend or interest reinvestment plans, please check
the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ___________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] ___________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Title of Each Class of Amount to be Offering Aggregate Amount of
Securities to be Registered (1) Registered (2) Price Per Unit (2)(3) Offering Price (3) Registration Fee (3)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock(4)
Common Stock Warrants
Preferred Stock(5) ................ $175,000,000 (8) (8) $53,030.30 (9)
Depositary Shares(6)
Debt Securities (7)
- ---------------------------------------------------------------------------------------------------------------------
<FN>
(1) This Registration Statement also covers contracts which may be issued by
the Registrant under which the counterparty may be required to purchase
Debt Securities, Preferred Stock, Depositary Shares or Common Stock. Such
contracts would be issued with the Debt Securities, Preferred Stock,
Depositary Shares, Common Stock and/or Common Stock Warrants covered
hereby. In addition, Securities registered hereunder may be sold
separately, together or as units with other Securities registered
hereunder.
(2) In U.S. Dollars or the equivalent thereof denominated in one or more
foreign currencies or units of two or more foreign currencies or composite
currencies (such as European Currency Units).
(3) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for shares of Common Stock or
Preferred Stock that are issued upon conversion of Debt Securities,
Preferred Stock or Depositary Shares registered hereunder or upon exercise
of the Common Stock Warrants registered hereunder, as the case may be. The
aggregate maximum public offering price of all Offered Securities issued
pursuant to this Registration Statement will not exceed $175,000,000.
(4) Such indeterminate number of shares of Common Stock as may from time to
time be issued at indeterminate prices or issuable upon conversion of Debt
Securities, Preferred Stock or Depositary Shares registered hereunder or
upon exercise of the Common Stock Warrants registered hereunder, as the
case may be. Shares of Common Stock may be issued from time to time in one
or more classes or series.
(5) Such indeterminate number of shares of Preferred Stock as may from time to
time be issued at indeterminate prices or issuable upon conversion of Debt
Securities or other class or series of Preferred Stock registered
hereunder. Shares of Preferred Stock may be issued from time to time in one
or more classes or series.
(6) To be represented by Depositary Receipts representing a fractional interest
in a share of Preferred Stock.
(7) Such indeterminate amount of Debt Securities as may from time to time be
issued at indeterminate prices or issuable upon conversion of other Debt
Securities, Preferred Stock or Depositary Shares registered hereunder.
(8) Omitted pursuant to General Instruction II.D of Form S-3 under the
Securities Act of 1933, as amended.
(9) Calculated pursuant to Rule 457(o) of the rules and regulations under the
Securities Act of 1933, as amended.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
</FN>
</TABLE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED WITHOUT THE DELIVERY OF A FINAL PROSPECTUS SUPPLEMENT
AND PROSPECTUS. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
PRELIMINARY PROSPECTUS DATED MARCH 26, 1997
SUBJECT TO COMPLETION
$175,000,000
FIRST WASHINGTON REALTY TRUST, INC.
Common Stock, Common Stock Warrants, Preferred Stock, Depositary Shares
and Debt Securities
First Washington Realty Trust, Inc. (the "Company") may from time to
time offer in one or more series (i) shares of common stock, par value $.01 per
share (the "Common Stock"), (ii) warrants to purchase Common Stock (the "Common
Stock Warrants"), (iii) shares of preferred stock, par value $.01 per share (the
"Preferred Stock"), (iv) shares of Preferred Stock represented by depositary
shares (the "Depositary Shares"), or (v) debt securities (the " Debt
Securities"), with an aggregate public offering price of up to $175,000,000 in
amounts, at prices and on terms to be determined at the time of any such
offering. The Company may offer the Common Stock, Common Stock Warrants,
Preferred Stock, Depositary Shares, and Debt Securities (collectively, the
"Securities") from time to time, separately or together, in separate series, in
amounts, at prices and on terms to be set forth in supplements to this
Prospectus (each a "Prospectus Supplement").
The specific terms of the Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (i) in the case of Common Stock,
the specific number of shares and issuance price per share; (ii) in the case of
Common Stock Warrants, the duration, offering price, exercise price and
detachability; (iii) in the case of Preferred Stock, the specific number of
shares, designation, any dividend, liquidation, redemption, conversion, voting
and other rights, and issuance price per share; (iv) in the case of Depositary
Shares, the fractional share of Preferred Stock represented by each such
Depositary Share; and (v) in the case of Debt Securities, the specific title,
aggregate principal amount, form (which may be registered or bearer, or
certificated or global), authorized denominations, maturity, rate (or manner of
calculation thereof) and time of payment of interest, terms for redemption at
the option of the Company or repayment at the option of the holder, terms for
any sinking fund payments, terms for conversion into Common Stock, Preferred
Stock or Debt Securities of another series, and any initial public offering
price. In addition, such specific terms may include limitations on direct or
beneficial ownership and restrictions on transfer of the Securities, in each
case as may be appropriate to preserve the status of the Company as a real
estate investment trust ("REIT") for federal income tax purposes.
The applicable Prospectus Supplement will also contain information,
where applicable, about certain federal income tax considerations relating to,
and any listing on a securities exchange of, the Securities covered by such
Prospectus Supplement.
The Securities may be offered directly, through agents designated from
time to time by the Company, or to or through underwriters or dealers. If any
agents or underwriters are involved in the sale of any of the 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
series of Securities.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
------------------------
This Prospectus may not be used to consummate sales of securities
unless accompanied by a prospectus supplement. Any statement contained in this
Prospectus will be deemed to be modified or superseded by any inconsistent
statement contained in an accompanying Prospectus Supplement.
------------------------
THE DATE OF THIS PROSPECTUS IS ______, 1997
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities of the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional
Offices of the Commission: Midwest Regional Office, Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material may be obtained from the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. The Commission also maintains a website at
http://www.sec.gov containing reports, prospectuses and information statements
and other information regarding registrants, including the Company, that file
electronically. Similar materials and other information concerning the Company
also are available for inspection at The New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with all amendments, exhibits and schedules, the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the Securities. The Prospectus and any
accompanying Prospectus Supplement do not contain all of the information
included in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Securities, reference is hereby
made to the Registration Statement, including the exhibits and schedules
thereto. Statements contained in this Prospectus and any accompanying Prospectus
Supplement concerning the provisions or contents of any contract, agreement or
any other document referred to herein are not necessarily complete. With respect
to each such contract, agreement or document filed as an exhibit to the
Registration Statement, reference is made to such exhibit for a more complete
description of the matters involved, and each such statement shall be deemed
qualified in its entirety by such reference to the copy of the applicable
document filed with the Commission. The Registration Statement may be inspected
without charge at the Commission's principal office at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549 and copies of it or any part thereof
may be obtained from such office, upon payment of the fees prescribed by the
Commission. The Registration Statement also may be retrieved from the
Commission's website.
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have previously been filed by the Company
with the Commission are incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K, as amended, for
the year ended December 31, 1995;
(2) the Company's Quarterly Reports on Form 10-Q for the
quarterly periods ended March 31, 1996, June 30, 1996, and
September 30, 1996;
(3) the Company's Current Reports on Form 8-K dated February 13,
1997; November 5, 1996; June 28, 1996; April 29, 1996; April
1, 1996; January 30, 1996; and January 19, 1996;
(4) the description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A filed with
the Commission on August 9, 1996;
(5) item 27 of the Company's Registration Statement on Form
S-11, as amended, filed on November 22, 1996;
(6) the Company's Proxy Statement with respect to its Annual
Meeting of Shareholders held on May 23, 1996.
All documents filed by the Company, pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Securities made hereby shall be deemed to
be incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of 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 any subsequently filed document
which also is or is deemed to be incorporated by reference herein, modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, on the written
request of any such person, a copy of any or all of the documents incorporated
herein by reference, except the exhibits to such documents (unless such exhibits
are specifically incorporated by reference in such documents). Requests for such
copies should be directed to the Company, at 4350 East-West Highway, Suite 400,
Bethesda, MD 20814, Attention: Investor Relations; telephone number (301)
907-7800.
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<PAGE>
THE COMPANY
First Washington Realty Trust, Inc. (the "Company") is a fully
integrated, self-administered and self-managed real estate company that operates
as a REIT with expertise in the acquisition, management, renovation and
development of principally supermarket-anchored neighborhood shopping centers.
As of January 31, 1997, the Company owned a portfolio of 38 retail properties
(the "Retail Properties"). The Retail Properties contain a total of
approximately 3.9 million square feet of gross leasable area ("GLA") in the
Mid-Atlantic region. The Company also owns two multifamily properties in the
Mid-Atlantic region (the "Multifamily Properties") (the Retail Properties and
the Multifamily Properties are collectively referred to as the "Properties").
The Company's business strategy is highly focused with respect to
property type and location. The Company concentrates its efforts on
supermarket-anchored neighborhood shopping centers. The Company generally seeks
to own properties located in densely populated areas, that have high visibility,
open-air designs and ease of entry and exit, and that may be readily adaptable
over time to expansion, renovation and redevelopment.
The Retail Properties are strategically located neighborhood shopping
centers, principally anchored by well-known tenants such as Shoppers Food
Warehouse, Weis Markets, Rite Aid, A&P Superfresh, Giant Food, CVS/Pharmacy,
Safeway, Winn Dixie and Acme Markets. As of December 31, 1996, national and
regional tenants accounted for approximately 73% of leased GLA and approximately
60% of annualized minimum rents for the Retail Properties. The anchor tenants at
the Retail Properties typically offer daily necessity items. Management believes
that anchor tenants offering daily necessity items help to generate regular
consumer traffic and to provide economic stability.
From December 31, 1992 to December 31, 1996, the occupancy rate for the
Retail Properties (during the respective periods each such property was owned by
the Company) has averaged approximately 95%. Average effective net rents (as
measured by base rent divided by square feet leased, excluding vacant space)
increased from $9.07 per square foot as of December 31, 1992 to $10.44 as of
December 31, 1996.
The Company owns the Properties indirectly through its ownership of
First Washington Realty Limited Partnership (the "Operating Partnership").
Certain of the Properties are also owned by partnerships (or limited liability
companies) in which the Operating Partnership, the Company or a subsidiary of
the Company acts as general partner (or Managing Member) and owns a controlling
interest (the "Lower Tier Partnerships"). The Company, through its ownership of
First Washington Management, Inc. (the "Management Company"), manages and leases
all of the Retail Properties. In addition, the Management Company provides
management, leasing and related services for third parties. As of December 31,
1996, the Management Company provided management, leasing and related services
to third-party clients for 30 shopping centers containing approximately 3.2
million square feet of GLA throughout the Mid-Atlantic region.
Although the Company, the Operating Partnership, the Lower Tier
Partnerships and the Management Company are separate entities, each of which is
managed in accordance with its governing documents, for ease of reference the
term "Company" as used herein shall refer to the business and properties of the
Company, the Operating Partnership, the Lower Tier Partnerships and the
Management Company, unless the context indicates otherwise.
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<PAGE>
This Prospectus, including the documents incorporated herein by
reference, contain forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended (the "Securities Act"). Also,
documents subsequently filed by the Company with the Securities and Exchange
Commission and incorporated herein by reference will contain forward-looking
statements. Actual results could differ materially from those projected in the
forward-looking statements as a result of the risk factors set forth in the
Prospectus Supplement and the matters set forth or incorporated in this
Prospectus generally. The Company cautions the reader, however, that this list
of factors may not be exhaustive, particularly with respect to future filings.
Prospective investors should carefully consider, among other factors, the risk
factors described in the Prospectus Supplement and the matters described below
before purchasing Securities.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement accompanying
this Prospectus, the Company intends to use the net proceeds from the sale of
the Securities for general corporate purposes, which may include the
acquisition, development and renovation of neighborhood shopping centers as
suitable opportunities arise, the expansion and improvement of certain
properties and the repayment of outstanding indebtedness. Pending such uses, the
net proceeds from the sale of Securities will be invested in short-term,
investment grade securities.
RATIO OF EARNINGS TO FIXED CHARGES
Prior to its formation in June 1994, the Company and its predecessor
were privately held and operated in a manner to minimize net taxable income. As
a result, although the Company historically generated positive cash flow, it
experienced net losses for the years 1992 to 1996. Consequently, the computation
of the ratios of earnings to fixed charges for these periods were inadequate to
cover fixed charges by approximately $2.1 million, $3.0 million, $3.0 million,
$4.6 million and $1.2 million for the years 1992 through 1996.
For the purpose of computing these ratios, earnings have been
calculated by adding fixed charges (excluding capitalized interest) to income
(loss) before income taxes and extraordinary items. Fixed charges consist of
interest costs, whether expensed or capitalized, amortization of debt discount
and issuance costs, whether expensed or capitalized.
GENERAL DESCRIPTION OF CAPITAL STOCK
The following summary of the terms of the stock of the Company does not
purport to be complete and is subject to and qualified in its entirety by
reference to the Maryland law and to the Company's charter and bylaws which are
filed as exhibits to the Registration Statement of which this Prospectus is a
part. See "Available Information."
General
The charter of the Company provides that the Company may issue up to
100,000,000 shares of capital stock, consisting of 90,000,000 shares of common
stock, par value $0.01 per share (the "Common Stock"), and 10,000,000 shares of
preferred stock, par value $0.01 per share. As of December 31, 1996, 4,946,245
shares of Common Stock and 2,314,189 shares of Series A Cumulative Participating
Convertible Preferred Stock (the "Convertible Preferred Stock") were issued and
outstanding. Under Maryland law, stockholders generally are not liable for the
corporation's debts or obligations solely as a result of their status as
stockholders. In determining whether a distribution (other than upon voluntary
or involuntary liquidation), by distribution, redemption or other acquisition of
shares or otherwise, is permitted under the MGCL, the amount of the aggregate
liquidation preference of the Convertible Preferred Stock will not be counted as
a liability of the Company.
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Power To Issue Additional Shares Of Common Stock And Preferred Stock
The Board of Directors has the power under the charter to authorize the
Company to issue additional authorized but unissued shares of Common Stock and
preferred stock (including any unissued shares of any series of preferred stock,
to the extent permitted by the terms of such series or class) and to classify or
reclassify unissued shares of Common or preferred stock and thereafter to cause
the Company to issue such classified or reclassified shares of stock. Prior to
the issuance of such shares of Common Stock and shares of preferred stock, the
Board of Directors is required by the MGCL and the charter of the Company to
fix, the terms, preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
and terms or conditions of redemption for each share or series or class. The
Company believes that this power of the Board of Directors will provide the
Company with increased flexibility in structuring possible future financings and
acquisitions and in meeting other needs which might arise. The additional
classes or series of Preferred Stock, as well as the Common Stock, will be
available for issuance without further action by the Company's stockholders
(provided, however, that the issuance of additional series or classes of
preferred stock with rights senior to the Convertible Preferred Stock is subject
to the approval of the holders of Convertible Preferred Stock), unless such
action is required by applicable law or the rules of any stock exchange or
automated quotation system on which the Company's securities may be listed or
traded. Although the Board of Directors has no intention at the present time of
doing so, it could authorize the Company to issue a class or series that could,
depending upon the terms of such class or series, delay or impede a transaction
or a change of control of the Company that might involve a premium price for the
Common Stock and Convertible Preferred Stock or otherwise be in the best
interest of the stockholders.
Restrictions On Ownership, Transfer And Conversion
For the Company to qualify as a REIT under the Code, not more than 50%
in value of the issued and outstanding capital stock may be owned, actually or
constructively, by five or fewer individuals (as defined in the Code to include
certain entities) during the last half of a taxable year and the capital stock
must be beneficially owned by 100 or more persons during at least 335 days of a
taxable year of twelve months (or during a proportionate part of a shorter
taxable year). In addition, rent from Related Party Tenants (as defined below
under "Federal Income Tax Considerations-Taxation of the Company-Income Tests")
is not qualifying income for purposes of the gross income tests of the Code. See
"Federal Income Tax Considerations-Taxation of the Company-Requirements for
Qualification." Because the Board of Directors believes it is essential for the
Company to qualify as a REIT, the Board of Directors has adopted, and the
stockholders prior to the June 1994 Offering have approved, provisions in the
Company's charter restricting the acquisition and ownership of shares of the
Company's capital stock.
Subject to certain exceptions specified in the Company's charter, no
holder may own, either actually or constructively under the applicable
attribution rules of the Code, more than 9.8% (by number or value, whichever is
more restrictive) of the outstanding shares of Common Stock (the "Common
Ownership Limit"). Except as described below, the Common Ownership Limit will
not apply, however, to holders of shares of Common Stock who acquire shares of
Common Stock in excess of the Common Ownership Limit solely by reason of the
conversion of shares of Convertible Preferred Stock owned by such holder into
shares of Common Stock.
Subject to certain exceptions specified in the Company's charter, no
holder may acquire, either actually or constructively under the applicable
attribution rules of the Code, more than 9.8% (by number or value, whichever is
more restrictive) of the outstanding shares of Convertible Preferred Stock (the
"Convertible Preferred Ownership Limit"). Except as described below, there are
no restrictions on the ability of a holder of shares of Convertible Preferred
Stock to convert such shares into shares of Common Stock even if, as a result of
such conversion, the holder will own shares of Common Stock in excess of the
Common Ownership Limit. However, no person may actually or constructively
acquire or own shares of Convertible Preferred Stock or shares of Common Stock,
or convert Convertible Preferred Stock into Common Stock, to the extent that the
aggregate value of Convertible Preferred Stock and Common Stock actually and
constructively owned by such person would exceed 9.8% of the total value of the
outstanding shares of the capital stock of the Company (the "Aggregate Stock
Ownership Limit").
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Under certain circumstances, this limitation could prevent a person who owns
shares of Convertible Preferred Stock from converting a portion of such shares
into shares of Common Stock.
If, as a result of a purported acquisition (actual or constructive) of
capital stock, any person (a "Prohibited Transferee") would acquire, either
actually or constructively under the applicable attribution rules of the Code,
shares of capital stock in excess of an applicable ownership restriction, such
shares will be automatically transferred to a trust for the benefit of a
charitable beneficiary, effective as of the close of business on the business
day prior to the purported acquisition by the Prohibited Transferee. While such
stock is held in trust, the trustee shall have all voting rights with respect to
the shares, and all dividends or distributions paid on such stock will be paid
to the trustee of the trust for the benefit of the charitable beneficiary (any
dividend or distribution paid on shares of capital stock prior to the discovery
by the Company that such shares have been automatically transferred to the trust
shall, upon demand, be paid over to the trustee for the benefit of the
charitable beneficiary). Within 20 days of receiving notice from the Company of
the transfer of shares to the trust, the trustee of the trust is required to
sell the shares held in the trust to a person who may own such shares without
violating the ownership restrictions (a "Permitted Holder"). Upon such sale, the
price paid for the shares by the Permitted Holder shall be distributed to the
Prohibited Transferee to the extent of the lesser of (i) the price paid by the
Prohibited Transferee for the shares or, in the case of a transfer of shares to
a trust resulting from an event other than an actual acquisition of shares by a
Prohibited Transferee, the fair market value, on the date of transfer to the
trust, of the shares so transferred or (ii) the fair market value of the shares
on the date of transfer by the trustee to the Permitted Holder. Any proceeds in
excess of this amount shall be paid to the charitable beneficiary.
An automatic repurchase of shares by the Company will occur to the
extent necessary to prevent any violation of the Convertible Preferred Ownership
Limit, Common Stock Ownership Limit, or the Aggregate Stock Ownership Limit as
the result of events other than the actual or constructive acquisition of
capital stock by the holder, such as changes in the relative value of different
classes of the Company's capital stock. In the event of any such automatic
repurchase, the repurchase price of each share will be equal to the market price
on the date of the event that resulted in the repurchase. Any dividend or other
distribution paid to a holder of repurchased shares (prior to the discovery by
the Company that such shares have been automatically repurchased by the Company
as described above) will be required to be repaid to the Company upon demand.
If shares of capital stock which would cause the Company to be
beneficially owned by less than 100 persons 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 such stock.
The Board of Directors may waive the Common Ownership Limit or the
Convertible Preferred Ownership Limit or the Aggregate Stock Ownership Limit
with respect to a particular stockholder if evidence satisfactory to the Board
of Directors and the Company's tax counsel is presented that such ownership will
not then or in the future jeopardize the Company's status as a REIT. As a
condition of such waiver, the Board of Directors may require opinions of counsel
satisfactory to it and/or an undertaking from the applicant with respect to
preserving the REIT status of the Company.
In addition to any of the foregoing ownership limits, no holder may
own, either actually or constructively under the applicable attribution rules of
the Code, any shares of any class of the Company's capital stock if such
ownership or acquisition (i) would cause more than 50% in value of the Company's
outstanding capital stock to be owned, either actually or constructively under
the applicable attribution rules of the Code, by five or fewer individuals (as
defined in the Code to include certain entities), (ii) would result in the
Company's capital stock being beneficially owned by less than 100 persons
(determined without reference to any rules of attribution), or (iii) would
otherwise result in the Company failing to qualify as a REIT. Acquisition or
ownership (actual or constructive) of the Company's capital stock in violation
of these restrictions will result in automatic transfer of such stock to a trust
for the benefit of a charitable beneficiary, automatic repurchase of the
violative shares by the Company, or the violative transfer will be deemed void
ab initio, as described above.
If the Board of Directors shall at any time determine in good faith
that a person intends to acquire or own, has attempted to acquire or own, or may
acquire or own capital stock of the Company in violation of the above
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described limits, the Board of Directors shall take such action as it deems
advisable to refuse to give effect or to prevent such ownership or acquisition,
including but not limited to causing the Company to repurchase stock, refusing
to give effect to such ownership or acquisition on the books of the Company, or
instituting proceedings to enjoin such ownership or acquisition.
The constructive ownership rules are complex and may cause Common Stock
or Convertible Preferred Stock owned actually or constructively by a group of
related individuals and/or entities to be constructively owned by one individual
or entity. As a result, the acquisition of less than 9.8% of the outstanding
Common Stock or less than 9.8% of the outstanding Convertible Preferred Stock
(or the acquisition of an interest in an entity which owns Common Stock or
Convertible Preferred Stock) by an individual or entity could cause that
individual or entity (or another individual or entity) to constructively own
Common Stock or Convertible Preferred Stock in excess of the limits described
above, and thus subject such stock to the Common Ownership Limit, the
Convertible Preferred Ownership Limit, or the Aggregate Stock Ownership Limit.
All certificates representing shares of the Company's capital stock
bear a legend referring to the restrictions described above.
All persons who own a specified percentage (or more) of the outstanding
shares of the stock of the Company must file a completed questionnaire annually
with the Company containing information regarding their ownership of such
shares, as set forth in the Treasury Regulations. Under current Treasury
Regulations, the percentage will be set between 0.5% and 5.0%, depending on the
number of record holders of shares. In addition, each stockholder shall upon
demand be required to disclose to the Company in writing such information with
respect to the actual and constructive ownership of shares as the Board of
Directors 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.
These ownership limitations could have the effect of discouraging a
takeover or other transaction in which holders of some, or a majority, of shares
of Common Stock or Convertible Preferred Stock might receive a premium for their
shares over the then prevailing market price or which such holders might believe
to be otherwise in their best interest.
NYSE Listing
The Common Stock is listed on the NYSE under the symbol "FRW." The
Convertible Preferred Stock is listed on the NYSE under the symbol "FRW pfA."
DESCRIPTION OF COMMON STOCK
The following description of the Common Stock sets forth certain
general terms and provisions of the Common Stock to which any Prospectus
Supplement may relate, including a Prospectus Supplement providing that Common
Stock will be issuable upon conversion of Debt Securities or Preferred Stock of
the Company or upon the exercise of Common Stock Warrants issued by the Company.
The statements below describing the Common Stock are in all respects subject to
and qualified in their entirety by reference to the applicable provisions of the
Articles of Incorporation.
Holders of shares of Common Stock are entitled to receive such
dividends as the Board of Directors may declare out of funds legally available
for the payment of dividends. Upon issuance, the shares of Common Stock will be
fully paid and nonassessable and have no preferences or conversion, exchange or
preemptive rights. In the event of any liquidation, dissolution or winding-up of
the Company, the holders of shares of Common Stock are entitled to share ratably
in any of the Company's assets remaining after the satisfaction of all
obligations and liabilities of the Company and after required distributions to
holders of Preferred Stock, if any. Each share is entitled to one vote on all
matters voted upon by the holders of Common Stock. Holders of shares of Common
Stock have no cumulative voting rights.
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Subject to the preferential rights of any other shares or series of
capital stock, holders of shares of Common Stock are entitled to receive
distributions on such shares if, as and when authorized and declared by the
Board of Directors of the Company out of assets legally available therefor and
to share ratably in the assets of the Company legally available for distribution
to its stockholders in the event of its liquidation, dissolution or winding-up
after payment of, or adequate provision for, all known debts and liabilities of
the Company.
Subject to the matters discussed under "Certain Provisions of Maryland
Law and the Company's Charter and Bylaws-Control Share Acquisitions," each
outstanding share of Common Stock entitles the holder to one vote on all matters
submitted to a vote of stockholders, including the election of directors, and,
except as otherwise required by law or except as provided with respect to any
other class or series of stock, the holders of such shares of Common Stock
possess the exclusive voting power. There is no cumulative voting in the
election of directors, which means that the holders of a majority of the
outstanding shares of Common Stock can elect all of the directors then standing
for election and the holders of the remaining shares of Common Stock will not be
able to elect any directors.
Holders of shares of Common Stock have no preference, conversion,
sinking fund, redemption, exchange or preemptive rights to subscribe for any
securities of the Company. All shares of a particular class of issued Common
Stock have equal dividend, distribution, liquidation and other rights.
Pursuant to the MGCL, a corporation generally cannot (except under and
in compliance with specifically enumerated provisions of the MGCL) dissolve,
amend its charter, merge, sell all or substantially all of its assets, engage in
a share exchange or engage in similar transactions outside the ordinary course
of business unless approved by the affirmative vote of stockholders holding at
least two-thirds of the shares entitled to vote on the matter unless a lesser
percentage (but not less than a majority of all of the votes entitled to be cast
on the matter) is set forth in the corporation's charter. The Company's charter
provides for approval of any such action by a majority of the votes entitled to
be cast in the matter, except in the case of amendment of the charter provisions
relating to removal of directors, classification of the Board of Directors,
voting rights of the Common Stock or voting requirements for charter amendments.
In addition, a number of other provisions of the MGCL could have a significant
effect on the shares of Common Stock and the rights and obligations of holders
thereof. See "Certain Provisions of Maryland Law and the Company's Charter and
Bylaws."
The transfer agent and registrar for the shares of Common Stock is
American Stock Transfer & Trust Company.
DESCRIPTION OF COMMON STOCK WARRANTS
The Company may issue Common Stock Warrants for the purchase of Common
Stock. Common Stock Warrants may be issued independently or together with any
other Securities offered pursuant to any Prospectus Supplement and may be
attached to or separate from such Securities. Each series of Common Stock
Warrants will be issued under a separate warrant agreement (each, a "Warrant
Agreement") to be entered into between the Company and the warrant recipient or,
if the recipients are numerous, a warrant agent identified in the applicable
Prospectus Supplement (the "Warrant Agent"). The Warrant Agent, if engaged, will
act solely as an agent of the Company in connection with the Common Stock
Warrants of such series and will not assume any obligation or relationship of
agency or trust for or with any holders or beneficial owners of Common Stock
Warrants. Further terms of the Common Stock Warrants and the applicable Warrant
Agreements will be set forth in the Prospectus Supplement.
The applicable Prospectus Supplement will describe the terms of any
Common Stock Warrants in respect of which this Prospectus is being delivered,
including, where applicable, the following: (1) the title of such Common Stock
Warrants; (2) the aggregate number of such Common Stock Warrants; (3) the price
or prices at which such Common Stock Warrants will be issued; (4) the
designation, number and terms of the shares of Common Stock purchasable upon
exercise of such Common Stock Warrants; (5) the designation and terms of the
other Securities with which such Common Stock Warrants are issued and the number
of such Common Stock Warrants issued with such offered Securities; (6) the date,
if any, on and after which such Common Stock
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Warrants and the related Common Stock will be separately transferable; (7) the
price at which each share of Common Stock purchasable upon exercise of such
Common Stock Warrants may be purchased; (8) the date on which the right to
exercise such Common Stock Warrants shall commence and the date on which such
right shall expire; (9) the minimum or maximum amount of such Common Stock
Warrants which may be exercised at any one time; (10) information with respect
to book-entry procedures, if any; (11) a discussion of certain federal income
tax considerations relevant to a holder of such Common Stock Warrants; and (12)
any other terms of such Common Stock Warrants, including terms, procedures and
limitations relating to the exchange and exercise of such Common Stock Warrants.
Reference is made to the section captioned "Description of Common
Stock" for a general description of the Common Stock to be acquired upon the
exercise of the Common Stock Warrants. Additionally, the section captioned
"Description of Capital Stock" includes a description of certain restrictions on
transfer of the Common Stock.
DESCRIPTION OF PREFERRED STOCK
The following description of the Preferred Stock sets forth certain
anticipated general terms and provisions of the Preferred Stock to which any
Prospectus Supplement may relate. Certain other terms of any class or series of
Preferred Stock (which terms may be different than those stated below) will be
described in the Prospectus Supplement to which such class or series relates.
The statements below describing the Preferred Stock are in all respects subject
to and qualified in their entirety by reference to the applicable provisions of
the Prospectus Supplement and Articles of Incorporation (including the amendment
describing the designations, rights, and preferences of each class or series of
Preferred Stock) and Bylaws.
Subject to limitations prescribed by Maryland law and the Articles of
Incorporation, the Company's Board of Directors is authorized to fix the number
of shares constituting each class or series of Preferred Stock and the
designations and powers, preferences and relative, participating, optional or
other special rights and qualifications, limitations or restrictions thereof,
including such provisions as may be desired concerning voting, redemption,
dividends, dissolution or the distribution of assets, conversion or exchange,
and such other subjects or matters as may be fixed by resolution of the Board of
Directors or the duly authorized committee thereof. The Preferred Stock will,
when issued, be fully paid and nonassessable and will have no preemptive rights.
Reference is made to the Prospectus Supplement relating to the
Preferred Stock offered thereby for specific terms, including: (1) the title and
stated value of such Preferred Stock; (2) the number of shares of such Preferred
Stock offered, the liquidation preference per share and the offering price of
such Preferred Stock; (3) the dividend rate(s), period(s) and or payment date(s)
or method(s) of calculation thereof applicable to such Preferred Stock; (4) the
date from which dividends on such Preferred Stock shall accumulate, if
applicable; (5) the procedures for any auction and remarketing, if any, for such
Preferred Stock; (6) the provision for a sinking fund, if any, for such
Preferred Stock; (7) the provisions for redemption, if applicable, of such
Preferred Stock; (8) any listing of such Preferred Stock on any securities
exchange; (9) the terms and conditions, if applicable, upon which such Preferred
Stock will be convertible into Common Stock, including the conversion price (or
manner of calculation thereof); (10) a discussion of certain federal income tax
considerations relevant to a holder of such Preferred Stock; (11) the relative
ranking and preferences of such Preferred Stock as to dividend rights and rights
upon liquidation, dissolution or winding up of the affairs of the Company; (12)
any limitations on issuance of any series or classes of Preferred Stock ranking
senior to or on a parity with such class or series of Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or winding up of the
affairs of the Company; (13) any limitations on direct or beneficial ownership
and restrictions on transfer, in each case as may be appropriate to preserve the
status of the Company as a REIT and (14) any other specific terms, preferences,
rights, limitations or restrictions of such Preferred Stock.
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Rank
Unless otherwise specified in the Prospectus Supplement, the Preferred
Stock will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Company, rank (i) senior to all classes or
series of Common Stock of the Company, and to all equity and debt securities
which are specifically designated as ranking junior to such Preferred Stock with
respect to dividend rights or rights upon liquidation, dissolution or winding up
of the Company; (ii) on a parity with all equity and debt securities issued by
the Company the terms of which specifically provide that such equity and debt
securities rank on a parity with the Preferred Stock with respect to dividend
rights or rights upon liquidation, dissolution or winding up of the Company; and
(iii) junior to all equity and debt securities issued by the Company the terms
of which specifically provide that such equity and debt securities rank senior
to the Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company.
Dividends
Holders of shares of the Preferred Stock of each class or series shall
be entitled to receive, when, as and if declared by the Board of Directors of
the Company, out of assets of the Company legally available for payment, cash
dividends (or dividends in kind or in other property if expressly permitted and
described in the applicable Prospectus Supplement) at such rates and on such
dates as will be set forth in the applicable Prospectus Supplement. Each such
dividend shall be payable to holders of record as they appear on the stock
transfer books of the Company on such record dates as shall be fixed by the
Board of Directors of the Company.
Dividends on any class or series of the Preferred Stock may be
cumulative or non-cumulative, as provided in the applicable Prospectus
Supplement. Dividends, if cumulative, will be cumulative from and after the date
set forth in the Prospectus Supplement. If the Board of Directors of the Company
fails to declare a dividend payable on a dividend payment date on any class or
series of the Preferred Stock for which dividends are noncumulative, then the
holders of such class or series of the Preferred Stock will have no right to
receive a dividend in respect of the dividend period ending on such dividend
payment date, and the Company will have no obligation to pay the dividend
accrued for such period, whether or not dividends on such class or series are
declared payable on any future dividend payment date.
Unless otherwise specified in the applicable Prospectus Supplement, if
any shares of the Preferred Stock of any class or series are outstanding, no
full dividends shall be declared or paid or set apart for payment on the
Preferred Stock of the Company of any other class or series ranking, as to
dividends, on a parity with or junior to the Preferred Stock of such class or
series for any period unless full dividends (which include all unpaid dividends
in the case of cumulative dividend Preferred Stock) have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payment on the Preferred Stock of such class
or series.
When dividends are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the shares of Preferred Stock of any class or
series and the shares of any other class or series of Preferred Stock ranking on
a parity as to dividends with the Preferred Stock of such class or series, all
dividends declared upon shares of Preferred Stock of such class or series and
any other class or series of Preferred Stock ranking on a parity as to dividends
with such Preferred Stock shall be declared pro rata among the holders of such
class or series. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on Preferred Stock of
such class or series which may be in arrears.
Until required dividends are paid, no dividends (other than in Common
Stock or other capital stock ranking junior to the Preferred Stock of such class
or 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 the Company ranking junior to or on a
parity with the Preferred Stock of such class or series as to dividends or upon
liquidation, nor shall any Common Stock or any other capital stock of the
Company ranking junior to or on a parity with the Preferred Stock of such class
or 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
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for a sinking fund for the redemption of any shares of any such stock) by the
Company (except by conversion into or exchange for other capital stock of the
Company ranking junior to the Preferred Stock of such class or series as to
dividends and upon liquidation).
Any dividend payment made on shares of a class or series of Preferred
Stock shall first be credited against the earliest accrued but unpaid dividend
due with respect to shares of Preferred Stock of such class or series which
remains payable.
Redemption
If so provided in the applicable Prospectus Supplement, the shares of
Preferred Stock will be subject to mandatory redemption or redemption at the
option of the Company, as a whole or in part, in each case upon the terms, at
the times and at the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a class or series of Preferred
Stock that is subject to mandatory redemption will specify the number of shares
of such Preferred Stock that shall be redeemed by the Company in each year
commencing after a date to be specified, at a redemption price per share to be
specified, together with an amount equal to all accrued and unpaid dividends
thereon (which shall not, if such Preferred Stock does not have a cumulative
dividend, include any accumulation in respect of unpaid dividends for prior
dividend periods) to the date of redemption. The redemption price may be payable
in cash or other property, as specified in the Prospectus Supplement. If the
redemption price for Preferred Stock of any class or series is payable only from
the net proceeds of the issuance of capital stock of the Company, the terms of
such Preferred Stock may provide that, if no such capital stock shall have been
issued or to the extent the net proceeds from any issuance are insufficient to
pay in full the aggregate redemption price then due, such Preferred Stock shall
automatically and mandatorily be converted into shares of the applicable capital
stock of the Company pursuant to conversion provisions specified in the
applicable Prospectus Supplement.
So long as any dividends on shares of any class or series of the
Preferred Stock of the Company ranking on a parity as to dividends and
distributions of assets with such class or series of the Preferred Stock are in
arrears, no shares of any such class or series of the Preferred Stock of the
Company will be redeemed (whether by mandatory or optional redemption) unless
all such shares are simultaneously redeemed, and the Company will not purchase
or otherwise acquire any such shares; provided, however, that the foregoing will
not prevent the purchase or acquisition of such shares of Preferred Stock to
preserve the REIT status of the Company or pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of Preferred
Stock of such class or series and, unless the full cumulative dividends on all
outstanding shares of any cumulative Preferred Stock of such class or series and
any other stock of the Company ranking on a parity with such class or series as
to dividends and upon liquidation shall have been paid or contemporaneously are
declared and paid for all past dividend periods, the Company shall not purchase
or otherwise acquire directly or indirectly any shares of Preferred Stock of
such class or series (except by conversion into or exchange for stock of the
Company ranking junior to the Preferred Stock of such class or series as to
dividends and upon liquidation); provided, however, that the foregoing will not
prevent the purchase or acquisition of such shares of Preferred Stock to
preserve the REIT status of the Company or pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares of Preferred
Stock of such class or series.
If fewer than all of the outstanding shares of Preferred Stock of any
class or series are to be redeemed, the number of shares to be redeemed will be
determined by the Company and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares held
by such holders (with adjustments to avoid redemption of fractional shares) or
any other equitable method determined by the Company that will not result in the
issuance of any Excess Shares.
Notice of redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of record of a share of
Preferred Stock of any class or series to be redeemed at the address shown on
the stock transfer books of the Company. If notice of redemption of any shares
of Preferred Stock has been given and if the funds necessary for such redemption
have been set aside by the Company in trust for the benefit of the
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holders of any shares of Preferred Stock so called for redemption, then from and
after the redemption date dividends will cease to accrue on such shares of
Preferred Stock, such shares of Preferred Stock shall no longer be deemed
outstanding and all rights of the holders of such shares will terminate, except
the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Company, then, before any distribution or payment shall
be made to the holders of Common Stock, or any other class or series of capital
stock of the Company ranking junior to the Preferred Stock in the distribution
of assets upon any liquidation, dissolution or winding up of the Company, the
holders of each class or series of Preferred Stock shall be entitled to receive
out of assets of the Company legally available for distribution to shareholders
liquidating distributions in the amount of the liquidation preference per share
(set forth in the applicable Prospectus Supplement), plus an amount equal to all
dividends accrued and unpaid thereon (which shall not include any accumulation
in respect of unpaid dividends for prior dividend periods if such Preferred
Stock does not have a cumulative dividend). After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of shares
of Preferred Stock will have no right or claim to any of the remaining assets of
the Company. In the event that, upon any such voluntary or involuntary
liquidation, dissolution or winding up, the legally available assets of the
Company are insufficient to pay the amount of the liquidating distributions on
all outstanding shares of Preferred Stock and the corresponding amounts payable
on all shares of other classes or series of capital stock of the Company ranking
on a parity with the Preferred Stock in the distribution of assets upon
liquidation, dissolution or winding up, then the holders of the Preferred Stock
and all other such classes or series of capital stock shall share ratably in any
such distribution of assets in proportion to the full liquidating distributions
to which they would otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all
holders of shares of Preferred Stock, the remaining assets of the Company shall
be distributed among the holders of any other classes or series of capital stock
ranking junior to the Preferred Stock upon liquidation, dissolution or winding
up, according to their respective rights and preferences and in each case
according to their respective number of shares.
Voting Rights
Holders of the Preferred Stock will not have any voting rights, except
as set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Any class or series of Preferred Stock may provide that, so long as any
shares of such class or series of Preferred Stock remain outstanding, the
holders of such class or series may vote as a separate class on certain
specified matters, which may include changes in the Company's capitalization,
amendments to the Articles of Incorporation, and mergers and dispositions.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such class or series of Preferred
Stock shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been irrevocably deposited in trust to effect such
redemption.
The provisions of a class or series of Preferred Stock may provide for
additional rights, remedies, and privileges if dividends on such class or series
are in arrears for specified periods, which rights and privileges will be
described in the applicable Prospectus Supplement.
Under Maryland law, notwithstanding anything to the contrary set forth
above, holders of each class or series of Preferred Stock will be entitled to
vote upon a proposed amendment to the Articles of Incorporation, whether or not
entitled to vote thereon by the Articles of Incorporation, if the amendment
would alter the contract rights, as set forth in the Articles of Incorporation,
of their shares of stock.
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Conversion Rights
The terms and conditions, if any, upon which shares of any class or
series of Preferred Stock are convertible into Common Stock will be set forth in
the applicable Prospectus Supplement relating thereto. Such terms will include
the number of shares of Common Stock into which the Preferred Stock is
convertible, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option of
the holders of the Preferred Stock or the Company, the events requiring an
adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such Preferred Stock.
Restrictions On Ownership
The Preferred Stock will be subject to certain restrictions on
ownership as described in the applicable Prospectus Supplement.
DESCRIPTION OF DEPOSITARY SHARES
General
The Company may issue receipts ("Depositary Receipts") for Depositary
Shares, each of which will represent a fractional interest of a share of a
particular class or series of Preferred Stock, as specified in the applicable
Prospectus Supplement. Shares of Preferred Stock of each class or series
represented by Depositary Shares will be deposited under a separate Deposit
Agreement (each, a "Deposit Agreement") among the Company, the depositary named
therein (the "Preferred Stock Depositary") and the holders from time to time of
the Depositary Receipts. Subject to the terms of the Deposit Agreement, each
owner of a Depositary Receipt will be entitled, in proportion to the fractional
interest of a share of a particular class or series of Preferred Stock
represented by the Depositary Shares evidenced by such Depositary Receipt, to
all the rights and preferences of the Preferred Stock represented by such
Depositary Shares (including dividend, voting, conversion, redemption and
liquidation rights).
The Depositary Shares will be evidenced by Depositary Receipts issued
pursuant to the applicable Deposit Agreement. Immediately following the issuance
and delivery of the Preferred Stock by the Company to the Preferred Stock
Depositary, the Company will cause the Preferred Stock Depositary to issue, on
behalf of the Company, the Depositary Receipts. Copies of the applicable form of
Deposit Agreement and Depositary Receipt may be obtained from the Company upon
request, and the statements made hereunder relating to the Deposit Agreement and
the Depositary Receipts to be issued thereunder are summaries of certain
provisions thereof and do not purport to be complete and are subject to, and
qualified in their entirety by reference to, all of the provisions of the
applicable Deposit Agreement and related Depositary Receipts.
Dividends and Other Distributions
The Preferred Stock Depositary will distribute all cash dividends or
other cash distributions received in respect of the Preferred Stock to the
record holders of Depositary Receipts evidencing the related Depositary Shares
in proportion to the number of such Depositary Receipts owned by such holders,
subject to certain obligations of holders to file proofs, certificates and other
information and to pay certain charges and expenses to the Preferred Stock
Depositary.
In the event of a distribution other than in cash, the Preferred Stock
Depositary will distribute property received by it to the record holders of
Depositary Receipts entitled thereto, subject to certain obligations of holders
to file proofs, certificates and other information and to pay certain charges
and expenses to the Preferred Stock Depositary, unless the Preferred Stock
Depositary determines that it is not feasible to make such distribution, in
which case the Preferred Stock Depositary may, with the approval of the Company,
sell such property and distribute the net proceeds from such sale to such
holders.
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No distribution will be made in respect of any Depositary Share to the
extent that it represents any Preferred Stock converted into other securities.
Withdrawal of Stock
Upon surrender of the Depositary Receipts at the corporate trust office
of the Preferred Stock Depositary (unless the related Depositary Shares have
previously been called for redemption or converted into other securities), the
holders thereof will be entitled to delivery at such office, to or upon such
holder's order, of the number of whole or fractional shares of the Preferred
Stock and any money or other property represented by the Depositary Shares
evidenced by such Depositary Receipts. Holders of Depositary Receipts will be
entitled to receive whole or fractional shares of the related Preferred Stock on
the basis of the proportion of Preferred Stock represented by each Depositary
Share as specified in the applicable Prospectus Supplement, but holders of such
shares of Preferred Stock will not thereafter be entitled to receive Depositary
Shares therefor. If the Depositary Receipts delivered by the holder evidence a
number of Depositary Shares in excess of the number of Depositary Shares
representing the number of shares of Preferred Stock to be withdrawn, the
Preferred Stock Depositary will deliver to such holder at the same time a new
Depositary Receipt evidencing such excess number of Depositary Shares.
Redemption of Depositary Shares
Whenever the Company redeems shares of Preferred Stock held by the
Preferred Stock Depositary, the Preferred Stock Depositary will redeem as of the
same redemption date the number of Depositary Shares representing shares of the
Preferred Stock so redeemed, provided the Company shall have paid in full to the
Preferred Stock Depositary the redemption price of the Preferred Stock to be
redeemed plus an amount equal to any accrued and unpaid dividends thereon to the
date fixed for redemption. The redemption price per Depositary Share will be
equal to the corresponding proportion of the redemption price and any other
amounts per share payable with respect to the Preferred Stock. If fewer than all
the Depositary Shares are to be redeemed, the Depositary Shares to be redeemed
will be selected pro rata (as nearly as may be practicable without creating
fractional Depositary Shares) or by any other equitable method determined by the
Company that will not result in a violation of the Ownership Limit.
From and after the date fixed for redemption, all dividends in respect
of the shares of Preferred Stock so called for redemption will cease to accrue,
the Depositary Shares so called for redemption will no longer be deemed to be
outstanding and all rights of the holders of the Depositary Receipts evidencing
the Depositary Shares so called for redemption will cease, except the right to
receive any moneys payable upon such redemption and any money or other property
to which the holders of such Depositary Receipts were entitled upon such
redemption and surrender thereof to the Preferred Stock Depositary.
Voting of the Preferred Stock
Upon receipt of notice of any meeting at which the holders of the
Preferred Stock are entitled to vote, the Preferred Stock Depositary will mail
the information contained in such notice of meeting to the record holders of the
Depositary Receipts evidencing the Depositary Shares which represent such
Preferred Stock. Each record holder of Depositary Receipts evidencing Depositary
Shares on the record date (which will be the same date as the record date for
the Preferred Stock) will be entitled to instruct the Preferred Stock Depositary
as to the exercise of the voting rights pertaining to the amount of Preferred
Stock represented by such holder's Depositary Shares. The Preferred Stock
Depositary will vote the amount of Preferred Stock represented by such
Depositary Shares in accordance with such instructions, and the Company will
agree to take all reasonable action which may be deemed necessary by the
Preferred Stock Depositary in order to enable the Preferred Stock Depositary to
do so. The Preferred Stock Depositary will abstain from voting the amount of
Preferred Stock represented by such Depositary Shares to the extent it does not
receive specific instructions from the holders of Depositary Receipts evidencing
such Depositary Shares. The Preferred Stock Depositary shall not be responsible
for any failure to carry out any instruction to vote, or for the manner or
effect of any such vote made, as long as any such action or non-action is in
good faith and does not result from negligence or willful misconduct of the
Preferred Stock Depositary.
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Liquidation Preference
In the event of the liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holders of each Depositary
Receipt will be entitled to the fraction of the liquidation preference accorded
each share of Preferred Stock represented by the Depositary Shares evidenced by
such Depositary Receipt, as set forth in the applicable Prospectus Supplement.
Conversion of Preferred Stock
The Depositary Shares, as such, are not convertible into Common Stock
or any other securities or property of the Company. Nevertheless, if so
specified in the applicable Prospectus Supplement relating to an offering of
Depositary Shares, the Depositary Receipts may be surrendered by holders thereof
to the Preferred Stock Depositary with written instructions to the Preferred
Stock Depositary to instruct the Company to cause conversion of the Preferred
Stock represented by the Depositary Shares evidenced by such Depositary Receipts
into whole shares of Common Stock, other shares of Preferred Stock of the
Company or other shares of stock, and the Company has agreed that upon receipt
of such instructions and any amounts payable in respect thereof, it will cause
the conversion thereof utilizing the same procedures as those provided for
delivery of Preferred Stock to effect such conversion. If the Depositary Shares
evidenced by a Depositary Receipt are to be converted in part only, a new
Depositary Receipt or Receipts will be issued for any Depositary Shares not to
be converted. No fractional shares of Common Stock will be issued upon
conversion, and if such conversion would result in a fractional share being
issued, an amount will be paid in cash by the Company equal to the value of the
fractional interest based upon the closing price of the Common Stock on the last
business day prior to the conversion.
Amendment and Termination of the Deposit Agreement
The form of Depositary Receipt evidencing the Depositary Shares which
represent the Preferred Stock and any provision of the Deposit Agreement may at
any time be amended by agreement between the Company and the Preferred Stock
Depositary. However, any amendment that materially and adversely alters the
rights of the holders of Depositary Receipts or that would be materially and
adversely inconsistent with the rights granted to the holders of the related
Preferred Stock will not be effective unless such amendment has been approved by
the existing holders of at least 66 2/3% of the Depositary Shares evidenced by
the Depositary Receipts then outstanding. No amendment shall impair the right,
subject to certain exceptions in the Depositary Agreement, of any holder of
Depositary Receipts to surrender any Depositary Receipt with instructions to
deliver to the holder the related Preferred Stock and all money and other
property, if any, represented thereby, except in order to comply with law. Every
holder of an outstanding Depositary Receipt at the time any such amendment
becomes effective shall be deemed, by continuing to hold such Receipt, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby.
The Deposit Agreement may be terminated by the Company upon not less
than 30 days' prior written notice to the Preferred Stock Depositary if (i) such
termination is necessary to preserve the Company's status as a REIT or (ii) a
majority of each class or series of Preferred Stock affected by such termination
consents to such termination, whereupon the Preferred Stock Depositary shall
deliver or make available to each holder of Depositary Receipts, upon surrender
of the Depositary Receipts held by such holder, such number of whole or
fractional shares of Preferred Stock as are represented by the Depositary Shares
evidenced by such Depositary Receipts together with any other property held by
the Preferred Stock Depositary with respect to such Depositary Receipts. The
Company has agreed that if the Deposit Agreement is terminated to preserve the
Company's status as a REIT, then the Company will use its best efforts to list
the Preferred Stock issued upon surrender of the related Depositary Shares on a
national securities exchange. In addition, the Deposit Agreement will
automatically terminate if (i) all outstanding Depositary Shares shall have been
redeemed, (ii) there shall have been a final distribution in respect of the
related Preferred Stock in connection with any liquidation, dissolution or
winding up of the Company and such distribution shall have been distributed to
the holders of Depositary Receipts evidencing the Depositary Shares representing
such Preferred Stock or (iii) each share of the related Preferred Stock shall
have been converted into securities of the Company not so represented by
Depositary Shares.
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Charges of Preferred Stock Depositary
The Company will pay all transfer and other taxes and governmental
charges arising solely from the existence of the Deposit Agreement. In addition,
the Company will pay the fees and expenses of the Preferred Stock Depositary in
connection with the performance of its duties under the Deposit Agreement.
However, holders of Depositary Receipts will pay the fees and expenses of the
Preferred Stock Depositary for any duties requested by such holders to be
performed which are outside of those expressly provided for in the Deposit
Agreement.
Resignation and Removal of Depository
The Preferred Stock Depositary may resign at any time by delivering to
the Company notice of its election to do so, and the Company may at any time
remove the Preferred Stock Depositary, any such resignation or removal to take
effect upon the appointment of a successor Preferred Stock Depositary. A
successor Preferred Stock Depositary must be appointed within 60 days after
delivery of the notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and having a combined
capital and surplus of at least $50,000,000.
Miscellaneous
The Preferred Stock Depositary will forward to holders of Depositary
Receipts any reports and communications from the Company which are received by
the Preferred Stock Depositary with respect to the related Preferred Stock.
Neither the Preferred Stock Depositary nor the Company will be liable
if it is prevented from or delayed in, by law or any circumstances beyond its
control, performing its obligations under the Deposit Agreement. The obligations
of the Company and the Preferred Stock Depositary under the Deposit Agreement
will be limited to performing their duties thereunder in good faith and without
negligence (in the case of any action or inaction in the voting of Preferred
Stock represented by the Depositary Shares), gross negligence or willful
misconduct, and the Company and the Preferred Stock Depositary will not be
obligated to prosecute or defend any legal proceeding in respect of any
Depositary Receipts, Depositary Shares or shares of Preferred Stock represented
thereby unless satisfactory indemnity is furnished. The Company and the
Preferred Stock Depositary may rely on written advice of counsel or accountants,
or information provided by persons presenting shares of Preferred Stock
represented thereby for deposit, holders of Depositary Receipts or other persons
believed in good faith to be competent to give such information, and on
documents believed in good faith to be genuine and signed by a proper party.
In the event the Preferred Stock Depositary shall receive conflicting
claims, requests or instructions from any holders of Depositary Receipts, on the
one hand, and the Company, on the other hand, the Preferred Stock Depositary
shall be entitled to act on such claims, requests or instructions received from
the Company.
DESCRIPTION OF DEBT SECURITIES
The Company may issue Debt Securities under one or more trust
indentures (each an "Indenture") to be executed by the Company and one or more
trustees (each a "Trustee") meeting the requirements of a trustee under the
Trust Indenture Act of 1939, as amended (the "TIA"). The Indentures will be
qualified under the TIA.
The following description sets forth certain anticipated 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 (which terms may be different than those stated below) 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. Accordingly, for a description of the terms of a
particular issue of Debt Securities, reference must be made to both the
Prospectus Supplement relating thereto and the following description. Forms of
the Senior Indenture (as defined herein) and the Subordinated Indenture (as
defined herein) have been filed as exhibits to the Registration Statement of
which this Prospectus is a part.
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General
The Debt Securities will be direct obligations of the Company and may
be either senior Debt Securities ("Senior Securities") or subordinated Debt
Securities ("Subordinated Securities"). The indebtedness represented by
Subordinated Securities will be subordinated in right of payment to the prior
payment in full of the Senior Debt (as defined in the applicable Indenture) of
the Company. Senior Securities and Subordinated Securities will be issued
pursuant to separate indentures (respectively, a "Senior Indenture" and a
"Subordinated Indenture"), in each case between the Company and a Trustee.
Except as set forth in the applicable Indenture and described in a
Prospectus Supplement relating thereto, the Debt Securities may be issued
without limit as to aggregate principal amount, in one or more series, secured
or unsecured, in each case as established from time to time in or pursuant to
authority granted by a resolution of the Board of Directors of the Company or as
established in the applicable Indenture. All Debt Securities of one series need
not be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series.
The Prospectus Supplement relating to any series of Debt Securities being
offered will contain the specific terms thereof, including, without limitation:
(1) the title of such Debt Securities and whether such Debt Securities
are Senior Securities or Subordinated Securities;
(2) the aggregate principal amount of such Debt Securities and any
limit on such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt
Securities will be issued and, if other than the principal amount
thereof, the portion of the principal amount thereof payable upon
declaration of acceleration of the maturity thereof, or (if applicable)
the portion of the principal amount of such Debt Securities which is
convertible into Common Stock or Preferred Stock, or the method by
which any such portion shall be determined;
(4) if convertible, any applicable limitations on the ownership or
transferability of the Common Stock or Preferred Stock into which such
Debt Securities are convertible;
(5) the date or dates, or the method for determining such date or
dates, on which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method
by which such rate or rates shall be determined, at which such Debt
Securities will bear interest, if any;
(7) the date or dates, or the method for determining such date or
dates, from which any interest will accrue, the interest payment dates
on which any such interest will be payable, the regular record dates
for such interest payment dates, or the method by which any such date
shall be determined, the person to whom such interest shall be payable,
and the basis upon which interest shall be calculated if other than
that of a 360-day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if any)
and interest, if any, on such Debt Securities will be payable, such
Debt Securities may be surrendered for conversion or registration of
transfer or exchange and notices or demands to or upon the Company in
respect of such Debt Securities and the applicable Indenture may be
served;
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(9) the period or periods within which, the price or prices at which
and the terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of the Company, if the
Company is to have such an option;
(10) the obligation, if any, of the Company to redeem, repay or
purchase such Debt Securities pursuant to any sinking fund or analogous
provision or at the option of a holder thereof, and the period or
periods within which, the price or prices at which and the terms and
conditions upon which such Debt Securities will be redeemed, repaid or
purchased, as a whole or in part, pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which
such Debt Securities are denominated and payable, which may be a
foreign currency or units of two or more foreign currencies or a
composite currency or currencies, and the terms and conditions relating
thereto;
(12) whether the amount of payments of principal of (and premium, if
any) or interest, if any, on such Debt Securities may be determined
with reference to an index, formula or other method (which index,
formula or method may, but need not be, based on a currency,
currencies, currency unit or units or composite currency or currencies)
and the manner in which such amounts shall be determined;
(13) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the Events of Default or covenants
set forth in the applicable Indenture;
(14) any provisions for collateral security for repayment of such Debt
Securities;
(15) whether such Debt Securities will be issued in certificated and/or
book-entry form;
(16) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than
$1,000 and any integral multiple thereof and, if in bearer form, the
denominations thereof and terms and conditions relating thereto;
(17) the applicability, if any, of defeasance and covenant defeasance
provisions of the applicable Indenture;
(18) the terms, if any, upon which such Debt Securities may be
convertible into Common Stock or Preferred Stock of the Company and the
terms and conditions upon which such conversion will be effected,
including, without limitation, the initial conversion price or rate and
the conversion period;
(19) whether and under what circumstances the Company will pay
additional amounts as contemplated in the Indenture on such Debt
Securities in respect of any tax, assessment or governmental charge
and, if so, whether the Company will have the option to redeem such
Debt Securities in lieu of making such payment; and
(20) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture.
The Debt Securities may provide for less than the entire principal
amount thereof to be payable upon declaration of acceleration of the maturity
thereof ("Original Issue Discount Securities"). Special federal income tax,
accounting and other considerations applicable to Original Issue Discount
Securities will be described in the applicable Prospectus Supplement.
Except as set forth in the applicable Indenture, the applicable
Indenture will not contain any provisions that would limit the ability of the
Company to incur indebtedness or that would afford Holders of Debt Securities
protection in the event of a highly leveraged or similar transaction involving
the Company or in the event of a change of control. Restrictions on ownership
and transfers of the Company's Common Stock and Preferred Stock are designed to
preserve its status as a REIT and, therefore, may act to prevent or hinder a
change of control. See "Description of Capital Stock- Restrictions on
Ownership." Reference is made to the applicable Prospectus Supplement for
information with respect to any deletions from, modifications of or additions to
the Events of
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Default or covenants of the Company that are described below, including any
addition of a covenant or other provision providing event risk or similar
protection.
Merger, Consolidation Or Sale
It is expected that each Indenture will provide that the Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into, any other corporation, provided that (a)
either the Company shall be the continuing corporation, or the successor
corporation (if other than the Company) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such assets
shall expressly assume payment of the principal of (and premium, if any), and
interest on, all of the applicable Debt Securities and the due and punctual
performance and observance of all of the covenants and conditions contained in
the applicable Indenture; (b) immediately after giving effect to such
transaction and treating any indebtedness which becomes an obligation of the
Company or any subsidiary as a result thereof as having been incurred by the
Company or such subsidiary at the time of such transaction, no Event of Default
under the applicable Indenture, and no event which, after notice or the lapse of
time, or both, would become such an Event of Default, shall have occurred and be
continuing; and (c) an officer's certificate and legal opinion covering such
conditions shall be delivered to the Trustee.
Covenants
Each Indenture will contain covenants requiring the Company to take
certain actions and prohibiting the Company from taking certain actions. The
covenants with respect to any series of Debt Securities will be described in the
Prospectus Supplement relating thereto.
Events Of Default, Notice And Waiver
Each Indenture will describe specific "Events of Defaults" with respect
to any series of Debt Securities issued thereunder. Such "Events of Defaults"
are likely to include (with grace and cure periods): (i) default in the payment
of any installment of interest on any Debt Security of such series; (ii) default
in the payment of principal of (or premium, if any, on) any Debt Security of
such series at its maturity; (iii) default in making any required sinking fund
payment for any Debt Security of such series; (iv) default in the performance or
breach of any other covenant or warranty of the Company contained in the
applicable Indenture (other than a covenant added to the Indenture solely for
the benefit of a series of Debt Securities issued thereunder other than such
series), continued for a specified period of days after written notice as
provided in the applicable Indenture; (v) default in the payment of specified
amounts of indebtedness of the Company or any mortgage, indenture or other
instrument under which such indebtedness is issued or by which such indebtedness
is secured, such default having occurred after the expiration of any applicable
grace period and having resulted in the acceleration of the maturity of such
indebtedness, but only if such indebtedness is not discharged or such
acceleration is not rescinded or annulled and (vi) certain events of bankruptcy,
insolvency or reorganization, or court appointment of a receiver, liquidator or
trustee of the Company or any subsidiary or either of its property.
If an Event of Default under any Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then
in every such case the applicable Trustee or the holders of not less than 25% of
the principal amount of the outstanding Debt Securities of that series will have
the right to declare the principal amount (or, if the Debt Securities of that
series are Original Issue Discount Securities or indexed securities, such
portion of the principal amounts may be specified in the terms thereof) of all
the Debt Securities of that series to be due and payable immediately by written
notice thereof to the Company (and to the applicable Trustee if given by the
holders). However, at any time after such a declaration of acceleration with
respect to Debt Securities of such series (or of all Debt Securities then
outstanding under any Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained by the
applicable Trustee, the holders of not less than a majority in principal amount
of outstanding Debt Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) may rescind and
annul such declaration and its consequences if (a) the Company shall have
deposited with the applicable Trustee all required payments of the principal of
(and premium, if any) and interest on the Debt Securities of such series (or of
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all Debt Securities then outstanding under the applicable Indenture, as the case
may be), plus certain fees, expenses, disbursements and advances of the
applicable Trustee and (b) all events of default, other than the non-payment of
accelerated principal (or specified portion thereof), with respect to Debt
Securities of such series (or of all Debt Securities then outstanding under the
applicable Indenture, as the case may be) have been cured or waived as provided
in such Indenture. Each Indenture also will provide that the holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under the applicable
Indenture, as the case may be) may waive any past default with respect to such
series and its consequences, except a default (x) in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series or (y) in respect of a covenant or provision contained in the applicable
Indenture that cannot be modified or amended without the consent of the holder
of each outstanding Debt Security affected thereby.
Each Trustee will be required to give notice to the holders of Debt
Securities within 90 days of a default under the applicable Indenture unless
such default shall have been cured or waived; provided, however, that such
Trustee may withhold notice to the holders of any series of Debt Securities of
any default with respect to such series (except a default in the payment of the
principal of (or premium, if any) or interest on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any Debt
Security of such series) if specified responsible officers of such Trustee
consider such withholding to be in the interest of such holders.
Each Indenture will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the cases of failure of
the applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of a Event of Default from the
holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of Debt
Securities from instituting suit for the enforcement of payment of the principal
of (and premium, if any) and interest on such Debt Securities at the respective
due dates thereof.
Subject to provisions in each Indenture relating to its duties in case
of default, no Trustee will be under any obligation to exercise any of its
rights or powers under an Indenture at the request or direction of any holders
of any series of Debt Securities then outstanding under such Indenture, unless
such holders shall have offered to the Trustee thereunder reasonable security or
indemnity. The holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series (or of all Debt Securities then
outstanding under an Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the applicable Trustee, or of exercising any trust or power
conferred upon such Trustee. However, a Trustee may refuse to follow any
direction which is in conflict with any law or the applicable Indenture, which
may involve such Trustee in personal liability or which may be unduly
prejudicial to the holders of Debt Securities of such series not joining
therein.
Within 120 days after the close of each fiscal year, the Company will
be required to deliver to each Trustee a certificate, signed by one of several
specified officers, stating whether or not such officer has knowledge of any
default under the applicable Indenture and, if so, specifying each such default
and the nature and status thereof.
Modification Of The Indentures
It is anticipated that modifications and amendments of an Indenture may
be made by the Company and the Trustee, with the consent of the holders of not
less than a majority in aggregate principal amount of each series of the
outstanding Debt Securities issued under the Indenture which are affected by the
modification or amendment, provided that no such modification or amendment may,
without a consent of each holder of such Debt Securities affected thereby: (1)
change the stated maturity date of the principal of (or premium, if any) or any
installment of interest, if any, on any such Debt Security; (2) reduce the
principal amount of (or premium, if any) or the interest, if any, on any such
Debt Security or the principal amount due upon acceleration of an Original Issue
Discount Security; (3) change the place or currency of payment of principal of
(or premium, if any) or interest, if any, on any such Debt Security; (4) impair
the right to institute suit for the enforcement of any such payment on or with
respect to any such Debt Security; (5) reduce the above-stated percentage of
holders of Debt
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Securities necessary to modify or amend the Indenture; or (6) modify the
foregoing requirements or reduce the percentage of outstanding Debt Securities
necessary to waive compliance with certain provisions of the Indenture or for
waiver of certain defaults. A record date may be set for any act of the holders
with respect to consenting to any amendment.
The holders of not less than a majority in principal amount of
outstanding Debt Securities of each series affected thereby will have the right
to waive compliance by the Company with certain covenants in such Indenture.
Each Indenture will contain provisions for convening meetings of the
holders of Debt Securities of a series to take permitted action.
Redemption Of Securities
Each Indenture will provide that the Debt Securities may be redeemed at
any time at the option of the Company, in whole or in part, for certain reasons
intended to protect the Company's status as a REIT. Debt Securities may also be
subject to optional or mandatory redemption on terms and conditions described in
the applicable Prospectus Supplement.
From and after notice has been given as provided in the applicable
Indenture, if funds for the redemption of any Debt Securities called for
redemption shall have been made available on such redemption date, such Debt
Securities will cease to bear interest on the date fixed for such redemption
specified in such notice, and the only right of the holders of the Debt
Securities will be to receive payment of the Redemption Price.
Conversion Of Securities
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock or Preferred Stock will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Stock or Preferred
Stock, the conversion price (or manner of calculation thereof), the conversion
period, provisions as to whether conversion will be at the option of the holders
or the Company, the events requiring an adjustment of the conversion price and
provisions affecting conversion in the event of the redemption of such Debt
Securities and any restrictions on conversion, including restrictions directed
at maintaining the Company's REIT status.
Subordination
Upon any distribution to creditors of the Company in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
any Subordinated Securities will be subordinated to the extent provided in the
applicable Indenture in right of payment to the prior payment in full of all
Senior Securities. No payment of principal or interest will be permitted to be
made on Subordinated Securities at any time if a default in Senior Securities
exists that permits the Holders of such Senior Securities to accelerate their
maturity and the default is the subject of judicial proceedings or the Company
receives notice of the default. After all Senior Securities are paid in full and
until the Subordinated Securities are paid in full, Holders of Subordinated
Securities will be subrogated to the right of Holders of Senior Securities to
the extent that distributions otherwise payable to Holders of Subordinated
Securities have been applied to the payment of Senior Securities. By reason of
such subordination, in the event of a distribution of assets upon insolvency,
certain general creditors of the Company may recover more, ratably, than Holders
of Subordinated Securities. If this Prospectus is being delivered in connection
with a series of Subordinated Securities, the accompanying Prospectus Supplement
or the information incorporated herein by reference will contain the approximate
amount of Senior Securities outstanding as of the end of the Company's most
recent fiscal quarter.
CERTAIN PROVISIONS OF MARYLAND LAW AND
THE COMPANY'S CHARTER AND BYLAWS
The following paragraphs summarize certain provisions of Maryland law
and the Company's charter and bylaws. The summary does not purport to be
complete and is subject to and qualified in its entirety by reference to
Maryland law and to the Company's charter and bylaws. See "Available
Information."
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Classification Of The Board Of Directors
The Company's bylaws provide that the number of directors of the
Company may be established by the Board of Directors but may not be fewer than
the minimum number required by MGCL (which under most circumstances is three
directors) nor more than fifteen. Any vacancy will be filled, at any regular
meeting or at any special meeting called for that purpose, by a majority of the
remaining directors, except that a vacancy resulting from an increase in the
number of directors will be filled by a majority vote of the entire Board of
Directors. Pursuant to the terms of the charter, the directors are divided into
three classes. One class held office initially for a term which expired at the
annual meeting of stockholders held in May 1995 (and the directors of such class
were reelected for a full term of three years). Another class held office for a
term which expired at the annual meeting of stockholders held in 1996 (and the
directors of such class were reelected for a full term of three years) and
another class will hold office initially for a term expiring at the annual
meeting of stockholders to be held in 1997. As the term of each class expires,
directors in that class will be elected for a term of three years and until
their successors are duly elected and qualify. The Company believes that
classification of the Board of Directors will help to assure the continuity and
stability of the Company's business strategies and policies as determined by the
Board of Directors.
The classified director provision could have the effect of making the
replacement of incumbent directors more time consuming and difficult, which
could discourage a third party from making a tender offer or otherwise
attempting to obtain control of the Company, even though such an attempt might
be beneficial to the Company and its stockholders. At least two annual meetings
of stockholders, instead of one, will generally be required to effect a change
in a majority of the Board of Directors. Thus, the classified board provision
could increase the likelihood that incumbent directors will retain their
positions. Holders of Common Stock will have no right to cumulative voting for
the election of directors. Consequently, at each annual meeting of stockholders,
the holders of a majority of shares of Common Stock will be able to elect all of
the successors of the class of directors whose term expires at that meeting.
Removal Of Directors
The charter provides that a director may be removed only for cause (as
defined in the charter) and only by the affirmative vote of at least two-thirds
of the votes entitled to be cast in the election of directors. This provision,
when coupled with the provision in the bylaws authorizing the Board of Directors
to fill vacant directorships, precludes stockholders from removing incumbent
directors and filling the vacancies created by such removal with their own
nominees.
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 ten percent 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 ten percent 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 becomes an Interested Stockholder. Thereafter,
any such business combination must be recommended by the Board of Directors of
such 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 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 with whom (or with whose affiliate) 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
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previously paid by the Interested Stockholder for its shares. These provisions
of Maryland law 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
Board of Directors has exempted from these provisions of the MGCL any business
combination with the Principals and other officers of the Company, any present
or future affiliate or associate of theirs or any other person acting in concert
or as a group with any of the foregoing persons. As a result, these persons may
be able to enter into business combinations with the Company, which may not be
in the best interest of the stockholders, without compliance by the Company with
the super-majority vote requirement and the other provisions of the statute.
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, by officers or by
directors who are employees of the corporation. "Control Shares" are voting
shares of stock which, if aggregated with all other such shares of stock
previously acquired by such person, or in respect of which such person is able
to exercise or direct the exercise of voting power (except solely by virtue of a
revocable proxy), 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 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
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 previously have been approved) for fair value determined, without regard
to the absence of voting rights for control shares, as of the date of the last
control share acquisition or of any meeting of stockholders at which the voting
rights of such shares are 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 such 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 charter or
bylaws of the corporation.
The business combination statute and the control share acquisition
statute could have the effect of discouraging others to acquire the Company and
of increasing the difficulty of consummating any offer.
Amendment To The Charter
Certain provisions of the Company's charter, including its provisions
on classification of the Board of Directors, removal of directors, voting rights
of Common Stock and voting requirements for charter amendments, may be amended
only by the affirmative vote of the holders of not less than two-thirds of all
of the votes entitled to be cast on the matter.
Dissolution Of The Company
The dissolution of the Company must be approved by the affirmative vote
of the holders of not less than a majority of all of the votes entitled to be
cast on the matter.
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Advance Notice Of Director Nominations And New Business
The bylaws of the Company provide that: (a) with respect to an annual
meeting of stockholders, nominations of persons for election to the Board of
Directors and the proposal of business to be considered by stockholders may be
made only: (i) pursuant to the Company's notice of the meeting, (ii) by the
Board of Directors, (iii) by a stockholder who is entitled to vote at the
meeting and has complied with the advance notice procedures set forth in the
bylaws, and (b) with respect to special meetings of stockholders, only the
business specified in the Company's notice of meeting may be brought before the
meeting of stockholders, and nominations of persons for election to the Board of
Directors may be made only (i) pursuant to the Company's notice of the meeting,
(ii) by the Board of Directors, or (iii) provided that the Board of Directors
has determined that directors shall be elected to such meeting, by a stockholder
who is entitled to vote at the meeting and has complied with the advance notice
provisions set forth in the bylaws.
The provisions in the charter on classification of the Board of
Directors and removal of directors, the business combination and the control
share acquisition provisions of the MGCL, and the advance notice provisions of
the bylaws could have the effect of discouraging a takeover or other transaction
in which holders of some, or a majority, of the Common Stock might receive a
premium for their Common Stock over the then prevailing market price or which
such holders might believe to be otherwise in their best interests.
Limitation of Liability and Indemnification
The MGCL permits a Maryland corporation to include in its charter a
provision eliminating the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from: (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The charter of the
Company contains such a provision which limits such liability to the maximum
extent permitted by the MGCL. This provision does not limit the ability of the
Company or its stockholders to obtain other relief, such as an injunction or
rescission.
The bylaws of the Company obligate it to the maximum extent permitted
by Maryland law to indemnify and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to: (a) any present or former
director or officer or (b) any individual who, while a director of the Company
and at the request of the Company, serves or has served another corporation,
partnership, joint venture, trust, employee benefit plan or any other enterprise
as a director, officer, partner or trustee of such corporation, partnership,
joint venture, trust, employee benefit plan, or other enterprise. The charter
and bylaws also permit the Company to indemnify and advance expenses to any
person who served a predecessor of the Company in any of the capacities
described above and to any employee or agent of the Company or a predecessor of
the Company.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Company's charter does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
permits a corporation to indemnify its present and former directors and
officers, among others, 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 in those or other
capacities unless it is established that: (a) the act or omission of the
director or officer was material to the matter giving rise to the proceeding and
(i) was committed in bad faith or (ii) was the result of active and deliberate
dishonesty, (b) the director or officer actually received an improper personal
benefit in money, property or services or (c) in the case of any criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful. However, a Maryland corporation may not indemnify for
an adverse judgment in a suit by or in the right of the corporation. In
addition, the MGCL requires the Company, as a condition to advancing expenses,
to obtain: (a) a written affirmation by the director or officer of his good
faith belief that he has met the standard of conduct necessary for
indemnification by
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the Company as authorized by the bylaws and (b) a written statement by or on his
behalf to repay the amount paid or reimbursed by the Company if it shall
ultimately be determined that the standard of conduct was not met. 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 of 1933, as amended.
The limited partnership agreement of the Operating Partnership (the
"Partnership Agreement") also provides for indemnification of the Company, as
general partner, and its officers and directors generally to the same extent as
permitted by the MGCL for a corporation's officers and directors and limits the
liability of the Company to the Operating Partnership and its partners in the
case of losses sustained, liabilities incurred or benefits not derived as a
result of errors in judgment or mistakes of fact or law or any act or omission
if the Company acted in good faith.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
TO THE COMPANY OF ITS REIT ELECTION
The following summary of certain federal income tax considerations to
the Company is based on current law, is for general information only, and is not
tax advice. The tax treatment of a holder of any of the Offered Securities will
vary depending upon the terms of the specific securities acquired by such
holder, as well as his or her particular situation, and this discussion does not
attempt to address any aspects of federal income taxation relating to holders of
Offered Securities. Certain federal income tax considerations relevant to
holders of the Offered Securities will be provided in the applicable Prospectus
Supplement relating thereto.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT THE APPLICABLE PROSPECTUS
SUPPLEMENT, AS WELL AS HIS OR HER OWN TAX ADVISOR REGARDING THE SPECIFIC TAX
CONSEQUENCES TO HIM OR HER OF THE PURCHASE, OWNERSHIP AND SALE OF THE OFFERED
SECURITIES, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP AND SALE AND OF POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
Taxation Of The Company
General. The Company has elected to be taxed as a REIT under Sections
856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"),
commencing with its taxable year ended December 31, 1994. The Company believes
that it has been organized and has operated in such a manner as to qualify for
taxation as a REIT under the Code commencing with such taxable year, and the
Company intends to continue to operate in such a manner, but no assurance can be
given that it has operated or will continue to operate in such a manner so as to
qualify or remain qualified.
These sections of the Code are highly technical and complex. The
following sets forth the material aspects of the sections that govern the
federal income tax treatment of a REIT. This summary is qualified in its
entirety by the applicable Code provisions, rules and regulations promulgated
thereunder, and administrative and judicial interpretations thereof.
As a condition to the closing of each offering of Offered Securities,
except as otherwise specified in the applicable Prospectus Supplement, tax
counsel to the Company will render an opinion to the effect that, commencing
with the Company's taxable year ended December 31, 1994, the Company has been
organized in conformity with the requirements for qualification as a REIT, and
its proposed method of operation will enable it to meet the requirements for
continued qualification and taxation as a REIT under the Code. It must be
emphasized that this opinion will be based on various factual assumptions
relating to the organization and
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operation of the Company, the Operating Partnership, the Lower Tier
Partnerships, and the Management Company and will be conditioned upon certain
representations made by the Company as to factual matters. Tax counsel to the
Company will undertake no obligation to update its opinion subsequent to its
date. In addition, this opinion will be based upon the factual representations
of the Company concerning its business and properties as set forth in this
Prospectus and will assume that the actions described in this Prospectus have
been completed as described. Moreover, such qualification and taxation as a REIT
depends upon the Company's ability to meet, through actual annual operating
results, distribution levels and diversity of stock ownership, the various
qualification tests imposed under the Code discussed below, the results of which
have not been and will not be reviewed by such tax counsel to the Company.
Accordingly, no assurance can be given that the actual results of the Company's
operation for any particular taxable year will satisfy such requirements.
Further, the anticipated income tax treatment described in this Prospectus may
be changed, perhaps retroactively, by legislative or administrative action at
any time. See "-Failure to Qualify."
If the Company qualifies for taxation as a REIT, it generally will not
be subject to federal corporate income taxes on its net income that is currently
distributed to stockholders. This treatment substantially eliminates the "double
taxation" (at the corporate and stockholder levels) that generally results from
investment in a corporation. However, the Company will be subject to federal
income tax as follows: First, the Company will be taxed at regular corporate
rates on any undistributed REIT taxable income, including undistributed net
capital gains. Second, under certain circumstances, the Company may be subject
to the "alternative minimum tax" on its items of tax preference. Third, if the
Company has (i) net income from the sale or other disposition of "foreclosure
property" which is held primarily for sale to customers in the ordinary course
of business or (ii) other nonqualifying income from foreclosure property, it
will be subject to tax at the highest corporate rate on such income. Fourth, if
the Company has net income from prohibited transactions (which are, in general,
certain sales or other dispositions of property held primarily for sale to
customers in the ordinary course of business other than foreclosure property),
such income will be subject to a 100% tax. Fifth, if the Company should fail to
satisfy the 75% gross income test or the 95% gross income test (as discussed
below), but has nonetheless maintained its qualification as a REIT because
certain other requirements have been met, it will be subject to a 100% tax on an
amount equal to (a) the gross income attributable to the greater of the amount
by which the Company fails the 75% or 95% test multiplied by (b) a fraction
intended to reflect the Company's profitability. Sixth, if the Company should
fail to distribute during each calendar year at least the sum of (i) 85% of its
REIT ordinary income for such year, (ii) 95% of its REIT capital gain net income
for such year, and (iii) any undistributed taxable income from prior periods,
the Company would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. Seventh, with respect to an
asset (a "Built-In Gain Asset") acquired by the Company from a corporation which
is or has been a C corporation (i.e., generally a corporation subject to full
corporate-level tax) in certain transactions in which the basis of the Built-In
Gain Asset in the hands of the Company is determined by reference to the basis
of the asset in the hands of the C corporation, if the Company recognizes gain
on the disposition of such asset during the ten-year period (the "Recognition
Period") beginning on the date on which such asset was acquired by the Company,
then, to the extent of the Built-In Gain (i.e., the excess of (a) the fair
market value of such asset over (b) the Company's adjusted basis in such asset,
determined as of the beginning of the Recognition Period), such gain will be
subject to tax at the highest regular corporate tax pursuant to Internal Revenue
Service ("IRS") regulations that have not yet been promulgated. The results
described above with respect to the recognition of Built-In Gain assume that the
Company will make an election pursuant to IRS Notice 88-19.
Requirements for Qualification. The Code defines a REIT as a
corporation, trust or association (1) which is managed by one or more trustees
or directors; (2) the beneficial ownership of which is evidenced by transferable
shares, or by transferable certificates of beneficial interest; (3) which would
be taxable as a domestic corporation, but for Sections 856 through 859 of the
Code; (4) which is neither a financial institution nor an insurance company
subject to certain provisions of the Code; (5) the beneficial ownership of which
is held by 100 or more persons; (6) during the last half of each taxable year
not more than 50% in value of the outstanding stock of which is owned, directly
or constructively, by five or fewer individuals (as defined in the Code to
include certain entities); and (7) which meets certain other tests, described
below, regarding the nature of its income and assets. The Code provides that
conditions (1) to (4), inclusive, 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
twelve months, or during a proportionate part of a taxable year of less than
twelve months. Conditions (5) and (6) do not apply until after the first taxable
year for which an election is
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made to be taxed as a REIT. For purposes of conditions (5) and (6), pension
funds and certain other tax-exempt entities are treated as individuals, subject
to a "look-through" exception in the case of condition (6).
The Company has satisfied condition (5) and believes that it has issued
sufficient shares to allow it to satisfy condition (6). In addition, the
Company's charter provides for restrictions regarding ownership and transfer of
shares, which restrictions are intended to assist the Company in continuing to
satisfy the share ownership requirements described in (5) and (6) above. Such
ownership and transfer restrictions are described in "Description of Capital
Stock-Restrictions on Ownership, Transfer and Conversion." These restrictions
may not ensure that the Company will, in all cases, be able to satisfy the share
ownership requirements described above, primarily (though not exclusively) as a
result of fluctuations in value among the different classes of the Company's
capital stock. If the Company fails to satisfy such share ownership
requirements, the Company's status as a REIT will terminate. See "-Failure to
Qualify."
In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. The Company has and will continue to have a
calendar taxable year.
Ownership of Subsidiaries. The Company owns interests in certain of the
Lower Tier Partnerships through subsidiaries. Code Section 856(i) provides that
a corporation which is a "qualified REIT subsidiary" (defined as any corporation
if 100 percent of the stock of such corporation is held by the REIT at all times
during the period such corporation was in existence) shall not be treated as a
separate corporation, and all assets, liabilities, and items of income,
deduction, and credit of a "qualified REIT subsidiary" shall be treated as
assets, liabilities and such items (as the case may be) of the REIT. Each of the
Company's subsidiaries qualify as "qualified REIT subsidiaries" within the
meaning of the Code. Thus, in applying the requirements described herein, the
Company's subsidiaries are ignored, and all assets, liabilities and items of
income, deduction and credit of such subsidiaries are treated as assets,
liabilities and items of income, deduction, and credit of the Company.
Ownership of a Partnership Interest. In the case of a REIT which is a
partner in a partnership, IRS regulations provide that the REIT will be deemed
to own its proportionate share of the assets of the partnership and will be
deemed to be entitled to the income of the partnership attributable to such
share. In addition, the character of the assets and gross income of the
partnership shall retain the same character in the hands of the REIT for
purposes of Section 856 of the Code, including satisfying the gross income tests
and the asset tests. Thus, the Company's proportionate share of the assets,
liabilities and items of income of the Operating Partnership (including the
Operating Partnership's share of such items of any Lower Tier Partnership) are
treated as assets, liabilities and items of income of the Company for purposes
of applying the requirements described herein. A summary of the rules governing
the Federal income taxation of partnerships and their partners is provided below
in "-Tax Aspects of the Operating Partnership." The Company has direct control
of the Operating Partnership and has and will continue to operate it consistent
with the requirements for qualification as a REIT.
Income Tests. In order to maintain qualification as a REIT, the Company
annually must satisfy three gross income requirements. First, at least 75% of
the Company's gross income (excluding gross income from prohibited transactions)
for each taxable year must be derived directly or indirectly from investments
relating to real property or mortgages on real property (including "rents from
real property" and, in certain circumstances, interest) or from certain types of
temporary investments. Second, at least 95% of the Company's gross income
(excluding gross income from prohibited transactions) for each taxable year must
be derived from such real property investments, dividends, interest and gain
from the sale or disposition of stock or securities (or from any combination of
the foregoing). Third, short-term gain from the sale or other disposition of
stock or securities, gain from prohibited transactions and gain on the sale or
other disposition of real property held for less than four years (apart from
involuntary conversions and sales of foreclosure property) must represent less
than 30% of the Company's gross income (including gross income from prohibited
transactions) for each taxable year.
Rents received by the Company will qualify as "rents from real
property" in satisfying the gross income requirements for a REIT described above
only if several conditions are met. First, the amount of rent must not be based
in whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term "rents from
real property" solely by reason of being based on a fixed
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percentage or percentages of receipts or sales. Second, the Code provides that
rents received from a tenant will not qualify as "rents from real property" in
satisfying the gross income tests if the REIT, or an actual or constructive
owner of 10% or more of the REIT, actually or constructively owns 10% or more of
such tenant (a "Related Party Tenant"). Third, if rent attributable to personal
property, leased in connection with a lease of real property, is greater than
15% of the total rent received under the lease, then the portion of rent
attributable to such personal property will not qualify as "rents from real
property." Finally, 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 whom the REIT derives no revenue. The REIT may, however,
directly perform certain services that are "usually or customarily rendered" in
connection with the rental of space for occupancy only and are not otherwise
considered "rendered to the occupant" of the property. The Company has not and
will not (i) charge rent for any property that is based in whole or in part on
the income or profits of any person (except by reason of being based on a
percentage of receipts or sales, as described above), (ii) rent any property to
a Related Party Tenant (unless the Board of Directors determines in its
discretion that the rent received from such Related Party Tenant is not material
and will not jeopardize the Company's status as a REIT), (iii) derive rental
income attributable to personal property (other than personal property leased in
connection with the lease of real property, the amount of which is less than 15%
of the total rent received under the lease), or (iv) perform services considered
to be rendered to the occupant of the property, other than through an
independent contractor from whom the Company derives no revenue.
The Management Company receives fees in exchange for the performance of
certain management services. Such fees will not accrue to the Company, but the
Company will derive dividends from the Management Company which qualify under
the 95% gross income test, but not the 75% gross income test. The Company
believes that the aggregate amount of any non-qualifying income in any taxable
year has not exceeded and will not exceed the limit on non-qualifying income
under the gross income tests.
The term "interest" generally does not include any amount received or
accrued (directly or indirectly) if the determination of such amount depends in
whole or in part on the income or profits of any person. However, an amount
received or accrued generally will not be excluded from the term "interest"
solely by reason of being based on a fixed percentage or percentages of receipts
or sales.
If the Company fails to satisfy one or both of the 75% or 95% gross
income tests for any taxable year, it may 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 the Company's failure to
meet such tests was due to reasonable cause and not due to willful neglect, the
Company attaches a schedule of the sources of its income to its federal income
tax return, and any incorrect information on the schedule was not due to fraud
with intent to evade tax. It is not possible, however, to state whether in all
circumstances the Company would be entitled to the benefit of these relief
provisions. For example, if the Company fails to satisfy the gross income tests
because nonqualifying income that the Company intentionally incurs exceeds the
limits on such income, the IRS could conclude that the Company's failure to
satisfy the tests was not due to reasonable cause. If these relief provisions
are inapplicable to a particular set of circumstances involving the Company, the
Company will not qualify as a REIT. As discussed above in "-Taxation of the
Company-General," even if these relief provisions apply, a tax would be imposed
with respect to the excess net income. No similar mitigation provision provides
relief if the Company fails the 30% gross income test. In such case, the Company
would cease to qualify as a REIT.
Any gain realized by the Company on the sale of any property held as
inventory or other property held primarily for sale to customers in the ordinary
course of business (including the Company's share of any such gain realized by
the Operating Partnership) will be treated as income from a prohibited
transaction that is subject to a 100% penalty tax. Such prohibited transaction
income may also have an adverse effect upon the Company's ability to satisfy the
income tests for qualification as a REIT. Under existing law, whether property
is held as inventory or primarily for sale to customers in the ordinary course
of a trade or business is a question of fact that depends on all the facts and
circumstances with respect to the particular transaction. The Operating
Partnership intends to hold the Properties for investment with a view to
long-term appreciation, to engage in the business of acquiring, developing,
owning, and operating the Properties (and other properties) and to make such
occasional sales of the
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Properties as are consistent with the Operating Partnership's investment
objectives. There can be no assurance, however, that the IRS might not contend
that that one or more of such sales is subject to the 100% penalty tax.
Asset Tests. The Company, 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 the Company's total assets (including its allocable
share of the assets held by the Operating Partnership) must be represented by
real estate assets (including (i) its allocable share of real estate assets held
by partnerships in which the Company owns an interest and (ii) stock or debt
instruments held for not more than one year purchased with the proceeds of a
stock offering or long-term (at least five years) debt offering of the Company),
cash, cash items and government securities. Second, not more than 25% of the
Company's total assets may be represented by securities other than those in the
75% asset class. Third, of the investments included in the 25% asset class, the
value of any one issuer's securities owned by the Company may not exceed 5% of
the value of the Company's total assets and the Company may not own more than
10% of any one issuer's outstanding voting securities.
The Operating Partnership owns 100% of the nonvoting preferred stock of
the Management Company and a note of the Management Company. The Operating
Partnership does not and will not own any of the voting securities of the
Management Company, and therefore the Company will not be considered to own more
than 10% of the voting securities of the Management Company. In addition, the
Company believes (and has represented to counsel to the Company for purposes of
its opinion, as discussed below) that the value of its pro rata share of the
securities of the Management Company to be held by the Operating Partnership did
not exceed at any time up to and including the date of this Prospectus 5% of the
total value of the Company's assets and will not exceed such amount in the
future. Tax counsel to the Company, in rendering its opinion as to the
qualification of the Company as a REIT, will be relying on representations of
the Company to such effect with respect to the value of such securities and
assets. No independent appraisals will be obtained to support this conclusion.
There can be no assurance that the IRS will not contend that the value of the
securities of the Management Company held by the Company (through the Operating
Partnership) exceeds the 5% value limitation.
After initially meeting the asset tests at the close of any quarter,
the Company will not lose its status as a REIT for failure to satisfy the asset
tests at the end of a later quarter solely by reason of changes in asset values.
If the failure to satisfy the asset tests results from an acquisition of
additional securities of the Management Company or other securities or other
property during a quarter (including as a result of the Company increasing its
interests in the Operating Partnership), the failure can be cured by disposition
of sufficient nonqualifying assets within 30 days after the close of that
quarter. The Company has maintained and will continue to maintain adequate
records of the value of its assets to ensure compliance with the asset tests and
to take such other actions within the 30 days after the close of any quarter as
may be required to cure any noncompliance. If the Company fails to cure
noncompliance with the asset tests within such time period, the Company would
cease to qualify as a REIT.
Annual Distribution Requirements. The Company, 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 the
Company's "REIT taxable income" (computed without regard to the dividends paid
deduction and the Company's net capital gain) and (ii) 95% of the net income
(after tax), if any, from foreclosure property, minus (B) the sum of certain
items of noncash income. In addition, if the Company disposes of any Built-In
Gain Asset during its Recognition Period, the Company will be required, pursuant
to IRS regulations which have not yet been promulgated, to distribute at least
95% of the Built-in Gain (after tax), if any, recognized on the disposition of
such asset. Such distributions must be paid in the taxable year to which they
relate, or in the following taxable year if declared before the Company timely
files its tax return for such year and if paid on or before the first regular
dividend payment after such declaration. To the extent that the Company does not
distribute all of its net capital gain or distributes at least 95%, but less
than 100%, of its "REIT taxable income," as adjusted, it will be subject to tax
thereon at regular ordinary and capital gain corporate tax rates. The Company
has made and intends to make timely distributions sufficient to satisfy these
annual distribution requirements.
It is expected that the Company's REIT taxable income will be less than
its cash flow due to the allowance of depreciation and other non-cash charges in
computing REIT taxable income. Accordingly, the Company anticipates that it will
generally have sufficient cash or liquid assets to enable it to satisfy the
distribution
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requirements described above. It is possible, however, that the Company, from
time to time, may not have sufficient cash or other liquid assets to meet these
distribution requirements due to timing differences between (i) the actual
receipt of income and actual payment of deductible expenses and (ii) the
inclusion of such income and deduction of such expenses in arriving at taxable
income of the Company. In the event that such timing differences occur, in order
to meet the distribution requirements, the Company may find it necessary to
arrange for short-term, or possibly long-term, borrowings or to pay dividends in
the form of taxable stock dividends.
Under certain circumstances, the Company may be able to rectify a
failure to meet the distribution requirement for a year by paying "deficiency
dividends" to stockholders in a later year, which may be included in the
Company's deduction for dividends paid for the earlier year. Thus, the Company
may be able to avoid being taxed on amounts distributed as deficiency dividends;
however, the Company will be required to pay interest based upon the amount of
any deduction taken for deficiency dividends.
Furthermore, if the Company should fail to distribute during each
calendar year at least the sum of (i) 85% of its REIT ordinary income for such
year, (ii) 95% of its REIT capital gain income for such year, and (iii) any
undistributed taxable income from prior periods, the Company would be subject to
a 4% excise tax on the excess of such required distribution over the amounts
actually distributed.
Failure To Qualify
If the Company fails to qualify for taxation as a REIT in any taxable
year, and the relief provisions do not apply, the Company will be subject to tax
(including any applicable alternative minimum tax) on its taxable income at
regular corporate rates. Distributions to stockholders in any year in which the
Company fails to qualify will not be deductible by the Company nor will they be
required to be made. As a result, the Company's failure to qualify as a REIT
would reduce the cash available for distribution by the Company to its
stockholders. In addition, if the Company fails to qualify as a REIT, all
distributions to stockholders will be taxable as ordinary income, to the extent
of the Company's current and accumulated earnings and profits, and, subject to
certain limitations of the Code, corporate distributees may be eligible for the
dividends received deduction. Unless entitled to relief under specific statutory
provisions, the Company will 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 the Company would be
entitled to such statutory relief.
Tax Aspects Of The Operating Partnership
General. Substantially all of the Company's investments are held
indirectly through the Operating Partnership. In general, partnerships are
"pass-through" entities which 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 distribution from the
partnership. The Company 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, the Company will include its proportionate share of assets
held by the Operating Partnership. See "-Taxation of the Company."
Partnership Allocations. Although a partnership agreement will
generally determine the allocation of income and losses among partners, such
allocations will be disregarded for tax purposes if they do not comply with the
provisions of Section 704(b) of the Code and the Treasury Regulations
promulgated thereunder. Generally, Section 704(b) and the Treasury Regulations
promulgated thereunder require that partnership allocations respect the economic
arrangement of the partners.
If an allocation is not recognized for federal income tax purposes, the
item subject to the allocation will be reallocated in accordance with the
partners' interests in the partnership, which will be determined by taking into
account all of the facts and circumstances relating to the economic arrangement
of the partners with respect to such item. The Operating Partnership's
allocations of taxable income and loss are intended to comply with the
requirements of Section 704(b) of the Code and the Treasury Regulations
promulgated thereunder.
30
<PAGE>
Tax Allocations with Respect to the Properties. Pursuant to Section
704(c) of the Code, income, gain, loss and deduction attributable to appreciated
or depreciated property (such as the Properties) 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 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 Operating Partnership was formed by way of contributions of
appreciated property (including certain of the Properties). Moreover, subsequent
to the formation of the Operating Partnership, additional persons have
contributed appreciated property to the Operating Partnership in exchange for
interests in the Operating Partnership. The Partnership Agreement requires that
such allocations be made in a manner consistent with Section 704(c) of the Code.
In general, the limited partners of the Operating Partnership who
acquired their limited partnership interests through a contribution of
appreciated property will be allocated depreciation deductions for tax purposes
which are lower than such deductions would be if determined on a pro rata basis.
In addition, in the event of the disposition of any of the contributed assets
which have a Book-Tax Difference, all income attributable to such Book-Tax
Difference will generally be allocated to such limited partners, and the Company
will generally be allocated only its share of capital gains attributable to
appreciation, if any, occurring after the time of contribution to the Operating
Partnership. This will tend to eliminate the Book-Tax Difference over the life
of the Operating Partnership. However, the special allocation rules of Section
704(c) do not always entirely eliminate the Book-Tax Difference on an annual
basis or with respect to a specific taxable transaction such as a sale. Thus,
the carryover basis of the contributed assets in the hands the Operating
Partnership may cause the Company to be allocated lower depreciation and other
deductions, and possibly an amount 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 the Company to recognize taxable income
in excess of cash proceeds, which might adversely affect the Company's ability
to comply with the REIT distribution requirements. See "-Taxation of the
Company-Annual Distribution Requirements."
Treasury Regulations under Section 704(c) of the Code provide
partnerships with a choice of several methods of accounting for Book-Tax
Differences, including retention of the "traditional method" or the election of
certain methods which would permit any distortions caused by a Book-Tax
Difference to be entirely rectified on an annual basis or with respect to a
specific taxable transaction such as a sale. The Operating Partnership and the
Company have determined to use the "traditional method" for accounting for
Book-Tax Differences with respect to the Properties initially contributed to the
Operating Partnership.
With respect to any property purchased by the Operating Partnership in
a taxable transaction, such property will initially have a tax basis equal to
its fair market value, and Section 704(c) of the Code will not apply.
Basis in Operating Partnership Interest. The Company's adjusted tax
basis in its interest in the Operating Partnership generally (i) will be equal
to the amount of cash and the basis of any other property contributed to the
Operating Partnership by the Company, (ii) will be increased by (a) its
allocable share of the Operating Partnership's income and (b) its allocable
share of indebtedness of the Operating Partnership and (iii) will be reduced,
but not below zero, by the Company's allocable share of (a) losses suffered by
the Operating Partnership, (b) the amount of cash distributed to the Company and
(c) by constructive distributions resulting from a reduction in the Company's
share of indebtedness of the Operating Partnership.
If the allocation of the Company's distributive share of the Operating
Partnership's loss exceeds the adjusted tax basis of the Company's partnership
interest in the Operating Partnership, the recognition of such excess loss will
be deferred until such time and to the extent that the Company has adjusted tax
basis in its interest in the Operating Partnership. To the extent that the
Operating Partnership's distributions, or any decrease in the Company's share of
the indebtedness of the Operating Partnership (such decreases being considered a
cash
31
<PAGE>
distribution to the partners), exceeds the Company's adjusted tax basis, such
excess distributions (including such constructive distributions) constitute
taxable income to the Company. Such taxable income will normally be
characterized as a capital gain, and if the Company's interest in the Operating
Partnership has been held for longer than the long-term capital gain holding
period (currently one year), the distributions and constructive distributions
will constitute long-term capital gain.
Other Tax Consequences
The Company may be subject to state or local taxation in various state
or local jurisdictions, including those in which it or they transact business or
reside. The state and local tax treatment of the Company may not conform to the
federal income tax consequences discussed above. Consequently, prospective
investors should consult their own tax advisors regarding the effect of state
and local tax laws on an investment in the Company.
A portion of the cash to be used by the Operating Partnership to fund
distributions to partners is expected to come from the Management Company,
through interest payments and dividends on non-voting preferred stock to be held
by the Operating Partnership. The Management Company will pay federal and state
tax on its net income at full corporate rates, which will reduce the cash
available for distribution to stockholders.
PLAN OF DISTRIBUTION
The Company may sell Securities through underwriters for public offer
and sale by them, and also may sell Securities offered hereby to investors
directly or through agents. Any such underwriter or agent 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, at prices related to the prevailing market prices
at the time of sale or at negotiated prices. The Company also may, from time to
time, authorize underwriters acting as the Company's agents to offer and sell
Securities upon terms and conditions set forth in the applicable Prospectus
Supplement. In connection with the sale of the Securities, underwriters may be
deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of the 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 from the underwriters
and/or commissions from the purchasers for whom they may act as agent.
Any underwriters or agents in connection with an offering of the
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, 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 to be entered into with the Company, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Securities from the Company
at the public offering price set forth in such Prospectus Supplement pursuant to
delayed delivery contracts providing for payment and delivery on the date or
dates stated in such Prospectus Supplement. Each delayed delivery contract will
be for an amount not less than, and the aggregate principal amount of Securities
sold pursuant to delayed delivery contracts shall be not less nor more than, the
respective amounts stated in the applicable Prospectus Supplement. Institutions
with whom delayed delivery contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other institutions but
will in all cases be subject to the approval of the Company. Delayed delivery
contracts will not be subject to any conditions except (i) the purchase by an
institution of the Securities covered by its delayed delivery contracts shall
not at the time of delivery be prohibited under the
32
<PAGE>
laws of any jurisdiction in the United States to which such institution is
subject, and (ii) if the Securities are being sold to underwriters, the Company
shall have sold to such underwriters the total principal amount of the
Securities less the principal amount thereof covered by delayed delivery
contracts.
EXPERTS
The consolidated financial statements of First Washington Realty Trust,
Inc. incorporated by reference from the Annual Report on Form 10-K for the year
ended December 31, 1995, have been audited by Coopers & Lybrand L.L.P,
independent accountants as set forth in their report, which is incorporated
herein by reference. The financial statements of the New Retail Properties and
the 1996(B) Acquisition Properties incorporated by reference from the
Registration Statement on Form S-11, as amended, filed on November 22, 1996,
have been audited by Coopers & Lybrand L.L.P., independent accountants, as set
forth in their report, which is incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such reports
given on the authority of that firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company by Latham &
Watkins, Washington, D.C. Latham & Watkins will rely as to certain matters of
Maryland law, including the legality of the Securities, on the opinion of
Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland.
33
<PAGE>
NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY UNDERWRITER. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
----
FIRST WASHINGTON
REALTY TRUST, INC.
PROSPECTUS
_______________, 199_
<PAGE>
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate of the amount of fees and expenses to be incurred
in connection with the issuance and distribution of the Securities registered
hereby:
SEC Registration Fee....................................... $ 53,030
NASD Filing Fee............................................ 18,000
Printing and Mailing Costs................................. 125,000
Legal Fees and Expenses.................................... 150,000
Accounting Fees and Expenses............................... 50,000
Blue Sky Fees and Expenses (including Fees of Counsel)..... 7,500
Transfer Agent and Registrar Fees.......................... 5,000
Miscellaneous.............................................. 16,740
Total...................................................... 425,000
=======
-------
ITEM 15. LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
The MGCL permits a Maryland corporation to include in its charter a
provision eliminating the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The charter of the
Company contains such a provision which limits such liability to the maximum
extent permitted by the MGCL. This provision does not limit the ability of the
Company or its stockholders to obtain other relief, such as an injunction or
rescission.
The bylaws of the Company obligate it to the maximum extent permitted
by Maryland law to indemnify and to pay or reimburse reasonable expenses in
advance of final disposition of a proceeding to (a) any present or former
director or officer who is made a party to the proceeding by reason of his
service in that capacity or (b) any individual who, while a director of the
Company and at the request of the Company, serves or has served another
corporation, partnership, joint venture, trust, employee benefit plan or any
other enterprise as a director, officer, partner or trustee of such corporation,
partnership, joint venture, trust, employee benefit plan, or other enterprise
and who is made a party to the proceeding by reason of his service in that
capacity. The charter and bylaws also permit the Company to indemnify and
advance expenses to any person who served a predecessor of the Company in any of
the capacities described above and to any employee or agent of the Company or a
predecessor of the Company.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Company's charter does not) to indemnify a director or officer who has
been successful, on the merits or otherwise, in the defense of any proceeding to
which he is made a party by reason of his service in that capacity. The MGCL
permits a corporation to indemnify its present and former directors and
officers, among others, 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 in those or other
capacities unless it is established that (a) the act or omission of the director
or officer was material to the matter giving rise to the proceeding and (i) was
committed in bad faith or (ii) was the result of active and deliberate
dishonesty, (b) the director or officer actually received an improper personal
benefit in money, property or services or (c) in the case of any criminal
proceeding, the director or officer had reasonable cause to believe that the act
or omission was unlawful. However, a Maryland corporation may not indemnify for
an adverse judgment in a suit by or in the right of the corporation. In
addition, the MGCL requires the Company, as a condition to advancing expenses,
to obtain (a) a written affirmation by the director or officer of his good faith
belief that he has met the standard of conduct necessary for indemnification by
the Company as authorized by the bylaws and (b) a written statement by or on his
behalf to repay the amount paid or reimbursed by the Company if it shall
ultimately be determined that the standard of conduct was not met. 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.
II-1
<PAGE>
The Partnership Agreement also provides for indemnification of the
Company, as general partner, and its officers and directors generally to the
same extent as permitted by the MGCL for a corporation's officers and directors
and limits the liability of the Company to the Operating Partnership and its
partners in the case of losses sustained, liabilities incurred or benefits not
derived as a result of errors in judgment or mistakes of fact or law or any act
or omission if the Company acted in good faith.
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.
II-2
<PAGE>
ITEM 16. EXHIBITS
EXHIBITS.
1.1(a) Form of Underwriting Agreement for Equity Securities (1)
1.1(b) Form of Underwriting Agreement for Debt Securities (1)
4(a) Form of Senior Indenture (2)
4(b) Form of Subordinated Indenture (2)
4(c) Form of Debt Security (2)
4(d) Form of Common Stock Warrant Agreement (1)
4(e) Form of Articles Supplementary for the Preferred Stock (1)
4(f) Form of Preferred Stock Certificate (1)
4(g) Form of Common Stock Certificate (1)
4(h) Form of Deposit Agreement (1)
5 Opinion of Ballard Spahr Andrews & Ingersoll (2)
8 Opinion of Latham & Watkins regarding tax matters (1)
12 Computation of the Company's Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends (2)
23(a) Consent of Latham & Watkins (included in Exhibit 8) (1)
23(b) Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5)(2)
23(c) Consent of Coopers & Lybrand L.L.P. (2)
24 Power of Attorney (included in signature page hereto).
25 Statement of Eligibility of Trustee on Form T-1 (filed under separate
cover)(1)
-------------
(1) To be filed by amendment or incorporated by reference.
(2) Filed herewith.
II-3
<PAGE>
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement
(or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. 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 percent 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 this registration statement or any material change to such
information in this registration statement;
provided, however, that subparagraphs (i) and (ii) do not apply if
the information required to be included in a post-effective
amendment by those paragraphs is contained in the periodic reports
filed by the Registrant pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
Securities offered herein, and the offering of such Securities at
that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective
amendment any of the Securities being registered which remain
unsold at the termination of the offering.
The undersigned Registrant hereby further undertakes that, for the
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by reference
in this registration statement shall be deemed to be a new registration
statement relating to the Securities offered herein, and the offering of such
Securities at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned Registrant hereby further undertakes to file an
application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15 of this
registration statement, or otherwise (other than insurance), the Registrant has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the Securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the
II-4
<PAGE>
question whether such indemnification by it is against public policy as
expressed in such Act and will be governed by the final adjudication of such
issue.
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3, and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Bethesda, State of Maryland on March 26, 1997.
FIRST WASHINGTON REALTY TRUST, INC.
By: /s/ William J. Wolfe
---------------------------------
William J. Wolfe
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Each person whose signature appears below hereby constitutes and
appoints William Wolfe as his attorney-in-fact and agent, with full power of
substitution and resubstitution for him in any and all capacities, to sign any
or all amendments or post-effective amendments to this Registration Statement,
or any Registration Statement for the same offering that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file the
same, with exhibits thereto and other documents in connection therewith or in
connection with the registration of the Securities under the Securities Exchange
Act of 1934, as amended, with the Securities and Exchange Commission, granting
unto such attorney-in-fact and agent full power and authority to do and perform
each and every act and thing requisite and necessary in connection with such
matters and hereby ratifying and confirming all that such attorney-in-fact and
agent or his substitutes may do or cause to be done by virtue hereof.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ Stuart D. Halpert
- ------------------------
Stuart D. Halpert Chairman of the Board of Directors March 26, 1997
/s/ William J. Wolfe
- ------------------------
William J. Wolfe President, Chief Executive Officer, March 26, 1997
Director
/s/ Lester Zimmerman
- ------------------------
Lester Zimmerman Executive Vice President, Director March 26, 1997
/s/ James G. Blumenthal
- ------------------------
James G. Blumenthal Executive Vice President March 26, 1997
and Chief Financial Officer
/s/ Stanley T. Burns
- -------------------------
Stanley T. Burns Director March 26, 1997
/s/ Matthew J. Hart
- -------------------------
Matthew J. Hart Director March 26, 1997
/s/ William. M. Russell
- -------------------------
William M. Russell Director March 26, 1997
/s/ Heywood Wilansky
- -------------------------
Heywood Wilansky Director March 26, 1997
II-6
EXHIBIT 4(a)
FIRST WASHINGTON REALTY TRUST, INC.
as Issuer
TO
[NAME OF TRUSTEE],
as Trustee
__% [Convertible] Debt Securities
INDENTURE
Dated as of _________, __
<PAGE>
FIRST WASHINGTON REALTY TRUST, INC.
Reconciliation and tie between Trust Indenture Act of 1939 (the "TIA"), as
amended by the Company Reform Act of 1990, and the Indenture, dated as of
_____________, 19__.
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
ss.310(a)(1) 6.9
(a)(2) 6.9
(a)(3) Not Applicable
(a)(4) Not Applicable
(a)(5) 6.9
(b) 6.9
ss.311(a) 6.10
(b) 6.10
(c) Not Applicable
ss.312(a) 7.1, 7.2
(b) 7.2(b)
(c) 7.2(c)
ss.313(a) 7.3
(b) 7.3
(c) 7.3
(d) 7.3
ss.314(a) 7.4
(b) Not Applicable
(c)(1) 1.3
(c)(2) 1.3
(c)(3) Not Applicable
(d) Not Applicable
(e) 1.3
(f) Not Applicable
ss.315(a) 6.1(b)
(b) 6.5
(c) 6.1(a)
(d) 6.1(c)
(e) 5.14
ss.316(a)(last sentence) 1.1 ("Outstanding")
(a)(1)(A) 5.2, 5.12
(a)(1)(B) 5.13
(a)(2) Not Applicable
(b) 5.8
(c) 1.5
ss.317(a)(1) 5.3
(a)(2) 5.4
(b) 10.3
ss.318(a) 1.8
<PAGE>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to Section 318(c) of the TIA, which provides
that the provisions of Sections 310 to and including 317 of the TIA are a part
of and govern every qualified Indenture, whether or not physically contained
therein.
ii
<PAGE>
ARTICLE 1 - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION....................................................................1
SECTION 1.1. Definitions...................................................1
SECTION 1.2. Incorporation by Reference to Trust Indenture Act............10
SECTION 1.3. Compliance Certificates and Opinions.........................10
SECTION 1.5. Acts of Holders..............................................11
SECTION 1.6. Notices, Etc., to Trustee and the Company....................13
SECTION 1.7. Notice to Holders; Waiver....................................13
SECTION 1.8. Conflict with Trust Indenture Act............................14
SECTION 1.9. Effect of Headings and Table of Contents.....................14
SECTION 1.10. Successors and Assigns......................................14
SECTION 1.11. Severability Clause.........................................14
SECTION 1.12. Benefits of Indenture.......................................14
SECTION 1.13. Governing Law...............................................14
SECTION 1.14. Legal Holidays..............................................14
SECTION 1.15. Shareholders, Employees, Officers and
Directors of the Company Exempt from.....................................15
Individual Liability.......................................................15
ARTICLE 2 - SECURITY FORMS....................................................15
SECTION 2.1. Forms Generally..............................................15
SECTION 2.2. Securities in Global Form....................................16
ARTICLE 3 - THE SECURITIES....................................................17
SECTION 3.1. Amount Unlimited; Issuable in Series.........................17
SECTION 3.2. Denominations................................................19
SECTION 3.3. Execution, Authentication, Delivery
and Dating...............................................................19
SECTION 3.4. Temporary Securities.........................................21
SECTION 3.5. Registration, Registration of Transfer
and Exchange.............................................................21
iii
<PAGE>
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities.............23
SECTION 3.7. Payment of Interest; Interest Rights Preserved;
Paying Agent Definitions.................................................24
SECTION 3.8. Persons Deemed Owners........................................26
SECTION 3.9. Cancellation.................................................26
SECTION 3.10. Computation of Interest.....................................26
ARTICLE 4 - SATISFACTION AND DISCHARGE........................................26
SECTION 4.1. Satisfaction, Discharge and Defeasance of
the Securities of Indenture..............................................26
SECTION 4.2. Application of Trust Money...................................27
SECTION 4.3. Paying Agent to Repay Monies Held............................28
SECTION 4.4. Return of Unclaimed Monies...................................28
SECTION 4.5. Reinstatement................................................29
ARTICLE 5 - DEFAULTS AND REMEDIES.............................................29
SECTION 5.1. Events of Default............................................29
SECTION 5.2. Acceleration of Maturity; Rescission
and Annulment............................................................31
SECTION 5.3. Collection of Indebtedness and Suits
for Enforcement by Trustee...............................................32
SECTION 5.4. Trustee May File Proofs of Claim.............................33
SECTION 5.5. Trustee May Enforce Claims Without
Possession of Securities.................................................34
SECTION 5.6. Application of Money Collected...............................34
SECTION 5.7. Limitations on Suits.........................................34
SECTION 5.8. Unconditional Right of Holders to
Receive Principal, Premium, if any, and Interest.........................35
SECTION 5.9. Restoration of Rights and Remedies...........................35
SECTION 5.10. Rights and Remedies Cumulative..............................36
SECTION 5.11. Delay or Omission Not Waiver................................36
SECTION 5.12. Control by Holders..........................................36
SECTION 5.13. Waiver of Past Defaults.....................................37
SECTION 5.14. Undertaking for Costs.......................................37
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SECTION 5.15. Waiver of Stay or Extension Laws............................38
ARTICLE 6 - THE TRUSTEE.......................................................38
SECTION 6.1. Certain Duties and Responsibilities
of the Trustee...........................................................38
SECTION 6.2. Certain Rights of Trustee....................................39
SECTION 6.3. Individual Rights of Trustee.................................40
SECTION 6.4. Trustee's Disclaimer.........................................40
SECTION 6.5. Notice of Defaults...........................................40
SECTION 6.6. Compensation and Indemnity...................................40
SECTION 6.7. Replacement of Trustee.......................................41
SECTION 6.8. Successor Trustee by Merger, Etc.............................42
SECTION 6.9. Eligibility; Disqualification................................42
SECTION 6.10. Preferential Collection of Claims
Against Trust............................................................42
SECTION 6.11. Appointment of Authenticating Agent.........................42
ARTICLE 7 - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND
COMPANY...........................................................44
SECTION 7.1. Company to Furnish Trustee Names and
Addresses of Holders.....................................................44
SECTION 7.2. Preservation of Information;
Communications to Holders................................................44
SECTION 7.3. Reports by Trustee to Holders................................45
SECTION 7.4. Reports by the Company.......................................46
ARTICLE 8 - SUCCESSOR CORPORATION OR TRUST....................................46
SECTION 8.1. When Company May Merge, Etc..................................46
SECTION 8.2. Successor Corporation or Trust
Substituted..............................................................47
ARTICLE 9 - SUPPLEMENTAL INDENTURES...........................................47
SECTION 9.1. Supplemental Indentures Without
Consent of Holders.......................................................47
SECTION 9.2. Supplemental Indentures with
Consent of Holders.......................................................48
SECTION 9.3. Compliance with Trust Indenture Act..........................49
SECTION 9.4. Revocation and Effect of Consents............................49
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SECTION 9.5. Notation On or Exchange of Securities........................50
SECTION 9.6. Effect of Supplemental Indentures............................50
SECTION 9.7. Reference in Securities to Supplemental
Indentures...............................................................50
ARTICLE 10 - COVENANTS........................................................50
SECTION 10.1. Payment of Principal, Premium and Interest..................50
SECTION 10.2. Maintenance of Office or Agency.............................50
SECTION 10.3. Money for Securities Payments to Be
Held in Trust............................................................51
SECTION 10.4. Company Existence...........................................52
SECTION 10.5. Maintenance of Properties...................................52
SECTION 10.6. Insurance...................................................53
SECTION 10.7. SEC Reports.................................................53
SECTION 10.8. Compliance Certificates.....................................53
SECTION 10.9. Limitation on Dividends and Other Distributions.............53
SECTION 10.10. Payment of Taxes and Other Claims..........................54
SECTION 10.11. Defeasance of Certain Obligations..........................54
ARTICLE 11 - REDEMPTION OF SECURITIES.........................................55
SECTION 11.1. Applicability of Article....................................55
SECTION 11.2. Election to Redeem; Notice to Trustee.......................55
SECTION 11.3. Selection by Trustee of Securities
to Be Redeemed...........................................................55
SECTION 11.4. Notice of Redemption........................................56
SECTION 11.5. Deposit of Redemption Price.................................57
SECTION 11.6. Securities Payable on Redemption Date.......................57
SECTION 11.7. Securities Redeemed in Part.................................58
ARTICLE 12 - SINKING FUNDS....................................................58
SECTION 12.1. Applicability of Article....................................58
SECTION 12.2. Satisfaction of Sinking Fund
Payments with Securities.................................................58
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SECTION 12.3. Redemption of Securities
for Sinking Fund.........................................................59
ARTICLE 13 - REPAYMENT AT THE OPTION OF HOLDERS...............................59
SECTION 13.1. Applicability of Article....................................59
ARTICLE 14 - MEETINGS OF HOLDERS..............................................59
SECTION 14.1. Purposes of Holders' Meetings...............................59
SECTION 14.2. Call of Meetings by Trustee.................................60
SECTION 14.3. Call of Meetings by Company
or Holders...............................................................60
SECTION 14.4. Qualifications for Voting...................................60
SECTION 14.5. Regulations.................................................61
SECTION 14.6. Voting......................................................61
SECTION 14.7. Rights of Trustee or Holders
Not Delayed..............................................................62
ARTICLE 15 - SUBORDINATION; SENIORITY.........................................62
SECTION 15.1. Securities Subordinated to
Senior Indebtedness......................................................62
SECTION 15.2. Company Not to Make Payments
with Respect to Securities in Certain Circumstances......................63
SECTION 15.3. Subrogation of Securities...................................64
SECTION 15.4. Authorization by Holders of Securities......................65
SECTION 15.5. Notices of Trustee..........................................66
SECTION 15.6. Trustee's Relation to Senior Indebtedness...................66
SECTION 15.7. No Impairment of Subordination..............................67
SECTION 15.8. Article 15 Not To Prevent Events of Default.................67
SECTION 15.9. Paying Agents Other Than the Trustee........................67
ARTICLE 16 - CONVERSION OF SECURITIES.........................................67
SECTION 16.1. Right of Conversion; Conversion Price.......................67
SECTION 16.2. Issuance of Shares on Conversion............................68
SECTION 16.3. No Adjustment for Interest or Dividends.....................69
SECTION 16.4. Adjustment of Conversion Price..............................69
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SECTION 16.5. Notice of Adjustment of Conversion Price....................72
SECTION 16.6. Notice of Certain Company Action............................72
SECTION 16.7. Taxes on Conversions........................................73
SECTION 16.8. Fractional Shares...........................................73
SECTION 16.9. Cancellation of Converted Securities........................74
SECTION 16.10. Provisions in Case of Consolidation,
Merger or Sale of Assets.................................................74
SECTION 16.11. Disclaimer by Trustee of Responsibility
for Certain Matters......................................................74
SECTION 16.12. Covenant to Reserve Shares.................................75
EXHIBIT A - FORM OF SECURITY
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INDENTURE, dated as of _________________, by and between FIRST WASHINGTON REALTY
TRUST, INC., a Maryland corporation (the "Company"), having its principal office
at 4350 East-West Highway, Suite 400, Bethesda, Maryland 20814 and _____________
(the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of
this Indenture to provide for the issuance of its [convertible] securities
(hereinafter being collectively referred to as the "Securities") evidencing its
[convertible] unsecured indebtedness, unlimited as to principal amount, to bear
interest at the rates, to mature at such times[, to be convertible into shares
of the capital stock of the Company], and to have such other provisions, as
shall be fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended (the "TIA"), that are deemed to be
incorporated into this Indenture and shall, to the extent applicable, be
governed by such provisions.
All things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchases of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE 1 - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article 1 have the meanings
assigned them in this Article, and include the plural as well as the singular;
(2) whenever this Indenture refers to a provision of the TIA,
the provision is incorporated by reference in and made a part of this Indenture.
All terms used herein which are defined in the TIA, either directly or by
reference therein, have the meaning assigned to them therein;
(3) all accounting terms, not otherwise defined herein, have
the meanings assigned them in accordance with GAAP; and
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(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not any
particular Article, Section or other subdivision.
"Act," when used herein with respect to any Holder, has the
meaning set forth in Section 1.5.
"Affiliate" means any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession, directly
or indirectly, of the power to direct to cause the direction of the management
or policies of such Person, whether through the ownership of voting securities
or by agreement or otherwise.
"Agent" means any Authenticating Agent, Security Registrar,
Paying Agent, Conversion Agent, co-registrar or agent for service of notices and
demands.
"Articles of Incorporation" means the Company's Articles of
Incorporation, as amended, supplemented or otherwise modified from time to time
in accordance with the provisions thereof.
"Authenticating Agent" means any Person or Persons authorized
from time to time by the Trustee pursuant to Section 6.11 to act on behalf of
the Trustee to authenticate Securities of one or more series.
"Bankruptcy Law" means Title 11 of the U.S. Code or any
similar Federal or State law for the relief of debtors.
"Board of Directors" means the Board of Directors of the
Company or any Committee thereof.
"Board Resolution" means 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," when used with respect to any Place of Payment
or any other particular location referred to in this Indenture or the Securities
of any series, means, unless specified with respect to such Securities pursuant
to Section 3.1, any day, other than Saturday or Sunday, that is neither a legal
holiday, nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"Capital Stock" means any and all shares or other equivalents
(however designated) of capital stock, including Common Shares and Preferred
Shares issued or authorized for issuance, in series or otherwise, all in
accordance with the Articles of Incorporation.
2
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"Closing Price" means with respect to the per share price of
Common Shares or Preferred Shares, as the case may be, on any Trading Day, (i)
the last reported sales price regular way or, in case no such reported sale
takes place on such Trading Day, the average of the reported closing bid and
asked prices regular way, in either case on the New York Stock Exchange, or (ii)
if not listed or admitted to trading on the New York Stock Exchange, on the
principal national securities exchange on which such shares are listed or
admitted to trading, or (iii) if such shares are not listed or admitted to
trading on any national securities exchange, the average of the closing bid and
asked prices as furnished by any New York Stock Exchange member firm selected
from time to time by the Company for that purpose.
"Code" means the Internal Revenue Code of 1986, as amended,
and the rules and regulations issued thereunder, as from time to time in effect.
"Common Shares" of the Company means every share of each class
(however designated) of the Capital Stock that is not a Preferred Share of the
Company issued or authorized for issuance in accordance with the Articles of
Incorporation.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by an Officer and delivered to the
Trustee.
"Conversion Agent" means any Person authorized by the Company
to act as a conversion agent pursuant to this Indenture for purposes of Article
16.
"Conversion Price" has the meaning set forth in Section 16.1.
"Corporate Trust Office" means the principal office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office on the date of execution of this Indenture is located
at ____________ ________________.
"Custodian" means any receiver, trustee, liquidator or similar
official under any Bankruptcy Law.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means with respect to the Securities of any
series issuable or issued in the form of one or more Global Securities, the
Person designated as the "Depositary" by the Company pursuant to Section 3.1
until a successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter the "Depositary" shall mean or
include each Person who is then a Depositary hereunder, and if at any time there
is more than one such
Person, the "Depositary" as used with respect to the
Securities of any series shall mean the Depositary with respect to the
Securities of that series. Each Depositary must, at the time of its designation
and at all times while it serves as a Depositary, be a clearing agency
registered under the Exchange Act, and any other applicable statute or
regulation.
3
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"Dollar" or "$" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time there shall be legal
tender for the payment of public and private debts.
"Events of Default" has the meaning set forth in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as from time to
time in effect.
"GAAP" means generally accepted accounting principles, as in
effect from time to time, as used in the United States.
"Global Security" means a Security evidencing all or a part of
a series of Securities, issued to and registered in the name of the Depositary
for such series, or its nominee, in accordance with Section 3.3, and bearing the
legend prescribed in Section 2.2.
"Holder" means, in the case of a registered Security, the
Person in whose name a Security is registered in the Security Register and, in
the case of a bearer Security, if any, the bearer thereof, and, when used with
respect to any coupon, if any, shall mean the bearer thereof.
"Indebtedness," as applied to any Person, means, without
duplication (i) all indebtedness for borrowed money whether or not evidenced by
bonds, notes, debentures or a similar instrument, (ii) that portion of
obligations with respect to leases that is properly classified as a liability on
a balance sheet in accordance with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit, (iv) any balance owed for all or any part of
the deferred purchase price of property or services, which purchase price is due
more than six months from the date of incurrence of the obligation in respect
thereof (except any such balance that constitutes (x) a trade payable or an
accrued liability arising in the ordinary course of business or (y) a trade
draft or note payable issued in the ordinary course of business in connection
with the purchase of goods or services), if and to the extent such debt would
appear as a liability upon a balance sheet of such Person prepared in accordance
with GAAP, (v) all indebtedness for letters of credit or bankers acceptances
issued for the account of such Person or performance, surety or similar bonds,
(vi) all indebtedness under interest rate swaps, caps or similar agreements and
foreign exchange contracts, currency swaps or similar agreements, (vii) any
liability of others of the kind described in the preceding clauses (i) through
(vi), which such Person has guaranteed or which is otherwise its legal
liability, and (viii) any and all deferrals, renewals, extensions and refunding
of, or amendments, modifications or supplements to, any liability of the kind
described in any of the preceding clauses (i) through (vi); provided, however,
that, in computing the "Indebtedness" of any Person, there shall be excluded any
particular indebtedness if, upon or prior to the maturity thereof and at the
time of determination of such indebtedness, there shall have been deposited with
a depositary in trust money (or evidences of indebtedness if permitted by the
instrument creating such indebtedness) in the necessary amount to pay, redeem or
satisfy such indebtedness as it becomes due, and the amount so deposited shall
not be included in any computation of the assets of such Person.
4
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"Indenture" means the instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of particular series of Securities established as
contemplated by Section 3.1; provided, however, that if at any time more than
one Person is acting as Trustee under this Indenture due to the appointment of
one or more separate Trustees for any one or more separate series of Securities
pursuant to Section 6.7, "Indenture" shall mean, with respect to such series of
Securities for which any such Person is Trustee, this instrument as originally
executed or as it may from time to time be supplemented or amended by one or
more indentures supplemental hereto entered into pursuant to the applicable
provisions of Article 9 and shall include the terms, as contemplated by Section
3.1, of the particular series of Securities for which such Person is Trustee,
exclusive, however, of any provisions or terms which relate solely to any other
series of Securities for which such Person is not Trustee, regardless of when
such terms or provisions were adopted, and exclusive of any provisions or terms
adopted by means of one or more indentures supplemental hereto executed and
delivered after such Person had become such Trustee, but to which such Person,
as such Trustee, was not a party.
"Interest Payment Date," when used with respect to any
Security, means the Stated Maturity of an installment of interest on such
Security.
"Maturity," when used with respect to any Security, means the
date on which the principal of such Security or an installment of principal
becomes due and payable, as therein or herein defined, whether at the Stated
Maturity or by declaration of acceleration, notice of redemption, notice of
option to elect repayment or otherwise.
"Officer" means the Chairman of the Board, the President, any
Vice President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers and delivered to the Trustee.
"Opinion of Counsel" means a written opinion from Latham &
Watkins or any other legal counsel who is reasonably acceptable to the Trustee.
The counsel may be an employee of or counsel to the Company or the Trustee.
"Original Issue Discount Security" means any Security which
provides for an amount less than the principal amount thereof to be due and
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 5.2.
"Outstanding," when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
5
<PAGE>
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any Paying
Agent (other than the Company) in trust or set aside and segregated in trust by
the Company (if the Company shall act as its own Paying Agent) for the Holders
of such Securities; provided that, if such Securities are to be redeemed, notice
of such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made;
(iii) Securities, with respect to which the Company effected
defeasance pursuant to or in accordance with this Indenture if the terms of such
Securities provided for defeasance pursuant to Section 3.1;
(iv) Securities which have been paid pursuant to Section 3.6
or in exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company; and
(v) Securities converted into Common Shares or Preferred
Shares pursuant to or in accordance with this Indenture if the terms of such
Securities provided for convertibility pursuant to Section 3.1;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA ss. 313, (i) the principal amount of an Original
Issue Discount Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and payable as of the date of
such determination upon acceleration of the Maturity thereof pursuant to Section
5.2, (ii) the principal amount of a Security denominated in one or more foreign
currencies or currency units shall be the Dollar equivalent, determined as of
the date of original issuance of such Security in the manner provided as
contemplated by Section 3.1, of the principal amount (or, in the case of an
Original Issue Discount Security, the Dollar equivalent on the date of original
issuance of such Security of the amount determined as provided in (i) above) of
such Security, and (iii) Securities owned by the Company or any other obligor
upon the Securities or any Affiliate of the Company or of such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in 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 owned as provided in clause (iii) above 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.
"Ownership Limit" as to any Holder or other Person means, on
any date of determination, the number of shares of any or all classes or series
of Capital Stock with an aggregate value equal to 9.8% of the aggregate value of
all outstanding shares of Capital Stock of the Company determined in accordance
with the principles (including, without limitation, the authority of the Board
of Directors) set forth in the Articles of Incorporation.
6
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"Paying Agent" means any Person authorized by the Company
to pay the principal of (and premium, if any), or interest on, any Securities
on behalf of the Company.
"Payment or Distribution" has the meaning set forth in Section
15.1.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Securities
of or within any series, means the place or places where the principal of (and
premium, if any) and interest on the Securities of that series are payable as
specified as contemplated by Sections 3.1 and 10.2.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same indebtedness as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 3.6 in exchange for 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.
"Preferred Shares" means, with respect to the Company, Capital
Stock issued by the Company in accordance with the Articles of Incorporation
that is entitled to a preference or priority over any other Capital Stock issued
by the Company upon any distribution of the Company's assets, whether by
dividends or upon any voluntary or involuntary liquidation, dissolution or
winding up to any other share of such or any class of the Capital Stock.
"Principal" of a Security means the principal of the Security
plus, when appropriate, the premium, if any, on the Security.
"Redemption Date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
"Redemption Price," when used with respect to the Securities
of any series to be redeemed means the price fixed for such redemption pursuant
to this Indenture as specified in such Security.
"Regular Record Date," for the interest payable on any
Interest Payment Date on the Securities of or within any series, means the date
specified for that purpose as contemplated by Section 3.1, whether or not a
Business Day.
"Responsible Officer," when used with respect to the Trustee,
means the chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether designated by a number or a word or words
added before and after the title "vice president"), the secretary, any assistant
secretary, the clerk, any assistant clerk, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the officers
designated hereinabove and also means, with respect to a particular corporate
trust matter, any
7
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other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"Rule 13e-3 Transaction" has the meaning set forth in Section
16.6(2).
"SEC" means the Securities and Exchange Commission, as from
time to time constituted, or, if at any time after execution of this instrument
the SEC is not existing and performing the duties now assigned to it under the
TIA, then the body performing such duties on such date.
"Security" has the meaning set forth in the first recital of
this Indenture and, more particularly, means any Security authenticated and
delivered under this Indenture; provided, however, that, if at any time there is
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to this Indenture as to which such Person is Trustee will have the
meaning stated in the first recital of hereof and, more particularly, will mean
Securities authenticated and delivered hereunder, exclusive, however, of
Securities of any series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.5.
"Senior Indebtedness" means the principal of and interest on,
or substantially similar payments to be made by the Company in respect of, the
following, whether outstanding at the date of execution of this Indenture or
thereafter incurred, created or assumed: (a) Indebtedness of the Company for
money borrowed or represented by purchase-money obligations, (b) indebtedness of
the Company evidenced by notes, debentures, or bonds, or other securities issued
under the provisions of an indenture, fiscal agency agreement or other
instrument, (c) obligations of the Company as lessee under leases of property
either made as part of any sale and lease-back transaction to which the Company
is a party or otherwise, (d) indebtedness of partnerships and joint ventures
which is included in the Company's consolidated financial statements, (e)
indebtedness, obligations and liabilities of others in respect of which the
Company is liable contingently or otherwise to pay or advance money or property
or as guarantor, endorser of otherwise or which the Company has agreed to
purchase or otherwise acquire, and (f) any binding commitment of the Company to
fund any real estate investment or to fund any investment in any entity making
such real estate investment; but excluding, however, (1) any such indebtedness,
obligation or liability referred to in clauses (a) through (f) above as to
which, in the instrument creating or evidencing the same or pursuant to which
the same is outstanding, it is provided that such indebtedness, obligation or
liability is not superior in right of payment to the Securities, or ranks pari
passu with the Securities, (2) any such indebtedness, obligation or liability
which is subordinated to indebtedness of the Company to substantially the same
extent as or to a greater extent than the Securities are subordinated and (3)
the Securities. As used in the preceding sentence the term "purchase-money
obligations" shall mean indebtedness or obligations evidenced by a note,
debenture, bond or other instrument (whether or not secured by any lien or other
security interest but excluding indebtedness or obligations for which recourse
is limited to the property purchased) issued or assumed as all or a part of the
consideration for the acquisition of
8
<PAGE>
property, whether by purchase, merger, consolidation or otherwise, but shall not
include any trade accounts payable. A distribution may consist of cash,
securities or other property.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Company pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security or a coupon representing such installment of interest
as the fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"Subordinated Indebtedness" means the principal, premium, if
any, and interest on any Indebtedness of the Company which by its terms is
expressly subordinated in right of payment to the Senior Indebtedness.
"Subsidiary" means, with respect to any Person, any
corporation or other business entity of which securities representing more than
50% of the combined voting power of the total voting stock (or in the case of an
association or other business entity which is not a corporation, more than 50%
of the equity interest) is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof. When used herein without reference to any
Person, Subsidiary means a Subsidiary of the Company. For the purposes of this
definition, "voting stock" means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency.
"Trading Day" means each day on which the securities exchange
or other market which is used to determine the Closing Price is open for trading
or operation.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act
of 1939, as amended and as in force at the date as of which this indenture was
executed, except as provided in Section 9.3.
"Trust Officer," when used with respect to the Trustee, means
the chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the Company committee, the president, any vice-president, the secretary, any
assistant secretary, the clerk, any assistant clerk, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller or any assistant controller or any other
officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer of the Trustee to whom
such matter is referred because of such officer's knowledge of and familiarity
with the particular subject.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a trustee
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hereunder, and if at any time there is more than one such Person, "Trustee" as
used with respect to the Securities of any series shall mean the Trustee with
respect to Securities of that series, and if at any time there is more than one
such Person, the "Trustee" as used with respect to the Securities of any series
shall mean the Trustee with respect to that series.
"United States" means the United States of America.
"U.S. Government Obligations" means direct, noncallable
obligations of, or noncallable obligations guaranteed by, the United States for
the timely payment of which obligation or guarantee the full faith and credit of
the United States is pledged.
SECTION 1.2. Incorporation by Reference to 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.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company or any
other obligor on the indenture securities.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rules have
the meanings assigned to them therein.
SECTION 1.3. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than certificates
provided pursuant to the last paragraph of Section 3.3) shall include:
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(a) a statement that each individual signing such certificate
or opinion has read such condition or covenant and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual,
such individual has made such examination or investigation as is necessary to
enable such individual to express an informed opinion as to whether or not such
condition or covenant has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.4. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer may be based, insofar
as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such Officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an Officer or Officers, stating that the information with
respect to such factual matters is in the possession of the Company, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
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SECTION 1.5. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of the Outstanding Securities of all series or one or more series, as
the case may be, may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agents duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Holders signing
such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.1) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section 1.5. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 14.6.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such individual the execution
thereof. Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of such signer's authority. The fact and date of the execution
of any such instrument or writing, or the authority of the Person executing the
same, may also be proved in any other manner which the Trustee deems sufficient.
(c) The Company may, in the circumstances permitted by the TIA
or by this Indenture, fix any day as the record date for the purpose of
determining the Holders of Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders of Securities of such series. If not set by the Company prior to the
first solicitation of a Holder of Securities of such series made by any person
in respect of any such action, or, in the case of any such vote, prior to such
vote, the record date for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required to be provided
pursuant to Section 7.1) prior to such first solicitation or vote, as the case
may be, except otherwise expressly provided herein. With regard to any record
date for action to be taken by the Holders of one or more series of Securities,
only the Holders of Securities of such series on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the relevant
action.
(d) The ownership of Securities shall be proved by the
Security Register; as to any matter relating to beneficial ownership interests
in any Global Security, the appropriate Depositary's records shall be
dispositive for purposes of this Indenture.
(e) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the
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Trustee, any Security Registrar, any Paying Agent, any Authenticating Agent or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 1.6. Notices, Etc., to Trustee and the Company.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given or furnished or filed in
writing to or with the Trustee at its ________________________, Attention:
____________,
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company, Attention: Jeffrey S. Distenfeld, Esq.,
or
(3) either the Trustee or the Company, by the other party,
shall be sufficient for every purpose hereunder if given by facsimile
transmission, receipt confirmed by telephone followed by an original copy
delivered by guaranteed overnight courier; if to the Trustee at facsimile number
(___) ___-____; and if to the Company at facsimile number (301) 907-4911.
SECTION 1.7. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class, postage prepaid, to
each Holder affected by such event, at such Holder's address as it appears in
the Security Register, not later than the latest date, if any, and not earlier
than the earliest date, if any, prescribed for the giving of such notice. In any
case where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. 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.
In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
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SECTION 1.8. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required or deemed to be included in this
Indenture by any of the provisions of the TIA, such required provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the TIA that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
SECTION 1.9. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 1.10. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.11. Severability Clause.
In case any provision in this Indenture or in the Securities
of any series shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 1.12. Benefits of Indenture.
Nothing in this Indenture or in the Securities of any series,
express or implied, shall give to any Person, other than the parties hereto and
their successors hereunder and the Holders, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.13. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York; provided,
however, that, solely as to the standards of performance by the Trustee of its
obligations hereunder to the extent the Federal laws of the United States are
not applicable, the laws in the State in which the principal corporate trust
office of the Trustee is located shall govern.
SECTION 1.14. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date
or Stated Maturity of the Securities of any series or the last date on which a
Holder has the right to convert or exchange the Securities of any series shall
not be a Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities of such series, other than a
provision of the Securities of any series that specifically states that it shall
apply in lieu of this Section 1.14) payment of interest or principal (and
premium, if any) or conversion or exchange of such Security need not be made at
such Place of Payment on such date, but (except as otherwise provided in a Board
Resolution, Officers' Certificate or supplemental indenture with
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respect to Securities of any series) may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, or on such
last day for conversion or exchange, as the case may be; provided that no
interest shall accrue for the period from and after such Interest Payment Date,
Redemption Date or Stated Maturity, as the case may be.
SECTION 1.15. Shareholders, Employees, Officers and Directors of the Company
Exempt from Individual Liability.
No recourse under or upon any obligation, covenant or
agreement contained in this Indenture, or in the Securities of any series, or
because of any Indebtedness evidenced thereby, shall be had against any past,
present or future shareholder, employee, officer or trustee, as such, of the
Company or of any successor, either directly or through the Company or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders and as part of the consideration for
the issuance of the Securities.
ARTICLE 2 - SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series shall either be (i)
substantially in the form of Exhibit A hereto or (ii) in such form (not
inconsistent with this Indenture) as shall be established from time to time by
or pursuant to a Board Resolution 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. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an 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 Company
Order contemplated by Section 3.3 for the authentication and delivery of such
Securities.
The Trustee's certificates of authentication shall be substantially in the form
set forth below:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[NAME OF TRUSTEE],
as Trustee
By
-------------------
Authorized Signature
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The definitive Securities shall be printed, lithographed or engraved on steel
engraved borders or mechanically reproduced on safety paper, or may be produced
in any other manner, all as determined by the Officers executing such
Securities, as evidenced by their execution of such Securities.
SECTION 2.2. Securities in Global Form.
If Securities of or within a series shall be issuable in the
form of one or more Global Securities, then notwithstanding clause (10) of
Section 3.1 and the provisions of Section 3.2, any such Global Security or
Global Securities may provide that it or they shall represent the aggregate
amount of all Outstanding Securities of such series (or such lesser amount as is
permitted by the terms thereof) from time to time endorsed thereon and may also
provide that the aggregate amount of Outstanding Securities represented thereby
may from time to time be increased or reduced from time to time to reflect
exchanges. Any endorsement of any Global Security to reflect the amount, or any
increase or decrease in the amount, or changes in the rights of Holders, of
Outstanding Securities represented thereby shall be made by the Trustee in such
manner or by such Person or Persons as shall be specified therein or in the
Company Order to be delivered pursuant to Section 3.3 or 3.4 with respect
thereto and the records of the registrar for such Global Securities shall be
conclusive evidence of the aggregate principal amount outstanding of any Global
Security. Subject to the provisions of Section 3.3 and, if applicable, Section
3.4, the Trustee shall deliver and redeliver any Global Security in permanent
global form in the manner and upon instructions given by the Person or Persons
specified therein or in the applicable Company Order.
Unless otherwise specified as contemplated by Section 3.1,
payment of principal of and premium, if any, and interest on any Global Security
in permanent global form shall be made to the registered Holder thereof.
Any Global Security authenticated and delivered hereunder
shall bear a legend in substantially the following form:
"This Security is a Global Security within the meaning set
forth in the Indenture hereinafter referred to and is
registered in the name of a Depositary or a nominee of a
Depositary. This Security is exchangeable for Securities
registered in the name of a person other than the Depositary
or its nominee only in the limited circumstances described in
the Indenture, and may not be transferred except as a whole by
the Depositary to a nominee of the Depositary to the
Depositary or another nominee of the Depositary or by the
Depositary or its nominee to a successor Depositary or its
nominee."
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ARTICLE 3 - THE SECURITIES
SECTION 3.1. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution, and set forth in an
Officers' Certificate, or established in one or more indentures supplemental
hereto, prior to the issuance of Securities of any series:
(1) the title of such Securities (which shall distinguish the
Securities of the series from all other series of Securities);
(2) the currency or currencies, including composite
currencies, in which payment of the principal of (and premium, if any) and
interest on the Securities of the series shall be payable (if other than
Dollars) and the manner of determining the equivalent thereof in Dollars for
purposes of the definition of "Outstanding" pursuant to Section 1.1;
(3) 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 such
series pursuant to Section 3.4, 3.5, 3.6, 9.3 or 11.7 and except from any
Securities which, pursuant to Section 3.3, are deemed never to have been
authenticated and delivered hereunder);
(4) if the amount of payments of principal of (and premium, if
any) or interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method, the manner in which such amounts
shall be determined;
(5) the date or dates, or the method for determining such date
or dates, on which the principal of the Securities of the series will be
payable;
(6) the rate or rates, or the method by which such rate or
rates shall be determined, at which the Securities of the series will bear
interest, if any, and the date or dates from which such interest will accrue or
the method by which such date or dates will be determined, the Interest Payment
Dates on which such interest will be payable and the Regular Record Date, if
any, for the interest payable on any Security on any Interest Payment Date, or
the method by which such date will be determined, and the basis upon which
interest will be calculated if other than that of a 360-day year of twelve
30-day months;
(7) the place or places where the principal of (and premium,
if any) and interest, if any, on the Securities of the series will be payable,
where such Securities may be surrendered for conversion or registration of
transfer or exchange and where notices or demands to or upon the Company in
respect of such Securities and this Indenture may be served;
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(8) the period or periods within which, the price or prices at
which, the currency or currencies, currency unit or units or composite currency
or currencies in which other terms and conditions upon which the Securities of
the series may, pursuant to any optional or mandatory redemption provisions, be
redeemed, in whole or in part, at the option of the Company, if the Company is
to have the option;
(9) the obligation, if any, of the Company to redeem, repay or
purchase the Securities of the series pursuant to any sinking fund or analogous
provision or at the option of a Holder thereof, and the period or periods within
which or the date or dates on which, the price or prices at which, the currency
or currencies, currency unit or units or composite currency or currencies in
which, and other terms and conditions upon which such Securities of the series
will be redeemed, repaid or purchased, in whole or in part, pursuant to such
obligation;
(10) whether the Securities of the series will be in
registered or bearer form and, if in registered form, the denominations thereof
if other than $1,000 and any integral multiple thereof and, if in bearer form,
the denominations thereof and terms and conditions relating thereto;
(11) whether the Securities of the series shall be issued in
the form of one or more Global Securities and in such case, (a) if registered
Securities of the series are to be issuable as a Global Security, the Depositary
for such Global Security or Securities, which Depositary shall be a clearing
agency registered under the Exchange Act and (b) the circumstances under which
any such Global Security may be exchanged for Securities registered in the name
of, and any transfer of such Global Security may be registered to, a Person
other than such Depositary or its nominee, if other than as set forth in Section
3.5;
(12) whether the principal of (and premium, if any), or
interest, if any, on the Securities of the series are to be payable, at the
election of the Company or a Holder thereof, in a currency or currencies,
currency unit or units or composite currency or currencies other than that in
which such Securities are denominated or stated to be payable, the period or
periods within which, an the terms and conditions upon which, such election may
be made, and the time and manner of, and identity of the exchange rate between
the currency or currencies, currency unit or units or composite currency or
currencies in which such Securities are to be so payable;
(13) if the Securities of the series are to be issued upon the
exercise of warrants, the time, manner and place for such Securities to be
authenticated and delivered;
(14) any deletions from, modifications of, or additions to,
the Events of Default or covenants of the Company with respect to the Securities
of such series, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
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(15) if other than the Trustee, the identity of each Security
Registrar and/or Paying Agent;
(16) the applicability, if any, of the defeasance and covenant
defeasance provisions described herein or set forth in any applicable supplement
hereto, or any modification hereof or thereof;
(17) the circumstances, if any, under which the Company will
pay any additional amounts on the Securities of the series in respect of any
tax, assessment or governmental charge and, if so, whether the Company will have
the option to redeem such Securities in lieu of making such payment;
(18) if the Securities of the series are to be issued at an
original issue discount, the amount of principal, if any, payable upon
acceleration of such Securities following an Event of Default; and
(19) any other terms of the Securities of the series not
inconsistent with the provisions of this Indenture.
All Securities of any one series shall be substantially
identical (other than as to denomination) except as may otherwise be provided in
or pursuant to such Board Resolution and set forth in such Officers' Certificate
setting forth the terms of such series.
If any of the terms of a series of Securities are established
by action taken pursuant to a Board Resolution, a copy of an 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 to the
Trustee of the Officers' Certificate setting forth the terms of such series.
SECTION 3.2. Denominations.
The Securities of each series shall be issuable in registered
form without coupons in such denominations as shall be specified as contemplated
by Section 3.1. In the absence of any such provisions with respect to the
Securities of any series, the Securities of each series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities, if issued, shall be signed by manual or
facsimile signature by the Chairman of the Board, the President, or any Vice
President of the Company and countersigned by the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company. The
Company's seal shall be impressed, affixed, imprinted or reproduced on the
Securities and may be in facsimile form.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall nevertheless be valid.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication thereon. Such signature shall be conclusive
evidence that such Security has been authenticated under this Indenture. The
Trustee shall authenticate Securities for original issue upon written order or
orders of the Company signed by two Officers thereof.
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
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such Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities. If the form or terms of the Securities
of the series have been established in or pursuant to one or more Board
Resolutions as permitted by Section 2.1 and 3.1, 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 6.2) shall be fully protected in relying upon, (a) an
Opinion of Counsel stating:
(1) that the form of such Securities has been established in
conformity with the provisions of this Indenture;
(2) that the terms of such Securities have been established in
conformity with the provisions of this Indenture; and
(3) 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 bankruptcy, insolvency, fraudulent transfer, reorganization
and other laws of general applicability relating to or affecting the enforcement
of creditors' rights and to general equity principles;
and (b) an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the issuance of the
Securities have been complied with and that, to the knowledge of the signers of
such certificate, no Event of Default with respect to any of the Securities
shall have occurred and be continuing.
If all of the Securities of a series are not to be originally
issued at the same time, then the documents required to be delivered pursuant to
the fourth paragraph of this Section 3.3 must be delivered only once, prior to
the authentication and delivery of the first security of such series; provided,
however, that any subsequent request by the Company to the Trustee to
authenticate Securities of such series upon original issuance shall be deemed to
constitute a representation and warranty by the Company that, as of the date of
such request, the statements made in the Officers' Certificate delivered
pursuant to the fourth paragraph of this Section 3.3 shall be true and correct
as if made on such date.
If the Company shall establish pursuant to Section 3.1 that
the Securities of a series are to be issued in the form of one or more Global
Securities, then the Company shall execute and the Trustee shall, in accordance
with this Section 3.3 and the Company Order with respect to such series,
authenticate and deliver one or more Global Securities that shall be registered
in the name of the Depositary for such Global Security or Securities or the
nominee of such Depositary and shall be delivered by the Trustee to such
Depositary or pursuant to such Depositary's instruction.
Each Security shall be dated the date of its authentication.
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
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substantially in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder and is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Security (including a
Global Security) shall have been authenticated and delivered hereunder but never
issued and sold by the Company, and the Company shall deliver such Security to
the Trustee for cancellation as provided in Section 3.9 together with a written
statement (which need not comply with Section 1.3 and need not be accompanied by
an Opinion of Counsel) stating that such Security has never been issued and sold
by the Company, for all purposes of this Indenture such Security shall be deemed
never to have been authenticated and delivered hereunder and shall never be
entitled to the benefits of this Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company may
execute, and upon CompanyOrder 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 and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
Except in the case of temporary Securities issued in global
form, which shall be exchanged in accordance with the provisions thereof, if
temporary Securities of any series are issued, the Company will cause definitive
Securities of that series to be prepared without unreasonable delay. After the
preparation of definitive Securities of such series, the temporary Securities of
such series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment for that series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series, the Company shall execute and the Trustee shall authenticate and deliver
in exchange therefor a like principal amount of definitive Securities of the
same series of authorized denominations. Until so exchanged the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of such series.
SECTION 3.5. Registration, Registration of Transfer and Exchange.
With respect to Securities issued in definitive registered
form, if any, the Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
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Upon surrender for registration of transfer of any Security of
any series at the office or agency in a Place of Payment for the series, 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
the same series, of any authorized denomination and of a like aggregate
principal amount.
Notwithstanding any other provision of this Section 3.5,
unless and until it is exchanged in whole or in part for Securities in
definitive registered form, a Global Security 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, by a nominee of such
Depositary to 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 (except
a Global Security) may be exchanged for other Securities of the same series, of
any authorized denominations and of a like aggregate principal amount, 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.
All Securities issued upon any registration or 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 be duly endorsed or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.4, 9.3 or 11.7 not involving any transfer.
Notwithstanding the foregoing and except as otherwise
specified or contemplated by Section 3.1, any Global Security shall be
exchangeable pursuant to this Section 3.5 or Sections 3.4 and 11.7 for
Securities registered in the name of any person other than the Depositary for
such Security or its nominee only if (i) such Depositary notifies the Company
that it is unwilling or unable to continue as Depositary for such Global
Security or if at any time such Depositary ceases to be a clearing agency
registered under the Exchange Act; (ii) the Company executes and delivers to the
Trustee a CompanyOrder that such Global Security shall be so exchangeable and
the transfer thereof so registrable (which CompanyOrder will authorize and
direct the Trustee to authenticate and deliver upon such exchange Securities of
such series in definitive registered form, in authorized denominations, in the
aggregate principal amount equal to the principal amount or
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amounts of such Global Security or Securities) or (iii) there shall have
occurred and be continuing an Event of Default with respect to the Securities of
such series. Upon the occurrence in respect of any Global Security of any series
of any one or more of the conditions specified in clause (i), (ii) or (iii) of
the preceding sentence or such other conditions as may be specified pursuant to
Section 3.1, such Global Security may be exchanged for Securities registered in
the names of, and the transfer of such Global Security may be registered to,
such persons (including persons other than the Depositary with respect to such
series and its nominees) as such Depositary, pursuant to instructions from its
direct or indirect participants or otherwise, shall direct. Such Securities
shall be delivered at the Corporate Trust Office to the persons in whose names
such Securities are so registered. Notwithstanding any other provision of this
Indenture, any Security authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, any Global Security shall also
be a Global Security and shall bear the legend specified in Section 2.2 except
for any Security authenticated and delivered in exchange for, or upon
registration of transfer of, a Global Security pursuant to the preceding
sentence. Upon the exchange of a Global Security for Securities in definitive
registered form such Global Security shall be cancelled by the Trustee.
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 the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
11.3 and ending at the close of business on the day of such mailing, 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 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefore a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like tenor and principal
amount and 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 an new Security, pay such Security.
Upon the issuance of any new Securities under this Section
3.6, the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be
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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 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 shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series 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 3.7. Payment of Interest; Interest Rights Preserved; Paying
Agent Definitions.
Interest of 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 referred to as the "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 of such
series 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 (1)
provided. Thereupon the Company 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
Company shall promptly notify the Trustee of such Special Record Date and, in
the name and at the expense of the Company, the Trustee 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
of such series at such Holder's 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 of
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such series (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2);
(2) The Company may make payment of any Defaulted Interest on
the Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this clause (2), such manner of payment shall be practicable by the Trustee.
Subject to the foregoing provisions of this Section 3.7, 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.
The Company shall maintain an office or agency where
Securities may be presented for payment. The Trustee is hereby appointed "Paying
Agent." The Company may appoint one or more additional Paying Agents. The term
Paying Agent includes any additional Paying Agent. The Company or any of its
Subsidiaries may act as Paying Agent.
The Company shall enter into an appropriate agency agreement
with any Paying Agent not a party to this Indenture that shall implement the
provisions of this Indenture that relate to such Paying Agent. The Company shall
give prompt written notice to the Trustee of the name and address of any such
Paying Agent and any change in the address of such Paying Agent.
In the case of any Security which is converted after any
Regular Record Date and on or prior to the next succeeding Interest Payment Date
(other than any Security whose Maturity is prior to such Interest Payment Date),
interest, the Stated Maturity of which is on such Interest Payment Date, shall
be payable on such Interest Payment Date notwithstanding such conversion, and
such interest (whether or not punctually paid or duly provided for) 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 such Regular Record Date.
Except as otherwise expressly provided in the immediately preceding sentence, in
the case of any Security which is converted, interest the Stated Maturity of
which is after the date of conversion of such Security shall not be payable.
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SECTION 3.8. 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 premium,
if any) and, subject to Section 3.7, 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. If such payments so made to any such Person,
or upon such Person's order, shall be valid, and, to the extent of the sum or
sums so paid, effectual to satisfy and discharge the liability for monies
payable upon any such Security.
No Holder of any beneficial interest in any Global Security
held on its behalf by a Depositary shall have any rights under this Indenture
with respect to such Global Security, and such Depositary shall be treated by
the Company, the Trustee, and any agent of the Company or the Trustee as the
owner of such Global Security for all purposes whatsoever. Neither the Company,
the Trustee, any Paying Agent or the Security Registrar will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in any Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer or exchange or conversion or for credit against any
sinking fund payment shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver 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. No
Securities shall be authenticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be destroyed by
the Trustee and a certificate of destruction provided to the Company, unless the
Trustee is otherwise directed by a CompanyOrder.
SECTION 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1
for Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
ARTICLE 4 - SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction, Discharge and Defeasance of the Securities
of Indenture.
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This Indenture shall upon CompanyRequest cease to be of
further effect (except as to any surviving rights of conversion, exchange,
registration of transfer or exchange of Securities herein expressly provided
for), and the Trustee, at the expense of the Company, shall execute instruments
in form and substance satisfactory to the Trustee and the Company acknowledging
satisfaction and discharge of this Indenture, when:
(a) either:
(1) all Securities 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 3.6 and (ii) Securities for
whose payment money has therefore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 10.3) have been delivered to the Trustee for
cancellation; or
(2) all Securities not theretofore delivered to the Trustee
for cancellation (i) have become due and payable, (ii) will become due and
payable at their Stated Maturity within one year, (iii) are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Company, or (iv) are deemed paid and discharged pursuant to this
Section 4.1, and the Company, in the case of clauses (i), (ii), (iii) or (iv)
above, has deposited or caused to be deposited with the Trustee as trust funds
in trust, money, U.S. Government Obligations, or a combination thereof,
sufficient, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee, to pay and discharge the entire indebtedness on all the Securities of
such series of Securities for principal (and premium, if any, or interest to the
Maturity thereof of such series of Securities as such principal, premium, if
any) and interest becomes due and payable in accordance with the terms of this
Indenture and the Securities;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company in connection with all of the Securities of any
series, including all fees and expenses of the Trustee; and
(c) the Company has delivered to the Trustee an Officers'
Certificate stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of the entire indebtedness on the Securities
and the discharge of this Indenture and the termination of the Company's
obligations hereunder have been complied with.
Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 6.6, the
obligations of the Company to any Authenticating Agent under Section 6.11 and,
if money shall have been deposited with the Trustee pursuant to subclause (ii)
of clause (1) of this Section 4.1, the obligations of the Trustee under Section
4.2 and the last paragraph of Section 10.3 shall survive.
SECTION 4.2.Application of Trust Money.
(a) Subject to the provisions of Section 4.1 and the last
paragraph of Section 10.3, all money and U.S. Government Obligations deposited
with the Trustee for the Securities of any series pursuant to Section 4.1, and
all money received by the Trustee in respect of U.S. Government Obligations
deposited with the Trustee for the Securities of any series pursuant to Section
4.1, shall be held in trust and reinvested by the Trustee in U.S. Government
Obligations in accordance with the Company's written instructions and applied by
the Trustee in accordance with the provisions of the Securities of such series
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal of (and premium, if
any) and interest, if any, on the Securities of such series; but such money need
not be segregated from other funds except to the extent required by law.
(b) The Trustee shall deliver or pay to the Company from time
to time upon the Company's written request any U.S. Government Obligations, or
money held by it as provided in Section 4.1 which, in the written opinion of a
nationally recognized firm of independent public
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accountants expressed in a written certification thereof delivered to the
Trustee, are then in excess of the amount thereof which then would have been
required to be deposited for the purpose for which such U.S. Government
Obligations, or money were deposited or received.
SECTION 4.3. Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture with
respect to the Securities of any series, all monies then held by any Paying
Agent for the benefit of Securities of such series under the provisions of this
Indenture shall, upon written demand of the Company, be repaid to it or paid to
the Trustee, and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
SECTION 4.4. Return of Unclaimed Monies.
Any monies deposited with or paid to the Trustee or any Paying
Agent for the Securities of any series, or then held by the Company in trust,
for the payment of any principal of (and premium, if any) and interest, if any,
on the Securities of any series and not applied but remaining unclaimed by the
Holders of the Securities of such series for three years after the date upon
which the principal of (and premium, if any) and interest, if any, on the
Securities of such series, as the case may be, shall have become due and
payable, shall, unless otherwise required by mandatory provisions of applicable
escheat or abandoned or unclaimed property law, be repaid to the Company by such
Trustee or any Paying Agent on written demand by the Company or (if then held by
the Company) shall be discharged from such trust; and the Holders of the
Securities of such series entitled to receive such payment shall thereafter look
only to the Company for the payment thereof; provided, however, that, before
being required to make any such repayment, such Trustee may, or shall at the
written request of the Company, at the expense of the Company, cause to be
published once in an authorized newspaper in the same city in which the place of
payment with respect to the Securities of such series shall be located and in an
authorized newspaper in the City of New York, or mail to each such Holder, a
notice (in such form as may be deemed appropriate by such Trustee) that said
monies remain unclaimed and that, after a date named therein, any unclaimed
balance of said monies then remaining will be returned to the Company.
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SECTION 4.5. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or
U.S. Government Obligations with respect to the Securities of any series in
accordance with Section 4.1 by reason of any legal proceeding or by reason of
any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, the Company's obligations
under this Indenture and the Securities of such series shall be revived and
reinstated as though no deposit had occurred pursuant to Section 4.1 until such
time as the Trustee or Paying Agent is permitted to apply all such money or U.S.
Government Obligations in accordance with Section 4.4; provided, however, that
if the Company has made any payment of interest on or principal of any
Securities of any series because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money or U.S. Government Obligations held by the
Trustee or Paying Agent.
ARTICLE 5 - DEFAULTS AND REMEDIES
SECTION 5.1. Events of Default.
An "Event of Default", wherever used herein with respect to
Securities of any series, means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law pursuant to any judgment, decree
or order of any court or any order, rule or regulation of any administrative or
governmental body):
(1) default in the payment of interest on any Security of
that series when the same becomes due and payable and the default continues for
a period of 30 days;
(2) default in (a) the payment of the principal of (and
premium, if any, on) any Security of that series when the same becomes due and
payable at Maturity, or (b) the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series;
(3) default in the performance, or breach of any covenant or
warranty of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty, a default in whose performance or
whose breach is elsewhere in this Section 5.1 specifically dealt with), and
continuance of such default or breach for a period of 60 days after there has
been given, by registered or certified mail to the Company by the Trustee or to
the Company and by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(4) default under any bond, debenture, note or other evidence
of indebtedness for money borrowed by the Company (including obligations under
leases required to be capitalized on the balance sheet of the lessee under GAAP,
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but not including any indebtedness or obligations for which recourse is limited
to such property purchased or so encumbered, as the case may be) or under any
mortgage, indenture or other instrument under which there may be issued or by
which there may be secured or evidenced any indebtedness of the Company or any
Subsidiary, whether any such indebtedness now exists or shall hereafter be
created, if (a) either (i) such default results from the failure to pay any such
indebtedness at maturity or (ii) as a result of such default, the maturity of
such indebtedness has been accelerated prior to its expressed maturity, provided
that any such failure to pay shall not be cured and any such acceleration shall
not be rescinded or annulled or the accelerated amount paid within ten days
after notice to the Company of such failure to pay or acceleration, or such
indebtedness having been discharged and (b) the principal amount of such
indebtedness, together with the principal amount of any other such indebtedness
in default for failure to pay principal or interest thereon, or the maturity of
which has been so accelerated, aggregates $10,000,000 or more;
(5) the Company pursuant to or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order or of relief
against it in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian of it
or for all or substantially all of its property; or
(D) makes a general assignment for the benefit of its
creditors;
(6) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company in an
involuntary case or proceeding;
(B) appoints a Custodian of the Company or for all or
substantially all of its property; or
(C) orders the liquidation of the Company;
and the order or decree remains in effect for 90 consecutive days (or any
dismissal, stay, recision or termination ceasing to remain in effect); or
(7) any other Event of Default provided with respect to
Securities of that series,
provided, however, that a default under this Section 5.1 is not an Event of
Default with respect to any series of Securities if a specified event is either
applicable to a particular series or it is specifically deleted or modified in
the supplemental indenture creating such series of Securities or in the form of
Security for such series.
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Upon receipt by the Trustee of any Notice of Default pursuant
to this Section 5.1 with respect to Securities of a series all or part of which
is represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such Notice of Default, which record date shall be at the close of business on
the day the Trustee receives such Notice of Default. The Holders of such series
on such record date, or their duly designated proxies, and only such Persons,
shall be entitled to join in such Notice of Default, whether or not such Holders
remain Holders after such record date; provided that if Holders of less than the
requisite percentage in principal amount of the Outstanding Securities of such
series, or their proxies, shall have joined in such Notice of Default prior to
the day which is 90 days after such record date, such Notice of Default shall
automatically and without further action by any Holder be cancelled and of no
further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of
a Holder, from giving, after expiration of such 90-day period, a new Notice of
Default identical to a Notice of Default which has been cancelled pursuant to
the proviso to the preceding sentence, in which event a new record date shall be
established pursuant to the provisions of this Section 5.1.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default
described in Section 5.1(5) or 5.1(6)) with respect to Securities of any series
at the time Outstanding occurs and is continuing, then in every such case the
Trustee or the Holders of not less than a majority in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) and all
accrued interest thereon, if any, shall become immediately due and payable. In
case an Event of Default described in Section 5.1(5) or 5.1(6) shall occur, such
amount shall be due and payable without any declaration of acceleration or any
act on the part of the Trustee or the Holders.
At any time after such a declaration of acceleration with
respect to Securities of any series has been made and before a judgment or
decree for payment of the money due has been obtained by the Trustee as
hereinafter in this Article 5 provided, the Holders of a majority in principal
amount of the Outstanding Securities of the series, by written notice to the
Company and the Trustee, may rescind and annul such declaration of acceleration
and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) All overdue interest on all Securities of that
series;
(ii) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise than
by such declaration of acceleration and interest thereon at
the rate or rates prescribed therefor in such Securities;
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(iii) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities; and
(iv) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agent and
counsel;
and
(2) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
Upon receipt by the Trustee of any written notice declaring
such an acceleration, or rescission and annulment thereof, with respect to
Securities of a series all or part of which is represented by a Global Security,
a record date shall be established for determining Holders of Outstanding
Securities of such series entitled to join in such notice, which record date
shall be at the close of business on the day the Trustee receives such notice.
The Holders on such record date or their duly designated proxies, and only such
Persons, shall be entitled to join in such notice, whether or not such Holders
remain Holders after such record date; provided, that unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such notice
prior to the day which is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be cancelled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice which has been cancelled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.2.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default continues
for a period of 30 days; or
(2) default is made in the payment of the principal of (and
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
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Securities for principal of (and premium, if any) and interest and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal (and premium, if any) and on any overdue interest, 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 the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the monies adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities wherever situated.
If an Event of Default with respect to Securities of any
series occurs and is continuing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of Securities of
such series by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other judicial proceeding relative to, or in case a Custodian or similar
official shall have been appointed for or taken possession of, the Company or
any other obligor upon the Securities or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of whether the
principal of the Securities of any series shall then be due and payable as
therein expressed 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:
(1) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest owing and unpaid in respect of the
Securities of any series and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding; and
(2) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any Custodian or other similar official in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due 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 6.6.
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Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holders
any plan or reorganization, arrangement, adjustment or composition affecting the
Securities of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Holder in any such proceeding, except, as aforesaid, to vote
for the election of a trustee in bankruptcy or similar Person.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the Holders of the Securities, and it shall not be necessary to make any Holders
of the Securities of any series parties to any such proceedings.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities of any series may be prosecuted and enforced by the Trustee without
the possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article 5
shall be applied in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal
(or premium, if any) or interest, upon presentation of the Securities and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.6; and
SECOND: To the payment of the amounts then due and unpaid for
principal of (or premium, if any) 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 (or premium, if any) and interest,
respectively.
SECTION 5.7. Limitations on Suits.
No Holder of any Security of any series shall have any right
to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
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(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than a majority in principal
amount of the Outstanding Securities of that series shall have given written
request to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium, if
any, and Interest.
Notwithstanding any other provision in this Indenture but
subject to the provisions of Article 15, the Holder of any Security shall have
the right, which is absolute and unconditional and shall not be impaired without
the consent of such Holder, to
(1) receive payment of the principal (or premium, if any) and
(subject to Section 3.7) interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption, on the
Redemption Date);
(2) convert such Security in accordance with Article 16, if
such Security is so convertible;
(3) exchange such Security in accordance with one or more
indentures supplemental hereto, if such Security is exchangeable; and
(4) institute suit for the enforcement of any such payment,
right to convert or right to exchange, as the case may be.
SECTION 5.9. Restoration of Rights and Remedies.
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If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 3.6, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article Five or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 5.12. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred on the Trustee, with respect
to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Upon receipt by the Trustee of any written notice directing
the time, method or place of conducting any such proceeding or exercising any
such trust or power, with respect to Securities of a series all or part of which
is represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
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such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided that if less than the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall automatically
and without further action by any Holder be cancelled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new notice identical to a
notice which has been cancelled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 5.12.
Nothing in this Indenture shall impair the right of the
Trustee in its discretion to take any action deemed proper by the Trustee and
which is not inconsistent with such direction by Holders.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of
the Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences except a default:
(1) in the payment of the principal of (or premium, if any) or
interest, if any, on any Security of such series; or
(2) in respect of a covenant or provision hereof which under
Article 9 cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the persons entitled to waive any past
default hereunder. If a record date is fixed, the Holders of securities of such
series on such record date, or their duly designated proxies, and only such
persons, shall be entitled to waive any default hereunder, whether or not such
Holders remain Holders after such record date; provided that unless such
majority in principal amount of the Outstanding Securities of any series shall
have waived such default prior to the date which is 90 days after such record
date, any such waiver previously given shall automatically and without further
action by any Holder of securities of such series be cancelled and of no further
effect.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by such Holder's acceptance thereof shall be deemed to have agreed,
that any court may in its discretion require, in any suit for the enforcement of
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any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.14 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of Holders,
holding in the aggregate more than 10% in principal amount of the Outstanding
Securities of any series or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.15. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE 6 - THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities of the Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise its rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
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 no implied covenants or obligation shall be read into this
Indenture against the Trustee.
(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.
The Trustee, however, shall examine the certificates and
opinions to determine whether or not they confirm 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 does not limit the effect of
Section 6.1(b).
(2) The Trustee shall not be liable for any error in
judgment made in good faith by a Trust Officer, unless it is
proved that the Trustee was negligent in ascertaining the
pertinent facts.
(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
5.12.
(4) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates
to the Trustee is subject to Sections 6.1(a), 6.1(b) and 6.1(c).
(e) Subject to Section 6.1(c), the Trustee may refuse to
perform any duty or exercise any right or power unless, subject to the
provisions of the TIA, it receives indemnity satisfactory to it against any
loss, liability, expense or fee.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 6.2. Certain Rights of Trustee.
Subject to the provisions of TIA Section 3.15(a) through
3.15(d):
(1) The Trustee may rely on and shall be protected in acting
or refraining from acting upon 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.
(2) Before the Trustee acts or, refrains from acting, it may
require an Officers' certificate or an Opinion of Counsel, or both, which shall
conform to Section 1.3. 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.
(3) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(4) 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.
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(5) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by the Trustee hereunder in good faith and reliance thereon.
(6) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders of Securities of any series pursuant to this
Indenture, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction.
SECTION 6.3. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of securities of any series and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee. Any agent may do the same with like rights.
The Trustee, however, is subject to Sections 6.10 and 6.11.
SECTION 6.4. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or
adequacy of this Indenture or the Securities of any series, it shall not be
accountable for the Company's use of the proceeds from the Securities of any
series, and it shall not be responsible for any statement of the Company in the
Indenture or any statement in the Securities of any series other than its
certificate of authentication or in any document used in the sale of the
Securities of any series other than any statement in writing provided by the
Trustee expressly for use in such document.
SECTION 6.5. Notice of Defaults.
Within 90 days after the occurrence and continuance of a
default or an Event of Default with respect to the Securities of any series, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
3.13(c), notice of such default or Event of Default, hereunder known to the
Trustee, unless such default or Event of Default in the payment of principal of
(premium, if any) or interest on the Securities of such series, or in the
payment of any sinking fund installment with respect to the Securities of such
series, the Trustee shall be protected in withholding such notice if and so long
as Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of such
Securities; provided further, however, that in the case of any default or Event
of Default of the character set forth in Section 5.1(3), no such notice to
Holders shall be given until at least 60 days after the occurrence thereof.
SECTION 6.6. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its services (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust). The Company shall reimburse the Trustee upon request for all
reasonable disbursements, expenses and advances incurred or made by it. Such
expenses may include the reasonable compensation, disbursements and expenses of
the Trustee's agents and counsel.
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The Company shall indemnify the Trustee for, and hold it
harmless against, any loss or liability incurred by it 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
Securities or the exercise or performance of any of its powers or duties
hereunder. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity and the Company may elect by
written notice to the Trustee to assume the defense of any such claim at the
Company's expense with counsel reasonably satisfactory to the Trustee.
The Company need not reimburse the Trustee for any expense or
indemnify it against any loss or liability incurred by it through the Trustee's
negligence, bad faith or willful misconduct. The Company shall not be liable for
any settlement of any claim or action effected without the Company's consent.
SECTION 6.7. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of any
successor trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 6.7.
Any Trustee may resign with respect to any series of
Securities by so notifying the Company. The Holders of a majority in principal
amount of the Securities of any series then outstanding may remove any Trustee
with respect to such series of securities by so notifying such Trustee and may
appoint a successor Trustee with respect to such series of Securities with the
Company's written consent. The Company may remove any Trustee with respect to
any series of Securities (or, if clause (4) of this Section 6.7 applies, with
respect to all series) if:
(1) such Trustee fails to comply with Section 6.9;
(2) such Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of such
Trustee or its property; or
(4) such Trustee otherwise becomes incapable of acting with
respect to any series of Securities.
If any Trustee resigns or is removed with respect to any
series of Securities or if a vacancy exists in the office of Trustee with
respect to any series of Securities for any reason, the Company shall promptly
appoint a successor Trustee with respect to such series.
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If a successor Trustee with respect to any series of
Securities does not take office within 45 days after the retiring Trustee with
respect to such series resigns or is removed, the retiring Trustee, the Company
or the Holders of a majority in principal amount of the Securities of such
series then outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If any Trustee fails to comply with Section 6.9, any Holder
may petition any court of competent jurisdiction for the removal of such Trustee
and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment with respect to any series of Securities to the retiring Trustee and
to the Company. Immediately after that, the retiring Trustee shall, upon payment
of its charges, transfer all property held by it as Trustee with respect to such
series to the successor Trustee, the resignation or removal of the retiring
Trustee shall become effective with respect to such series, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture with respect to such series. Notwithstanding the replacement of the
Trustee with respect to any series of Securities pursuant to this Section 6.7,
the Company's obligations under Section 6.6 shall continue for the benefit of
the retiring Trustee with respect to expenses and liabilities incurred by it and
compensation earned by it prior to such replacement or otherwise with respect to
the Securities of such series or the Indenture. A successor Trustee with respect
to any series of Securities shall mail notice of its succession to each Holder
of Securities of such series.
SECTION 6.8. Successor Trustee by Merger, Etc.
If any Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust assets to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
SECTION 6.9. Eligibility; Disqualification.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA ss.310(a)(1). Each 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. Each Trustee shall comply with TIA ss.310(b), including the
optional provision permitted by the second sentence of TIA ss.310(b)(9). Neither
the Company nor any Person directly or indirectly controlling, controlled by, or
under common control with the Company shall serve as Trustee.
SECTION 6.10. Preferential Collection of Claims Against Trust.
The Trustee is subject to TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
SECTION 6.11. Appointment of Authenticating Agent.
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The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
exchange, registration of transfer or partial redemption thereof or pursuant to
Section 3.6, and Securities so authenticated shall be entitled to the benefits
of this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder. Whenever reference is made in this
Indenture to the authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed to
include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section 6.11, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.11, such Authenticating Agent shall resign
immediately in the manner and with the effect specified in this Section 6.11.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided that such corporation shall be
otherwise eligible under this Section 6.11, without the execution or filing of
any paper of any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving
written notice thereof to the Trustee and to the Company. The Trustee may at any
time terminate the agency of its respective Authenticating Agent by giving
written notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of the Section 6.11, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally names as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.11.
The Company agrees to pay each Authenticating Agent from time
to time reasonable compensation for its services under this Section 6.11.
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If an appointment with respect to one or more series is made
pursuant to this Section 6.11, the Securities of such series may have endorsed
thereon, in addition to each Trustee's certificate of authentication, an
alternate certificate of authentication in the following form:
This is one of the Securities of the
series designated therein referred
to in the within-mentioned
Indenture.
[NAME OF TRUSTEE],
As Trustee
By:
As Authenticating Agent
By:
Authorized Agent
ARTICLE 7 - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee:
(1) semi-annually, not later than ___________ and ________ in
each year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of the preceding _______ and ___________,
as the case may be, and
(2) at such other times as the Trustee may request in writing,
within 10 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;
provided, however, that so long as the Trustee is acting as
Securities Registrar, no such list need be furnished.
SECTION 7.2. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 7.1 and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so furnished.
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(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders with respect
to their rights under this Indenture or under the Securities and is accompanied
by a copy of the form of proxy or other communication which such applicants
propose to transmit, then the Trustee shall, within five business days after the
receipt of such application, at its election, either:
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance with
Section 7.2(a); or
(2) inform such applicants as to the approximate
number of Holders whose names and addresses appear in the
information preserved at the time by the Trustee in accordance
with Section 7.2(a), and as to the approximate cost of mailing
to such Holders the form of proxy or other communication, if
any, specified in such application.
If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written request of such
applicant, mail to each Holder whose name and address appear in the information
preserved at the time by the Trustee in accordance with Section 7.2(a) a copy of
the form of proxy or other communication which is specified in such request,
with reasonable promptness after a tender to the Trustee of the material to be
mailed and of payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender the Trustee shall mail to
such applicants and file with the SEC, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders or
would be in violation of applicable law. Such written statement shall specify
the basis of such opinion. If the SEC, after opportunity for a hearing upon the
objections specified in the written statement so filed, shall enter an order
refusing to sustain any of such objections or if, after the entry of an order
sustaining one or more of such objections, the SEC shall find, after notice and
opportunity for hearing, that all the objections so sustained have been met, and
shall enter an order so declaring, the Trustee shall mail copies of such
material to all such Holders with reasonable promptness after the entry of such
order and the renewal of such tender; otherwise the Trustee shall be relieved of
any obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 7.2(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held accountable
by reason of mailing any material pursuant to a request made under Section
7.2(b).
SECTION 7.3. Reports by Trustee to Holders.
Within 60 days after each ________ beginning with _______, the
Trustee, if required by the provisions of TIA ss.313(a), shall mail to each
Holder a brief report dated as of such _______, that complies with TIA
ss.313(a). The Trustee also shall comply with TIA ss.313(b) and ss.313(c).
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A copy of each report at the time of its mailing to Holders
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Securities of any series are listed. The Company agrees to notify the
Trustee in writing whenever the Securities of any series become listed or
delisted on or from any stock exchange.
SECTION 7.4. Reports by the Company.
The Company will:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the SEC, copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may from time to time by rules and regulations
prescribe) which the Company may be required to file with the SEC pursuant to
Section 13 or Section 15(d) of the Exchange Act, or, if the Company is not
required to file information, documents or reports pursuant to either of such
Sections, then it shall file with the Trustee and the SEC, in accordance with
rules and regulations prescribed from time to time by the SEC, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be prescribed
from time to time in such rules and regulations;
(2) file with the Trustee and the SEC, in accordance with the
rules and regulations prescribed from time to time by the SEC, such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations;
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the filing
thereof with the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and (2)
of this Section 7.4 as may be required by rules and regulations prescribed from
time to time by the SEC; and
(4) furnish to the Trustee the certificate required by Section
10.8. For purposes of such certificate, compliance by the Company with all
conditions and covenants of this Indenture shall be determined without regard to
any period of grace or requirement of notice provided under this Indenture.
ARTICLE 8 - SUCCESSOR CORPORATION OR TRUST
SECTION 8.1. When Company May Merge, Etc.
The Company shall not consolidate with or merge into, or
transfer all or substantially all of its assets to, another Person in any
transaction in which the Company is not the continuing or surviving entity
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unless (i) the resulting, surviving or transferee Person is a corporation or
trust which assumes by supplemental indenture all the obligations of the Company
under the Securities of each series and this Indenture; (ii) such corporation or
trust is organized and existing under the laws of the United States, a State
thereof, or the District of Columbia although it in turn may be owned by a
foreign entity; (iii) immediately after giving effect to such transaction no
material default or Event of Default shall have happened and be continuing, and
the Officers' Certificate referred to in the following clause reflects that such
Officers are not aware of any such material default or Event of Default that
shall have occurred and be continuing, and (iv) the Company shall have delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating
that such consolidation, merger or transfer and such supplemental indenture
comply with this Indenture, and thereafter all obligations of the Company shall
terminate.
SECTION 8.2. Successor Corporation or Trust Substituted.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Company in accordance with Section 8.1,
the successor corporation or trust formed by such consolidation or into which
the Company is merged or to which such transfer 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 corporation or trust
has been named as the Company herein.
ARTICLE 9 - SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders.
The Company, when authorized by Board Resolution, and the
Trustee at any time and from time to time, may amend this Indenture or enter
into one or more indentures supplemental hereto, to be in a form satisfactory to
the Trustee without notice to or consent of any Holder for any of the following
purposes:
(1) to comply with Section 8.1; or
(2) to provide for uncertificated Securities of any series in
addition to or in place of certificated Securities; or
(3) to add to the covenants of the Company, for the benefit of
the Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such series),
or to surrender any right or power herein conferred upon the Company; or
(4) to add any Events of Default (and if such Events of
Default are to be applicable to less than all series of Securities, stating that
such Events of Default are expressly being included solely to be applicable to
such series); or
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(5) to change or eliminate any of the provisions of this
Indenture; provided that any such change or elimination shall become effective
only when there is no Security outstanding of any series created prior to the
execution of such supplemental indenture which is entitled to the benefit of
such provision; or
(6) to establish the form or terms of Securities of any series
as permitted by Sections 3.1 and 3.2; or
(7) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other provision
herein, or to make any other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent with any provision
of this Indenture, provided that such other provisions shall not adversely
affect the interests of the Holders of Securities of any series in any material
respect.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the written consent of the Holders of not less than a
majority in aggregate principal amount of the Securities of each series at the
time outstanding affected by such supplemental indenture, the Company, when
authorized by Board Resolution, and the Trustee may amend this Indenture or from
time to time and at any time enter into an indenture or indenture supplemental
hereto (which shall conform to the provisions of the TIA as in force at the date
of the execution thereof) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or
of any supplemental indenture, except as otherwise permitted by Section 9.1, or
of modifying in any manner the rights of the Holders of the Securities of each
such series. Subject to Section 9.4, without the consent of each Holder of
Securities of any series affected, however, an amendment, supplement or waiver,
including a waiver pursuant to Section 5.13, may not:
(1) change the Stated Maturity of the principal of (or
premium, if any, on) or any installment of principal of or interest on, any
Security or reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 5.2 or the amount thereof provable in
bankruptcy pursuant to Section 5.4, or adversely affect any right of repayment
at the option of the Holder of any Security, or change any Place of Payment
where, or the currency or currencies, currency unit or units or composite
currency or currencies in which, any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of
any such payment on or after the Stated Maturity thereof (or, in the case of
redemption at the option of the Holder, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (or compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
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(3) modify any of the provisions of this Section 9.2, Section
5.8, or Section 5.13, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Outstanding
Security affected thereby.
Upon the request of the Company, accompanied by a copy of a
Board Resolution certified by the Secretary or an Assistant Secretary of the
Company authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Holders as aforesaid,
the Trustee shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
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,
supplement or waiver, but it shall be sufficient if such consent shall approve
the substance thereof.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Company shall mail a notice, setting forth in general terms the substance of
such supplemental indenture, to all Holders of Securities of each series so
affected as the names and addresses of such Holders shall appear on the registry
books. Any failure of the Company so to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.3. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the
Securities of any series shall comply with the TIA as then in effect.
SECTION 9.4. Revocation and Effect of Consents.
Subject to this Indenture, each amendment, supplement or
waiver evidencing other action shall become effective in accordance with its
terms. Until an amendment, supplement or waiver becomes effective, a consent to
it by a Holder of a Security of any series is a continuing consent by the Holder
even if notation of the consent is not made on any Security. Any such Holder or
subsequent Holder, however, may revoke the consent as to such Holder's Security
or portion of a Security, if the Trustee receives the notice of revocation
before the date the amendment, waiver or other action becomes effective.
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, supplement or waiver. If a record date is fixed, then notwithstanding
the provisions of the immediately preceding paragraph, those Persons who were
Holders at such record date (or their duly designated proxies) and only those
Persons, shall be entitled to consent to such amendment, supplement or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders after such record date. No consent shall be valid or effective for
more than 90 days after such record date unless consent from Holders of the
principal amount of Securities of any series then outstanding required hereunder
for such amendment, supplement or waiver to be effective shall have also been
given and not revoked within such 90-day period.
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After an amendment supplement or waiver becomes effective, it
shall bind every Holder, unless it makes a change described in any of the
clauses (1) through (3) of Section 9.2. In that case the amendment, supplement
or waiver shall only bind the Holders of a Security or portion of a Security of
the same series.
SECTION 9.5. Notation On or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security of any series, the Trustee may request the Holder of the Security of
such series to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security about the changed terms and return it to the Holder.
Alternatively, if the Company or the Trustee so determine, the Company in
exchange for the Security of such series shall issue and the Trustee shall
authenticate a new Security of such series that reflects the changed terms the
cost and expense of which will be borne by the Company.
SECTION 9.6. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article 9, 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 of any applicable series theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby.
SECTION 9.7. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article 9 may, and
shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Board of Trustees, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Securities
outstanding of such series.
ARTICLE 10 - COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each
series of Securities that it will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities of that series in accordance
with the terms of the Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
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The Company will maintain in each Place of Payment for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange, where Securities may be
surrendered for conversion and where notices and demands to or for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. The
Company will give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office of the
Trustee, and the Company hereby appoints the Trustee as its agent to receive all
such 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 each Place of Payment for Securities of any series for
such purposes. The Company will give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
SECTION 10.3. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of (and premium, if any) or interest on any of the Securities of
that series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for
any series of Securities, it will, on or before each due date of the principal
of (and premium, if any) or interest on any Securities of that series, deposit
with a Paying Agent a sum sufficient to pay the principal (and premium, if any)
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent for any series of
Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section 10.3, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest on Securities of that series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
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(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities of that series) in the making of any
payment of principal (and premium, if any) or interest on the Securities of that
series; and
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee all sums
so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same terms as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company in trust for the payment of the principal of (and
premium, if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium, if any) or interest
has become due and payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any such repayment,
may at the expense of the Company cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Company.
SECTION 10.4. Company Existence.
Subject to Article 8, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, all material rights (as provided in the Articles of Incorporation and
under applicable law) and material franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company.
SECTION 10.5. Maintenance of Properties.
The Company will cause all of its properties used or useful in
the conduct of its business or the business of any Subsidiary to be maintained
and kept in good condition, repair and working order and supplied with all
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necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be reasonably necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
SECTION 10.6. Insurance.
The Company will, and will cause each Subsidiary to, keep all
of its insurable properties insured against loss or damage at least equal to
their then full insurable value with insurers of recognized responsibility.
SECTION 10.7. SEC Reports.
The Company shall file with the Trustee, promptly after it
files them with the SEC, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the 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 shall also comply with the other provisions of TIA ss.314(a).
SECTION 10.8. Compliance Certificates.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company (which as of the date hereof is
November 30), a written statement signed by an Officer, stating, as to each
signer thereof, that:
(1) a review of the activities of the Company during such year
and of performance under this Indenture has been made under such Officer's
supervision; and
(2) to each Officer's knowledge, based on such review, the
Company has kept, observed, performed and fulfilled in all material respects
each and every condition and covenant contained in this Indenture throughout
such year, or, if there has been a default in the fulfillment of any such
condition or covenant, specifying each such default known to such Officer and
the nature and status thereof.
The Company will give the Trustee written notice of a change
in the fiscal year of the Company, within a reasonable time after such change is
effected.
SECTION 10.9. Limitation on Dividends and Other Distributions.
The Company will not declare or pay any dividends or make any
distribution to holders of its Capital Stock (other than dividends or
distributions payable in Capital Stock of the Company), or purchase, redeem or
otherwise acquire or retire for value any of its Capital Stock or permit any
Subsidiary to purchase, redeem or otherwise acquire or retire for value any of
the Company's Capital Stock if at the time of any of the aforementioned actions
an Event of Default has occurred and is continuing or would exist immediately
after giving effect to such action.
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Notwithstanding the foregoing, the provisions of this Section
10.9 will not prevent (i) the payment of any dividend within 60 days after the
date of declaration when the payment would have complied with the foregoing
provisions on the date of declaration; (ii) the retirement of any share of
Capital Stock by exchange for, or out of the proceeds of the substantially
concurrent sale (other than to a Subsidiary) of, other shares of its Capital
Stock; or (iii) the payment of any dividend or distribution or the purchase or
redemption of any share of Capital Stock to the extent deemed prudent by the
Company to enable it to maintain its status as a real estate investment trust
under the Code.
SECTION 10.10. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, within 30 days after the Company shall have received notice that the
same has become delinquent, (i) all material taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, and (ii) all material
lawful claims for labor, materials and supplies which, if unpaid, might by law
become a lien upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 10.11. Defeasance of Certain Obligations.
Subject to Section 4.1, the Company may omit to comply with
any term, provision or condition set forth in Sections 10.5, 10.6, 10.8 or 10.10
and Section 5.1(4) shall not be deemed to be an Event of Default with respect to
any series of Securities, provided that the following conditions shall have been
satisfied:
(1) The Company has deposited or caused to be deposited with
the Trustee (or another Trustee satisfying the requirements of Section 6.9),
irrevocably (irrespective of whether the conditions in subparagraphs (2), (3),
(4) and (5) below have been satisfied), as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit of the Holders of
such series of Securities, with reference to this Section 10.11, (i) money in an
amount, (ii) U.S. Government Obligations which through the payment of interest
and principal in respect thereof in accordance with their terms, without regard
to any reinvestment thereof, will provide not later than the close of business
on the day prior to the date of any payment referred to in this subparagraph (1)
money in an amount, or (iii) a combination thereof, sufficient, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge the
principal of (and premium, if any) and each installment of interest of such
Outstanding Securities on the Stated Maturity of such principal or installment
of interest on the day on which such payments are due and payable in accordance
with the terms of this Indenture and of such Securities;
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(2) such deposit will not result in a breach or violation of,
or constitute a default under, this Indenture or any other agreement or
instrument to which the Company is a party or by which it is bound;
(3) no Event of Default or event which, after notice or lapse
of time or both, would become an Event of Default shall have occurred and be
continuing on the date of such deposit, and no Event of Default under Section
5.1(5) or 5.1(6) or event which, after notice or lapse of time or both, would
become an Event of Default under Section 5.1(5) or 5.1(6) shall have occurred
and be continuing on the 91st day after such date;
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel to the effect that Holders of such
Securities will not recognize income, gain or loss for Federal income tax
purposes as a result of such deposit and defeasance of certain obligations and
will be subject to Federal income tax on the same amounts and in the same manner
and at the same times, as would have been the case if such deposit and
defeasance had not occurred; and
(5) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the defeasance contemplated by this Section
10.11 have been complied with.
ARTICLE 11 - REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of Article.
Securities of any series which are redeemable before their
Stated Maturity shall be redeemable in accordance with their terms and (except
as otherwise specified as contemplated by Section 3.1 for Securities of any
series) in accordance with this Article 11.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption of any Securities at
the election of the Company, the Company shall, at least 60 days (45 days in the
case of redemption of all the Securities of any series) prior to the Redemption
Date fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Securities of such series to be redeemed. In the case of any redemption of
Securities prior to the expiration of any restriction on such redemption
provided in the terms of such Securities or elsewhere in this Indenture, the
Company shall furnish the Trustee, at the time of the giving of notice of
redemption to the Trustee, with an Officers' Certificate evidencing compliance
with such restriction.
SECTION 11.3. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be
redeemed (unless all of the Securities of such series of a specified tenor are
to be redeemed), the particular Securities to be redeemed shall be selected not
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more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption by
pro rata or by lot or such method as the Trustee shall deem fair and appropriate
and which may provide for the selection for redemption of portions (equal to the
minimum authorized denomination for Securities of that series or any integral
multiple thereof) of the principal amount of Securities of such series of a
denomination larger than the $1,000 or integral multiples thereof. If less than
all of the Securities of such series and of a specified tenor are to be
redeemed, the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously called for
redemption in accordance with the preceding sentence.
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption and, in the case of any Securities
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, or by guaranteed overnight courier, mailed not less than 30
days and not more than 60 days prior to the Redemption Date, to each Holder of
Securities to be so redeemed, at such Holder's address appearing in the Security
Register.
All notices of redemption shall state:
(1) the Redemption Date, plus accrued interest, if any, or
Defaulted Interest, if any;
(2) the Redemption Price;
(3) if less 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;
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(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and after said date;
(5) the Conversion Price, if any, the date on which the right
to convert the principal of the Securities to be redeemed will terminate and the
place or places where such Securities may be surrendered for conversion, if
applicable;
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price; and
(7) the CUSIP number of the Securities to be redeemed.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company.
SECTION 11.5. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount
of money sufficient to pay the Redemption Price of, and (except if the
Redemption Date shall be an Interest Payment Date) accrued interest on all the
Securities which are to be redeemed on that date.
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.7) be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 11.6. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, 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 installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more
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Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
3.7.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 11.7. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with 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 such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities of the same series, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Global Security is so surrendered, the Company shall execute
and the Trustee shall authenticate and deliver to the Depositary, without
service charge, a new Global Security in a denomination equal to and in exchange
for the unredeemed portion of the principal of the Global Security so
surrendered.
ARTICLE 12 - SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article 12 shall be applicable to any
sinking fund for the retirement of Securities of a series except as otherwise
specified as contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by
the terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount provided
for by the terms of 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 12.2. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
The Company (i) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (ii) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case, in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so
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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 12.3. Redemption of Securities for Sinking Fund.
Not less than 75 days 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 ensuing 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 12.2 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 60 days before each such sinking
fund payment date the Trustee shall select the Securities to be redeemed upon
such sinking fund payment date in the manner specified in Section 11.3. The
Trustee shall cause notice of the redemption thereof to be given in the name of
and at the expense of the Company in the manner provided in Section 11.4. Such
notice having been duly given, the redemption of such Securities shall be made
upon the terms and in the manner stated in Sections 11.6 and 11.7.
ARTICLE 13 - REPAYMENT AT THE OPTION OF HOLDERS
SECTION 13.1. Applicability of Article.
Unless otherwise provided with respect to Securities of any
series in accordance with Section 3.1 hereof, Securities of any series which are
repayable at the option of the Holders thereof before their Stated Maturity
shall be repaid in accordance with the terms of the Securities of such series.
The repayment of any principal amount of Securities pursuant to such option of
the Holder to require repayment of Securities before their Stated Maturity, for
purposes of Section 3.9, shall not operate as a payment, redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the Company, at its option, shall deliver or surrender the same to the Trustee
with a directive that such Securities be cancelled. Notwithstanding anything to
the contrary contained in this Section 13.1, in connection with any repayment of
Securities the Company may arrange for the purchase of any Securities by an
agreement with one or more investment bankers or other purchasers to purchase
such Securities by paying to the Holders of such Securities on or before the
close of business on the repayment date an amount no less than the repayment
price payable by the Company on repayment of such Securities, and the obligation
of the Company to pay the repayment price of such Securities shall be satisfied
and discharged to the extent such payment is so paid by such purchasers.
ARTICLE 14 - MEETINGS OF HOLDERS
SECTION 14.1. Purposes of Holders' Meetings.
A meeting of Holders of Securities of any series may be called
at any time and from time to time pursuant to the provisions of this Article 14
for any of the following purposes:
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(1) to give any notice to the Company or to the Trustee, or to
give any directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to be
taken by Holders pursuant to any of the provisions of Article 5;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article 6;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Article 9; or
(4) to take any other action authorized to be taken by or on
behalf of the Holders of any specified aggregate principal amount of the
Securities of such series under any other provision of this Indenture or under
applicable law.
SECTION 14.2. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Holders of
Securities of any series to take any action specified in Section 14.1, to be
held at such time and at such place as the Trustee shall determine. Notice of
every meeting of Holders of Securities in 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 to Holders of Securities of such series in the
manner provided in Section 1.6. Such notice shall be given not less than 20 nor
more than 90 days prior the date fixed for such meeting. Any failure by the
Trustee to give such notice, or any defect therein, shall not affect or impair
the validity of any action taken at such meeting.
Any meeting of Holders of Securities of any series shall be
valid without notice if the Holders of all Outstanding Securities of such series
are present in person or by proxy or if notice is waived before or after the
meeting by all Holders of Outstanding Securities of such series who are not
present in person or by proxy, and if the Company and the Trustee are either
present by duly authorized representative or have, before or after the meeting,
waived notice.
SECTION 14.3. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of Holders of Securities of such series, by written request setting
forth in reasonable detail the action proposed to be taken at the meeting, and
the Trustee shall not have mailed the notice of such meeting within 20 days
after receipt of such request, then the Company or such Holders may determine
the time and the place for such meeting and may call such meeting to take any
action authorized in Section 14.1, by giving notice thereof as provided in
Section 14.2.
SECTION 14.4. Qualifications for Voting.
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To be entitled to vote at any meetings of Holders of
Securities of any series a Person shall (i) be a Holder of one or more
Securities of such series or (ii) be a Person appointed by an instrument in
writing as proxy by a Holder of one or more Securities of such series. The only
Persons who shall be entitled to be present or to speak at any meeting of
Holders shall be the persons entitled to vote at such meetings and their counsel
and any representatives of the Trustee and its counsel and any representatives
of the Company and its counsel.
SECTION 14.5. Regulations.
Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties if
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 think fit.
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 the Holders as provided in Section 14.3, in which case the
Company, or Holders 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 majority vote of the Holders of
Outstanding Securities and proxies.
At any meeting each Holder of Outstanding Securities or proxy
shall be entitled to one vote for each $1,000 principal amount of Securities
held or represented by such Holder; provided, 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 other than by virtue of Outstanding
Securities held by such chairman or instruments in writing as aforesaid duly
designating such chairman as the person to vote on behalf of other Holders. At
any meeting of Holders duly called pursuant to the provisions of Section 14.2 or
14.3, the presence of persons holding or representing Securities in an aggregate
principal amount sufficient to take any action on any business for the
transaction of which such meeting was called shall constitute a quorum. Any
meeting of Holders duly called pursuant to the provisions of Section 14.2 or
14.3 may be adjourned from time to time by a majority of those present, whether
or not constituting a quorum, and the meeting may be held as so adjourned
without further notice.
SECTION 14.6. Voting.
The vote upon any resolution submitted to any meeting of
Holders shall be by written ballots on which shall be subscribed the signatures
of the Holders of Securities or of their representatives by proxy and the
principal amount of Securities 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 in duplicate of the
proceedings of each meeting of Holders shall be prepared by the secretary of the
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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 14.2.
The record shall show the principal amount of the Securities voting in favor of
or against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 14.7. Rights of Trustee or Holders Not Delayed.
Nothing in this Article 14 contained shall be deemed or
construed to authorize or permit, by reason of any call of a meeting of Holders
or any rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the provisions of this
Indenture or of the Securities.
ARTICLE 15 - SUBORDINATION; SENIORITY
SECTION 15.1. Securities Subordinated to Senior Indebtedness.
(a) The Company agrees, and each Holder of the Securities of
any series by such Holder's acceptance thereof likewise agrees, that the payment
of the principal of, premium, if any, and interest on the Securities of such
series (all of the foregoing, a "Payment or Distribution") is subordinated and
junior in right of payment, to the extent and in the manner provided in this
Article 15, to the prior payment in full in cash of all Senior Indebtedness
whether outstanding on the date hereof or hereafter created, incurred, assumed
or guaranteed. A Payment or Distribution shall include any asset of any kind or
character, and may consist of cash, securities or other property, by set-off or
otherwise, and shall include, without limitation, any purchase, redemption or
other acquisition of the Securities of the series or the making of any deposit
of funds or securities pursuant to this Indenture (including, without
limitation, any deposit pursuant to Article 4).
(b) The Senior Indebtedness of the Company shall continue to
be Senior Indebtedness and entitled to the benefit of these subordination
provisions irrespective of any amendment, modification or waiver of any term of
any instrument relating to refinancing, extension or renewal of the Senior
Indebtedness.
(c) All the provisions of this Indenture and the Securities of
any series shall be subject to the provisions of this Article 15 so far as they
may be applicable thereto, except that nothing in this Article 15 shall apply to
claims for, or payments to, the Trustee under or pursuant to Section 6.6.
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(d) No right of any holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time or in any way be
affected or impaired by any failure to act on the part of the Company, any
Paying Agent, the Holders of the Securities of any series, the Trustee or the
holders of the Senior Indebtedness, or by any noncompliance by the Company, any
Paying Agent, the Holders of the Securities of any series or the Trustee with
any of the terms, provisions and covenants of the Securities of this Indenture,
regardless of any knowledge thereof that any such holder of Senior Indebtedness
may have or be otherwise charged with.
(e) In the event that the Securities of any series are
declared due and payable before the maturity because of the occurrence of a
default hereunder, the Company will give prompt notice in writing of such
happening to the holders of Senior Indebtedness.
SECTION 15.2. Company Not to Make Payments with Respect to Securities in
Certain Circumstances.
No Payment or Distribution shall be made by the Company, the
Trustee or the Paying Agent on account of principal of (or premium, if any) or
interest on the Securities of any series, whether upon Stated Maturity, upon
redemption or acceleration, or otherwise, or on account of the purchase or other
acquisition of Securities of such series, whether upon stated maturity, upon
redemption or acceleration, or otherwise, if there shall have occurred and be
continuing a default with respect to any Senior Indebtedness permitting the
acceleration thereof or with respect to the payment of any Senior Indebtedness
and (a) such default is the subject of a judicial proceeding or (b) notice of
such default in writing or by telegram has been given to the Company by any
holder or holders of any Senior Indebtedness, unless and until the Company shall
have received written notice from such holder or holders that such default or
event of default shall have been cured or waived or shall have ceased to exist.
Upon any acceleration of the principal of the Securities of
any series or any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash, or payment thereof
provided for to the satisfaction of the holders thereof, before any Payment or
Distribution is made on account of the redemption price or principal of (and
premium, if any) or interest on the Securities of such series; and (subject to
the power of a court of competent jurisdiction to make other equitable
provision, which shall have been determined by such court to give effect to the
rights conferred in this Article 15 upon the Senior Indebtedness and the holders
thereof with respect to the Securities of such series or the Holders thereof or
the Trustee, by a lawful plan of reorganization or readjustment under applicable
law) upon any such dissolution or winding up or liquidation or reorganization,
any Payment or Distribution by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Securities of any series or the Trustee would be
entitled except for the provisions of this Article 15, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such Payment or Distribution directly to the holders of
Senior Indebtedness of the Company or their representative or representatives,
or to the Trustee or trustees under any
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indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, at their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in cash, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any Payment or Distribution is made to the Holders of the
Securities of such series or to the Trustee, except that the Trustee will have a
lien for the payment of its fees and expenses.
In the event that, notwithstanding the foregoing, any Payment
or Distribution by the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Securities of any series before all Senior
Indebtedness is paid in full in cash, or provision is made for such payment to
the satisfaction of the holders thereof, and if such fact shall then have been
or thereafter be made known to a Trust Officer of the Trustee or, as the case
may be, such Holder, then and in such event such Payment or Distribution shall
be paid over or delivered to the holders of Senior Indebtedness or their
representative or representatives, or to the Trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, for application
to the payment of all Senior Indebtedness remaining unpaid to the extent
necessary to pay all Senior Indebtedness in full in cash, after giving effect to
any concurrent Payment or Distribution to or for the holders of such Senior
Indebtedness, and, until so delivered, the same shall be held in trust by any
Holder of a Security as the property of the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another trust or corporation upon the terms and
conditions provided in Article 8 shall not be deemed a dissolution, winding up,
liquidation or reorganization for the purposes of this Section 15.2 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article 8. Nothing in this
Section shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 6.6.
The holders of Senior Indebtedness may, at any time and from
time to time, without the consent of or notice to the Holders of the Securities
of any series, without incurring responsibility to the Holders of the Securities
of such series and without impairing or releasing the obligations of the Holders
of the Securities of such series hereunder to the holders of Senior
Indebtedness; (i) change the manner, place or terms of payment or change or
extend the time of payment of, or renew or alter, Senior Indebtedness, or
otherwise amend 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 deal with any property pledged, mortgaged
or otherwise securing Senior Indebtedness; (iii) release any Person liable in
any manner for the collection of Senior Indebtedness; and/or (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 15.3. Subrogation of Securities.
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Subject to the payment in full in cash of all amounts then due
(whether by acceleration of the maturity thereof or otherwise) on account of all
Senior Indebtedness at the time outstanding, the Holders of the Securities of
any series shall be subrogated to the rights of the holders of Senior
Indebtedness to receive Payment or Distributions of cash, property or securities
of the Company applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full; and, for
the purposes of such subrogation, no Payments or Distributions to the holders of
Senior Indebtedness to which the Holders of the Securities of any series or the
Trustee would be entitled except for the provisions of this Article 15, and no
payments over pursuant to the provisions of this Article 15 to the holders of
Senior Indebtedness by Holders of the Securities of any series or the Trustee,
shall, as between the Company, the Company's creditors other than holders of
Senior Indebtedness, and the Holders of the Securities of such series, be deemed
to be a payment by the Company to or on account of the Senior Indebtedness. It
is understood that the provisions of this Article 15 are and are intended solely
for the purpose of defining the relative rights of the Holders of the Securities
of any series, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
Nothing contained in this Article 15 or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities of each series, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities of any
series the principal of (and premium, if any) and interest on the Securities of
such series as and when the same shall become due and payable in accordance wit
their terms, or is intended to or shall affect the relative rights of the
Holders of the Securities of any series and creditors of the Company other than
the holder of Senior Indebtedness, nor shall anything herein or therein prevent
the Trustee or the Holder of any Security of any series from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 15 of the holders
of Senior Indebtedness in respect of cash, property or securities of the Company
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Article
6, and the Holders of the Securities of any series shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
any dissolution, winding up, liquidation or reorganization proceedings are
pending, or certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, delivered to
the Trustee or to the Holders of the Securities of such series, for the purpose
of ascertaining the Persons entitled to participate in such 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 15.
SECTION 15.4. Authorization by Holders of Securities.
Each Holder of a Security of any series by acceptance thereof
authorizes and directs the Trustee on such Holder's behalf to take such action
as may be necessary or appropriate to effectuate, as between the Holder of the
Security and the holders of Senior Indebtedness, the subordination provided in
this Article and appoints the Trustee such Holder's attorney-in-fact for
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any and all such purposes including, without limitation, to execute, verify,
deliver and file any proofs of claim which any holder of Senior Indebtedness may
at any time require in order to prove and realize upon any rights of claims
pertaining to the Securities and to effectuate the full benefit of the
subordination contained herein. Upon failure of the Trustee so to do, any such
holder of Senior Indebtedness shall be deemed to be irrevocably appointed the
agent and attorney-in-fact of the Holder to execute, verify, deliver and file
any such proofs of claim.
SECTION 15.5. Notices of Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to it which would prohibit the making of any payment of monies to
or by the Trustee in respect of the Securities of any series pursuant to the
provisions of this Article 15. Notwithstanding the provisions of this Article 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 of monies to or by the Trustee in respect of the Securities of any
series pursuant to the provisions of this Article, unless and until a Trust
Officer of the Trustee shall have received at its Corporate Trust Office written
notice thereof from the Company or a holder or holders 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 Article 6, 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 monies may become
payable for any purpose (including, without limitation, the payment of the
principal of (premium, if any) or interest on any Security of any series) with
respect to such monies the notice provided for in this Section 15.5, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have the full power and authority to receive such monies and to apply the same
to the purpose for which they were 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.
The Trustee shall be entitled to rely conclusively on the
delivery to it of a written notice by a Person representing such Person to a
holder of Senior Indebtedness (or a trustee 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 15, 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 15, and if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 15.6. Trustee's Relation to Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article 15 in respect of any Senior
Indebtedness at any time held by it, to the same extent as
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any other holder of Senior Indebtedness, and nothing in Article 6 or elsewhere
in this Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 15, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not owe
any fiduciary duty to the holders of Senior Indebtedness and shall not be liable
to any such holder if it shall mistakenly pay over or distribute to Holders of
the Securities of any series or the Company or any other Person money or assets
to which any holder of Senior Indebtedness shall be entitled by virtue of this
Article 15 or otherwise.
SECTION 15.7. No Impairment of Subordination.
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, the Trustee or the Holder of any of the Securities of any series or
by any act, or failure to act, in good faith, by any such holder of Senior
Indebtedness, or by any noncompliance by the Company, the Trustee or the Holder
of any of the Securities of any series with the terms, provisions and covenants
of this Indenture, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with.
SECTION 15.8. Article 15 Not To Prevent Events of Default.
The failure to make a payment on account of principal of
(premium, if any) or interest on the Securities of any series by reason of any
provision in this Article 15 shall not be construed as preventing the occurrence
of an Event of Default with respect to such series under Section 5.1.
SECTION 15.9. Paying Agents Other Than the Trustee.
In any case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then acting hereunder,
the term "Trustee," as used in this Article 15 shall in such case (unless the
context shall otherwise require) be construed as extending to and including such
Paying Agent within its meaning as fully for all intents and purposes as if such
Paying Agent were named in this Article 15 in addition to or in place of the
Trustee.
ARTICLE 16 - CONVERSION OF SECURITIES
SECTION 16.1. Right of Conversion; Conversion Price.
Subject to the provisions of any series of the Securities, the
Holder of any Security or Securities of a particular series shall have the
right, at such Holder's option, at any time after such date as determined by
Board Resolution with respect to such series of Securities and before the close
of business on such date as determined by Board Resolution with respect to such
series of Securities (except that, with respect to any Security or portion of a
Security of such series
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which shall be called for redemption, such right shall terminate at the close of
business on the date fixed for redemption of such Security or portion of a
Security unless the Company shall default in payment due upon redemption
thereof) to convert, subject to the terms and provisions of this Article 16, the
principal of any Security or Securities of such series or any portion thereof
which is $1,000 principal amount or an integral multiple thereof into shares of
Capital Stock, initially at the conversion price per share specified in the
Securities of such series; or, in case an adjustment of such price has taken
place pursuant to the provisions of Section 16.4, that at the price as last
adjusted (such price or adjusted price being referred to herein as the
"Conversion Price"), upon surrender of the Security or Securities, the principal
of which is so to be converted, accompanied by written notice of conversion duly
executed, to the Company, at any time during usual business hours at the office
or agency maintained by it for such purpose, and, if so required by the
Conversion Agent or Registrar, accompanied by a written instrument or
instruments of transfer in form satisfactory to the Conversion Agent or Security
Registrar duly executed by the Holder of such Holder's duly authorized
representative in writing. For convenience, the conversion of any portion of the
principal of any Security or Securities into shares of Capital Stock is
hereinafter sometimes referred to as the conversion of such Security or
Securities.
Notwithstanding the other provisions contained in this Article
16, a Holder may not convert the Securities of any series and the Securities of
such securities held by such Holder shall not be convertible, if as a result of
such conversion such Holder or any other Person would, or in the determination
of the Board of Trustees, might then be deemed, directly or indirectly, to have
acquired or be holding shares of Capital Stock in excess of such Holder's or
other Person's Ownership Limit.
SECTION 16.2. Issuance of Shares on Conversion.
As promptly as practicable after the surrender, as herein
provided, of any Security or Securities of any series for conversion, the
Company shall deliver or cause to be delivered at its said office or agency, to
or upon the written order of the Holder of the Security or Securities so
surrendered, certificates representing the number of fully paid and
nonassessable shares of Capital Stock into which such Security or Securities may
be converted in accordance with the provisions of this Article 16. Such
conversion shall be deemed to have been made as of the close of business on the
date that such Security or Securities shall have been surrendered for conversion
by delivery thereof with a written notice of conversion duly executed, so that
the rights of the Holder of such Security or Securities as a Holder shall cease
at such time and, subject to the following provisions of this paragraph, the
Person or Persons entitled to receive the shares of Capital Stock upon
conversion of such Security or Securities shall be treated for all purposes as
having become the record holder or holders of such shares of Capital Stock at
such time and such conversion shall be at the Conversion Price in effect at such
time; provided, however, that no such surrender on any date when the stock
transfer books of the Company shall be closed shall be effective to constitute
the Person or Persons entitled to receive the shares of Capital Stock upon such
conversion as the record holder or holders of such shares of Capital Stock on
such date, but such surrender shall be effective to constitute the Person or
Persons entitled to receive such shares of Capital Stock as the record holder or
holders thereof for all purposes at the close of business on the next succeeding
day on which such stock transfer books are open; such conversion shall be at the
Conversion Price in effect on the date that such Security or Securities shall
have been surrendered for
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conversion by delivery thereof, as if the stock transfer books of the Company
had not been closed. The Company shall give or cause to be given to the Trustee
written notice whenever the stock transfer books of the Company shall be closed.
Upon Conversion of any Security of any series which is
converted in part only, the Company shall execute and the Trustee shall
authenticate and deliver to or on the order of the Holder thereof in accordance
with Section 3.3, at the expense of the Company, a new Security or Securities of
such series of authorized denominations in principal amount equal to the
unconverted portion of such Security.
SECTION 16.3. No Adjustment for Interest or Dividends.
No payment or adjustment in respect of interest on the
Securities of any series or dividends on the shares of Capital Stock shall be
made upon the conversion of any Security or Securities; provided, however, that
if a Security or any series or any portion thereof shall be converted subsequent
to any Regular Record Date and on or prior to the next succeeding interest
payment date, the interest falling due on such interest payment date shall be
payable on such interest payment date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name such Security is registered at the close of business on
such Regular Record Date and Securities surrendered for conversion during the
period from the close of business on any Regular Record Date to the opening of
business on the corresponding Interest Payment Date must be accompanied by
payment of any amount equal to the interest payable on such interest payment
date.
SECTION 16.4. Adjustment of Conversion Price.
(1) In case the Company shall pay or make a dividend or other
distribution on any class of Capital Stock in shares of Capital Stock, the
Conversion Price for any series of Securities in effect at the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution shall be
reduced by multiplying such Conversion Price by a fraction of which the
numerator shall be the number of shares of the appropriate class of Capital
Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares and
the total number of shares constituting such dividend or other distribution,
such reduction to become effective immediately after the opening of business on
the day following the date fixed for such determination.
(2) In case the Company shall issue rights or warrants to all
or substantially all holders of shares of a class of Capital Stock entitling
them to subscribe for or purchase shares of Capital Stock at a price per share
(or having a Conversion Price per share) less than the current market price per
share (determined as provided in paragraph (6) of this Section 16.4) of the
shares of such class of Capital Stock on the date fixed for the determination of
shareholders entitled to receive such rights or warrants, the Conversion Price
for any series of Securities in effect at the opening of business on the day
following the date fixed for such determination shall be reduced by multiplying
such Conversion Price by a fraction of which the numerator shall be the number
of shares of such class of Capital Stock outstanding at the close of business on
the date
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fixed for such determination plus the number of shares of such class of Capital
Stock which the aggregate of the subscription price of the total number of
shares of such class of Capital Stock so offered for subscription or purchase
would purchase at such current market price and the denominator shall be the
number of shares of such class of Capital Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares of
such class of Capital Stock so offered for subscription or purchase, such
reduction to become effective immediately after the opening of business on the
day following the date fixed for such determination. In the event that all of
the shares of such class of Capital Stock subject to such rights or warrants
have not been issued when such rights or warrants expire, then the Conversion
Price shall promptly be readjusted to the Conversion Price which would then be
in effect had the adjustment upon the issuance of such rights or warrants been
made on the basis of the actual number of shares of such class of Capital Stock
issued upon the exercise of such rights or warrants. Shares issued under the
Company's Dividend Reinvestment Plan in effect on the date of this Indenture, or
under any successor plan which permits shareholders to reinvest dividends and
purchase [shares of additional Capital Stock in any fiscal quarter] at a
discount of not in excess of 5% of the current market price per share (as
determined in said plan)], shall not be deemed to be issued pursuant to rights
or warrants for purposes of this paragraph (2). For the purposes of this
paragraph (2), the number of shares of Capital Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall include
shares issuable in respect of scrip certificates issued in lieu of fractions of
shares of Capital Stock. The Company will not issue any rights or warrants in
respect of shares of such class of Capital Stock held in the treasury of the
Company.
(3) In case the outstanding shares of such class of Capital
Stock shall be subdivided into a greater number of shares, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective for any series of Securities (that are
convertible into such classes of Capital Stock) shall be proportionately
reduced, and, conversely, in case outstanding shares of such class of Capital
Stock shall each be combined into a smaller number of shares, the Conversion
price for any series of Securities in effect at the opening of business on the
day following the day upon which such combination becomes effective shall be
proportionately increased, such reduction or increase, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(4) In case the Company shall, by dividend or otherwise,
distribute to all or substantially all holders of shares of such class of
Capital Stock evidences of indebtedness or assets (including securities, but
excluding (i) any rights or warrants referred to in paragraph (2) of this
Section 16.4, (ii) any cash dividend or distribution not prohibited by Section
10.9 and (iii) any dividend or distribution referred to in paragraph (1) of this
Section), the Conversion Price for any series of Securities that are convertible
into such class of Capital Stock shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the close of business on the day fixed for the
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determination of shareholders entitled to receive such distribution by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (6) of this Section 16.4) of the shares of
such class of Capital Stock on the date fixed for such determination less the
then fair market value as determined by the Board of Directors (whose
determination shall be conclusive and described in a resolution of the Board of
Directors filed with the Trustee) of the portion of the assets or evidences of
indebtedness so distributed allocable to one share of such class of Capital
Stock and the denominator shall be such current market price per share of the
shares of such class of Capital Stock, such adjustment to become effective
immediately prior to the opening of business on the day following the date fixed
for the determination of shareholders entitled to receive such distribution.
(5) In case the shares of such class of Capital Stock shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than a subdivision or combination of shares or a stock dividend described in
paragraph (1) or paragraph (3) of this Section 16.4, or a consolidation, merger
or sale of assets described in Section 16.10), then and in each such event the
Holders of Securities of any series that have the rights to convert into such
class shall have the right thereafter to convert such Securities into the kind
and amount of shares of stock and other securities and property receivable upon
such reorganization, reclassification or other change, by holders of the number
of shares of such class of Capital Stock into which such Securities might have
been converted immediately prior to such reorganization, reclassification or
change.
(6) For the purpose of any computation under paragraphs (2)
and (4) of this Section 16.4, the current market price for a share of such class
of Capital Stock on any date shall be deemed to be the average of the Closing
Prices for a share of such class for the 15 consecutive Business Days selected
by the Company commencing not more than 30 and not less than 20 Business Days
before the date in question.
(7) No adjustment in the Conversion Price for the Securities
of any series shall be required unless such adjustment (plus any adjustments not
previously made by reason of this paragraph (7)) would require an increase or
decrease of at least 1% in such price; provided, however, that any adjustments
which by reason of this paragraph (7) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this paragraph (7) shall be made to the nearest cent.
(8) The Company may, but shall not be required to, make such
reductions in the Conversion Price for the Securities of any series, in addition
to those required by paragraphs (1), (2), (3), (4) and (5) of this Section, as
the Board of Directors considers to be advisable in order to avoid or diminish
any income tax to any holders of shares of such class of Capital Stock resulting
from any dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for income tax
purposes or for any other reasons. The Board of Directors shall have the power
to resolve any ambiguity or correct any error in the adjustments made pursuant
to this Section 16.4 and its actions in so doing shall be final and conclusive.
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SECTION 16.5. Notice of Adjustment of Conversion Price.
Whenever the Conversion Price for the Securities of any series
is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with Section 16.4 and shall prepare an Officers' Certificate setting
forth the adjusted Conversion Price and showing the facts upon which such
adjustment is based and the computation thereof, and such certificate shall
forthwith be filed at each office or agency maintained for the purpose of
conversion of Securities pursuant to Section 3.5 and with the Trustee; and
(b) a notice stating that the Conversion Price has been
adjusted and setting forth the adjusted Conversion Price shall as soon as
practicable be mailed by the Company to all Holders of Securities of such series
at their last addresses as they shall appear in the Security Register.
(c) If the Conversion Price is adjusted and the Company fails
to file an Officers' Certificate with the Trustee as provided by Section 16.5(a)
and the Trustee is acting as the Conversion Agent, the Trustee shall be entitled
to rely conclusively on the Conversion Price set forth in the Officers'
Certificate most recently received by the Trustee (or as set forth in this
Indenture if the Conversion Price shall not have been adjusted).
SECTION 16.6. Notice of Certain Company Action.
(1) In case:
(a) the Company shall authorize the granting to
holders of its shares of such class of Capital Stock into which a series of
Securities is convertible of rights or warrants entitling them to subscribe for
or purchase any shares of such class of Capital Stock of any class or of any
other rights; or
(b) of any reclassification of the shares of such
class of Capital Stock of the Company into which a series of Securities is
convertible, or of any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or of the
sale or transfer of all or substantially all of the assets of the Company; or
(c) of the voluntary or involuntary dissolution,
liquidation or winding up of the Company;
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then the Company shall cause to be filed at each office or
agency maintained for the purpose of conversion of Securities of any series
pursuant to Section 3.5 and shall cause to be mailed to all Holders of
Securities of such series at their last addresses as they shall appear in the
Security Register, at least 20 days (or 10 days in any case specified in clause
(a) or (b) above) prior to the applicable record date hereinafter specified, a
notice stating (x) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record is not to be
taken the date as of which the Holders of shares of Capital Stock of record to
be entitled to such dividend, distribution, rights or warrants are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of shares
of Capital Stock of record shall be entitled to exchange their shares of Capital
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Such notice shall also state whether such transaction
will result in any adjustment in the Conversion Price applicable to the
Securities of such series and, if so, shall state what the adjusted Conversion
Price will be and when it will become effective. Neither the failure to give the
notice required by this Section, nor any defect therein, to any particular
Holder shall affect the sufficiency of the notice or the legality or validity of
any such dividend, distribution, right, warrant, reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding-up,
or the vote on any notice authorizing such with respect to the other Holders.
(2) In case the Company or any Affiliate of the Company shall
propose to engage in a "Rule 13e-3 Transaction" as defined in the SEC's Rule
13e-3 promulgated under the Exchange Act, the Company shall, no later than the
date on which any information with respect to such Rule 13e-3 Transaction is
first required to be given to the SEC or any Person pursuant to such Rule 13e-3,
cause to be mailed to all Holders at their last addresses as they shall appear
in the Security Register, a copy of all information required to be given to the
holders of Capital Stock pursuant to such Rule 13e-3. The information required
to be given under this paragraph shall be in addition to and not in lieu of any
other information required to be given by the Company pursuant to this Section
16.6 or any other provision of the Securities or this Indenture.
SECTION 16.7. Taxes on Conversions.
The Company will pay any and all stamp or similar taxes that
may be payable in respect of the issuance or delivery of shares of Capital Stock
on conversion of Securities pursuant hereto. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issuance and delivery of shares of Capital Stock in a name other than
that of the Holder of the Security or Securities to be converted, and no such
issuance or delivery shall be made unless and until the Person requesting such
issuance has paid to the Company the amount of any such tax, or has established
to the satisfaction of the Company that such tax has been paid.
SECTION 16.8. Fractional Shares.
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No fractional shares or scrip representing fractional shares
shall be issued upon any conversion of Securities. If any such conversion would
otherwise require the issuance of a fractional share, an amount equal to such
fraction multiplied by the current market price per share of Capital Stock
(determined as provided in paragraph (6) of Section 16.4) on the day of
conversion shall be paid to the Holder in cash by the Company.
SECTION 16.9. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to
the Trustee or the Conversion Agent to be cancelled by or at the direction of
the Trustee or the Conversion Agent, which shall dispose of the same as provided
in Section 3.9.
SECTION 16.10. Provisions in Case of Consolidation, Merger or Sale of Assets.
(1) In case of any consolidation of the Company with, or
merger of the Company into, any other corporation or trust, or in case of any
merger of another corporation or trust into the Company (other than a
consolidation or merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Capital Stock of
the Company), or in case of any sale or transfer of all or substantially all of
the assets of the Company, the corporation or trust formed by such consolidation
or resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture providing that
the Holder of each Security of any series then outstanding shall have the right
thereafter, during the period such Security shall be convertible as specified in
Section 16.1 to convert such Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer by a holder of the number of shares of Capital Stock into which
such Security might have been converted immediately prior to such consolidation,
merger, sale or transfer. Such supplemental indenture shall provide for
adjustments which, for events subsequent to the effective date of such
supplemental indenture, shall be as nearly equivalent as may be practicable to
the adjustments provided for in this Article. The provisions of this Section
16.10 shall similarly apply to successive consolidations, mergers, sales or
transfers.
(2) The Trustee shall not be under any responsibility to
determine the correctness of any provisions contained in any such supplemental
indenture relating either to the kind or amount of shares of stock or securities
or property receivable by Holders upon the conversion of their Securities after
any such reclassification, change, consolidation, merger, sale or conveyance or
to any adjustment to be made with respect thereto.
SECTION 16.11. Disclaimer by Trustee of Responsibility for Certain Matters.
The Trustee shall not at any time be under any duty or
responsibility to any Holder of Securities of any series to determine whether
any facts exist which may require any adjustment of the Conversion Price for
such series, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed, or herein or in any supplemental
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indenture provided to be employed, in making the same. The Trustee shall not be
accountable with respect to the validity, value, kind or amount of any shares of
Capital Stock, or of any securities or property, which may at any time be issued
or delivered upon the conversion of any Security; and it makes no representation
with respect thereto. The Trustee shall not be responsible for any failure of
the Company to issue, transfer or deliver any shares of Capital Stock or stock
certificates or other securities or property upon the surrender of any Security
for the purpose of conversion or, subject to Article 6, to comply with any of
the covenants of the Company contained in this Article 16.
SECTION 16.12. Covenant to Reserve Shares.
The Company covenants that it will at all times reserve and
keep available, free from preemptive rights, out of its authorized shares of
Capital Stock, solely for the purpose of issuance upon conversion of Securities
as herein provided, such number of shares of the appropriate class or classes or
series of Capital Stock as shall then be issuable upon the conversion of all
outstanding Securities. The Company covenants that all shares of Capital Stock
which shall be so issuable shall be, when issued, duly and validly issued and
fully paid and non-assessable. For purposes of this Section 16.12, the number of
shares of such class of Capital Stock which shall be deliverable upon the
conversion of all outstanding Securities shall be computed as if at the time of
computation all outstanding Securities were held by a single holder.
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* * * * * * * *
This Indenture may be executed in multiple counterparts, each
of which so executed shall be deemed to be an original, but both of such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective seals to be hereunder
affixed and attested, all as of the day and year first above written.
FIRST WASHINGTON REALTY
TRUST, INC.
Attest:
By:
Name: Title:
-----------------------
Attest:
By:
Name: Title:
STATE OF )
)SS.:
)
On the ________ day of ______________________, 1997, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he is the _________________________ of FIRST WASHINGTON REALTY TRUST,
INC., one of the entities described in and which executed the foregoing
instrument; that he knows the seal of said entity; that the seal affixed to said
instrument is such entity's seal; that it was so affixed by authority of the
Board of Directors of said entity, and that he signed his name thereto by like
authority.
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Notary Public
My Commission Expires:
STATE OF )
)SS.:
COUNTY OF )
On the ________ day of ______________________, 1997, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he is the _________________________ of ________________________, one of
the entities described in and which executed the foregoing instrument; that he
knows the seal of said entity; that the seal affixed to said instrument is such
entity's seal; that it was so affixed by authority of the Board of Directors of
said entity, and that he signed his name thereto by like authority.
Notary Public
My Commission Expires:
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EXHIBIT A
[Form of [Convertible] [Redeemable] [Nonredeemable]
Subordinated Security]
If the Holder of this Note (as indicated below) is The
Depository Trust Company (the "Depository") or a nominee of the Depository, this
Note is a Global Security and the following two legends apply:
Unless this Note is presented by an authorized representative
of The Depository Trust Company [(55 Water Street, New York, New York)] to the
issuer or its agent for registration of transfer, exchange or payment, and such
Note issued is registered in the name of CEDE & Co., or such other name as
requested by an authorized representative of the Depository, ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL, since the registered owner hereof, CEDE & CO., has an interest herein.
Unless and until this certificate is exchanged in whole or in
part for Notes in certificated form, this certificate may not be transferred
except as a whole by the Depository to a nominee thereof or by a nominee thereof
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor of the Depository or a nominee of such
successor.
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[FACE OF SECURITY]
FIRST WASHINGTON REALTY TRUST, INC.
__% [Convertible] [Redeemable] [Nonredeemable] [Subordinated] Note
Due _______________________
No. _________________ $__________________
FIRST WASHINGTON REALTY TRUST, INC., a Maryland corporation
(herein referred to as the "Company," which term includes any successor entity
under the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to _________________ or registered assigns, the principal
sum of _________________________ Dollars, on ____________ (the "Stated
Maturity") [or date fixed for earlier redemption (the "Redemption Date," and
with respect to principal repayable on such date, the "Maturity Date")], and to
pay interest thereon from ________________ or the most recent Interest Payment
Date to which interest has been paid or duly provided for, semi-annually on
______________ and ________________ in each year (each, an "Interest Payment
Date"), commencing __________, at the rate of _________% per annual, until the
principal hereof is paid or duly provided for. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Holder in whose name this Note (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be _______ or _____
(whether or not a Business Day), as the case may be, next preceding such
Interest payment Date [at the office or agency of the Company maintained for
such purpose; provided, however, that such interest may be paid, at the
Company's option, by mailing a check to such Holder at its registered address or
by transfer of fund to an account maintained by such Holder within the United
States]. Any such interest or so punctually paid or duly provided for shall
forthwith cease to be payable to the Holder on such Regular Record Date, and may
be paid to the Holder in whose name this Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee referred to on
the reverse hereof, notice whereof shall be given to Holders of Notes of this
series not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Notes of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in the Indenture. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
The principal of this Note payable on the Stated Maturity Date
[or the principal of, premium, if any, and, if the Redemption Date is not an
Interest Payment Date, interest on this Note payable on the Redemption Date]
will be paid against presentation of this Note at the office or agency of the
Company maintained for that purpose in _______________, in such coin or currency
of the United States of America as at the time of payment is legal tender for
the payment of public and private debts.
79
<PAGE>
Interest payable on this Note on any Interest Payment Date and
on the [Stated] Maturity Date [or Redemption Date], as the case may be, will
include interest accrued from and including the next preceding Interest Payment
Date in respect of which interest has been paid or duly provided for (or from
and including ________________, if no interest has been paid on this Note) to
but excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date], as the case may be. If any Interest Payment Date or the
[Stated] Maturity Date or [Redemption Date] falls on a day that is not a
Business Day, as defined below, principal, premium, if any and/or interest
payable with respect to such Interest Payment Date or [Stated] Maturity Date [or
Redemption Date], as the case may be, will be paid on the next succeeding
Business Day with the same force and effect as if it were paid on the date such
payment was due, and no interest shall accrue on the amount so payable for the
period from and after such Interest Payment Date or [Stated] Maturity Date [or
Redemption Date], as the case may be. "Business Day" means any day, other than a
Saturday or Sunday, on which banking institutions in the City of New York are
authorized or required by law, regulation or executive order to be closed.
[If this Note is a Global Security, insert - All payments of
principal, premium if any, any interest in respect of this Note will be made by
the Company in immediately available funds.]
Reference is hereby made to the further provisions of this
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been
executed by the Trustee by manual signature of one of its authorized
signatories, this Note shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
80
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed under its facsimile seal.
Date:
FIRST WASHINGTON REALTY TRUST, INC.
By:
Name: Title:
---------------------------
Attest:
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
By:
Authorized Officer
SEAL
81
<PAGE>
[REVERSE OF SECURITY]
FIRST WASHINGTON REALTY TRUST, INC.
__% [Convertible] [Redeemable] [Nonredeemable] [Subordinated] Notes
Due _________
This Note is one of a duly authorized issue of [Convertible]
[Redeemable] [Nonredeemable] [Subordinated] Notes of the Company (herein called
the "Securities"), issued and to be issued in one or more series under an
Indenture, dated as of ____________, (herein called the "Indenture") between the
Company and __________________, as Trustee (herein called the "Trustee," which
term includes any successor trustee under the Indenture with respect to the
series of which this Note is a part), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations or rights, duties and immunities thereunder of the Company,
the Trustee and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Note is one of
the duly authorized series of Securities designated as "_______% [Convertible]
[Redeemable] [Nonredeemable] [Subordinated] Notes due ______________"
(collectively, the "Notes"), and the aggregate principal amount of the Notes to
be issued under such series is limited to $___________ (except for Notes
authenticated and delivered upon transfer of, or in exchange for, or in lieu of
other Notes). All terms used in this Note which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
1. Interest. The Company promises to pay interest on the
principal amount of this Security at the rate per annum shown above. The Company
will pay interest semiannually on _____________ and ___________ of each year
beginning _________ 19__. Interest on the Securities will accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from ___________, ________; provided that, if there is no existing default in
the payment of interest, and if this Security is authenticated between a record
date referred to on the face hereof and the next succeeding interest payment
date, interest shall accrue from such interest payment date. Interest will be
computed on the basis of a 360 day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the
Securities (except defaulted interest) to the Persons who are the registered
Holders of the Securities at the close of business on the _________ or
__________ next preceding the interest payment date. Holders must surrender
Securities to a Paying Agent to collect the principal payments. The Company will
pay principal and interest in money of the United States that at the time of
payment is legal tender for payment of public and private debts. The Company,
however, may pay principal and interest by its check payable in such money. It
may mail an interest check to Holder's registered address.
3. Registrar and Agents. Initially, _____________ will act as
Security Registrar, Paying Agent, Conversion Agent and agent for service of
notices and demands. The Company may change any Security Registrar,
co-registrar, Paying Agent, Conversion Agent and agent for service of notices
and demands without notice. The Company or any of its Subsidiaries may act as
Paying Agent or
82
<PAGE>
Conversion Agent. The address of _____________________________
_________________________________, Attention: _______________________________.
4. Indenture; Limitations. The Company issued the Securities
as a series of its Securities under the Indenture. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the TIA as in effect on the date of the Indenture. The Securities
are subject to all such terms, and the Holders of the Securities are referred to
the Indenture and said TIA for a statement of them.
The Securities are general unsecured obligations of the
Company limited to $_________ principal amount. The Indenture imposes certain
limitations on the ability of the
Company to, among other things, make payments in respect of its Capital Stock,
merge or consolidate with any other Person and sell, lease, transfer or
otherwise dispose of its properties or assets.
5. Optional Redemption by the Company. The Company may, at its
option, redeem the Securities, in whole or from time to time in part, on any
date subsequent to ______________, _________ at ___% of the principal amount
thereof, plus accrued interest to the Redemption Date; provided, however, that
Securities will be immediately redeemable by the Company to the extent deemed
sufficient by the Company to prevent the Holder of such Securities or any other
person having an interest therein in excess of the Ownership Limit.
6. Notice of Redemption. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $_________ principal amount may be redeemed in part,
but only in whole multiples thereof. On and after the Redemption Date interest
ceases to accrue on Securities or portions of them called for redemption.
[7. Conversion. A Holder of a Security may convert such
Security into _______ Shares at any time after _______, _______ and before the
close of business on ________. If the Security is called for redemption, the
Holder may convert it at any time before the close of business on the date fixed
for such redemption. The initial Conversion Price is $_____________ per share,
subject to adjustment in certain events (such conversion price, as adjusted, the
"Conversion Price"). To determine the number of shares issuable upon conversion
of a Security, divide the principal amount to be converted by the Conversion
Price in effect on the conversion date. The Company will deliver a check for any
fractional share.
To convert a Security, a Holder must (1) complete and sign the
conversion notice on the back of the Security, (2) surrender the Security to the
Conversion Agent, (3) furnish appropriate endorsements and transfer documents if
required by the Registrar or Conversion Agent and (4) pay any transfer or
similar tax if required. No payment or adjustment is to be made on conversion
for interest accrued hereon or for dividends on _______ Shares issued on
conversion; provided, however, that if a Security is surrendered for conversion
after the record date for a payment of interest and on or before the interest
payment date, then, notwithstanding such conversion, the interest falling due to
such interest payment date will be paid to the Person in whose name the Security
is registered at the close of business on such record date and any
83
<PAGE>
Security surrendered for conversion during the period from the close of business
on any regular record payment date to the opening of business on the
corresponding interest payment date must be accompanied by payment of an amount
equal to the interest payable on such interest payment date. A Holder may
convert a portion of a Security if the portion is $1,000 principal amount or an
integral multiple thereof.
If the Company is a party to a consolidation or merger or a
transfer or lease of all or substantially all of its assets, the right to
convert a Security into _______ Shares may be changed into a right to convert it
into securities, cash or other assets of the Company or another Person.
Notwithstanding the foregoing, a Holder may not convert any
Security, and the Security shall not be convertible, if as a result of such
conversion the Holder or any other Person would, or, in the determination of the
Board of Directors, might then be deemed, directly or indirectly, to have
acquired or be holding shares of Capital Stock in excess of such Holder's or
other Person's Ownership Limit.]
[8. Subordination. This Security is subordinated and junior in
right of payment to all Senior Indebtedness of the Company. To the extent and in
the manner provided in the Indenture, Senior Indebtedness must be paid before
any payment may be made to any Holders of Securities. Any Holder by accepting
this Security agrees to the subordination and authorizes the Trustee to give it
effect.
In addition to all other rights of Senior Indebtedness
described in the Indenture, the Senior Indebtedness shall continue to be Senior
Indebtedness and entitled to the benefits of the subordination provisions
irrespective of any amendment, modification or waiver of any term of any
instrument relating to the Senior Indebtedness or extension or renewal of the
Senior Indebtedness.]
[9.] Denominations, Transfer, Exchange. This Security is one
of a duly authorized issue of Securities of the Company designated as its ____%
[Convertible] [Redeemable] [Nonredeemable] [Subordinated] Notes due ________
[Series ________] limited in aggregate principal amount to $_______. The
Securities are in registered form without coupons in denominations of
$___________ principal amount and integral multiples thereof. A Holder may
register the transfer of or exchange Securities in accordance with the
Indenture. The Security Registrar may require a Holder, among other things, to
furnish appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Security Registrar need
not register the transfer of or exchange any Securities selected for redemption
or register the transfer of or exchange any Securities for a period of 15 days
before a selection of Securities to be redeemed.
[10.] Persons Deemed Owners. The registered Holder of a
Security may be treated as the owner of it for all purposes.
[11.] Unclaimed Money. If money for the payment of principal
or interest on any Securities remains unclaimed for two years, subject to
applicable law, the Trustee and the Paying
84
<PAGE>
Agent will pay the money back to the Company at its request. After that, Holders
may look only to the Company for payment.
12.] Discharge Prior to Redemption or Maturity. The Indenture
will be discharged and cancelled except for certain sections thereof upon
payment of all the Securities, or upon the irrevocable deposit with the Trustee
of funds or U.S. Government Obligations maturing on or before such payment date
or Redemption Date, sufficient to pay principal, premium, if any, and interest
on such payment or redemption.
[13.] Supplemental Indenture. Subject to certain exceptions,
without notice to the Holders of the Securities, the Indenture may be amended or
supplemented with respect to the Securities with the consent of the Holders of
at least a majority in principal amount of the Securities then outstanding and
any existing default or compliance with any provision may be waived with the
consent of the Holders of the majority in principal amount of the Securities
then outstanding. Without the consent of or notice to any Holder, the Company
may supplement the Indenture, to among other things, to cure any ambiguity,
defect or inconsistency or make any other change that does not adversely affect
the rights or any Holder.
[14.] Successors. When a successor assumes all the obligations
of its predecessor under the Securities and the Indenture, the predecessor will
be released from those obligations.
[15.] Defaults and Remedies. If an Event of Default with
respect to these Securities, as defined in the Indenture, occurs and is
continuing, the Trustee or the Holders of a majority in principal amount of
Securities may declare all the Securities to be due and payable immediately in
the manner and with the effect provided in the Indenture. Holders of Securities
may not enforce the Indenture or the Securities except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it, subject to the
provisions of the TIA before it enforces the Indenture or the Securities.
Subject to certain limitations, Holders of a majority in principal amount of the
Securities then outstanding may direct the Trustee in its exercise of any trust
or power with respect to the Securities. The Trustee may withhold from Holders
of Securities notice of certain continuing defaults (except a default in payment
of principal or interest) if it determines that withholding notice is in their
interests. The Company is required to file periodic reports with the Trustee as
to the absence of any default or Event of Default.
[16.] Trustee Dealings with the Company. ______________, the
Trustee under the Indenture, in its individual or any other capacity, may make
loans to, accept deposits from, and perform services for the Company or its
Affiliates, and may otherwise deal with the Company or its Affiliates, as if it
were not Trustee.
[17.] No Recourse Against Others. No shareholder, trustee,
officer or incorporator, as such, past, present or future, of the Company or any
successor trust shall have any liability for any obligation of the Company under
the Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations, or their creation. Each Holder of a Security by
accepting a Security waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Securities.
85
<PAGE>
[18.] Authentication. This Security shall not be valid until
the Trustee or an authenticating agent appointed by the Trustee signs the
certificate of authentication on the other side of this Security.
[19.] Abbreviations. Customary abbreviations may be used in
the name of a Holder or an assignee, such as: TEN COM (=tenants in common), TEN
ENT (=tenants by the entities), JT TEN (=Joint tenants with rights of
survivorship and not as tenants in common), CUST (=Custodian), and U/G/M/A
(=Uniform Gifts to Minors Act).
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and any supplemental indentures
thereto. It also will furnish the text of this Security in larger type. Requests
may be made to: First Washington Realty Trust, Inc., 4350 East-West Highway,
Suite 400, Bethesda, Maryland 20814, Attention: Investor Relations.
86
<PAGE>
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the
form below and have your signature guaranteed:
For value received, I or we assign and transfer this Security to
(INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER)
(Print or type assignee's name, address and zip code)
and irrevocably appoint---------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Date:
Your signature:
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee:
87
<PAGE>
CONVERSION NOTICE
To convert this Security into __________ Shares of the Company, check the box:
[ ]
To convert only part of this Security, state the principal
amount to be converted (which must be a minimum of $_________ or any multiple
thereof):
$
If you want the Security certificate, if any, made out in
another person's name, fill in the form below:
(INSERT OTHER PERSON'S SOCIAL SECURITY OR TAX IDENTIFICATION
NUMBER)
(Print or type assignee's name, address and zip code)
Date:
Your signature:
(Sign exactly as your name appears on the other side of this Security)
Signature Guarantee By:
88
Exhibit 5
[Ballard Spahr Andrews & Ingersoll Letterhead]
FILE NUMBER
111111
March 26, 1997
First Washington Realty Trust, Inc.
4350 East-West Highway, Suite 400
Bethesda, Maryland 20814
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
We have served as Maryland counsel to First Washington Realty Trust,
Inc., a Maryland corporation (the "Company"), in connection with certain matters
of Maryland law arising out of the registration of the following securities of
the Company having an aggregate initial offering price of up to $175,000,000
(collectively, the "Securities"): (a) shares of common stock, $.01 par value per
share, of the Company ("Common Stock"), (b) warrants to purchase shares of
Common Stock, (c) shares of preferred stock, $.01 par value per share, of the
Company ("Preferred Stock"), (d) shares of Preferred Stock represented by
depositary shares and (e) debt securities, covered by the above-referenced
Registration Statement, and all amendments thereto (the "Registration
Statement"), filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "1933
Act"). Unless otherwise defined herein, capitalized terms used herein shall have
the meanings assigned to them in the Registration Statement.
In connection with our representation of the Company, and as a basis
for the opinion hereinafter set forth, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of the following
documents (collectively, the "Documents"):
<PAGE>
First Washington Realty Trust, Inc.
March 26, 1997
Page 2
1. The Registration Statement and the related form of prospectus
included therein in the form in which it was transmitted to the Commission under
the 1933 Act;
2. The charter of the Company (the "Charter"), certified as of a recent
date by the State Department of Assessments and Taxation of Maryland (the
"SDAT");
3. The Bylaws of the Company, certified as of a recent date by its
Secretary;
4. Resolutions adopted by the Board of Directors of the Company (the
"Board") relating to the sale, issuance and registration of the Securities,
certified as of a recent date by the Secretary of the Company (the
"Resolutions");
5. The form of certificate representing a share of Common Stock,
certified as of a recent date by the Secretary of the Company;
6. The form of certificate representing a share of Preferred Stock,
certified as of a recent date by the Secretary of the Company;
7. A certificate of the SDAT as to the good standing of the Company,
dated March 26, 1997;
8. A certificate executed by the Secretary of the Company, dated March
26, 1997; and
9. Such other documents and matters as we have deemed necessary or
appropriate to express the opinion set forth in this letter, subject to the
assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed, and so far
as is known to us there are no facts inconsistent with, the following:
1. Each individual executing any of the Documents, whether on behalf of
such individual or another person, is legally competent to do so.
<PAGE>
First Washington Realty Trust, Inc.
March 26, 1997
Page 3
2. Each individual executing any of the Documents on behalf of a party
(other than the Company) is duly authorized to do so.
3. Each of the parties (other than the Company) executing any of the
Documents has duly and validly executed and delivered each of the Documents to
which such party is a signatory, and such party's obligations set forth therein
are legal, valid and binding.
4. All Documents submitted to us as originals are authentic. All
Documents submitted to us as certified or photostatic copies conform to the
original documents. All signatures on all such Documents are genuine. All public
records reviewed or relied upon by us or on our behalf are true and complete.
All statements and information contained in the Documents are true and complete.
There are no oral or written modifications or amendments to the Documents, by
action or conduct of the parties or otherwise.
5. The outstanding shares of stock of the Company have not been and
will not be transferred in violation of any restriction or limitation contained
in the Charter. The Securities will not be transferred in violation of any
restriction or limitation contained in the Charter.
6. In accordance with the Resolutions, the issuance of, and certain
terms of, the Securities to be issued by the Company from time to time will be
approved by the Board or a duly authorized committee thereof in accordance with
the Maryland General Corporation Law (the "Corporate Proceedings").
The phrase "known to us" is limited to the actual knowledge, without
independent inquiry, of the lawyers at our firm who have performed legal
services in connection with the issuance of this opinion.
Based upon the foregoing, and subject to the assumptions, limitations
and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under
and by virtue of the laws of the State of Maryland and is in good standing with
the SDAT.
<PAGE>
First Washington Realty Trust, Inc.
March 26, 1997
Page 4
2. Upon the completion of all Corporate Proceedings relating to the
Securities that are shares of Common Stock (the "Common Securities") and the due
execution, countersignature and delivery of certificates representing Common
Securities and assuming that the sum of (a) all shares of Common Stock issued as
of the date hereof, (b) any shares of Common Stock issued between the date
hereof and the date on which any of the Common Securities are actually issued
(not including any of the Common Securities), and (c) the Common Securities will
not exceed the total number of shares of Common Stock that the Company is
authorized to issue, the Common Securities are duly authorized and, when and if
delivered against payment therefor in accordance with the Resolutions, will be
validly issued, fully paid and nonassessable.
3. Upon the completion of all Corporate Proceedings relating to the
Securities that are shares of Preferred Stock (the "Preferred Securities") and
the due execution, countersignature and delivery of certificates representing
Preferred Securities and assuming that the sum of (a) all shares of Preferred
Stock issued as of the date hereof, (b) any shares of Preferred Stock issued
between the date hereof and the date on which any of the Preferred Securities
are actually issued (not including any of the Preferred Securities), and (c) the
Preferred Securities will not exceed the total number of shares of Preferred
Stock that the Company is authorized to issue, the Preferred Securities are duly
authorized and, when and if delivered against payment therefor in accordance
with the Resolutions, will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the laws of the State of Maryland
and we do not express any opinion herein concerning any other law. The opinion
expressed herein is subject to the effect of judicial decisions which may permit
the introduction of parol evidence to modify the terms or the interpretation of
agreements. We express no opinion as to compliance with the securities (or "blue
sky") laws of the State of Maryland.
We assume no obligation to supplement this opinion if any applicable
law changes after the date hereof or if we become aware of any fact that might
change the opinion expressed herein after the date hereof.
<PAGE>
First Washington Realty Trust, Inc.
March 26, 1997
Page 5
This opinion is being furnished to you solely for submission to the
Commission as an exhibit to the Registration Statement and, accordingly, may not
be relied upon by, quoted in any manner to, or delivered to any other person or
entity without, in each instance, our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of the name of our firm therein. In giving
this consent, we do not admit that we are within the category of persons whose
consent is required by Section 7 of the 1933 Act.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll
Ballard Spahr Andrews & Ingersoll
EXHIBIT 12
FIRST WASHINGTON REALTY TRUST, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Income (loss) before extraordinary item and minority
interest.................................................. $ 4,774 $ 2,931 $ (836) $ (1,240) $ (2,096)
Add:
Interest on indebtedness................................ 12,819 8,968 7,993 7,693 7,872
Amortization of debt expense............................ 2,167 2,262 1,308 216 272
----- ----- ----- --- ---
Income as adjusted.................................... $ 19,760 $ 14,161 $ 8,465 $ 6,669 $ 6,048
========= ========= ========= ========= =========
Fixed charges:
Interest on indebtedness................................ $ 12,819 $ 8,968 $ 7,993 $ 7,693 $ 7,872
Amortization of debt expense............................ 2,167 2,262 1,308 216 272
Capitalized interest.................................... 244 -- -- -- 92
Preferred dividends..................................... 6,617 5,975 2,142 -- --
----- ----- ----- --------- ---------
Total fixed charges................................... $ 21,847 $ 17,205 $ 11,443 $ 7,909 $ 8,236
========= ========= ========= ========= =========
Ratio of earnings to fixed charges........................ -- -- -- -- --
========= ========= ========= ========= =========
Earnings Deficiency....................................... $ 2,087 $ 3,044 $ 2,978 $ 4,593 $ 1,240
========= ========= ========= ========= =========
</TABLE>
Exhibit 23(c)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation in this registration statement on Form S-3 of
First Washington Realty Trust, Inc. (the "Company"), of: (1) our report, dated
February 9, 1996, on our audits of the consolidated balance sheets of the
Company as of December 31, 1995 and 1994 and the related consolidated statements
of operations, stockholders' equity and cash flows for each of the three years
in the period ended December 31, 1995, which report is included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1995, (2) our report,
dated February 9, 1996 on our audits of the financial statement schedules of the
Company, which report is included in the Company's Annual Report on Form 10-K
for the year ended December 31, 1995, (3) our report, dated October 18, 1996, on
our audit of the combined statement of revenues and certain expenses of the New
Retail Properties for the year ended December 31, 1995, which report is included
in the registration statement on Form S-11 of the Company, as amended, dated
November 23, 1996, and (4) our report, dated July 2, 1996, on our audit of the
combined statement of revenues and certain expenses of the 1996(B) Acquisition
Properties for the year ended December 31, 1995, which report is included in the
registration statement on Form S-11 of the Company, as amended, dated November
23, 1996.
We also consent to the reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Washington, D.C.
March 24, 1997
