<PAGE>
As filed with the Securities and Exchange Commission on September 4, 1996
Registration Statement No. 333-08883
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
PRE-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-------------------------
Sovran Self Storage, Inc.
(Exact name of Registrant as specified in its charter)
Maryland 16-1194043
(State of incorporation) (I.R.S. Employer Identification Number)
5166 Main Street
Williamsville, N.Y. 14221
(716) 633-1850
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-------------------------------
Kenneth F. Myszka
President and Chief Executive Officer
Sovran Self Storage, Inc.
5166 Main Street
Williamsville, N.Y. 14221
(716) 633-1850
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------------
With copies to:
Frederick G. Attea, Esq.
Phillips, Lytle, Hitchcock, Blaine & Huber
3400 Marine Midland Center
Buffalo, NY 14203
(716) 847-7010
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box.|_|
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box.|X|
If this form is used to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier
effective registration statement for the same offering.|_|
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective registration statement
for the same offering.|_|
If delivery of the Prospectus is expected to be made pursuant to Rule
434, please check the following box.|_|
-----------------------------
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
- --------------------------------------------------------------------------------
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell nor the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED SEPTEMBER 4, 1996
PROSPECTUS
- ----------
$150,000,000
Sovran Self Storage, Inc.
Debt Securities
Preferred Stock
Common Stock
---------------
Sovran Self Storage, Inc. ("Sovran" or the "Company") may offer from
time to time in one or more series (i) its debt securities ("Debt Securities")
which may be senior or subordinated, (ii) shares of its preferred stock, $.01
par value per share ("Preferred Stock"), and (iii) shares of its common stock,
$.01 par value per share ("Common Stock"), with an aggregate public offering
price of up to $150,000,000 (or its equivalent based on the exchange rate at the
time of sale) in amounts, at prices and on terms to be determined at the time of
offering. The Debt Securities, Preferred Stock and Common Stock (collectively,
the "Securities") may be offered separately or together, in separate classes or
series, in amounts, at prices and on terms to be set forth in one or more
supplements to this Prospectus (each a "Prospectus Supplement").
The specific terms of the Securities for 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 Debt Securities, the specific
title, aggregate principal amount, ranking, currency, 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 sinking fund payments, terms for conversion into
Common Stock or Preferred Stock, covenants and any initial public offering
price; (ii) in the case of Preferred Stock, the specific designation and stated
value per share, any dividend, liquidation, redemption, conversion, voting and
other rights, and any initial public offering price; and (iii) in the case of
Common Stock, 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 consistent with the
Company's Amended and Restated Articles of Incorporation or otherwise
appropriate to preserve the status of the Company as a real estate investment
trust ("REIT") for federal income tax purposes. See "Restrictions on Transfers
of Capital Stock."
The applicable Prospectus Supplement will also contain information,
where appropriate, about certain United States 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 by the Company directly to one or more
purchasers, 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 an accompanying
Prospectus Supplement. See "Plan of Distribution." No Securities may be sold
without delivery of a Prospectus Supplement describing the method and terms of
the offering of such Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
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.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
-------------------
The date of this Prospectus is September ____, 1996.
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"SEC" or "Commission") a Registration Statement on Form S-3 under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the Securities.
This Prospectus, which constitutes part of the Registration Statement, omits
certain of the information contained in the Registration Statement and the
exhibits thereto on file with the Commission pursuant to the Securities Act and
the rules and regulations of the Commission thereunder. The Registration
Statement, including exhibits thereto, may be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at the Commission's Regional Offices at 7
World Trade Center, 13th Floor, New York, New York 10048, and Northwestern
Atrium Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661-2511,
and copies may be obtained at the prescribed rates from the Public Reference
Section of the Commission at its principal office in Washington, D.C. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference.
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 and proxy statements and other information
with the Commission. Such reports, proxy statements and other information can be
inspected and copied at the locations described above. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
In addition, the Common Stock is listed on the New York Stock Exchange (the
"NYSE"), and such materials can be inspected and copied at the NYSE, 20 Broad
Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are incorporated by reference in this
Prospectus: (i) Annual Report on Form 10-K for the fiscal year ended December
31, 1995, (ii) Quarterly Report on Form 10-Q for the fiscal quarter ended March
31, 1996, (iii) the Company's Current Report on Form 8-K dated July 25, 1996 as
amended by the Company's Amended Current Report on Form 8-K/A dated September 3,
1996, and (iv) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A dated June 16, 1995.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior
to the termination of the offering of all Securities shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. The Company will provide, without charge, to
each person, including any beneficial owner, to whom a copy of this Prospectus
is delivered, at the request of such person, a copy of any or all of the
documents incorporated herein by reference (other than exhibits thereto, unless
such exhibits are specifically incorporated by reference into such documents).
Written requests for such copies should be directed to David L. Rogers, Chief
Financial Officer, Sovran Self Storage, Inc., 5166 Main Street, Williamsville,
New York, 14221, telephone (716) 633-1850.
Any statement contained herein or in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in an applicable Prospectus Supplement) or in any
subsequently filed document that is incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this Prospectus or any Prospectus
Supplement, except as so modified or superseded.
2
<PAGE>
THE COMPANY
General
Sovran Self Storage, Inc. is a self-administered and self-managed real
estate investment trust ("REIT") which acquires, owns and manages self storage
properties. (The Company's self storage properties are hereinafter referred to
collectively as the "Properties" and individually as a "Property"). The Company
was formed through the transfer for cash on June 26, 1995 of 62 Properties
previously owned by limited partnerships of which the Company was the general
partner, and the simultaneous acquisition of 12 additional Properties from
unrelated third parties, in connection with the contemporaneous consummation of
the Company's initial public offering (the "Initial Offering") and related
transactions. The Company has since acquired 26 additional Properties from
unrelated third parties. As of June 30, 1996, the Company owned and operated, a
total of 100 self-storage Properties, consisting of approximately 5.45 million
net rentable square feet, situated primarily in the Eastern United States, in 15
states. As of June 30, 1996, the Properties had a weighted average occupancy of
87.8% and a weighted average annual rent per square foot of $7.20. The Company
believes that it is one of the largest operators of self-storage properties in
the United States based on facilities owned.
The Company seeks to increase cash flow and enhance shareholder value
through aggressive management of the Properties and selective acquisition of new
self-storage properties. Aggressive property management entails increasing
rents, increasing occupancy levels, strictly controlling costs, maximizing
collections, strategically expanding and improving the Properties and, should
economic conditions warrant, developing new properties. The Company believes
that there continue to be significant opportunities for growth through
acquisitions, and constantly seeks to acquire self-storage properties located
primarily in the Eastern United States that are susceptible to realization of
increased economies of scale and enhanced performance through the application of
the Company's management expertise.
The Company was formed to continue the business of its predecessor
company which had engaged in the self storage business since 1985. The Company
owns a 100% fee simple interest in each of the Properties through a limited
partnership (the "Partnership") of which the Company holds a 99% limited
partnership interest and a wholly-owned subsidiary of the Company (the
"Subsidiary") holds a 1% general partnership interest. The Company believes that
this structure, commonly known as an umbrella partnership real estate investment
trust ("UPREIT"), facilitates the Company's ability to acquire properties by
using units of the Partnership as currency in property acquisitions.
The Company was incorporated on April 19, 1995 under Maryland law. The
Company's principal executive offices are located at 5166 Main Street,
Williamsville, New York 14221, and its telephone number is (716) 633-1850. The
Company also maintains a regional office in Atlanta, Georgia.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Company intends to use the net proceeds from the sale of Securities for general
corporate purposes, which may include the acquisition of additional properties,
the repayment of outstanding debt or the improvement of certain properties
already in the Company's portfolio.
3
<PAGE>
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Company's and its predecessor's
consolidated ratios of earnings to fixed charges for the periods shown:
<TABLE>
Company Predecessors
------------------------------------------- ----------------------------------------------
<S> <C> <C> <C>
Six months Year ended January 1, 1995 Year ended December 31,
ended June December to 1994 1993 1992 1991
30, 1996 31, 1995 June 25, 1995
------------------------------------------- ----------------------------------------------
7.26 21.88 1.09 1.31 0.84 0.53 0.31
</TABLE>
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For this purpose, earnings consist of pre-tax income from
continuing operations plus fixed charges. Fixed charges consist of interest
expense and the amortization of debt issuance costs. To date, the Company has
not issued any Preferred Stock; therefore, the ratios of earnings to combined
fixed charges and preferred stock dividend requirements are the same as the
ratios of earnings to fixed charges presented above.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities will be direct unsecured obligations of the Company
and may be either senior Debt Securities ("Senior Debt Securities") or
subordinated Debt Securities ("Subordinated Debt Securities"). The Debt
Securities will be issued under one or more indentures, each dated as of a date
prior to the issuance of the Debt Securities to which it relates. Senior Debt
Securities and Subordinated Debt Securities may be issued pursuant to separate
indentures (respectively, a "Senior Indenture" and a "Subordinated Indenture"),
in each case between the Company and a trustee (a "Trustee"), which may be the
same Trustee, and in the form that has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part, subject to such
amendments or supplements as may be adopted from time to time. The Senior
Indenture and the Subordinated Indenture, as amended or supplemented from time
to time, are sometimes hereinafter referred to collectively as the "Indentures."
The Indentures will be subject to and governed by the Trust Indenture Act of
1939, as amended (the "TIA"). The statements made under this heading relating to
the Debt Securities and the Indentures are summaries of the anticipated
provisions thereof, do not purport to be complete and are qualified in their
entirety by reference to the Indentures and such Debt Securities.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the applicable Indenture.
Terms
General. The Debt Securities will be direct, unsecured obligations of
the Company. The indebtedness represented by the Senior Debt Securities will
rank equally with all other unsecured and unsubordinated indebtedness of the
Company. The indebtedness represented by Subordinated Debt Securities will be
subordinated in right of payment to the prior payment in full of Senior
Indebtedness of the Company as described under "--Subordination." The particular
terms of the Debt Securities offered by a Prospectus Supplement will be
described in the applicable Prospectus Supplement, along with any applicable
modifications of or additions to the general terms of the Debt Securities as
described herein and in the applicable Indenture and any applicable federal
income tax considerations. Accordingly, for a description of the terms of any
series of Debt Securities, reference must be made to both the Prospectus
Supplement relating thereto and the description of the Debt Securities set forth
in this Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities
may be issued without limit as to aggregate principal amount, in one or more
series, in each case as established from time to time by the
4
<PAGE>
Company or as set forth in the applicable Indenture or in one or more indentures
supplemental to such 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 issuance of additional Debt Securities of such series.
Each Indenture will provide that the Company may, but need not,
designate more than one Trustee thereunder, each with respect to one or more
series of Debt Securities. Any Trustee under an Indenture may resign or be
removed with respect to one or more series of Debt Securities, and a successor
Trustee may be appointed to act with respect to such series. In the event that
two or more persons are acting as Trustee with respect to different series of
Debt Securities, each such Trustee shall be a Trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any other
Trustee, and, except as otherwise indicated herein, any action described herein
to be taken by each Trustee may be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Debt Securities for which it
is Trustee under the applicable Indenture.
The following summaries set forth certain general terms and provisions
of the Indentures and the Debt Securities. The Prospectus Supplement relating to
the series of Debt Securities being offered will contain further terms of such
Debt Securities, including the following specific terms:
(1) The title of such Debt Securities and whether such Debt
Securities are Senior Debt Securities or Subordinated Debt
Securities;
(2) The aggregate principal amount of such Debt Securities and
any limit on such aggregate principal amount;
(3) The price (expressed as a percentage of the principal amount
thereof) at which such Debt Securities will be issued and,
if other than the principal amount thereof, the portion of
the principal amount thereof payable upon declaration of
acceleration of the maturity thereof, or (if applicable) the
portion of the principal amount of such Debt Securities that
is convertible into Common Stock or Preferred Stock, or the
method by which any such portion shall be determined;
(4) If convertible, the terms on which such Debt Securities are
convertible, including the initial conversion price or rate
and the conversion period and any applicable limitations on
the ownership or transferability of the Common Stock or
Preferred Stock receivable on conversion;
(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 such interest will accrue, the
dates on which any such interest will be payable, the record
dates for such interest payment dates, or the method by
which such dates shall be determined, the persons to whom
such interest shall be payable, and the basis upon which
interest shall be calculated if other than that of a 360-day
year of twelve 30-day months;
(8) The place or places where the principal of (and premium or
Make-Whole Amount (as defined in the Indenture), if any) and
interest, if any, on such Debt Securities will be payable,
where such Debt Securities may be surrendered for
registration of transfer or exchange and where notices or
demands to or upon the Company in respect of such Debt
Securities and the applicable Indenture may be served;
5
<PAGE>
(9) The period or periods, if any, within which, the price or
prices at which and the other terms and conditions upon
which such Debt Securities may, pursuant to any optional or
mandatory redemption provisions, be redeemed, as a whole or
in part, at the option of the Company;
(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 other 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
or Make-Whole Amount, if any, including any amount due upon
redemption, 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 the yield on or trading price of
other securities, including United States Treasury
securities, or on a currency, currencies, currency unit or
units, or composite currency or currencies) and the manner
in which such amounts shall be determined;
(13) Whether the principal of (and premium or Make-Whole Amount,
if any) or interest on the Debt 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 Debt Securities are denominated or stated to be
payable, the period or periods within which, and the terms
and conditions upon which, such election may be made, and
the time and manner of, and identity of the exchange rate
agent with responsibility for, determining the exchange rate
between the currency or currencies, currency unit or units
or composite currency or currencies in which such Debt
Securities are denominated or stated to be payable and the
currency or currencies, currency unit or units or composite
currency or currencies in which such Debt Securities are to
be so payable;
(14) Provisions, if any, granting special rights to the holders
of Debt Securities of the series upon the occurrence of such
events as may be specified;
(15) Any deletions from, modifications of or additions to the
Events of Default (as defined in the Indenture) or covenants
of the Company with respect to Debt Securities of the
series, whether or not such Events of Default or covenants
are consistent with the Events of Default or covenants
described herein;
(16) Whether and under what circumstances the Company will pay
any additional amounts on such Debt Securities in respect of
any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt
Securities in lieu of making such payment;
(17) Whether Debt Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without
coupons) or both, any restrictions applicable to the offer,
sale or delivery of Bearer Securities and the terms upon
which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if
permitted by applicable laws and regulations), whether any
Debt Securities of the series are to be
6
<PAGE>
issuable initially in temporary global form and whether any
Debt Securities of the series are to be issuable in
permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent
global Security may exchange such interests for Debt
Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under
which any such exchanges may occur, if other than in the
manner provided in the Indenture, and, if Registered
Securities of the series are to be issuable as a Global
Security (as defined), the identity of the depository for
such series;
(18) The date as of which any Bearer Securities of the series and
any temporary Global Security representing outstanding Debt
Securities of the series shall be dated if other than the
date of original issuance of the first Security of the
series to be issued;
(19) The Person to whom any interest on any Registered Security
of the series shall be payable, if other than the Person in
whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the
Regular Record Date for such interest, the manner in which,
or the Person to whom, any interest on any Bearer Security
of the series shall be payable, if otherwise than upon
presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which,
or the manner in which, any interest payable on a temporary
Global Security on an Interest Payment Date will be paid if
other than in the manner provided in the Indenture;
(20) The applicability, if any, of the defeasance and covenant
defeasance provisions of the Indenture to the Debt
Securities of the series;
(21) If the Debt Securities of such series are to be issuable in
definitive form (whether upon original issue or upon
exchange of a temporary Security of such series) only upon
receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms
of such certificates, documents or conditions;
(22) The obligation, if any, of the Company to permit the
conversion of the Debt Securities of such series into Common
Stock or Preferred Stock, as the case may be, and the terms
and conditions upon which such conversion shall be effected
(including, without limitation, the initial conversion price
or rate, the conversion period, any adjustment of the
applicable conversion price and any requirements relative to
the reservation of such shares for purposes of conversion);
and
(23) Any other terms of the series (which terms shall not be
inconsistent with the provisions of the Indenture under
which the Debt Securities are issued).
If so provided in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon declaration
of acceleration of the maturity thereof ("Original Issue Discount Securities").
In such cases, all material U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt
Securities 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 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 "Restrictions on Transfers of Capital Stock." Reference is made to
the applicable Prospectus Supplement for information with respect to any
deletions from, modifications of, or additions to,
7
<PAGE>
the events of default or covenants of the Company that are described below,
including any addition of a covenant or other provision providing event risk or
similar protection.
Denomination, Interest, Registration and Transfer
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof. Where Debt Securities of any series are issued in
bearer form, the special restrictions and considerations, including special
offering restrictions and special federal income tax considerations, applicable
to any such Debt Securities and to payment on and transfer and exchange of such
Debt Securities will be described in the applicable Prospectus Supplement.
Bearer Debt Securities will be transferable by delivery.
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium or Make-Whole Amount, if any) and interest
on any series of Debt Securities will be payable at the corporate trust office
of the applicable Trustee, the address of which will be stated in the applicable
Prospectus Supplement; provided that, at the option of the Company, payment of
interest may be made by check mailed to the address of the person entitled
thereto as it appears in the applicable register for such Debt Securities or by
wire transfer of funds to such person at an account maintained within the United
States.
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security in registered form ("Defaulted
Interest") will forthwith cease to be payable to the holder on the applicable
Regular Record Date and may either be paid to the Person in whose name such Debt
Security is registered at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest to be fixed by
the Trustee, in which case notice thereof shall be given to the holder of such
Debt Security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described in
the applicable Indenture.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt Securities
at the corporate trust office of the applicable Trustee or at the office of any
transfer agent designated by the Company for such purpose. In addition, subject
to certain limitations imposed upon Debt Securities issued in book-entry form,
the Debt Securities of any series may be surrendered for registration of
transfer or exchange thereof at the corporate trust office of the applicable
Trustee or at the office of any transfer agent designated by the Company for
such purpose. Every Debt Security in registered form surrendered for
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer, and the person requesting such action must
provide evidence of title and identity satisfactory to the applicable Trustee or
transfer agent. No service charge will be made for any registration of transfer
or exchange of any Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. If the applicable Prospectus Supplement refers to any transfer agent
(in addition to the applicable Trustee) initially designated by the Company with
respect to any series of Debt Securities, the Company may at any time rescind
the designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in each place of payment for such series.
The Company may at any time designate additional transfer agents with respect to
any series of Debt Securities.
Neither the Company nor any Trustee shall be required to (a) issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before the selection of any
Debt Securities for redemption and ending at the close of business on the day of
mailing of the notice of redemption; (b) register the transfer of or exchange
any Debt Security, or portion thereof, so selected for redemption, in whole or
in part, except the unredeemed portion of any Debt Security being redeemed in
part; or (c) issue, register the transfer of or exchange any Debt Security that
has been surrendered for repayment at the option of the holder, except the
portion, if any, of such Debt Security not to be so repaid.
8
<PAGE>
Payment in respect of Debt Securities in bearer form will be made in the
currency and in the manner designated in the applicable Prospectus Supplement,
subject to any applicable laws and regulations, at such paying agencies outside
the United States as the Company may appoint from time to time. The paying
agents outside the United States, if any, initially appointed by the Company for
a series of Debt Securities will be named in the Prospectus Supplement. Unless
otherwise provided in the applicable Prospectus Supplement, the Company may at
any time designate additional paying agents or rescind the designation of any
paying agents, except that, if Debt Securities of a series are issuable in
registered form, the Company will be required to maintain at least one paying
agent in each place of payment for such series and if Debt Securities of a
series are issuable in bearer form, the Company will be required to maintain at
least one paying agent in a place of payment outside the United States where
Debt Securities of such series and any coupons appertaining thereto may be
presented and surrendered for payment.
Merger, Consolidation or Sale of Assets
The Indentures will provide that the Company may, without the consent of
the holders of any outstanding Debt Securities, consolidate with, or sell, lease
or convey all or substantially all of its assets to, or merge with or into, any
other entity provided that (a) either the Company shall be the continuing
entity, or the successor entity (if other than the Company) formed by or
resulting from any such consolidation or merger or which shall have received the
transfer of such assets is organized under the laws of any domestic jurisdiction
and assumes the Company's obligations to pay principal of (and premium or
Make-Whole Amount, if any) and interest on all of the Debt Securities and the
due and punctual performance and observance of all of the covenants and
conditions contained in such Indenture; (b) immediately after giving effect to
such transaction and treating any indebtedness that 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 such 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 officers' certificate and legal opinion covering such
conditions shall be delivered to each Trustee.
Certain Covenants
The applicable Prospectus Supplement will describe any material
covenants in respect of a series of Debt Securities that are not described in
this Prospectus. Unless otherwise indicated in the applicable Prospectus
Supplement, Senior Debt Securities will include the following covenants of the
Company:
Existence. Except as permitted under "--Merger, Consolidation or Sale of
Assets," the Indentures will require the Company to do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (by articles of incorporation, by-laws and statute) and
franchises; provided, however, that the Company shall not be required to
preserve any right or franchise if its Board of Directors determines that the
preservation thereof is no longer desirable in the conduct of its business.
Maintenance of Properties. The Indentures will require the Company to
cause all of its material properties used or useful in the conduct of its
business or the business of any subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that the
Company and its subsidiaries shall not be prevented from selling or otherwise
disposing of their properties for value in the ordinary course of business.
9
<PAGE>
Insurance. The Indentures will require the Company to cause each of its
and its subsidiaries' insurable properties to be insured against loss or damage
at least equal to their then full insurable value with insurers of recognized
responsibility and, if described in the applicable Prospectus Supplement, having
a specified rating from a recognized insurance rating service.
Payment of Taxes and Other Claims. The Indentures will require the
Company to pay or discharge or cause to be paid or discharged, before the same
shall become delinquent, (i) all taxes, assessments and governmental charges
levied or imposed upon it or any subsidiary or upon the income, profits or
property of the Company or any subsidiary and (ii) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith.
Events of Default, Notice and Waiver
Unless otherwise provided in the applicable Prospectus Supplement, each
Indenture will provide that the following events are "Events of Default" with
respect to any series of Debt Securities issued thereunder: (a) default in the
payment of any interest on any Debt Security of such series when such interest
becomes due and payable that continues for a period of 30 days; (b) default in
the payment of the principal of (or premium or Make-Whole Amount, if any, on)
any Debt Security of such series when due and payable; (c) default in making any
sinking fund payment as required for any Debt Security of such series; (d)
default in the performance, or breach, of any other covenant or warranty of the
Company in the applicable Indenture with respect to the Debt Securities of such
series and continuance of such default or breach for a period of 60 days after
written notice as provided in the Indenture; (e) default under any bond,
debenture, note, mortgage, indenture or instrument under which there may be
issued or by which there may be secured or evidenced any indebtedness for money
borrowed by the Company (or by any Subsidiary, the repayment of which the
Company has guaranteed or for which the Company is directly responsible or
liable as obligor or guarantor), having an aggregate principal amount
outstanding of at least $25,000,000, whether such indebtedness now exists or
shall hereafter be created, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or annulled,
within a period of 30 days after written notice to the Company as provided in
the Indenture; (f) certain events of bankruptcy, insolvency or reorganization,
or court appointment of a receiver, liquidator or trustee of the Company or any
Significant Subsidiary; and (g) any other event of default provided with respect
to a particular series of Debt Securities. The term "Significant Subsidiary" has
the meaning ascribed to such term in Regulation S-X promulgated under the
Securities Act.
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% in
principal amount of the 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 amount as may be specified in the terms thereof) of, and premium or
Make-Whole Amount, if any, on, 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 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 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 or Make-Whole Amount, if any) and interest on the Debt Securities
of such series, 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 and the premium or
Make-Whole Amount, if any), with respect to Debt Securities of such series have
been cured or waived as provided in such Indenture. The Indentures will also
provide that the holders of not less than a majority in principal amount of the
outstanding Debt Securities of any series may
10
<PAGE>
waive any past default with respect to such series and its consequences, except
a default (i) in the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on any Debt Security of such series or (ii) in
respect of a covenant or provision contained in the applicable Indenture that
cannot be modified or amended without the consent of the holder of each
outstanding Debt Security affected thereby.
The Indentures will require each Trustee 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 or Make-Whole Amount, 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.
The Indentures will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the case of failure of
the applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the
holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of Debt
Securities from instituting suit for the enforcement of payment of the principal
of (and premium or Make-Whole Amount, if any) and interest on such Debt
Securities at the respective due dates or redemption dates thereof.
The Indentures will provide that, subject to provisions in each
Indenture relating to its duties in case of default, a Trustee will be under no
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 of the Company, stating whether or not such officer has
knowledge of any default under the applicable Indenture and, if so, specifying
each such default and the nature and status thereof.
Modification of the Indentures
Modifications and amendments of an Indenture will be permitted to be
made only with the consent of the holders of not less than a majority in
principal amount of all outstanding Debt Securities issued under such Indenture
affected by such modification or amendment; provided, however, that no such
modification or amendment may, without the consent of the holder of each such
Debt Security affected thereby, (a) change the stated maturity of the principal
of, or any installment of interest (or premium or Make-Whole Amount, if any) on,
any such Debt Security; (b) reduce the principal amount of, or the rate or
amount of interest on, or any premium or Make-Whole Amount payable on redemption
of, any such Debt Security, or reduce the amount of principal of an Original
Issue Discount Security that would be due and payable upon declaration of
acceleration of the maturity thereof or would be provable in bankruptcy, or
adversely affect any right of repayment of the holder of any such Debt Security;
(c) change the place of payment, or the coin or currency, for payment of
principal of, premium or Make-Whole Amount, if any, or interest on any such Debt
Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce the
above-stated percentage of outstanding Debt Securities of any series necessary
to
11
<PAGE>
modify or amend the applicable Indenture, to waive compliance with certain
provisions thereof or certain defaults and consequences thereunder or to reduce
the quorum or voting requirements set forth in the applicable Indenture; (f)
change the currency or currency unit in which any Debt Security or any premium
or interest thereon is payable; (g) in the case of the Subordinated Indenture,
modify the subordination provisions thereof in a manner adverse to the holders
of Subordinated Debt Securities of any series then outstanding; or (h) modify
any of the foregoing provisions or any of the provisions relating to the waiver
of certain past defaults or certain covenants, except to increase the required
percentage to effect such action or to provide that certain other provisions may
not be modified or waived without the consent of the holder of such Debt
Security.
The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Company with certain restrictive covenants of the applicable
Indenture.
Modifications and amendments of an Indenture will be permitted to be
made by the Company and the respective Trustee thereunder without the consent of
any holder of Debt Securities for any of the following purposes: (a) to evidence
the succession of another person to the Company as obligor under such Indenture;
(b) to add to the covenants of the Company for the benefit of the holders of all
or any series of Debt Securities or to surrender any right or power conferred
upon the Company in such Indenture; (c) to add events of default for the benefit
of the holders of all or any series of Debt Securities; (d) to add or change any
provisions of an Indenture to facilitate the issuance of, or to liberalize
certain terms of, Debt Securities in bearer form, or to permit or facilitate the
issuance of Debt Securities in uncertificated form, provided that such action
shall not adversely affect the interests of the holders of the Debt Securities
of any series in any material respect; (e) to change or eliminate any provisions
of an Indenture, provided that any such change or elimination shall become
effective only when there are no Debt Securities outstanding of any series
created prior thereto which are entitled to the benefit of such provision; (f)
to secure the Debt Securities; (g) to establish the form or terms of Debt
Securities of any series; (h) to provide for the acceptance of appointment by a
successor Trustee or facilitate the administration of the trusts under an
Indenture by more than one Trustee; (i) to cure any ambiguity, defect or
inconsistency in an Indenture, provided that such action shall not adversely
affect the interests of holders of Debt Securities of any series issued under
such Indenture; or (j) to supplement any of the provisions of an Indenture to
the extent necessary to permit or facilitate defeasance and discharge of any
series of such Debt Securities, provided that such action shall not adversely
affect the interests of the holders of the outstanding Debt Securities of any
series.
The Indentures will provide that in determining whether the holders of
the requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (a) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (b) the principal amount of
any Debt Security denominated in a foreign currency that shall be deemed
Outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (a) above), (c) the
principal amount of an indexed security that shall be deemed outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed security pursuant such
Indenture, and (d) Debt Securities owned by the Company or any other obligor
upon the Debt Securities or any affiliate of the Company or of such other
obligor shall be disregarded.
The Indentures will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting will be permitted to be called
at any time by the applicable Trustee, and also, upon request, by the Company or
the holders of at least 25% in principal amount of the outstanding Debt
Securities of such series, in any such case upon notice given as provided in
such Indenture. Except for any consent that must be given by the holder of each
Debt Security affected by certain modifications and amendments of an
12
<PAGE>
Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage, which is less than a majority, in principal
amount of the outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the holders of such specified
percentage in principal amount of the outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of holders of
Debt Securities of any series duly held in accordance with an Indenture will be
binding on all holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may be
given by the holders of not less than a specified percentage in principal amount
of the outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, the Indentures will provide
that if any action is to be taken at a meeting of holders of Debt Securities of
any series with respect to any request, demand, authorization, direction,
notice, consent, waiver and other action that such Indenture expressly provides
may be made, given or taken by the holders of a specified percentage in
principal amount of all outstanding Debt Securities affected thereby, or of the
holders of such series and one or more additional series: (a) there shall be no
minimum quorum requirement for such meeting, and (b) the principal amount of the
outstanding Debt Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action shall
be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been made,
given or taken under such Indenture.
Certain Definitions
"Indebtedness" means, with respect to any person, (a) any obligation of
such person to pay the principal of, premium, if any, interest on (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such person, whether or not a claim for such
post-petition interest is allowed in such proceeding), penalties, reimbursement
or indemnification amounts, fees, expenses or other amounts relating to any
indebtedness of such person (i) for borrowed money (whether or not the recourse
of the lender is to the whole of the assets of such person or only to a portion
thereof), (ii) evidenced by notes, debentures or similar instruments (including
purchase money obligations) given in connection with the acquisition of any
property or assets (other than trade accounts payable for inventory or similar
property acquired in the ordinary course of business), including securities, for
the payment of which such person is liable, directly or indirectly, or the
payment of which is secured by a lien, charge or encumbrance on property or
assets of such person, (iii) for goods, materials or services purchased in the
ordinary course of business (other than trade accounts payable arising in the
ordinary course of business), (iv) with respect to letters of credit or bankers
acceptances issued for the account of such person or performance bonds, (v) for
the payment of money relating to a Capitalized Lease Obligation (as defined in
the Indenture), or (vi) under interest rate swaps, caps or similar agreements
and foreign exchange contracts, currency swaps or similar agreements; (b) any
liability of others of the kind described in the preceding clause (a) which such
person has guaranteed or which is otherwise its legal liability; and (c) 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 (a) or (b).
"Senior Indebtedness" means Indebtedness of the Company, whether
outstanding on the date of issue of any Subordinated Debt Securities or
thereafter created, incurred, assumed or guaranteed by the Company, other than
the following: (a) any Indebtedness as to which, in the instrument evidencing
such Indebtedness or pursuant to which such Indebtedness was issued, it is
expressly provided that such Indebtedness is subordinate in right of payment to
all indebtedness of the Company not expressly subordinated to such Indebtedness;
(b) any Indebtedness which by its terms refers explicitly to the Subordinated
Debt Securities and
13
<PAGE>
states that such Indebtedness shall not be senior, shall be pari passu or shall
be subordinated in right of payment to the Subordinated Debt Securities; and (c)
with respect to any series of Subordinated Debt Securities, any Indebtedness of
the Company evidenced by Subordinated Debt Securities of the same or of another
series. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include: (x) Indebtedness of or amounts owed by the
Company for compensation to employees, or for goods, materials and services
purchased in the ordinary course of business, or (y) Indebtedness of the Company
to a subsidiary of the Company.
Subordination
Unless otherwise provided in the applicable Prospectus Supplement,
Subordinated Debt Securities will be subject to the following subordination
provisions.
The payment of the principal of, interest on, or any other amounts due
on, the Subordinated Debt Securities will be subordinated in right of payment to
the prior payment in cash in full of all Senior Indebtedness of the Company. No
payment on account of the principal of, redemption of, interest on or any other
amounts due on the Subordinated Debt Securities and no redemption, purchase or
other acquisition of the Subordinated Debt Securities may be made, unless (a)
full payment in cash of amounts then due for principal, sinking funds, interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company, whether or not a claim
for such post-petition interest is allowed in such proceeding), penalties,
reimbursement or indemnification amounts, fees and expenses, and of all other
amounts then due on all Senior Indebtedness shall have been made or duly
provided for pursuant to the terms of the instrument governing such Senior
Indebtedness, and (b) at the time of, or immediately after giving effect to, any
such payment, redemption, purchase or other acquisition, there shall not exist
under any Senior Indebtedness or any agreement pursuant to which any Senior
Indebtedness has been issued, any default which shall not have been cured or
waived and which shall have resulted in the full amount of such Senior
Indebtedness being declared due and payable and not rescinded. In addition, the
Subordinated Indenture provides that, if holders of any Senior Indebtedness
notify the Company and the Subordinated Trustee that a default has occurred
giving the holders of such Senior Indebtedness the right to accelerate the
maturity thereof, no payment on account of principal, sinking fund or other
redemption, interest or any other amounts due on the Subordinated Debt
Securities and no purchase, redemption or other acquisition of the Subordinated
Debt Securities will be made for the period (the "Payment Blockage Period")
commencing on the date such notice is received and ending on the earlier of (i)
the date on which such event of default shall have been cured or waived or (ii)
180 days from the date such notice is received. Notwithstanding the foregoing,
only one payment blockage notice with respect to the same event of default or
any other events of default existing and known to the person giving such notice
at the time of such notice on the same issue of Senior Indebtedness may be given
during any period of 360 consecutive days. No new Payment Blockage Period may be
commenced by the holders of Senior Indebtedness during any period of 360
consecutive days unless all events of default which triggered the preceding
Payment Blockage Period have been cured or waived. Upon any distribution of its
assets in connection with any dissolution, winding-up, liquidation or
reorganization of the Company, all Senior Indebtedness must be paid in full in
cash before the holders of the Subordinated Debt Securities are entitled to any
payments whatsoever.
The Subordinated Indenture does not restrict the amount of Senior
Indebtedness or other indebtedness of the Company or any Subsidiary. As a result
of these subordination provisions, in the event of the Company's insolvency,
holders of the Subordinated Debt Securities may recover ratably less than
general creditors of the Company.
If this Prospectus is being delivered in connection with a series of
Subordinated Debt Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Indebtedness outstanding as of the end of the Company's most
recent fiscal quarter.
14
<PAGE>
Discharge, Defeasance and Covenant Defeasance
Unless otherwise indicated in the applicable Prospectus Supplement, the
Company will be permitted, at its option, to discharge certain obligations to
holders of any series of Debt Securities issued under any Indenture that have
not already been delivered to the applicable Trustee for cancellation and that
either have become due and payable or will become due and payable within one
year (or scheduled for redemption within one year) by irrevocably depositing
with the applicable Trustee, in trust, funds in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable in an amount sufficient to pay the entire indebtedness on
such Debt Securities in respect of principal (and premium or Make-Whole Amount,
if any) and interest to the date of such deposit (if such Debt Securities have
become due and payable) or to the stated maturity or redemption date, as the
case may be.
The Indentures will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Company may elect either (a) to defease
and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligations to register the transfer or exchange of
such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of such Debt
Securities, and to hold moneys for payment in trust) ("defeasance") or (b) to be
released from certain obligations with respect to such Debt Securities under the
applicable Indenture (including the restrictions described under "--Certain
Covenants") or, if provided in the applicable Prospectus Supplement, its
obligations with respect to any other covenant, and any omission to comply with
such obligations shall not constitute an Event of Default with respect to such
Debt Securities ("covenant defeasance"), in either case upon the irrevocable
deposit by the Company with the applicable Trustee, in trust, of an amount, in
such currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable at stated maturity, or
Government Obligations (as defined below), or both, applicable to such Debt
Securities, which through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount sufficient to pay
the principal of (and premium or Make-Whole Amount, if any) and interest on such
Debt Securities, and any mandatory sinking fund or analogous payments thereon,
on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other
things, the Company has delivered to the applicable Trustee an opinion of
counsel (as specified in the applicable Indenture) to the effect that the
holders of such Debt Securities will not recognize income, gain or loss for U.S.
federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such opinion of counsel,
in the case of defeasance, will be required to refer to and be based upon a
ruling received from or published by the Internal Revenue Service or a change in
applicable United States federal income tax law occurring after the date of the
Indenture. In the event of such defeasance, the holders of such Debt Securities
would thereafter be able to look only to such trust fund for payment of
principal (and premium or Make-Whole Amount, if any) and interest.
"Government Obligations" means securities that are (a) direct
obligations of the United States of America or the government which issued the
foreign currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged or (b)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the Government Obligation or
the specific payment of interest on or principal of the Government Obligation
evidenced by such depository receipt.
15
<PAGE>
Unless otherwise provided in the applicable Prospectus Supplement, if
after the Company has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any series,
(a) the holder of a Debt Security of such series is entitled to, and does, elect
pursuant to the applicable Indenture or the terms of such Debt Security to
receive payment in a currency, currency unit or composite currency other than
that in which such deposit has been made in respect of such Debt Security, or
(b) a Conversion Event (as defined below) occurs in respect of the currency,
currency unit or composite currency in which such deposit has been made, the
indebtedness represented by such Debt Security will be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of
(and premium or Make-Whole Amount, if any) and interest on such Debt Security as
they become due out of the proceeds yielded by converting the amount so
deposited in respect of such Debt Security into the currency, currency unit or
composite currency in which such Debt Security becomes payable as a result of
such election or such cessation of usage based on the applicable market exchange
rate. "Conversion Event" means the cessation of use of (i) a currency, currency
unit or composite currency both by the government of the country which issued
such currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community, (ii) the
ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit or composite currency other than the ECU for the
purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium or
Make-Whole Amount, if any) and interest on any Debt Security that is payable in
a foreign currency that ceases to be used by its government of issuance shall be
made in U.S. dollars.
In the event the Company effects covenant defeasance with respect to any
Debt Securities and such Debt Securities are declared due and payable because of
the occurrence of any of Event of Default other than the Event of Default
described in clause (d) under "--Events of Default, Notice and Waiver" with
respect to specified sections of an Indenture (which sections would no longer be
applicable to such Debt Securities) or described in clause (g) under "--Events
of Default, Notice and Waiver" with respect to any other covenant as to which
there has been covenant defeasance, the amount in such currency, currency unit
or composite currency in which such Debt Securities are payable, and Government
Obligations on deposit with the applicable Trustee, will be sufficient to pay
amounts due on such Debt Securities at the time of their stated maturity but may
not be sufficient to pay amounts due on such Debt Securities at the time of the
acceleration resulting from such of Event of Default. However, the Company would
remain liable to make payment of such amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance, including
any modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
Conversion Rights
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Stock 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 shares of 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.
Book-Entry System
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities ("Global Securities") that will be
deposited with, or on behalf of, a depository (the "Depository") identified in
the Prospectus Supplement relating to such series. Global Securities, if any,
issued in the United States are expected to be deposited with The Depository
Trust Company ("DTC"), as Depository. Global Securities may be issued in fully
registered form and may be issued in either temporary or permanent form.
16
<PAGE>
Unless and until it is exchanged in whole or in part for the individual Debt
Securities represented thereby, a Global Security may not be transferred except
as a whole by the Depository for such Global Security to a nominee of such
Depository or by a nominee of such Depository to such Depository or another
nominee of such Depository or by such Depository or any nominee of such
Depositor to a successor Depository or any nominee of such successor.
The specific terms of the depository arrangement with respect to a
series of Debt Securities will be described in the Prospectus Supplement
relating to such series. The Company expects that unless otherwise indicated in
the applicable Prospectus Supplement, the following provisions will apply to
depository arrangements.
Upon the issuance of a Global Security, the Depository for such Global
Security or its nominee will credit on its book-entry registration and transfer
system the respective principal amounts of the individual Debt Securities
represented by such Global Security to the accounts of persons that have
accounts with such Depository ("Participants"). Such accounts shall be
designated by the underwriters, dealers or agents with respect to such Debt
Securities or by the Company if such Debt Securities are offered directly by the
Company. Ownership of beneficial interests in such Global Security will be
limited to Participants or persons that may hold interests through Participants.
The Company expects that, pursuant to procedures established by DTC,
ownership of beneficial interests in any Global Security with respect to which
DTC is the Depository will be shown on, and the transfer of that ownership will
be effected only through, records maintained by DTC or its nominee (with respect
to beneficial interests of Participants) and records of Participants (with
respect to beneficial interests of persons who hold through Participants).
Neither the Company nor the Trustee will have any responsibility or liability
for any aspect of the records of DTC or for maintaining, supervising or
reviewing any records of DTC or any of its Participants relating to beneficial
ownership interests in the Debt Securities. The laws of some states require that
certain purchasers of securities take physical delivery of such securities in
definitive form. Such limits and laws may impair the ability to own, pledge or
transfer beneficial interest in a Global Security.
So long as the Depository for a Global Security or its nominee is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
applicable Indenture. Except as described below or in the applicable Prospectus
Supplement, owners of beneficial interest in a Global Security will not be
entitled to have any of the individual Debt Securities represented by such
Global Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Debt Securities in definitive form and
will not be considered the owners or holders thereof under the applicable
Indenture. Beneficial owners of Debt Securities evidenced by a Global Security
will not be considered the owners or holders thereof under the applicable
Indenture for any purpose, including with respect to the giving of any
direction, instructions or approvals to the Trustee thereunder. Accordingly,
each person owning a beneficial interest in a Global Security with respect to
which DTC is the Depository must rely on the procedures of DTC and, if such
person is not a Participant, on the procedures of the Participant through which
such person owns its interests, to exercise any rights of a holder under the
applicable Indenture. The Company understands that, under existing industry
practice, if it requests any action of holders or if an owner of a beneficial
interest in a Global Security desires to give or take any action which a holder
is entitled to give or take under the applicable Indenture, DTC would authorize
the Participants holding the relevant beneficial interest to give or take such
action, and such Participants would authorize beneficial owners through such
Participants to give or take such actions or would otherwise act upon the
instructions of beneficial owners holding through them.
Payments of principal of, any premium or Make-Whole Amount and any
interest on individual Debt Securities represented by a Global Security
registered in the name of a Depository or its nominee will be made to or at the
direction of the Depository or its nominee, as the case may be, as the
registered owner of the Global Security under the applicable Indenture. Under
the terms of the applicable Indenture, the Company
17
<PAGE>
and the Trustee may treat the persons in whose name Debt Securities, including a
Global Security, are registered as the owners thereof for the purpose of
receiving such payments. Consequently, neither the Company nor the Trustee has
or will have any responsibility or liability for the payment of such amounts to
beneficial owners of Debt Securities (including principal, premium or Make-Whole
Amount, if any, and interest). The Company believes, however, that it is
currently the policy of DTC to immediately credit the accounts of relevant
Participants with such payments, in amounts proportionate to their respective
holdings of beneficial interests in the relevant Global Security as shown on the
records of DTC or its nominee. The Company also expects that payments by
Participants to owners of beneficial interests in such Global Security held
through such Participants will be governed by standing instructions and
customary practices, as is the case with securities held for the account of
customers in bearer form or registered in street name, and will be the
responsibility of such Participants. Redemption notices with respect to any Debt
Securities represented by a Global Security will be sent to the Depository or
its nominee. If less than all of the Debt Securities of any series are to be
redeemed, the Company expects the Depository to determine the amount of the
interest of each Participant in such Debt Securities to be redeemed to be
determined by lot. None of the Company, the Trustee, any Paying Agent or the
Security Registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Global Security for such Debt
Securities or for maintaining any records with respect thereto.
Neither the Company nor the Trustee will be liable for any delay by the
holders of a Global Security or the Depository in identifying the beneficial
owners of Debt Securities and the Company and the Trustee may conclusively rely
on, and will be protected in relying on, instructions from the holder of a
Global Security or the Depository for all purposes. The rules applicable to DTC
and its Participants are on file with the Securities and Exchange Commission.
If a Depository for any Debt Securities is at any time unwilling, unable
or ineligible to continue as depository and a successor depository is not
appointed by the Company within 90 days, the Company will issue individual Debt
Securities in exchange for the Global Security representing such Debt
Securities. In addition, the Company may at any time and in its sole discretion,
subject to any limitations described in the Prospectus Supplement relating to
such Debt Securities, determine not to have any of such Debt Securities
represented by one or more Global Securities and in such event will issue
individual Debt Securities in exchange for the Global Security or Securities
representing such Debt Securities. Individual Debt Securities so issued will be
issued in denominations of $1,000 and integral multiples thereof.
The Debt Securities of a series may also be issued in whole or in part
in the form of one or more bearer global securities (a "Bearer Global Security")
that will be deposited with a depository, or with a nominee for such depository,
identified in the applicable Prospectus Supplement. Any such Bearer Global
Securities may be issued in temporary or permanent form. The specific terms and
procedures, including the specific terms of the depository arrangement, with
respect to any portion of a series of Debt Securities to be represented by one
or more Bearer Global Securities will be described in the applicable Prospectus
Supplement.
Payment and Paying Agents
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium or Make-Whole Amount, if any) and interest
on any series of Debt Securities will be payable at the corporate trust office
of the Trustee, the address of which will be stated in the applicable Prospectus
Supplement; provided that, at the option of the Company, payment of interest may
be made by check mailed to the address of the person entitled thereto as it
appears in the applicable register for such Debt Securities or by wire transfer
of funds to such person at an account maintained within the United States.
All moneys paid by the Company to a paying agent or a Trustee for the
payment of the principal of or any premium, Make-Whole Amount or interest on any
Debt Security which remain unclaimed at the end of two years after such
principal, premium, Make-Whole Amount or interest has become due and payable
will be repaid to the Company, and the holder of such Debt Security thereafter
may look only to the Company for payment thereof.
18
<PAGE>
Global Securities
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depositary arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
19
<PAGE>
DESCRIPTION OF PREFERRED STOCK
The description of the Company's preferred stock, par value $.01 per
share ("Preferred Stock"), set forth below does not purport to be complete and
is qualified in its entirety by reference to the Company's Amended and Restated
Articles of Incorporation (the "Articles of Incorporation") and Amended and
Restated Bylaws (the "Bylaws").
General
Under the Articles of Incorporation, the Company has authority to issue
10 million shares of Preferred Stock, none of which was outstanding as of July
25, 1996. Shares of Preferred Stock may be issued from time to time, in one or
more series, as authorized by the Board of Directors of the Company. Prior to
issuance of shares of each series, the Board of Directors is required by the
Maryland General Corporation Law ("MGCL") and the Company's Articles of
Incorporation to fix for each series, the terms, preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications and terms or conditions of redemption, as are
permitted by Maryland law. The Preferred Stock will, when issued, be fully paid
and nonassessable and will have no preemptive rights. The Board of Directors
could authorize the issuance of shares of Preferred Stock with terms and
conditions that could have the effect of discouraging a takeover or other
transaction that holders of Common Stock might believe to be in their best
interests or in which holders of some, or a majority, of the shares of Common
Stock might receive a premium for their shares over the then market price of
such shares of Common Stock.
Terms
The following description of the Preferred Stock sets forth certain
general terms and provisions of the Preferred Stock to which any Prospectus
Supplement may relate. 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 Company's Articles of Incorporation and Bylaws and
any applicable amendment to the Articles of Incorporation designating terms of a
series of Preferred Stock (a "Designating Amendment").
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 provision 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);
20
<PAGE>
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Stock;
(11) A discussion of federal income tax considerations applicable to
such Preferred Stock;
(12) The relative ranking and preference of such Preferred Stock as to
dividend rights and rights upon liquidation, dissolution or
winding up of the affairs of the Company;
(13) Any limitations on issuance of any series of Preferred Stock
ranking senior to or on a parity with such series of Preferred
Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the affairs of the Company; and
(14) 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.
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 securities 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 securities issued by the Company the terms of which specifically provide
that such equity 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 securities issued by the Company
the terms of which specifically provide that such equity securities rank senior
to the Preferred Stock with respect to dividend rights or rights upon
liquidation, dissolution or winding up of the Company. The term "equity
securities" does not include convertible debt securities.
Dividends
Holders of the Preferred Stock of each series will 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 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 share transfer books of the Company on such record dates as shall
be fixed by the Board of Directors of the Company.
Dividends on any 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
applicable Prospectus Supplement. If the Board of Directors of the Company fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Stock for which dividends are non-cumulative, then the holders of such
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 series are declared payable on any future
dividend payment date.
If Preferred Stock of any series is outstanding, no dividends will be
declared or paid or set apart for payment on any capital stock of the Company of
any other series ranking, as to dividends, on a parity with or junior to the
Preferred Stock of such series for any period unless (i) if such series of
Preferred Stock has a cumulative dividend, full cumulative dividends have been
or contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof is set apart for such payment on the Preferred Stock of such
series for all past dividend periods and the then current dividend period or
(ii) if such series of Preferred Stock does not have a cumulative dividend, full
dividends for the then current dividend period have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for such payment on the Preferred Stock of such series. When
dividends are not paid in full (or a sum
21
<PAGE>
sufficient for such full payment is not so set apart) upon Preferred Stock of
any series and the shares of any other series of Preferred Stock ranking on a
parity as to dividends with the Preferred Stock of such series, all dividends
declared upon Preferred Stock of such series and any other series of Preferred
Stock ranking on a parity as to dividends with such Preferred Stock shall be
declared pro rata so that the amount of dividends declared per share of
Preferred Stock of such series and such other series of Preferred Stock shall in
all cases bear to each other the same ratio that accrued dividends per share on
the Preferred Stock of such series (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) and such other series of Preferred Stock
bear to each other. 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 series which may be in arrears.
Except as provided in the immediately preceding paragraph, unless (i)
if such series of Preferred Stock has a cumulative dividend, full cumulative
dividends on the Preferred Stock of such series have been or contemporaneously
are declared and paid or declared and a sum sufficient for the payment thereof
is set apart for payment for all past dividend periods and the then current
dividend period, and (ii) if such series of Preferred Stock does not have a
cumulative dividend, full dividends on the Preferred Stock of such series have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof is set apart for payment for the then current dividend
period, no dividends (other than in shares of Common Stock or other shares of
capital stock ranking junior to the Preferred Stock of such 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 series as to dividends or upon
liquidation, nor shall any shares of Common Stock, or any other shares of
capital stock of the Company ranking junior to or on a parity with the Preferred
Stock of such series as to dividends or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such shares) by the
Company (except by conversion into or exchange for other capital stock of the
Company ranking junior to the Preferred Stock of such series as to dividends and
upon liquidation).
Any dividend payment made on shares of a series of Preferred Stock
shall first be credited against the earliest accrued but unpaid dividend due
with respect to shares of such series which remains payable.
Redemption
If so provided in the applicable Prospectus Supplement, the 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 series of Preferred Stock that
is subject to mandatory redemption will specify the number of shares of such
Preferred Stock that shall be redeemed by the Company in each year commencing
after a date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon (which
shall not, if such Preferred Stock does not have a cumulative dividend, include
any accumulation in respect of unpaid dividends for prior dividend periods) to
the date of redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement. If the
redemption price for Preferred Stock of any series is payable only from the net
proceeds of the issuance of shares of capital stock of the Company, the terms of
such Preferred Stock may provide that, if no such shares of 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 the
applicable shares of capital stock of the Company pursuant to conversion
provisions specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if a series of Preferred
Stock has a cumulative dividend, full cumulative dividends on all shares of such
series of Preferred Stock shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for
payment for all
22
<PAGE>
past dividend periods and the then current dividend period, and (ii) if a series
of Preferred Stock does not have a cumulative dividend, full dividends on all
shares of the Preferred Stock of such series have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof set
apart for payment for the then current dividend period, no shares of such series
of Preferred Stock shall be redeemed unless all outstanding shares of Preferred
Stock of such series are simultaneously redeemed; provided, however, that the
foregoing shall not prevent the purchase or acquisition of Preferred Stock of
such series 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 series. In addition, unless (i) if such series of
Preferred Stock has a cumulative dividend, full cumulative dividends on all
outstanding shares of such series of Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period, and (ii) if such series of Preferred Stock does not
have a cumulative dividend, full dividends on the Preferred stock of such series
have been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for payment for the then current
dividend period, the Company shall not purchase or otherwise acquire directly or
indirectly any shares of Preferred Stock of such series (except by conversion
into or exchange for capital shares of the Company ranking junior to the
Preferred Stock of such series as to dividends and upon liquidation); provided,
however, that the foregoing shall not prevent the purchase or acquisition of
shares of Preferred Stock of such series 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 series.
If fewer than all of the outstanding shares of Preferred Stock of any
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
or for which redemption is requested by such holder (with adjustments to avoid
redemption of fractional shares) or by any other equitable manner determined by
the Company.
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 Preferred Stock
of any series to be redeemed at the address shown on the stock transfer books of
the Company. Each notice shall state: (i) the redemption date; (ii) the number
of shares and series of the Preferred Stock to be redeemed; (iii) the redemption
price; (iv) the place or places where certificates for such Preferred Stock are
to be surrendered for payment of the redemption price; (v) that dividends on the
shares to be redeemed will cease to accrue on such redemption date; and (vi) the
date upon which the holder's conversion rights, if any, as to such shares shall
terminate. If fewer than all the shares of Preferred Stock of any series are to
be redeemed, the notice mailed to each such holder thereof shall also specify
the number of shares of Preferred Stock to be redeemed from each such holder. If
notice of redemption of any 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 holders of any Preferred Stock so called for redemption, then
from and after the redemption date dividends will cease to accrue on such
Preferred Stock, 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 any 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 series of Preferred Stock shall be entitled to
receive out of assets of the Company legally available for distribution to
stockholders liquidating distributions in the amount of the liquidation
preference per share, if any, 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 noncumulative dividends for
prior dividend periods). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Preferred Stock will
have no right or claim to any of the remaining assets of the Company. In the
event that, upon any such voluntary or involuntary liquidation, dissolution or
winding up, the available assets
23
<PAGE>
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, 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 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. For such purposes, the
consolidation or merger of the Company with or into any other corporation, trust
or entity, or the sale, lease or conveyance of all or substantially all of the
property or business of the Company, shall not be deemed to constitute a
liquidation, dissolution or winding up of the Company.
Voting Rights
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.
Unless provided otherwise for any series of Preferred Stock, so long as
any shares of Preferred Stock of a series remain outstanding, the Company will
not, without the affirmative vote or consent of the holders of at least
two-thirds of the shares of such series of Preferred Stock outstanding at the
time, given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of capital stock ranking
prior to such series of Preferred Stock with respect to payment of dividends or
the distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized capital stock of the Company into such shares, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or repeal
the provisions of the Company's Articles of Incorporation or the Designating
Amendment for such series of Preferred Stock, whether by merger, consolidation
or otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of such series of Preferred Stock or the
holders thereof; provided, however, with respect to the occurrence of any of the
Events set forth in (ii) above, so long as the Preferred Stock remains
outstanding with the terms thereof materially unchanged, taking into account
that upon the occurrence of an Event the Company may not be the surviving
entity, the occurrence of any such Event shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting power of holders
of Preferred Stock, and provided further that (x) any increase in the amount of
the authorized Preferred Stock or the creation or issuance of any other series
of Preferred Stock, or (y) any increase in the amount of authorized shares of
such series or any other series of Preferred Stock, in each case ranking on a
parity with or junior to the Preferred Stock of such series with respect to
payment of dividends or the distribution of assets upon liquidation, dissolution
or winding up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of such series of Preferred Stock
shall have been redeemed or called for redemption and sufficient funds shall
have been deposited in trust to effect such redemption.
Conversion Rights
The terms and conditions, if any, upon which any series of Preferred
Stock is 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 shares of Preferred Stock are convertible,
the conversion price (or manner of calculation thereof), the conversion period,
provisions as to whether conversion will be at the option of the holders of the
Preferred Stock or the Company, the events requiring
24
<PAGE>
an adjustment of the conversion price and provisions affecting conversion in the
event of the redemption of such series of Preferred Stock.
Restrictions on Ownership
For the Company to qualify as a REIT under the Internal Revenue Code of
1986, as amended (the "Code"), not more than 50% in value of its outstanding
capital stock may be owned, directly or indirectly, by five or fewer individuals
(as defined in the Code to include certain entities) during the last half of a
taxable year. To assist the Company in meeting this requirement, the Company may
take certain actions to limit the beneficial ownership, directly or indirectly,
by a single person of the Company's outstanding equity securities, including any
Preferred Stock of the Company. Therefore, the Designating Amendment for each
series of Preferred Stock may contain provisions restricting the ownership and
transfer of the Preferred Stock. The applicable Prospectus Supplement will
specify any additional ownership limitation relating to a series of Preferred
Stock. See "Restrictions on Transfers of Capital Stock."
Transfer Agent
The transfer agent and registrar for the Preferred Stock will be set
forth in the applicable Prospectus Supplement.
DESCRIPTION OF COMMON STOCK
The description of the Company's Common Stock set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Company's Articles of Incorporation and Bylaws.
General
Under the Articles of Incorporation, the Company has authority to issue
100 million shares of Common Stock, par value $.01 per share. Under Maryland
law, stockholders generally are not responsible for the corporation's debts or
obligations. At July 25, 1996, the Company had outstanding 7,544,171 shares of
Common Stock.
Terms
Subject to the preferential rights of any other shares or series of
stock, holders of shares of Common Stock will be entitled to receive dividends
on shares of Common Stock 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.
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 Common Stock will
possess the exclusive voting power. There is no cumulative voting in the
election of Directors, which means that the holders of a majority of the
outstanding shares of Common Stock can elect all of the Directors then standing
for election, and the holders of the remaining shares of Common Stock will not
be able to elect any Directors.
Holders of Common Stock have no conversion, sinking fund or redemption
rights, or preemptive rights to subscribe for any securities of the Company.
25
<PAGE>
The Company intends to furnish its stockholders with annual reports
containing audited consolidated financial statements and an opinion thereon
expressed by an independent public accounting firm and quarterly reports for the
first three quarters of each fiscal year containing unaudited financial
information.
All shares of Common Stock will have equal dividend, distribution,
liquidation and other rights, and will have no preference, appraisal or exchange
rights.
Pursuant to the MGCL, a corporation generally cannot dissolve, amend
its Articles of Incorporation, 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 to be cast on the matter) is set forth in the corporation's Articles of
Incorporation. The Company's Articles of Incorporation do not provide for a
lesser percentage in such situations.
Restrictions on Ownership
For the Company to qualify as a REIT under the Code, not more than 50%
in value of its outstanding capital stock may be owned, directly or indirectly,
by five or fewer individuals (as defined in the Code to include certain
entities) during the last half of a taxable year. To assist the Company in
meeting this requirement, the Company may take certain actions to limit the
beneficial ownership, directly or indirectly, by a single person of the
Company's outstanding equity securities. See "Restrictions on Transfers of
Capital Stock."
Transfer Agent
The transfer agent and registrar for the Common Stock is American Stock
Transfer and Trust Company.
RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK
For the Company to qualify as a REIT under the Code, among other
things, not more than 50% in value of its outstanding capital stock may be
owned, directly or indirectly, by five or fewer individuals (defined in the Code
to include certain entities) during the last half of a taxable year (other than
the first year) (the "Five or Fewer Test"), and such shares of capital stock
must be beneficially owned by 100 or more persons during at least 335 days of a
taxable year of 12 months (other than the first year) or during a proportionate
part of a shorter taxable year. The Articles of Incorporation, subject to
certain exceptions, provide that no holder may own, or be deemed to own by
virtue of the attribution provisions of the Code, shares of the Company's
capital stock in excess of the Ownership Limit. Pursuant to the Code, generally,
certain types of entities, such as pension trusts qualifying under Section
401(a) of the Code, United States investment companies registered under the
Investment Company Act of 1940, corporations, trusts and partnerships will be
looked-through for purposes of the Five or Fewer Test (i.e., the beneficial
owners of such entities will be counted as holders). The Company's Articles of
Incorporation limit such entities under the Look-Through Ownership Limit to
holdings of no more than 15% of the aggregate value of the Company's shares of
capital stock. Any transfer of shares of capital stock or any security
convertible into shares of capital stock that would create a direct or indirect
ownership of shares of capital stock in excess of the Ownership Limit or the
Look-Through Ownership Limit or that would result in the disqualification of the
Company as a REIT, including any transfer that results in the shares of capital
stock being owned by fewer than 100 persons or results in the Company being
"closely held" within the meaning of Section 856(h) of the Code shall be null
and void, and the intended transferee will acquire no rights to the shares of
capital stock. The foregoing restrictions on transferability and ownership will
not apply if the Board of Directors determines that it is no longer in the best
interests of the Company to attempt to qualify, or to continue to qualify, as a
REIT. The Board of Directors may, in its sole discretion, waive the Ownership
Limit or the Look-Through
26
<PAGE>
Ownership Limit if evidence satisfactory to the Board of Directors and the
Company's tax counsel is presented that the changes in ownership will not then
or in the future jeopardize the Company's REIT status.
Capital stock owned, or deemed to be owned, or transferred to a
shareholder in excess of the Ownership Limit or the Look-Through Ownership Limit
or that causes the Company to be treated as "closely-held" under Section 856(h)
of the Code or is otherwise not permitted as provided above, will be designated
shares in trust ("Shares in Trust") that will be transferred, by operation of
law, to a person unaffiliated with the Company designated by the Board of
Directors as trustee (the "Trustee") of a trust (the "Share Trust") for the
benefit of one or more charitable organizations. Shares in Trust will remain
issued and outstanding Common or Preferred Shares of the Company and will be
entitled to the same rights and privileges as all other shares of the same class
or series. The Trustee will receive all dividends and distributions on the
Shares in Trust for the Share Trust and will hold such dividends or
distributions in trust for the benefit of one or more designated charitable
beneficiaries. The Trustee will vote all Shares in Trust. Any vote cast by the
proposed transferee in respect of the Shares in Trust prior to the discovery by
the Company that such shares have been transferred to the Share Trust shall be
rescinded and shall be void ab initio. Any dividend or distribution paid to a
proposed transferee or owner of Shares in Trust prior to the discovery by the
Company that such shares have been transferred to the Share Trust will be
required to be repaid upon demand to the Trustee for the benefit of one or more
charitable beneficiaries. The Trustee may, at any time the Shares in Trust are
held in the Share Trust, transfer the interest in the Share Trust representing
the Shares in Trust to any person whose ownership of the shares of capital stock
designated as Shares in Trust would not violate the Ownership Limit or the
Look-Through Ownership Limit, or otherwise result in the disqualification of the
REIT, as described above, and provided such permitted transferee purchases such
shares for valuable considerations. Upon such sale, the proposed original
transferee will receive the lesser of (i) the price paid by the original
transferee shareholder for the shares of capital stock that were transferred to
the Share Trust, or if the original transferee shareholder did not give value
for such shares (e.g., the capital stock was received through a gift, devise or
other transaction), the average closing price for the class of shares from which
such shares of Shares in Trust were designated for the ten days immediately
preceding such sale or gift and (ii) the price received by the Trustee from such
sale. Any amounts received by the Trustee in excess of the amounts paid to the
proposed transferee will be distributed to one or more charitable beneficiaries
of the Share Trust. If the foregoing transfer restrictions are determined to be
void or invalid by virtue of any legal decision, statute, rule or regulation,
then the intended transferee of shares held in the Share Trust may be deemed, at
the option of the Company, to have acted as an agent on behalf of the Company in
acquiring the Shares in Trust and to hold the Shares in Trust on behalf of the
Company.
In addition, the Company has the right, for a period of 90 days during
the time any shares of Shares in Trust are held by the Trustee, to purchase all
or any portion of the Shares in Trust from the Trust at the lesser of (i) the
price initially paid for such shares by the original transferee-shareholder, or
if the original transferee-shareholder did not give value for such shares (e.g.,
the shares were received through a gift, device or other transaction), the
average closing price for the class of stock from which such Shares in Trust
were designated for the ten days immediately preceding such sale or gift, and
(ii) the average closing price for the class of shares form which such Shares in
Trust were designated for the ten trading days immediately preceding the date
the Company elects to purchase such shares. The 90-day period begins on date of
the violative transfer if the original transferee-shareholder gives notice to
the Company of the transfer or, if no such notice is given, the date the Board
of Directors determines that a violative transfer has been made.
All certificates representing shares of stock of the Company bear a
legend referring to the restrictions described above.
Each shareholder shall upon demand be required to disclose to the
Company in writing any information with respect to the direct, indirect and
constructive ownership of capital stock as the Board of Directors deems
necessary to comply with the provisions of the Code applicable to REITs, to
comply with the requirements of any taxing authority or governmental agency or
to determine any such compliance.
27
<PAGE>
The Ownership Limit and the Look-Through Ownership Limit may have the
effect of precluding acquisition of control of the Company.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain material U.S. Federal income tax
considerations to the Company regarding the offering of Securities. The
following discussion is not exhaustive of all possible tax considerations and is
not tax advice. The Code provisions governing the Federal income tax treatment
of REITs are highly technical and complex, and this summary is qualified in its
entirety by the applicable Code provisions, rules and regulations promulgated
thereunder, and the administrative and judicial interpretations thereof. The
following discussion is based on current law. The tax treatment of a holder of
any of the Securities will vary depending upon the terms of the specific
Securities acquired by such holder as well as his particular situation, and this
discussion does not attempt to address any aspects of Federal income taxation
relating to the holders of Securities. Certain Federal income tax considerations
relevant to holders of Securities will be provided in the applicable Prospectus
Supplement relating thereto.
EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT WITH HIS OR HER OWN TAX
ADVISOR WITH RESPECT TO SUCH PURCHASER'S SPECIFIC FEDERAL, STATE, LOCAL, FOREIGN
AND OTHER TAX CONSEQUENCES OF THE PURCHASE, HOLDING AND SALE OF SECURITIES.
Taxation of the Company
The Company intends to operate so as to meet the requirements under the
Code for qualification as a REIT, commencing with its taxable year ending
December 31, 1995. No assurance can be given, however, that such requirements
will be met. Based on various assumptions and factual representations made by
the Company, in the opinion of Phillips, Lytle, Hitchcock, Blaine & Huber,
counsel to the Company, the Company has been organized in conformity with the
requirements for qualification as a REIT beginning with its taxable year ending
December 31, 1995, and its proposed method of operation as described in this
Prospectus and as represented by the Company will enable it to satisfy the
requirements for such qualification. Such qualification depends upon the
Company's ability to meet the various requirements imposed under the Code
through actual operating results, as discussed below. Phillips, Lytle,
Hitchcock, Blaine & Huber will not review these operating results, and no
assurance can be given that actual operating results will meet these
requirements. The opinion of Phillips, Lytle, Hitchcock, Blaine & Huber is not
binding on the Internal Revenue Service (the "Service"). In addition, the
opinion of Phillips, Lytle, Hitchcock, Blaine & Huber is also based upon
existing law, Treasury regulations, currently published administrative positions
of the Service and judicial decisions, which are subject to change either
prospectively or retroactively.
In any year in which the Company qualifies as a REIT, it generally will
not be subject to Federal corporate income taxes on that portion of its ordinary
income or capital gain that is currently distributed to shareholders. The REIT
provisions of the Code generally allow a REIT to deduct distributions paid to
its shareholders. This deduction for distributions paid to shareholders
substantially eliminates the Federal "double taxation" on earnings (once at the
corporate level and once again at the shareholder level) that usually results
from investments in a corporation.
Even if the Company qualifies as a REIT, however, the Company will be
subject to Federal income tax, as set forth below. First, the Company will be
taxed at regular corporate rates on its undistributed REIT taxable income,
including undistributed net capital gains. Second, under certain circumstances,
the Company may be subject to the "alternative minimum tax" as a consequence of
its items of tax preference. Third, if
28
<PAGE>
the Company has net income from the sale or other disposition of "foreclosure
property" that is held primarily for sale to customers in the ordinary course of
business or other non-qualifying income from foreclosure property, it will be
subject to tax at the highest corporate rate on such income. Fourth, if the
Company has net income from prohibited transactions (which are, in general,
certain sales or other disposition of property other than foreclosure property
held primarily for sale to customers in the ordinary course of business), such
income will be subject to a 100% tax. Fifth, if the Company should fail to
satisfy either the 75% or 95% gross income test (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 the net income
attributable to the greater of the amount by which the Company fails the 75% or
95% test, multiplied by a fraction intended to reflect the Company's
profitability. Sixth, if the Company fails to distribute during each 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 will be subject to a 4% excise
tax on the excess of such required distribution over the amounts actually
distributed. Seventh, if the Company should dispose of any of the asset owned at
the time of the Initial Offering that had a fair market value at such time in
excess of its adjusted tax basis ("Built-In-Gain") or any asset acquired by the
Company from a C corporation (i.e., a corporation generally subject to the full
corporate level tax) in a carryover basis transaction during the ten-year period
(the "Recognition Period") beginning on the date of the Initial Offering with
respect to assets owned by the Company at the time of the Initial Offering, or
the date on which the asset was acquired by the Company from a C corporation,
then, to the extent of the Built-In Gain, such gain will be subject to a tax at
the highest regular corporate rate, pursuant to guidelines issued by the Service
(the "Built-In Gain Rules").
Requirements for Qualification
To qualify as a REIT, the Company must elect to be so treated and must meet
the requirements, discussed below, relating to the Company's organization,
sources of income, nature of assets and distributions of income to shareholders
("REIT Requirements").
Organizational Requirements
The Code defines a REIT as a corporation, trust or association: (i)
that is managed by one or more trustees or directors, (ii) the beneficial
ownership of which is evidenced by transferable shares or by transferable
certificates of beneficial interest, (iii) that would be taxable as a domestic
corporation but for the REIT Requirements, (iv) that is neither a financial
institution nor an insurance company subject to certain provisions of the Code,
(v) the beneficial ownership of which is held by 100 or more persons, and (vi)
at all times during the last half of each taxable year not more than 50% in
value of the outstanding shares of which is owned, directly or indirectly,
through the application of certain attribution rules, by five or fewer
individuals (as defined in the Code to include certain entities). In addition,
certain other tests, described below, regarding the nature of its income and
assets also must be satisfied. The Code provides that conditions (i) through
(iv), inclusive, must be met during the entire taxable year and that condition
(v) must be met during at least 335 days of a taxable year of twelve months, or
during a proportionate part of a taxable year of less than 12 months. Conditions
(v) and (vi) (the "100 shareholder" and "five or fewer" requirements) will not
apply until after the first taxable year for which an election is made to be
taxed as a REIT. For purposes of conditions (v) and (vi), pension funds and
certain other tax-exempt entities are treated as individuals, subject to a
"look-through" exception in the case of condition (vi).
Prior to consummation of the Initial Offering, the Company did not
satisfy conditions (v) and (vi) above. The Initial Offering and related
transactions allowed the Company to satisfy the 100 shareholder and
29
<PAGE>
five or fewer requirements. In addition, the Company's Articles of Incorporation
currently include certain restrictions regarding transfer of its stock, which
restrictions are intended (among other things) to assist the Company in
continuing to satisfy conditions (v) and (vi) above.
In addition, a corporation may not elect to become a REIT unless its
taxable year is the calendar year. Effective January 1, 1995, the Company
changed its taxable year to the calendar year.
In order to provide the Company with flexibility, the Company owns the
Properties through the Partnership. The Company holds a 99% limited partnership
interest in the Partnership. The Subsidiary, a wholly-owned subsidiary of the
Company, holds a 1% general partner interest in the Partnership. The Partnership
and the Subsidiary are qualified REIT subsidiaries. A qualified REIT subsidiary
is any corporation that is 100% owned by a REIT at all times during the period
the subsidiary is in existence. Under Section 856(i) of the Code, a qualified
REIT subsidiary is not treated as a separate corporation from the REIT, and all
assets, liabilities, income, deductions, and credits of the qualified REIT
subsidiary are treated as assets, liabilities and such items (as the case may
be) of the REIT. The Partnership is currently disregarded for Federal income tax
purposes since the existence of the Subsidiary is ignored for Federal income tax
purposes and, as a result, the Partnership has only one partner for Federal
income tax purposes.
Although the Partnership is, as of July 25, 1996, wholly-owned by the
Company and the Subsidiary, the Company anticipates using units of the
Partnership to acquire properties from unrelated third parties which would
result in the Partnership being treated as a partnership for Federal income tax
purposes and the Company being treated as a partner in the Partnership. In the
case of a REIT that is a partner in a partnership, Treasury 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 asset tests. Thus, the Company's proportionate share of the
assets, liabilities and items of income of the Partnership will be treated as
assets, liabilities and items of income of the Company for purposes of applying
the requirements described herein.
Income Tests
To maintain qualification as a REIT, three gross income requirements
must be satisfied annually.
. First, at least 75% of the Company's gross income,
excluding gross income from certain dispositions of
property held primarily for sale to customers in the
ordinary course of a trade or business ("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 form 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 and from dividends, interest and
gain from the sale or disposition of stock or
securities or from any combination of the foregoing.
. Third, less than 30% of the Company's gross income
(including gross income from prohibited transactions)
for each taxable year is derived from gain from the
sale or other disposition of stock or securities held
for less than one year, gain from
30
<PAGE>
prohibited transactions and gain from the sale or
other disposition of real property held for less than
four years (apart from involuntary conversion and
sales of foreclosure property). For purposes of
applying the 30% gross income test, the holding
period of the Properties acquired by the Company at
the time of the Initial Offering will be deemed to
have commenced on the date of acquisition.
Rents received or deemed to be 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 generally must not be based
in whole or in part on the income or profits of any
person.
. Second, the Code provides that rents from a tenant will
not qualify as "rents from real property" in satisfying
the gross income tests if the REIT, or an owner of 10%
or more of the REIT, directly 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 the
personal property will not qualify as "rents from real
property."
. Finally, for rents to qualify as "rents from real
property" the REIT must not operate or manage the
property or furnish or render services to tenants,
other than through an "independent contractor" who is
adequately compensated and from whom the REIT does not
derive any income; provided, however, that a REIT may
provide services with respect to its properties and the
income will qualify as "rents from real property" if
the services are "usually or customarily rendered" in
connection with the rental of a room or other space for
occupancy only and are not otherwise considered
"rendered to the occupant."
The Company does not anticipate charging rent that is based in whole or
in part on the income or profits of any person. The Company will not derive rent
attributable to personal property leased in connection with real property that
exceeds 15% of the total rents. The Company does not anticipate receiving rent
from Related Party Tenants.
The Company provides certain services with respect to the Properties.
The Company believes that the services provided by it directly are usually or
customarily rendered in connection with the rental of space for occupancy only
and are not otherwise rendered to particular tenants and therefore that the
provision of such services will not cause rents received with respect to the
Properties to fail to qualify as rents from real property. Services with respect
to the Properties that may not be provided by the Company directly will be
performed by independent contractors.
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
that year if it is eligible for relief under certain provisions of the Code.
These relief provisions will generally be available if (i) the Company's failure
to meet these tests was due to reasonable cause and not due to willful neglect,
(ii) the Company attaches a schedule of the sources of its income to its Federal
income tax return and (iii) any incorrect information on the schedule is 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
31
<PAGE>
satisfy the gross income tests because non-qualifying income that the Company
intentionally incurs exceeds the limits on such income, the Service could
conclude that the Company's failure to satisfy the tests was not due to
reasonable cause. As discussed above, even if these relief provisions apply, a
100% tax would be imposed on the greater of the amount by which the Company
fails either the 75% or 95% gross income test, multiplied by a fraction intended
to reflect the Company's profitability. No similar mitigation provision provides
relief if the Company fails the 30% income test, and in such case, the Company
will cease to qualify as a REIT.
Asset Tests
At the close of each quarter of its taxable year, the Company also must
satisfy three tests relating to the nature and diversification of its assets.
. First, at least 75% of the value of the Company's
total assets must be represented by real estate
assets, cash, cash items and government securities.
. Second, no more than 25% of the value 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.
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
securities or other property during a quarter, the failure can be cured by
disposition of sufficient non-qualifying assets within 30 days after the close
of that quarter. The Company intends to maintain adequate records of the value
of its assets to ensure compliance with the asset tests and to take such other
actions within 30 days after the close of any quarter as may be required to cure
any noncompliance.
Annual Distribution Requirements
To qualify as a REIT, the Company is required to make distributions
(other than capital gain distributions) to its shareholders 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
capital gain) and (ii) 95% of the net income, if any, from foreclosure property
in excess of the special tax on income from foreclosure property, minus (b) the
sum of certain items of non-cash income. Such distributions must be paid in the
taxable year to which they relate, or in the following taxable year if declared
before the Company timely files its Federal income tax return for such year and
if paid on or before the first regular distribution after such declaration. To
the extent that the Company does not distribute all of its net capital gain or
distributes less than 100% (but at least 95%) of its "REIT taxable income" as
adjusted, it will be subject to tax thereon at regular ordinary or capital gains
corporate tax rates, as the case may be. Further, if the Company should fail to
distribute during each calendar year at least the sum of (a) 85% of its REIT
ordinary income for that year, (b) 95% of its REIT capital gain net income for
that year and (c) 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. In addition, during its
Recognition Period, if the
32
<PAGE>
Company disposes of any asset subject to the Built-In Gain Rules, the Company
will be required, pursuant to guidance issued by the Service, to distribute at
least 95% of the Built-In Gain (after tax), if any, recognized on the
disposition of the asset.
The Company intends to make timely distributions sufficient to satisfy
the 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 95%
distribution requirement. It is possible, however, that the Company, from time
to time, may not have sufficient cash or other liquid assets to meet the 95%
distribution requirement or to distribute such greater amount as may be
necessary to avoid income and excise taxation, due to timing differences between
(i) the actual receipt of income and actual payment of deductible expenses and
(ii) the inclusion of such income and deduction of such expenses in arriving at
taxable income of the Company, or if the amount of nondeductible expenses such
as principal amortization or capital expenditures exceed the amount of non-cash
deductions. In the event that such timing differences occur, the Company may
find it necessary to arrange for borrowings, if possible, in order to meet the
distribution requirement.
Under certain circumstances, the Company may be able to rectify a
failure to meet the distribution requirement for a year by paying "deficiency
dividends" to shareholders in a later year, which may be included in the
Company's deduction for dividends paid for the earlier year. Thus, the Company
may be able to avoid being taxed on amounts distributed as deficiency dividends.
The Company will, however, be required to pay interest based upon the amount of
any deduction taken for deficiency dividends.
Earnings and Profits.
In order to qualify as a REIT, the Company must either satisfy the REIT
requirements described in this Prospectus for all taxable years after 1986 or
have, at the close of any taxable year, no earnings and profits attributable to
a non-REIT year. Pursuant to Treasury Regulations, in order to qualify under
either of these two provisions, the Company must not have acquired the assets of
a corporation in a nonrecognition transaction after 1986 with accumulated
earnings and profits attributable to a non-REIT period unless, by the close of
its first taxable year, such earnings are distributed to the shareholders.
Accordingly, any earnings and profits that are carried over to the Company
through the transactions resulting in the formation of the Company (the
"Formation Transactions") were required, pursuant to Section 381 of the Code, to
have been distributed to the shareholders prior to the close of the Company's
first taxable year. The Company has represented that it had no non-REIT earnings
and profits for Federal income tax purposes as of the end of its first taxable
year ended December 31, 1995. In rendering its opinion regarding the eligibility
of the Company to qualify as a REIT, Phillips, Lytle, Hitchcock, Blaine & Huber
is relying on such representation. The Company believes that even if there were
a subsequent determination that it received non-REIT earnings and profits in the
Formation Transactions, distributions to shareholders in 1995 in excess of
current earnings and profits likely were sufficient to distribute any such non-
REIT earnings and profits. Moreover, although not free from doubt, pursuant to
Treasury Regulations, the Company may be able to use certain "deficiency
dividend" procedures to distribute any non-REIT earnings and profits determined
to exist that were not distributed by the close of the 1995 taxable year. There
can be no assurance, however, that 1995 distributions were sufficient to
distribute any non-REIT earnings and profits determined to exist or that such
deficiency dividend procedures would be available. In the event that 1995
distributions were insufficient to distribute any such non-REIT earnings and
profits, and the Company were unable to utilize the deficiency dividend
procedures in the Treasury Regulations, the Company would fail to qualify as a
REIT.
33
<PAGE>
Failure to Qualify
If the Company fails to qualify 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 shareholders in any year in which the Company
fails to qualify will not be deductible by the Company nor will they be required
to be made. In such event, to the extent of current and accumulated earnings and
profits, all distributions to shareholders will be dividends, taxable as
ordinary income, and subject to certain limitations of the Code, corporate
distributees may be eligible for the dividends-received deduction. Unless the
Company is entitled to relief under specific statutory provisions, the Company
also will be ineligible for qualification 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. For example, if the Company fails to satisfy the gross income
tests because non-qualifying income that the Company intentionally incurs
exceeds the limit on such income, the Service could conclude that the Company's
failure to satisfy the tests was not due to reasonable cause.
Built-In Gain
To the extent the Company held any asset that has Built-In Gain as of
the first day of the first taxable year for which the Company qualifies as a
REIT, the Company may recognize a corporate level tax at the time it disposes of
such asset. Pursuant to Section 337(d)(1) of the Code, Congress has authorized
the Service to issue regulations to ensure that the repeal of the General
Utilities doctrine is not circumvented through the use of investment vehicles
like a REIT. In Notice 88-19, 1988-1 C.B. 486, the Service announced that it
intends to promulgate regulations requiring a C corporation to recognize any net
Built-In Gain that would have been realized if the corporation had liquidated at
the end of the last taxable year before the taxable year in which it qualifies
to be taxed as a REIT. However, in lieu of this immediate recognition rule, the
regulations will permit a REIT to elect to be subject to rule similar to rules
applicable to S corporations with built-in gains under Section 1374 of the Code.
Section 1374 of the Code generally provides that a corporation with appreciated
assets that elects S corporation status will recognize a corporate level tax on
the built-in gain if the S corporation disposes of the appreciated assets within
a ten-year period commencing on the date on which the S corporation election was
made. The Company has represented that it will elect to have rules similar to
the rules of Section 1374 of the Code apply to it. Accordingly, if the Company
disposes of appreciated assets in a taxable transaction within a ten-year period
commencing on the date the Company first qualifies as a REIT, the Company will
be taxed at the corporate level on the Built-in Gain attributable to the
disposed assets. For these purposes, the assets owned by the Company prior to
the Formation Transactions will be appreciated assets. If these assets are
disposed of within the ten-year recognition period, the Company will recognize a
corporate level tax on the Built-In Gain attributable to the disposed assets.
Accordingly, the disposition of assets acquired in the Formation Transactions
will adversely affect a shareholder's investment in the Company. However, the
Company may dispose of Property that is subject to the tax on Built-in Gain in a
tax-free exchange of like-kind property pursuant to Section 1031 of the Code
which will not trigger Built-In Gain. Moreover, the Company does not anticipate
disposing of a substantial portion of its Built-In Gain assets, other than in a
tax-free exchange, within the ten-year recognition period. The Company estimates
that the amount of Built-In Gain with respect to the Properties is approximately
$5,000,000 and the amount of the corporate level tax if such Built-In Gain was
recognized would be approximately $1,750,000 at current tax rates. The amount of
such Built-In Gain is based upon the Company's determination of fair value as of
the first day of the first taxable year for which the Company qualified as a
REIT which valuation could be challenged by the Service.
34
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell Securities to or through one or more underwriters
or dealers for public offering and sale by or through them, and may also sell
Securities directly to one or more institutional or other purchasers, through
agents or through any combination of these methods of sale. Any such
underwriter, dealer or agent involved in the offer and sale of Securities will
be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company also may offer and sell the Securities in
exchange for one or more of its outstanding issues of debt or convertible or
exchangeable debt securities. The Company also may, from time to time, authorize
underwriters acting as the Company's agents to offer and sell the Securities
upon the terms and conditions as shall be set forth in any Prospectus
Supplement. In connection with the sale of 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 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 (which may be changed from time to time) from the purchasers for
whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Securities, and any discounts,
concessions or commission allowed by underwriters to participating dealers, will
be set forth in an 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 with the Company, to indemnification
against and contribution toward certain civil liabilities, including liabilities
under the Securities Act, and to reimbursement by the Company for certain
expenses.
Each series of Debt Securities or Preferred Stock will be a new issue
with no established trading market. The Company may elect to list any series of
Debt Securities or Preferred Stock on an exchange, but is not obligated to do
so. It is possible that one or more underwriters may make a market in a series
of Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. Therefore, no assurance can be given as to
the liquidity of, or the trading market for, the Securities.
Underwriters, dealers and agents and their associates may engage in
transactions with, or perform services for, the Company in the ordinary course
of business.
If so indicated in the applicable Prospectus Supplement, the Company
will authorize dealers or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt Securities from the
Company at the public offering price set forth in such Prospectus Supplement
pursuant to delayed delivery contracts ("Contracts") providing for payment and
delivery on the date or dates stated in such Prospectus Supplement. Each
Contract will be for an amount no less than, and the aggregate principal amounts
of Debt Securities sold pursuant to Contracts shall be not less nor more than,
the respective amounts stated in the applicable Prospectus Supplement.
Institutions with whom Contracts, when authorized, may be made include
commercial and savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions and other institutions, but
will in all cases be subject to the approval of the Company. Contracts will not
be subject to any conditions except (i) the purchase by an institution of the
Debt Securities covered by its Contracts shall not at the time of delivery be
prohibited under the laws of any jurisdiction in
35
<PAGE>
the United States to which such institution is subject, and (ii) if Debt
Securities are being sold to underwriters, the Company shall have sold to such
underwriters the total principal amount of the Debt Securities less the
principal amount thereof covered by the Contracts. If in conjunction with the
sale of Debt Securities to institutions under Contracts, Debt Securities are
also being sold to the public, the consummation of the sale under the Contracts
shall occur simultaneously with the consummation of the sale to the public. The
underwriters and such other agents will not have any responsibility in respect
of the validity or performance of such Contracts.
In order to comply with the securities laws of certain states and other
jurisdictions, if applicable, the Securities offered hereby will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states Securities may not be sold unless they have been
registered or qualified for sale in the applicable state or other jurisdiction
or an exemption from the registration or qualification requirement is available
and is complied with.
Under applicable rules and regulations under the Exchange Act, any
person engaged in the distribution of the Securities offered hereby may not
simultaneously engage in market making activities with respect to the Securities
for a period of two business days prior to the commencement of such
distribution.
LEGAL MATTERS
Phillips, Lytle, Hitchcock, Blaine & Huber, Buffalo, New York, will
pass upon certain legal matters for the Company. Phillips, Lytle, Hitchcock,
Blaine & Huber has in the past represented and is presently representing the
Company in certain other matters. Robert J. Attea, Chairman of the Board of the
Company, is the brother of a partner of Phillips, Lytle, Hitchcock, Blaine &
Huber. Several partners of Phillips, Lytle, Hitchcock, Blaine & Huber own shares
of Common Stock. Phillips, Lytle, Hitchcock, Blaine & Huber will rely upon the
opinion of Hogan & Hartson L.L.P., Washington, D.C., as to all matters of
Maryland law.
EXPERTS
The financial statements and schedules thereto incorporated by
reference in this Prospectus or elsewhere in the Registration Statement, to the
extent and for the periods indicated in their reports, have been audited by
Ernst & Young LLP, independent accountants, and are incorporated herein in
reliance upon the authority of said firm as experts in giving said reports.
36
<PAGE>
================================================================================
No person has been authorized in connection with the offering made hereby to
give any information or to make any representation not contained in this
Prospectus and, if given or made, such information or representation must not be
relied upon as having been authorized by the Company or any other person. This
Prospectus does not constitute an offer to sell or a solicitation of an 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
----
Available Information.......................... 2
Incorporation of Certain
Documents by Reference....................... 2
The Company.................................... 3
Use of Proceeds................................ 3
Ratios of Earnings to Fixed Charges............ 4
Description of Debt Securities................. 5
Description of Preferred Stock................. 20
Description of Common Stock.................... 25
Restrictions on Transfers of Capital Stock..... 26
Certain Federal Income Tax Considerations...... 28
Plan of Distribution........................... 35
Legal Matters.................................. 36
Experts........................................ 36
================================================================================
================================================================================
$150,000,000
Sovran Self Storage, Inc.
Debt Securities
Preferred Stock
Common Stock
--------------------
PROSPECTUS
--------------------
,1996
================================================================================
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses in connection with the issuance and distribution of the
securities being registered will be borne by the Company and are set forth in
the following table (all amounts except the registration fee and NASD fee are
estimated):
<TABLE>
<S> <C>
Registration fee $ 51,724
NASD fee 15,500
Legal fees and expenses 150,000
Blue Sky expenses 20,000
Accounting fees and expenses 100,000
Printing fees and expenses 300,000
Miscellaneous 10,000
-----
Total $647,224
========
</TABLE>
---------------
Item 15. Indemnification of Directors and Officers.
The Registrant's officers and Directors are and will be indemnified
under the Articles of Incorporation and Bylaws of the Registrant against certain
liabilities. The Articles of Incorporation requires the Registrant to indemnify
its Directors and officers, among others, against claims and liabilities and
reasonable expenses actually incurred by them in connection with any claim or
liability by reason of their services in those or other capacities unless it is
established that the act or omission of the Director or officer was material to
the matter giving rise to the proceeding and was committed in bad faith or was
the result of active and deliberate dishonestly or the Director or officer
actually received an improper personal benefit or, in the case of any criminal
proceeding, the Director or officer has reasonable cause to believe that the act
or omission was unlawful.
The Registrant has entered into indemnification agreements with each of
its senior executive officers and Directors. The indemnification agreements
require, among other matters, that the Registrant indemnify such officers and
Directors to the fullest extent permitted by law and advance to such officers
and Directors all related expenses, subject to reimbursement if it is
subsequently determined that indemnification is not permitted. Under these
agreements, the Registrant must also indemnify and advance all expenses incurred
by officers and Directors seeking to enforce their rights under the
indemnification agreements and may cover officers and Directors under the
Registrant's directors' and officers' liability insurance. Although the form of
indemnification agreement offers substantially the same scope of coverage
afforded by law, it provides additional assurance to Directors and officers that
indemnifications will be available because, as a contract, it cannot be modified
unilaterally in the future by the Board of Directors or the stockholders to
eliminate the rights it provides.
It is the position of the Commission that indemnification of directors
and officers for liabilities under the Securities Act is against public policy
and unenforceable pursuant to Section 14 of the Securities Act.
As permitted by Maryland Law, the Articles of Incorporation provides
that a Director or officer of the Company shall not be liable for monetary
damages to the Company or its shareholders for any act or omission in the
performance of his duties, except to the extent that (1) the person actually
received an improper benefit or (2) the person's action or failure to act was
the result of active and deliberate dishonesty and was material to the cause of
action adjudicated.
II-1
<PAGE>
Item 16. Exhibits.
- ------------
Exhibit No. Description
4.1 Amended and Restated Articles of Incorporation. (Incorporated by
reference to Exhibit 3.1 of the Registration Statement on Form S-11
of Sovran Self Storage, Inc., Registration No. 33-91422.)
4.2 Amended and Restated Bylaws. (Incorporated by reference to Exhibit
3.2 of the Registration Statement on Form S-11 of Sovran Self
Storage, Inc., Registration No. 33-91422.)
4.3 Indenture for Senior Debt Securities
4.4 Form of Senior Debt Security (included in Exhibit No. 4.3)
4.5 Indenture for Subordinated Debt Securities
4.6 Form of Subordinated Debt Security (included in Exhibit No. 4.5)
5.1 Opinion of Phillips, Lytle, Hitchcock, Blaine & Huber as to the
legality of the Securities being registered.
5.2 Opinion of Hogan & Hartson L.L.P. as to the legality of the
Securities being registered.
8.1 Opinion of Phillips, Lytle, Hitchcock, Blaine & Huber as to certain
tax matters.
12.1* Calculation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP, Independent Accountants.
23.2 Consent of Phillips, Lytle, Hitchcock, Blaine & Huber (included in
Exhibit 5.1 hereto).
23.3 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.2 hereto)
24.1* Powers of Attorney
- -----------------
* Previously filed.
II-2
<PAGE>
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
Section 10(a)(3)of the Securities Act;
(ii) To reflect in the prospectus any facts
or events arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change
in the information set forth in the registration
statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered
(if the total dollar value of securities offered
would not exceed that which was registered) and any
deviation from the low or high and 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 20% change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective registration statement; and
(iii) To include any material information
with respect to the plan of distribution not
previously disclosed in the registration statement or
any material change to such information in the
registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii)
herein do not apply if the information required to be included
in a post-effective amendment by those paragraphs is contained
in periodic reports filed with or furnished to the Commission
by the undersigned registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by
reference in the registration statement;
(2) That, for the purpose of determining any
liability under the Securities Act, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and
controlling persons of the registrant pursuant to the
provisions
II-3
<PAGE>
described under Item 15 above, or otherwise, the registrant
has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director,
officer, or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act ("Act") in accordance with the rules and
regulations prescribed by the Commission under Section
305(b)(2) of the Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Sovran Self
Storage, Inc. 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 Buffalo, New York, on the 4th day of September,
1996.
SOVRAN SELF STORAGE, INC.
By: /s/ Kenneth F. Myszka
--------------------------------
Kenneth F. Myszka, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
Signature Capacity Date
/s/ Robert J. Attea* Chairman of the Board of Directors September 4, 1996
- ------------------------------------
Robert J. Attea
/s/ Kenneth F. Myszka* President, Chief Executive Officer and September 4, 1996
- ---------------------------------- Director (Principal Executive Officer)
Kenneth F. Myszka
/s/ David L. Rogers Chief Financial Officer September 4, 1996
- ------------------------------------ (Principal Financial and Accounting
David L. Rogers Officer)
/s/ John Burns* Director September 4, 1996
- ------------------------------------
John Burns
/s/ Michael A. Elia* Director September 4, 1996
- ------------------------------------
Michael A. Elia
Director September 4, 1996
- ------------------------------------
Anthony P. Gammie
/s/ Charles E. Lannon* Director September 4, 1996
- ------------------------------------
Charles E. Lannon
</TABLE>
* By David L. Rogers as attorney-in-fact.
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ---------- ----------- ----
<S> <C> <C>
4.3 Indenture for Senior Debt Securities
4.4 Form of Senior Debt Security (included in Exhibit No. 4.3)
4.5 Indenture for Subordinated Debt Securities
4.6 Form of Subordinated Debt Security (included in Exhibit No. 4.5)
5.1 Opinion of Phillips, Lytle, Hitchcock, Blaine & Huber as to the legality of the Securities
being registered.
5.2 Opinion of Hogan & Hartson L.L.P. as to the legality of the Securities being registered.
8.1 Opinion of Phillips, Lytle, Hitchcock, Blaine & Huber as to certain tax matters.
12.1* Calculation of Ratios of Earnings to Fixed Charges.
23.1 Consent of Ernst & Young LLP, Independent Accountants.
23.2 Consent of Phillips, Lytle, Hitchcock, Blaine & Huber (included in Exhibit 5.1 hereto).
23.3 Consent of Hogan & Hartson L.L.P. (included in Exhibit 5.2 hereto)
24.1* Powers of Attorney
</TABLE>
* Previously filed
<PAGE>
EXHIBIT 4.3
- --------------------------------------------------------------------------------
SOVRAN SELF STORAGE, INC.
TO
[___________________]
Trustee
____________________
Indenture
Dated as of [______________,] 1996
____________________
Senior Debt Securities
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
RECITALS OF THE COMPANY....................................................... 1
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION......... 1
SECTION 101. Definitions................................................... 1
SECTION 102. Compliance Certificates and Opinions..........................12
------------------------------------
SECTION 103. Form of Documents Delivered to Trustee........................12
--------------------------------------
SECTION 104. Acts of Holders...............................................13
---------------
SECTION 105. Notices, etc., to Trustee and Company.........................15
-------------------------------------
SECTION 106. Notice to Holders: Waiver.....................................15
-------------------------
SECTION 107. Counterparts; Effect of Headings and Table of Contents........16
------------------------------------------------------
SECTION 108. Successors and Assigns........................................16
----------------------
SECTION 109. Severability Clause...........................................17
-------------------
SECTION 110. Benefits of Indenture.........................................17
---------------------
SECTION 111. Governing Law.................................................17
-------------
SECTION 112. Legal Holidays................................................17
--------------
SECTION 113. Immunity of Stockholders, Directors, Officers and Agents of
-----------------------------------------------------------
the Company...................................................17
-----------
SECTION 114. Conflict with Trust Indenture Act.............................18
---------------------------------
ARTICLE TWO - SECURITIES FORMS................................................18
SECTION 201. Forms of Securities...........................................18
-------------------
SECTION 202. Form of Trustee's Certificate of Authentication...............18
-----------------------------------------------
SECTION 203. Securities Issuable in Global Form............................19
----------------------------------
ARTICLE THREE - THE SECURITIES................................................20
SECTION 301. Amount Unlimited; Issuable in Series..........................20
------------------------------------
SECTION 302. Denominations.................................................23
-------------
SECTION 303. Execution, Authentication, Delivery and Dating................24
----------------------------------------------
SECTION 304. Temporary Securities..........................................26
--------------------
SECTION 305. Registration, Registration of Transfer and Exchange...........29
---------------------------------------------------
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities..............32
------------------------------------------------
SECTION 307. Payment of Interest; Interest Rights Preserved................33
----------------------------------------------
SECTION 308. Persons Deemed Owners.........................................36
---------------------
SECTION 309. Cancellation..................................................36
------------
SECTION 310. Computation of Interest.......................................37
-----------------------
ARTICLE FOUR - SATISFACTION AND DISCHARGE.....................................37
SECTION 401. Satisfaction and Discharge of Indenture.......................37
---------------------------------------
</TABLE>
(i)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 402. Application of Trust Funds......................................38
--------------------------
ARTICLE FIVE - REMEDIES.........................................................39
SECTION 501. Events of Default...............................................39
-----------------
SECTION 502. Acceleration of Maturity; Rescission and Annulment..............41
--------------------------------------------------
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.42
----------------------------------------------------------------
SECTION 504. Trustee May File Proofs of Claim................................42
--------------------------------
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
-----------------------------------------------------------
or Coupons......................................................43
----------
SECTION 506. Application of Money Collected..................................44
------------------------------
SECTION 507. Limitation on Suits.............................................44
-------------------
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium or
---------------------------------------------------------------
Make-Whole Amount, if any, and Interest..................................45
---------------------------------------
SECTION 509. Restoration of Rights and Remedies..............................45
----------------------------------
SECTION 510. Rights and Remedies Cumulative..................................45
------------------------------
SECTION 511. Delay or Omission Not Waiver....................................45
----------------------------
SECTION 512. Control by Holders of Securities................................46
--------------------------------
SECTION 513. Waiver of Past Defaults.........................................46
-----------------------
SECTION 514. Waiver of Usury, Stay or Extension Laws.........................46
---------------------------------------
SECTION 515. Undertaking for Costs...........................................47
---------------------
ARTICLE SIX - THE TRUSTEE.......................................................47
SECTION 601. Notice of Defaults..............................................47
------------------
SECTION 602. Certain Rights of Trustee.......................................47
-------------------------
SECTION 603. Not Responsible for Recitals or Issuance of Securities..........49
------------------------------------------------------
SECTION 604. May Hold Securities.............................................49
-------------------
SECTION 605. Money Held in Trust.............................................49
-------------------
SECTION 606. Compensation and Reimbursement..................................50
------------------------------
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting Interests.50
---------------------------------------------------------------
SECTION 608. Resignation and Removal; Appointment of Successor...............51
-------------------------------------------------
SECTION 609. Acceptance of Appointment by Successor..........................52
--------------------------------------
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.....53
-----------------------------------------------------------
SECTION 611. Appointment of Authenticating Agent.............................54
-----------------------------------
SECTION 612. Certain Duties and Responsibilities of the Trustee..............55
--------------------------------------------------
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY...............57
SECTION 701. Disclosure of Names and Addresses of Holders....................57
--------------------------------------------
SECTION 702. Reports by Trustee..............................................57
------------------
SECTION 703. Reports by Company..............................................57
------------------
SECTION 704. Company to Furnish Trustee Names and Addresses of Holders.......58
---------------------------------------------------------
</TABLE>
(ii)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE..............58
SECTION 801. Consolidations and Mergers of Company and Sales, Leases and
-----------------------------------------------------------
Conveyances Permitted Subject to Certain Conditions......................58
---------------------------------------------------
SECTION 802. Rights and Duties of Successor Corporation.......................59
------------------------------------------
SECTION 803. Officers' Certificate and Opinion of Counsel.....................59
--------------------------------------------
ARTICLE NINE - SUPPLEMENTAL INDENTURES........................................59
SECTION 901. Supplemental Indentures Without Consent of Holders...............59
--------------------------------------------------
SECTION 902. Supplemental Indentures with Consent of Holders..................61
-----------------------------------------------
SECTION 903. Execution of Supplemental Indentures.............................62
------------------------------------
SECTION 904. Effect of Supplemental Indentures................................62
---------------------------------
SECTION 905. Conformity with Trust Indenture Act..............................62
-----------------------------------
SECTION 906. Reference in Securities to Supplemental Indentures...............62
--------------------------------------------------
ARTICLE TEN - COVENANTS.......................................................63
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if any; and
---------------------------------------------------------------
Interest........................................................63
--------
SECTION 1002. Maintenance of Office or Agency.................................63
-------------------------------
SECTION 1003. Money for Securities Payments to Be Held in Trust...............65
-------------------------------------------------
SECTION 1004. Existence.......................................................66
---------
SECTION 1005. Maintenance of Properties.......................................66
-------------------------
SECTION 1006. Insurance.......................................................67
---------
SECTION 1007. Payment of Taxes and Other Claims...............................67
---------------------------------
SECTION 1008. Statement as to Compliance......................................67
--------------------------
SECTION 1009. Waiver of Certain Covenants.....................................67
---------------------------
ARTICLE ELEVEN - REDEMPTION OF SECURITIES.....................................67
SECTION 1101. Applicability of Article........................................67
------------------------
SECTION 1102. Election to Redeem; Notice to Trustee...........................68
-------------------------------------
SECTION 1103. Selection by Trustee of Securities to Be Redeemed...............68
-------------------------------------------------
SECTION 1104. Notice of Redemption............................................68
--------------------
SECTION 1105. Deposit of Redemption Price.....................................70
---------------------------
SECTION 1106. Securities Payable on Redemption Date...........................70
-------------------------------------
SECTION 1107. Securities Redeemed in Part.....................................71
---------------------------
ARTICLE TWELVE - SINKING FUNDS................................................71
SECTION 1201. Applicability of Article........................................71
------------------------
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities...........72
-----------------------------------------------------
SECTION 1203. Redemption of Securities for Sinking Fund.......................72
-----------------------------------------
ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS.........................72
</TABLE>
(iii)
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1301. Applicability of Article.................................... 72
------------------------
SECTION 1302. Repayment of Securities..................................... 73
-----------------------
SECTION 1303. Exercise of Option.......................................... 73
------------------
SECTION 1304. When Securities Presented for Repayment
---------------------------------------
Become Due and Payable...................................... 74
----------------------
SECTION 1305. Securities Repaid in Part................................... 75
-------------------------
ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE........................ 75
SECTION 1401. Applicability of Article: Company's Option to Effect Defeasance or
-------------------------------------------------------------------
Covenant Defeasance................................................... 75
-------------------
SECTION 1402. Defeasance and Discharge.................................... 75
------------------------
SECTION 1403. Covenant Defeasance......................................... 76
-------------------
SECTION 1404. Conditions to Defeasance or Covenant Defeasance............. 76
-----------------------------------------------
SECTION 1405. Deposited Money and Government Obligations to Be Held in Trust;
---------------------------------------------------------------
Other Miscellaneous Provisions........................................ 78
------------------------------
ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES.......................... 79
SECTION 1501. Purposes for Which Meetings May Be Called................... 79
-----------------------------------------
SECTION 1502. Call, Notice and Place of Meetings.......................... 79
----------------------------------
SECTION 1503. Persons Entitled to Vote at Meetings........................ 80
------------------------------------
SECTION 1504. Quorum; Action.............................................. 80
--------------
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
-------------------------------------------------------
of Meetings................................................. 81
-----------
SECTION 1506. Counting Votes and Recording Action of Meetings............. 82
-----------------------------------------------
SIGNATURES AND SEALS......................................................... 83
ACKNOWLEDGMENT............................................................... 84
EXHIBIT A
FORM OF REDEEMABLE OR NON-REDEEMABLE SENIOR SECURITY.......................A-1
EXHIBIT B
FORMS OF CERTIFICATION.....................................................B-1
</TABLE>
(iv)
<PAGE>
SOVRAN SELF STORAGE, INC.
Reconciliation and tie between Trust Indenture Act of 1939 (the "Trust
Indenture Act" or "TIA") and Indenture, dated as of [________________,] 1996.
<TABLE>
<CAPTION>
Trust Indenture
Act Section Indenture Section
--------------- -----------------
<S> <C>
(S) 310(a)(1)...................... 607
(a)(2)...................... 607
(b)...................... 607, 608
(S) 312(c)...................... 701
(S) 313(a)...................... 702
(c)...................... 702
(S) 314(a)...................... 703
(a)(4)...................... 1009
(c)(1)...................... 102
(c)(2)...................... 102
(e)...................... 102
(S) 315(b)...................... 601
(S) 316(a) (last sentence)...... 101 ("Outstanding")
(a)(1)(A)...................... 502, 512
(a)(1)(B)...................... 513
(b)...................... 508
(S) 317(a)(1)...................... 503
(a)(2)...................... 504
(S) 318(a)...................... 111
(c)...................... 111
</TABLE>
_______________
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 TIA Section 318(c), which provides
that the provisions of TIA Sections 310 to and including 317 of the Trust
Indenture Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
V
<PAGE>
INDENTURE, dated as of [_________________,] 1996, between SOVRAN SELF
STORAGE, INC., a corporation organized under the laws of the State of Maryland
(hereinafter called the "Company"), having its principal office at 5166 Main
Street, Williamsville, New York 14221, and [___________________], a banking
association organized under the laws of the _____________________________ as
Trustee hereunder (hereinafter called the "Trustee"), having a Corporate Trust
Office at ________________________________].
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes senior debt securities (hereinafter called the "Securities") evidencing
its unsecured and senior indebtedness, and has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time to time of the
Securities, to be issued in one or more Series as provided in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act" or "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 purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein,
and the terms "cash transaction" and "self-liquidating paper," as used in TIA
Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
<PAGE>
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP; and
(4) the words "herein," "hereof "and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in
---
Section 104.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
--------------------
to Section 611 hereof to act on behalf of the Trustee to authenticate
Securities.
"Authorized Newspaper" means a newspaper, printed in the English language
--------------------
or in an official language of the country of publication, customarily published
on each Business Day, whether or not published on Saturdays, Sundays or
holidays, and of general circulation in each place in connection with which the
term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
--------------
"Bearer Security" means any Security established pursuant to Section 201
---------------
which is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
------------------
committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary
----------------
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment or any other
------------
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities issued pursuant to
Section 301, any day, other than a
2
<PAGE>
Saturday or Sunday, that is not 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" of any Person means any and all shares, interests,
-------------
participations, rights to purchase, warrants, options or other equivalents
(however designated) of corporate stock or other equity of such Person.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
-----
successor.
"Commission" means the Securities and Exchange Commission, as from time to
----------
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Common Stock" means, with respect to any Person, all shares of capital
------------
stock issued by such Person other than Preferred Stock.
"Company" means the Person named as the "Company" in the first paragraph of
-------
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request
--------------- -------------
or order signed in the name of the Company by its Chairman of the Board, the
President or a Vice President, and by its Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"Comparable Treasury Issue" means the United States Treasury security
-------------------------
selected by an Independent Investment Banker as having maturity comparable to
the remaining term of the Notes to be redeemed that would be utilized, at the
time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Trustee after consultation with the
Company.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
-------------------------
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such a redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, the average of
all Reference Treasury Dealer Quotations for such redemption date.
3
<PAGE>
"Consolidated Net Assets" means as of any particular time the aggregate
-----------------------
amount of assets (less applicable reserves and other properly deductible items)
after deducting therefrom all current liabilities except for (a) notes and loans
payable, (b) current maturities of long-term debt and (c) current maturities of
obligations under capital leases, all as set forth on the most recent
consolidated balance sheet of the Company and its consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles and
practices as in effect on [_____________] [the date of the Senior Indenture].
"Conversion Event" means the cessation of use of (i) a Foreign Currency
----------------
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) any currency unit
(or composite currency) other than the ECU for the purposes for which it was
established.
"Corporate Trust Office" means the office of the Trustee at which, at any
----------------------
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at [______________________________].
"corporation" includes corporations, associations, companies and business
-----------
trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
------
"Custodian" has the meaning specified in Section 501.
---------
"Defaulted Interest" has the meaning specified in Section 307.
------------------
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
------ -
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to
---
time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
---------
office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the European
--------------------
Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System established
------------------------
by the Resolution of December 5, 1978 of the Council of the European
Communities.
4
<PAGE>
"Event of Default" has the meaning specified in Article Five.
----------------
"Foreign Currency" means any currency, currency unit or composite currency,
----------------
including, without limitation, the ECU issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments.
"GAAP" means, except as otherwise provided herein, generally accepted
----
accounting principles, as in effect from time to time, as used in the United
States applied on a consistent basis.
"Global Security" means a Security evidencing all or a part of a series of
---------------
Securities issued to and registered in the name of the depository for such
series, or its nominee, in accordance with Section 305, and bearing the legend
prescribed in Section 203.
"Government Obligations" means securities which are (i) direct obligations
----------------------
of the United States of America or the government which issued the Foreign
Currency in which the Securities of a particular series are payable, for the
payment of which its full faith and credit is pledged or (ii) obligations of a
Person controlled or supervised by and acting as an agency or instrumentality of
the United States of America or such government which issued the Foreign
Currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America or such other government, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
--------
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Guaranty" by any Person means any Obligation, contingent or otherwise, of
--------
such Person guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including, without
limitation, every Obligation of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Indebtedness, (ii) to purchase property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that a
-------- -------
Guaranty by any Person shall not include endorsements by such Person for
collection or deposit, in either case in the ordinary course of
5
<PAGE>
business. The terms "Guaranteed," "Guaranteeing" and "Guarantor" shall have
meanings correlative to the foregoing.
"Holder" means, in the case of a Registered Security, the Person in whose
------
name a Security is registered in the Security Register and, in the case of a
Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indebtedness" means, with respect to any Person, without duplication, (i)
------------
any Obligation of such Person relating to any indebtedness of such Person (A)
for borrowed money (whether or not the recourse of the lender is to the whole of
the assets, of such person or only to a portion thereof), (B) evidenced by
notes, debentures or similar instruments (including purchase money obligations)
given in connection with the acquisition of any property or assets (other than
trade accounts payable for inventory or similar property acquired in the
ordinary course of business), including securities, for the payment of which
such Person is liable, directly or indirectly, or the payment of which is
secured by a lien, charge or encumbrance on property or assets of such Person,
(C) for goods, materials or services purchased in the ordinary course of
business (other than trade accounts payable arising in the ordinary course of
business), (D) with respect to letters of credit or bankers acceptances issued
for the account of such Person or performance, surety or similar bonds, (E) for
the payment of money relating to a Capitalized Lease Obligation or (F) under
interest rate swaps, caps or similar agreements and foreign exchange contracts,
currency swaps or similar agreements; (ii) any liability of others of the kind
described in the preceding clause (i), which such Person has Guaranteed or which
is otherwise its legal liability; and (iii) 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) or (ii).
"Indenture" means this instrument as originally executed or as it may be
---------
supplemented or amended from time to time by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
-------- -------
acting as Trustee under this instrument, "Indenture" shall mean, with respect to
any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may be supplemented or amended from
time to time by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of the or those
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
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.
6
<PAGE>
"Indexed Security" means a Security the terms of which provide that the
----------------
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest," when used with respect to an Original Issue Discount Security
--------
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
---------------------
Stated Maturity of an installment of interest on such Security.
"Make-Whole Amount," when used with respect to any Security, means the
-----------------
amount, if any, in addition to principal which is required by a Security, under
the terms and conditions specified therein or as otherwise specified as
contemplated by Section 301, to be paid by the Company to the Holder thereof in
connection with any optional redemption or accelerated payment of such Security.
"Maturity," when used with respect to any Security, means the date on which
--------
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Obligation" of any Person with respect to any specified Indebtedness means
----------
any obligation of such Person to pay principal, premium, interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person, whether or not a claim for such post-
petition interest is allowed in such Proceeding), penalties, reimbursement or
indemnification amounts, fees, expenses or other amounts relating to such
Indebtedness.
"Officers' Certificate" means a certificate signed by the Chairman of the
---------------------
Board of Directors, the President or a Vice President and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
------------------
for the Company or who may be an employee of or other counsel for the Company
and who shall be satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
--------------------------------
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the date
-----------
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
------
7
<PAGE>
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
(including repayment at the option of the Holder) money in the necessary amount
has been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company (if
the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto; provided, however, that, if
-------- -------
such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Fourteen; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect
of which there shall have been presented to the Trustee proof satisfactory to it
that such Securities are held by a bona fide purchaser in whose hands such
Securities are valid obligations of the Company.
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless otherwise provided
with respect to such Security pursuant to Section 301, and (iv) Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded
8
<PAGE>
and deemed not to be Outstanding, except that, in determining whether the
Trustee shall be protected in making such calculation or in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trustee knows to be so owned shall be so disregarded.
Securities owned as provided in clause (iv) 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. In case of
a dispute as to such right, the advice of counsel shall be full protection in
respect of any decision made by the Trustee in accordance with such advice.
"Paying Agent" means any Person authorized by the Company to pay the
------------
principal of (and premium or Make-Whole Amount, if any) or interest on any
Securities or coupons on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of or within
----------------
any series, means the place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest on such Securities are payable as
specified as contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
--------------------
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Stock" means, with respect to any Person, all capital stock
---------------
issued by such Person that are entitled to a preference or priority over any
other capital stock issued by such Person with respect to any distribution of
such Person's assets, whether by dividend or upon any voluntary or involuntary
liquidation, dissolution or winding up.
"Redemption Date," when used with respect to any Security to be redeemed,
---------------
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
----------------
means the price at which it is to be redeemed pursuant to this Indenture.
9
<PAGE>
"Reference Treasury Dealer" means each of [_________________], and their
-------------------------
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
------------------------------------
Reference Treasury Dealer and any redemption date, the average, as determined by
the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
"Registered Security" shall mean any Security which is registered in the
-------------------
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
-------------------
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 301, whether or not a Business Day.
"Repayment Date" means, when used with respect to any Security to be repaid
--------------
at the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.
"Repayment Price" means, when used with respect to any Security to be
---------------
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer," when used with respect to the Trustee, means the
-------------------
chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice president"), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
"Security" has the meaning stated in the first recital of this Indenture
--------
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; provided, however, that, if at any time there is
-------- -------
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
10
<PAGE>
"Security Register" and "Security Registrar" have the respective meanings
----------------- ------------------
specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
----------------------
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
-------------------
Registered Securities of or within any series means a date fixed by the Company
pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any installment
---------------
of principal thereof or interest thereon, means the date specified in such
Security or a coupon representing such installment of interest as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" means a corporation a majority of the outstanding voting stock of
----------
which is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries of the Company. For the purposes of this definition, "voting
stock" means stock having voting power for the election of directors, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Treasury Rate" means, with respect to any redemption date, the rate per annum
-------------
equal to the semiannual equivalent yield to maturity of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
------------------- ---
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
-------
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; provided, however, that if
-------- -------
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean only the Trustee with respect to
Securities of that series.
"United States" means, unless otherwise specified with respect to any
-------------
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States Person" means, unless otherwise specified with respect to any
--------------------
Securities pursuant to Section 301, an individual who is a citizen or resident
of the United States, a
11
<PAGE>
corporation, partnership or other entity created or organized in or under the
laws of the United States or an estate or trust the income of which is subject
to United States Federal income taxation regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time of
-----------------
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. 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 (including certificates delivered
pursuant to Section 1008) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such condition or covenant and the definitions herein relating
thereto;
(2) 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;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such condition or covenant has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case where
--------------------------------------
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such
12
<PAGE>
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based, insofar
as it relates to legal matters, upon an Opinion of Counsel, or a certificate or
representations by counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the opinion, certificate or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such Opinion of Counsel or certificate or representations may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the Company stating that
the information as to such factual matters is in the possession of the Company,
unless such counsel knows, 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.
SECTION 104. Acts of Holders. (a) Any request, demand, authorization,
---------------
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and held in
accordance with the provisions of Article Fifteen, or a combination of such
instruments and any such record. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments and any such record (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments or so voting
at any such meeting. Proof of execution of any such instrument or of a writing
appointing any such agent, or of the holding by any Person of a Security, shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company and any agent of the Trustee or the Company, if made in
the manner provided in this Section. The record of any meeting of Holders of
Securities shall be proved in the manner provided in Section 1506.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a
13
<PAGE>
notary public or other officer authorized by law to take acknowledgments of
deeds, certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is by a signer
acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and
date of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other reasonable manner
which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the Security
Register. As to any matter relating to beneficial ownership interests in any
Global Security, the appropriate depository's records shall be dispositive for
purposes of this Indenture.
(d) The ownership of Bearer Securities may be proved by the production of
such Bearer Securities or by a certificate executed, as depository, by any trust
company, bank, banker or other depository, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depository, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered Securities
any request, demand, authorization, direction, notice, consent, waiver or other
Act, the Company may, at its option, in or pursuant to a Board Resolution, fix
in advance a record date for the determination of Holders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the Company shall have no obligation to do so. Notwithstanding TIA Section
316(c), such record date shall be the record date specified in or pursuant to
such Board Resolution, which shall be a date not earlier than the date 30 days
prior to the first solicitation of Holders generally in connection therewith and
not later than the date such solicitation is completed. If such a record date
is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other Act may be given before or after such record date, but only the
Holders of record at the close of business on such record date shall be deemed
to be Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
--------
the Holders on such record date shall be deemed
14
<PAGE>
effective unless it shall become effective pursuant to the provisions of this
Indenture not later than eleven months after the record date.
(f) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, any Security
Registrar, any Paying Agent, any Authenticating Agent or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
SECTION 105. Notices, etc., to Trustee and Company. Any request, demand,
-------------------------------------
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing
to or with the Trustee at [__________________________]; or
(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 Indenture or at any other address previously
furnished in writing to the Trustee by the Company, Attention: Chief
Financial Officer (with a copy to the Company's General Counsel), 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
(415) 391-6259.
SECTION 106. Notice to Holders: Waiver. Where this Indenture provides for
-------------------------
notice of any event to Holders of Registered Securities by the Company or the
Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, 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 of Registered Securities is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
15
<PAGE>
If by reason of the suspension of or irregularities in regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders of Registered Securities as shall be
made with the approval of the Trustee shall constitute a sufficient notification
to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified with
respect to any Securities pursuant to Section 301, where this Indenture provides
for notice to Holders of Bearer Securities of any event, such notice shall be
sufficiently given if published in an Authorized Newspaper in The City of New
York and in such other city or cities as may be specified in such Securities on
a Business Day, such publication to be not later than the latest date, if any,
and not earlier than the earliest date, if any, prescribed for the giving of
such notice. Any such notice shall be deemed to have been given on the date of
such publication or, if published more than once, on the date of the first such
publication.
If by reason of the suspension of publication of any Authorized Newspaper or
Authorized Newspapers or by reason of any other cause it shall be impracticable
to publish any notice to Holders of Bearer Securities as provided above, then
such notification to Holders of Bearer Securities as shall be given with the
approval of the Trustee shall constitute sufficient notice to such Holders for
every purpose hereunder. Neither the failure to give notice by publication to
any particular Holder of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of such notice with
respect to other Holders of Bearer Securities or the sufficiency of any notice
to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. Counterparts; Effect of Headings and Table of Contents. This
------------------------------------------------------
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 108. Successors and Assigns. All covenants and agreements in this
----------------------
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
16
<PAGE>
SECTION 109. Severability Clause. In case any provision in this Indenture or
-------------------
in any Security or coupon shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Securities or coupons, express or implied, shall give to any Person, other than
the parties hereto, any Security Registrar, any Paying Agent, any Authenticating
Agent and their successors hereunder and the Holders any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the Securities and coupons
-------------
shall be governed by and construed in accordance with the law of the State of
New York. This Indenture is subject to the provisions of the TIA that are
required to be part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
SECTION 112. Legal Holidays. In any case where any Interest Payment Date,
--------------
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity or
Maturity of any Security or the last date on which a Holder has the right to
exchange a Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security or coupon
other than a provision in the Securities of any series which specifically states
that such provision shall apply in lieu hereof), payment of interest or
principal (and premium or Make-Whole Amount, if any) or exchange of such
security need not be made at such Place of Payment on such date, but (except as
otherwise provided in the supplemental indenture with respect to such Security)
may be made on the next succeeding Business Day at such Place of Payment with
the same force and effect as if made on the Interest Payment Date, Redemption
Date, Repayment Date or sinking fund payment date, or at the Stated Maturity or
Maturity, or on such last day for exchange, provided that no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity, as the case may be.
SECTION 113. Immunity of Stockholders, Directors, Officers and Agents of the
---------------------------------------------------------------
Company. No recourse under or upon any obligation, covenant or agreement
- -------
contained in this Indenture, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any past, present or future stockholder,
employee, officer or director, 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 issue of the Securities.
17
<PAGE>
SECTION 114. 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 Trust
Indenture Act, such required provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act 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.
ARTICLE TWO - SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any, of each
-------------------
series and the Bearer Securities, if any, of each series and related coupons
shall be substantially in the form of Exhibit A hereto or in such other form as
---------
shall be established in one or more indentures supplemental hereto or approved
from time to time by or pursuant to a Board Resolution in accordance with
Section 301, shall have such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture or any
indenture supplemental hereto, and may have such letters, numbers or other marks
of identification or designation and such legends or endorsements placed thereon
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Securities may be listed, or to conform to
usage.
Unless otherwise specified as contemplated by Section 301, Bearer Securities
shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or mechanically reproduced on safety paper or
may be produced in any other manner, all as determined by the officers executing
such Securities or coupons, as evidenced by their execution of such Securities
or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication. Subject to
-----------------------------------------------
Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
18
<PAGE>
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
[ ]
-------------------
as Trustee
Dated: By:
-------------- ----------------------------
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If Securities of or
----------------------------------
within a series are issuable in the form of one or more Global Securities, then,
notwithstanding clause (8) of Section 301 and the provisions of Section 302, any
such Global Security or 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
of such series represented thereby may from time to time be increased or
decreased 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 thereof, 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 to the Trustee
pursuant to Section 303 or 304. Subject to the provisions of Section 303 and,
if applicable, Section 304, the Trustee shall deliver and redeliver any 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. If
a Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Global Security shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Global Security if such Security was never issued and
sold by the Company and the Company delivers to the Trustee the Global Security
together with written instructions (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of and any
premium or Make-Whole Amount, if any, and interest on any Global Security in
permanent global form shall be made to the registered Holder thereof.
Notwithstanding the provisions of Section 308 and except as provided
in the preceding paragraph, the Company, the Trustee and any agent of the
Company and the Trustee shall treat
19
<PAGE>
as the Holder of such principal amount of Outstanding Securities represented by
a permanent Global Security (i) in the case of a permanent Global Security in
registered form, the Holder of such permanent Global Security in registered
form, or (ii) in the case of a permanent Global Security in bearer form,
Euroclear or CEDEL.
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 Depository or a nominee of a Depository. This Security is
exchangeable for Securities registered in the name of a person other
than the Depository or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a nominee
of the Depository to the Depository or another nominee of the
Depository or by the Depository or its nominee to a successor
Depository or its nominee."
ARTICLE THREE - THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth 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 the Securities of the series (which shall distinguish
the Securities of such series from all other series of Securities);
(2) Any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906, 1107 or 1305);
(3) The price (expressed as a percentage of the principal amount
thereof) at which such Securities will be issued and, if other than the
principal amount
20
<PAGE>
thereof, the portion of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof;
(4) The date or dates, or the method for determining such date or
dates, on which the principal of such Securities will be payable;
(5) 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 Securities will
bear interest, if any;
(6) The date or dates, or the method for determining such date or
dates, from which any such interest will accrue, the dates on which any such
interest will be payable, the record dates for such interest payment dates, or
the method by which such dates shall be determined, the persons to whom such
interest shall be payable, and the basis upon which interest shall be calculated
if other than that of a 360-day year of twelve 30-day months;
(7) The place or places where the principal of (and premium or Make-
Whole Amount, if any) and interest, if any, on such Securities will be payable,
where such Securities may be surrendered for 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;
(8) The period or periods, if any, within which, the price or prices
at which and the other terms and conditions upon which such Securities may,
pursuant to any optional or mandatory redemption provisions, be redeemed, as a
whole or in part, at the option of the Company;
(9) The obligation, if any, of the Company to redeem, repay or
purchase such Securities pursuant to any sinking fund or analogous provision or
at the option of a holder thereof, and the period or periods within which, the
price or prices at which and the other terms and conditions upon which such
Securities will be redeemed, repaid or purchased, as a whole or in part,
pursuant to such obligation;
(10) If other than Dollars, the currency or currencies in which such
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, the
manner of determining the equivalent thereof in Dollars for purposes of the
definition of "Outstanding" in Section 101, and the terms and conditions
relating thereto;
(11) Whether the amount of payments of principal of (and premium or
Make-Whole Amount, if any, including any amount due upon redemption, if any) or
interest, if any, on such Securities may be determined with reference to an
index,
21
<PAGE>
formula or other method (which index, formula or method may, but need not be,
based on the yield on or trading price of other securities, including United
States Treasury securities or on a currency, currencies, currency unit or units,
or composite currency or currencies) and the manner in which such amounts shall
be determined;
(12) Whether the principal of (and premium or Make-Whole Amount, if
any) or interest 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, and the terms and conditions upon which, such election may
be made, and the time and manner of, and identity of the exchange rate agent
with responsibility for, determining the exchange rate between the currency or
currencies, currency unit or units or composite currency or currencies in which
such Securities are denominated or stated to be payable and the currency or
currencies, currency unit or units or composite currency or currencies in which
such Securities are to be so payable;
(13) Provisions, if any, granting special rights to the holders of
Securities of the series upon the occurrence of such events as may be specified;
(14) Any deletions from, modifications of or additions to the Events
of Default or covenants of the Company with respect to Securities of the series,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth herein;
(15) Whether and under what circumstances the Company will pay any
additional amounts on such Securities 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;
(16) Whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if permitted by applicable
laws and regulations), whether any Securities of the series are to be issuable
initially in temporary global form and whether any Securities of the series are
to be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global Security may
exchange such interests for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in the Indenture, and,
if Registered Securities of the series are to be issuable as a Global Security,
the identity of the depository for such series;
22
<PAGE>
(17) The date as of which any Bearer Securities of the series and any
temporary Global Security representing outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(18) The Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, or the Person
to whom, any interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any interest payable on a temporary Global Security on an Interest
Payment Date will be paid if other than in the manner provided herein;
(19) The applicability, if any, of the defeasance and covenant
defeasance provisions of Article Fourteen hereof to the Securities of the
series;
(20) If the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions; and
(21) Any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth the terms of the Securities
of such series.
SECTION 302. Denominations. The Securities of each series shall be
-------------
issuable in such denominations as shall be specified as contemplated by Section
301. With respect to Securities
23
<PAGE>
of any series denominated in Dollars, in the absence of any such provisions with
respect to the Securities of any series, the Securities of such series, other
than Global Securities (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. The
----------------------------------------------
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by its Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon, and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
-------- -------
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
-------- -------
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit B-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such Security or upon exchange of a
portion of a temporary Global Security shall be deemed to be delivery in
connection with its original issuance of such beneficial owner's interest in
such permanent Global Security. Except as permitted by Section 306, the Trustee
shall not authenticate and deliver any Bearer Security unless all appurtenant
coupons for interest then matured have been detached and canceled.
24
<PAGE>
If all the Securities of any series are not to be issued at one time and if
the Board Resolution or supplemental indenture establishing such series shall so
permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to TIA Section 315(a) through 315(d)) shall be fully protected in
relying upon,
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have been established
in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons appertaining thereto,
when completed by appropriate insertions and executed and delivered by the
Company to the Trustee for authentication in accordance with this
Indenture, authenticated and delivered by the Trustee in accordance with
this Indenture and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute legal,
valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of such
certificate, that no Event of Default with respect to any of the Securities
shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding
25
<PAGE>
paragraph at the time of issuance of each Security of such series, but such
order, opinion and certificates, with appropriate modifications to cover such
future issuances, shall be delivered at or before the time of issuance of the
first Security of such series.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security shall be dated as of the date specified as contemplated by
Section 301.
No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
or Security to which such coupon appertains a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security
(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 309
together with a written statement (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the 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 304. Temporary Securities.
--------------------
(a) Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Global Securities (which shall be exchanged
as otherwise provided herein or as otherwise provided in or pursuant to a Board
Resolution), 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 (accompanied by any non-matured
coupons appertaining thereto), the Company shall
26
<PAGE>
execute and the Trustee shall authenticate and deliver in exchange therefor a
like principal amount of definitive Securities of the same series of authorized
denominations; provided, however, that no definitive Bearer Security shall be
-------- -------
delivered in exchange for a temporary Registered Security; and provided further
-------- -------
that a definitive Bearer Security shall be delivered in exchange for a temporary
Bearer Security only in compliance with the conditions set forth in Section 303.
Until so exchanged, the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
(b) Unless otherwise provided in or pursuant to a Board Resolution, the
following provisions of this Section 304(b) shall govern the exchange of
temporary Securities other than through the facilities of The Depository Trust
Company. If any such temporary Security is issued in global form, then such
temporary Global Security shall, unless otherwise provided therein, be delivered
to the London office of a depository or common depository (the "Common
Depository"), for the benefit of Euroclear and CEDEL, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary Global Security, executed by the Company. On or after
the Exchange Date, such temporary Global Security shall be surrendered by the
Common Depository to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary Global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary Global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary Global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
--------
however, that, unless otherwise specified in such temporary Global Security,
- -------
upon such presentation by the Common Depository, such temporary Global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary Global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary Global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
-------- -------
shall be delivered in exchange for a portion of a temporary Global Security only
in compliance with the requirements of Section 303.
27
<PAGE>
Unless otherwise specified in such temporary Global Security, the interest
of a beneficial owner of Securities of a series in a temporary Global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date when the account holder instructs Euroclear or
CEDEL, as the case may be, to request such exchange on his behalf and delivers
to Euroclear or CEDEL, as the case may be, a certificate in the form set forth
in Exhibit B-1 to this Indenture (or in such other form as may be established
pursuant to Section 301), dated no earlier than 15 days prior to the Exchange
Date, copies of which certificate shall be available from the offices of
Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary Global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive
Securities in bearer form to be delivered in exchange for any portion of a
temporary Global Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 301, interest payable on a temporary Global Security
on an Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euroclear and CEDEL on such
Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee of a
certificate or certificates in the form set forth in Exhibit B-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary Global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit B-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary Global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary Global Security will be
made unless and until such interest in such temporary Global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and
28
<PAGE>
CEDEL and not paid as herein provided shall be returned to the Trustee prior to
the expiration of two years after such Interest Payment Date in order to be
repaid to the Company.
SECTION 305. Registration, Registration of Transfer and Exchange. The
---------------------------------------------------
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers of Registered
Securities on such Security Register as herein provided. In the event that the
Trustee shall cease to be Security Registrar, it shall have the right to examine
the Security Register at all reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the Holder,
Registered Securities of any series may be exchanged for other Registered
Securities of the same series, of any authorized denomination or denominations
and of a like aggregate principal amount, containing identical terms and
provisions, upon surrender of the Registered Securities to be exchanged at any
such office or agency. Whenever any such Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive. Unless otherwise specified with respect to any
series of Securities as contemplated by Section 301, Bearer Securities may not
be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and (subject
to Section 303) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or
29
<PAGE>
coupons in default, any such permitted exchange may be effected if the Bearer
Securities are accompanied by payment in funds acceptable to the Company in an
amount equal to the face amount of such missing coupon or coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there is furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to any Paying Agent any such missing
coupon in respect of which such a payment shall have been made, such Holder
shall be entitled to receive the amount of such payment; provided, however,
-------- -------
that, except as otherwise provided in Section 1002, interest represented by
coupons shall be payable only upon presentation and surrender of those coupons
at an office or agency located outside the United States. Notwithstanding the
foregoing, in case a Bearer Security of any series is surrendered at any such
office or agency in a permitted exchange for a Registered Security of the same
series and like tenor after the close of business at such office or agency on
(i) any Regular Record Date and before the opening of business at such office or
agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment Date or
proposed date for payment, as the case may be, and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon when due in accordance with the provisions of this
Indenture. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent Global Security shall be exchangeable
only as provided in this paragraph. If the depository for any permanent Global
Security is The Depository Trust Company ("DTC"), then, unless the terms of such
Global Security expressly permit such Global Security to be exchanged in whole
or in part for definitive Securities, a Global Security may be transferred, in
whole but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC,
or to a successor to DTC for such Global Security selected or approved by the
Company or to a nominee of such successor to DTC. If at any time DTC notifies
the Company that it is unwilling or unable to continue as depository for the
applicable Global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 if so
required by applicable law or regulation, the Company shall appoint a successor
depository with respect to such Global Security or Securities. If (x) a
successor depository for such Global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable series of Securities represented by such
Global Security or Securities advise DTC to cease acting as depository for such
Global Security or Securities or (z) the Company, in its
30
<PAGE>
sole discretion, determines at any time that all Outstanding Securities (but not
less than all) of any series issued or issuable in the form of one or more
Global Securities shall no longer be represented by such Global Security or
Securities, then the Company shall execute, and the Trustee shall authenticate
and deliver definitive Securities of like series, rank, tenor and terms in
definitive form in an aggregate principal amount equal to the principal amount
of such Global Security or Securities. If any beneficial owner of an interest
in a permanent global Security is otherwise entitled to exchange such interest
for Securities of such series and of like tenor and principal amount of another
authorized form and denomination, as specified as contemplated by Section 301
and provided that any applicable notice provided in the permanent Global
Security shall have been given, then without unnecessary delay but in any event
not later than the earliest date on which such interest may be so exchanged, the
Company shall execute, and the Trustee shall authenticate and deliver definitive
Securities in aggregate principal amount equal to the principal amount of such
beneficial owner's interest in such permanent Global Security. On or after the
earliest date on which such interests may be so exchanged, such permanent Global
Security shall be surrendered for exchange by DTC or such other depository as
shall be specified in the Company Order with respect thereto to the Trustee, as
the Company's agent for such purpose; provided, however, that no such exchanges
-------- -------
may occur during a period beginning at the opening of business 15 days before
any selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
-------- -------
exchange for a portion of a permanent Global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent Global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent Global Security is payable in accordance with the provisions
of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
31
<PAGE>
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 304, 906, 1107 or 1305 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor, provided that such Registered Security shall be simultaneously
--------
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
------------------------------------------------
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any,
32
<PAGE>
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Security or coupon has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or Make-
-------- -------
Whole Amount, if any), and any interest on, Bearer Securities shall, except as
otherwise provided in Section 1002, be payable only at an office or agency
located outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities shall be payable
only upon presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except as
----------------------------------------------
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 1002; provided, however, that each
-------- -------
installment of interest on any Registered Security may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section
33
<PAGE>
308, to the address of such Person as it appears on the Security Register or
(ii) transfer to an account maintained by the payee located inside the United
States.
Unless otherwise provided as contemplated by Section 301 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every permanent
global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case may be,
with respect to that portion of such permanent global Security held for its
account by Cede & Co. or the Common Depository, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the 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 Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Registered Security of such series and the date of the
proposed payment (which shall not be less than 20 days after such notice is
received by the Trustee), and at the same time the Company shall deposit
with the Trustee an amount of money in the currency or currencies, currency
unit or units or composite currency or currencies in which the Securities
of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest
34
<PAGE>
or shall make arrangements satisfactory to the Trustee for such deposit on
or prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered Securities of
such series at his address as it appears in the Security Register not less
than 10 days prior to such Special Record Date. The Trustee may, in its
discretion, in the name and at the expense of the Company, cause a similar
notice to be published at least once in an Authorized Newspaper in each
Place of Payment, but such publications shall not be a condition precedent
to the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to
the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2). In case a Bearer Security of any
series is surrendered at the office or agency in a Place of Payment for
such series in exchange for a Registered Security of such series after the
close of business at such office or agency on any Special Record Date and
before the opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer Security shall
be surrendered without the coupon relating to such proposed date of payment
and Defaulted Interest will not be payable on such proposed date of payment
in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305, 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.
35
<PAGE>
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
---------------------
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium or Make-Whole Amount, if any),
and (subject to Sections 305 and 307) interest on, such Registered Security and
for all other purposes whatsoever, whether or not such Registered Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. All 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 money payable upon any such Security.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
No Holder of any beneficial interest in any Global Security held on its
behalf by a depository shall have any rights under this Indenture with respect
to such Global Security and such depository 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. None of the Company, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depository, as a Holder, with respect to such
Global Security or impair, as between such depository and owners of beneficial
interests in such Global Security, the operation of customary practices
governing the exercise of the rights of such depository (or its nominee) as
Holder of such Global Security.
SECTION 309. Cancellation. All Securities and coupons surrendered for
------------
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly cancelled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in
36
<PAGE>
any manner whatsoever, and may deliver to the Trustee (or to any other Person
for delivery to the Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and sold, and all
Securities so delivered shall be promptly cancelled by the Trustee. If the
Company shall so acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities unless and until the same are surrendered to the Trustee for
cancellation. No Securities shall be authenticated in lieu of or in exchange
for any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. Cancelled Securities and coupons held by the
Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless the Trustee is otherwise
directed by a Company Order.
SECTION 310. Computation of Interest. Except as otherwise specified as
-----------------------
contemplated by Section 301 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE FOUR - SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for), and the Trustee, upon receipt of a
Company Order, and 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 as to such series when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than
(i) coupons appertaining to Bearer Securities surrendered for exchange
for Registered Securities and maturing after such exchange, whose
surrender is not required or has been waived as provided in Section
305, (ii) Securities and coupons of such series which have been
destroyed, lost or stolen and which have been replaced or paid as
provided in Section 306, (iii) coupons appertaining to Securities
called for redemption and maturing after the relevant Redemption Date,
whose surrender has been waived as provided in Section 1106, and
(iv) Securities and coupons of such series for whose payment money has
theretofore been deposited in trust or segregated and held in trust by
the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or
37
<PAGE>
(B) all Securities of such series and, in the case of (i) or
(ii) below, any coupons appertaining thereto not theretofore delivered
to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the
Company,
and the Company, in the case of (i), (ii) or (iii) above, has
irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the currency or
currencies, currency unit or units or composite currency or currencies
in which the Securities of such series are payable, sufficient to pay
and discharge the entire indebtedness on such Securities and such
coupons not theretofore delivered to the Trustee for cancellation, for
principal (and premium or Make-Whole Amount, if any) and interest to
the date of such deposit (in the case of Securities which have become
due and payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the provisions of
--------------------------
the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent
38
<PAGE>
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium or
Make-Whole Amount, if any), and any interest for whose payment such money has
been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
ARTICLE FIVE - REMEDIES
SECTION 501. Events of Default. "Event of Default," wherever used herein
-----------------
with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and whether or
not it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest on any Security of that
series or of any coupon appertaining thereto, when such interest or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (or premium or Make-
Whole Amount, if any, on) any Security of that series when it becomes due
and payable at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to any Security of that
series (other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(5) default under any bond, debenture, note, mortgage, indenture or
instrument under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Company (or by any
Subsidiary, the repayment of which the Company has guaranteed or for which
the Company is directly responsible or liable as obligor or guarantor),
having an aggregate principal amount outstanding of at least $25,000,000,
whether such indebtedness now exists or shall hereafter be created, which
default shall have resulted in such
39
<PAGE>
indebtedness becoming or being declared due and payable prior to the date
on which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there shall have
been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities of that series a written
notice specifying such default and requiring the Company to cause such
indebtedness to be discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" hereunder;
or
(6) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(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;
or
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of its property,
or
(C) orders the liquidation of the Company or any Significant
Subsidiary, and the order or decree remains unstayed and in effect for
90 days; or
(8) any other Event of Default provided with respect to Securities of
that series.
As used in this Section 501, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
40
<PAGE>
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
--------------------------------------------------
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if Securities of
that Series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by the Holders), and upon
any such declaration such principal or specified portion thereof shall become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration of acceleration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on all Outstanding
Securities of that series and any related coupons,
(B) the principal of (and premium or Make-Whole Amount, if any,
on) any Outstanding Securities of that series which have become due
otherwise than by such declaration of acceleration and interest
thereon at the rate or rates borne by or provided for in such
Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate or rates
borne by or provided for in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium or Make-Whole
Amount, if any) or interest on Securities of that series which have become
due solely by such declaration of acceleration, have been cured or waived
as provided in Section 513.
41
<PAGE>
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if:
- -------
(1) default is made in the payment of any installment of interest on
any Security of any series and any related coupon 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 (or premium or
Make-Whole Amount, if any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium or Make-Whole Amount, if any) and interest, with interest upon any
overdue principal (and premium or Make-Whole Amount, if any) and, to the extent
that payment of such interest shall be legally enforceable, upon any overdue
installments of interest at the rate or rates borne by or provided for in such
Securities, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series and any
related coupons by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the pendency
--------------------------------
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the principal of the Securities of any series shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the
42
<PAGE>
Trustee shall have made any demand on the Company for the payment of overdue
principal, premium or Make-Whole Amount, if any, or interest) shall be entitled
and empowered, by intervention in such proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of
principal (and premium or Make-Whole Amount, if any) and interest owing and
unpaid in respect of the Securities and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
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 parties to any such proceedings.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities
------------------------------------------------------------
or Coupons. All rights of action and claims under this Indenture or any of the
- ----------
Securities or coupons may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or coupons or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities and
coupons in respect of which such judgment has been recovered.
43
<PAGE>
SECTION 506. Application of Money Collected. Any money collected by the
------------------------------
Trustee pursuant to this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium or Make-Whole Amount, if any) or
interest, upon presentation of the Securities or coupons, or both, as the case
may be, and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium or Make-Whole Amount, if
any) and interest, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority of any
kind, according to the aggregate amounts due and payable on such Securities
and coupons for principal (and premium or Make-Whole Amount, if any) and
interest, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 507. Limitation on Suits. No Holder of any Security of any
-------------------
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(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 25% in principal amount of the
Outstanding Securities of that series shall have made written request
to the Trustee to institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(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;
44
<PAGE>
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium
------------------------------------------------------------
or Make-Whole Amount, if any, and Interest. Notwithstanding any other provision
- ------------------------------------------
in this Indenture, the Holder of any Security or coupon shall have the right
which is absolute and unconditional to receive payment of the principal of (and
premium or Make-Whole Amount, if any) and (subject to Sections 305 and 307)
interest on such Security or payment of such coupon on the respective due dates
expressed in such Security or coupon (or, in the case of redemption, on the
Redemption Date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities or coupons is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of the
----------------------------
Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
45
<PAGE>
SECTION 512. Control by Holders of Securities. The Holders of not less
--------------------------------
than a majority in principal amount of the Outstanding Securities of any series
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series,
provided that
- --------
(1) such direction shall not be in conflict with any rule of law
or with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it
in personal liability or be unduly prejudicial to the Holders of Securities
of such series not joining therein.
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 513. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on any Security of such series or any related
coupons, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will
46
<PAGE>
not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 515. Undertaking for Costs. All parties to this Indenture agree,
---------------------
and each Holder of any Security by his acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE SIX - THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence of
------------------
any default hereunder with respect to the Securities of any series, the Trustee
shall transmit in the manner and to the extent provided in TIA Section 313(c),
notice of such default hereunder known to the Trustee, unless such default shall
have been cured or waived; provided, however, that, except in the case of a
-------- -------
default in the payment of the principal of (or premium or Make-Whole Amount, if
any) or interest on any Security of such series, or in the payment of any
sinking fund installment with respect to the Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders of the Securities and coupons
of such series; and provided further that in the case of any default or breach
-------- -------
of the character specified in Section 501(4) with respect to the Securities and
coupons of such series, no such notice to Holders shall be given until at least
60 days after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to the Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of TIA
-------------------------
Section 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper
47
<PAGE>
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto,
to the Trustee for authentication and delivery pursuant to Section 303
which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document, unless requested
in writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of any series; provided
--------
that, if the payment within a reasonable time to the Trustee of the
costs, expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to proceeding; the reasonable
expenses of every such examination shall be paid by the Holders or, if paid
by the Trustee, shall be repaid by the Holders upon demand. The Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the
48
<PAGE>
Company, relevant to the facts or matters that are the subject of its
inquiry, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of Securities. The
------------------------------------------------------
recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
-------------------
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in trust
-------------------
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
49
<PAGE>
SECTION 606. Compensation and Reimbursement. The Company agrees:
------------------------------
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the reasonable expenses and disbursements of
its agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(7) or Section 501(8), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company under
this Section, the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (or premium or Make-Whole Amount, if
any) or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests. There shall at all times be a Trustee hereunder which shall be
- ---------
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
Federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and
50
<PAGE>
with the effect hereinafter specified in this Article. Neither the Company nor
any Person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as Trustee.
SECTION 608. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by
any Holder of a Security who has been a bona fide Holder of a Security for
at least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
51
<PAGE>
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner hereinafter provided, any Holder of a
Security who has been a bona fide Holder of a Security of such series for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series in the
manner provided for notices to the Holders of Securities in Section 106. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In case of the
--------------------------------------
appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and
52
<PAGE>
deliver an indenture supplemental hereto, pursuant to Article Nine hereof,
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates, (2)
if the retiring Trustee is not retiring with respect to all Securities, shall
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any successor Trustee, such
retiring Trustee shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which the appointment of
such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section 609, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to Business.
-----------------------------------------------------------
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
--------
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities or coupons shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities or coupons so authenticated with
the same effect as if such successor Trustee had itself authenticated such
53
<PAGE>
Securities or coupons. In case any Securities or coupons shall not have been
authenticated by such predecessor Trustee, any such successor Trustee may
authenticate and deliver such Securities or coupons, in either its own name or
that of its predecessor Trustee, with the full force and effect which this
Indenture provides for the certificate of authentication of the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when any
-----------------------------------
of the Securities remain Outstanding, the Trustee may appoint an Authenticating
Agent or Agents with respect to one or more series of Securities which shall be
authorized to act on behalf of the Trustee to authenticate Securities of such
series issued upon exchange, registration of transfer or partial redemption or
repayment thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for all purposes as
if authenticated by the Trustee hereunder. Any such appointment shall be
evidenced by an instrument in writing signed by a Responsible Officer of the
Trustee, a copy of which instrument shall be promptly furnished to the Company.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent and a certificate of authentication
executed on behalf of the Trustee by an Authenticating Agent. Each
Authenticating Agent shall be acceptable to the Company and shall at all times
be a bank or trust company or corporation organized and doing business and in
good standing under the laws of the United States of America or of any state or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or state authorities. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent
54
<PAGE>
by giving written notice of termination to such Authenticating Agent and to the
Company. Upon receiving such a notice of resignation or upon such a termination,
or in case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee for such series may
appoint a successor Authenticating Agent which shall be acceptable to the
Company and shall give notice of such appointment to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve in the
manner set forth in Section 106. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent herein. No successor Authenticating
Agent shall be appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
[___________________]
as Trustee
Dated: By:
----------------- ---------------------------
as Authenticating Agent
Dated: By:
----------------- ---------------------------
Authorized Signatory
SECTION 612. Certain Duties and Responsibilities of the Trustee.
--------------------------------------------------
(a) With respect to the Securities of any series, except during the
continuance of an Event of Default with respect to the Securities of such
series:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
55
<PAGE>
(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; but in the case of
any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture, but shall not be under any duty to verify the contents or
accuracy thereof.
(b) In case an Event of Default with respect to the Securities of any
series has occurred and is continuing, the Trustee shall, with respect to
Securities of such series, exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Holders of a majority in principal amount of the Outstanding Securities of
any series relating to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture with respect to the Securities
of such series; and
(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) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 612.
56
<PAGE>
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every Holder
--------------------------------------------
of Securities or coupons, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee. The Trustee shall transmit to Holders
------------------
such reports concerning the Trustee and its actions under this Indenture as may
be required by TIA Section 313 at the times and in the manner provided by the
TIA, which shall initially be not less than every twelve months commencing on
[_________________], 1996. A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange, if
any, upon which any Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when any Securities are listed on
any stock exchange.
SECTION 703. Reports by Company. The Company will:
------------------
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Company is not required to file information, documents
or reports pursuant to either of such Sections, then it will file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
57
<PAGE>
(3) transmit by mail to the Holders of Securities, within 30
days after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information, documents and
reports required to be filed by the Company pursuant to paragraphs (1) and (2)
of this Section as may be required by rules and regulations prescribed from time
to time by the Commission.
SECTION 704. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not later than 15 days after the Regular Record
Date for interest for each series of Securities, a list, in such form as the
Trustee may reasonably require, of the names and addresses of the Holders of
Registered Securities of such series as of such Regular Record Date, or if there
is no Regular Record Date for interest for such series of Securities,
semiannually, upon such dates as are set forth in the Board Resolution or
indenture supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
- -------- -------
such list shall be required to be furnished.
ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
--------------------------------------------------------
and Conveyances Permitted Subject to Certain Conditions. The Company may
- -------------------------------------------------------
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case, (1) either the Company shall be the continuing corporation, or the
successor corporation shall be a corporation organized and existing under the
laws of the United States or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of (and
premium or Make-Whole Amount, if any) and any interest on all of the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture, complying with Article Nine hereof,
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation and (2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result thereof as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or the lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing.
58
<PAGE>
SECTION 802. Rights and Duties of Successor Corporation. In case of any
------------------------------------------
such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
--------------------------------------------
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
ARTICLE NINE - SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the
Company contained herein and in the Securities; or
59
<PAGE>
(2) 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
(3) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such Events of
Default are to be for the benefit of less than all series of Securities,
stating that such Events of Default are expressly being included solely for
the benefit of such series); provided, however, that in respect of any such
-------- -------
additional Events of Default such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or
longer than that allowed in the case of other defaults) or may provide for
an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default or may limit the right of the
Holders of a majority in aggregate principal amount of that or those series
of Securities to which such additional Events of Default apply to waive
such default; or
(4) to add to or change any of the provisions of this
Indenture to provide that Bearer Securities may be registrable as to
principal, to change or eliminate any restrictions on the payment of
principal of or premium or Make-Whole Amount, if any, or interest on Bearer
Securities, to permit Bearer Securities to be issued in exchange for
Registered Securities, to permit Bearer Securities to be issued in exchange
for Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form, provided that
--------
any such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or
(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 secure the Securities; or
(7) to establish the form or terms of Securities of any series
and any related coupons as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee; or
60
<PAGE>
(9) to cure any ambiguity, to correct or supplement any
provision herein which may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to matters
or questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided such provisions shall not
--------
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(10) to supplement any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the defeasance
and discharge of any series of Securities pursuant to Sections 401, 1402
and 1403; provided that any such action shall not adversely affect the
--------
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders. With the
-----------------------------------------------
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
-------- -------
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium
or Make-Whole Amount, if any, on) or any installment of principal of or
interest on, any Security; or reduce the principal amount thereof or the
rate or amount of interest thereon, or any premium or Make-Whole Amount
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502
or the amount thereof provable in bankruptcy pursuant to Section 504, or
adversely affect any right of repayment at the option of the Holder of any
Security, or change any Place of Payment where, or the currency or
currencies, currency unit or units or composite currency or currencies in
which, any Security or any premium or Make-Whole Amount or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption or repayment at the option of the Holder, on
or after the Redemption Date or the Repayment Date, as the case may be), or
(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
61
<PAGE>
certain defaults hereunder and their consequences) provided for in this
Indenture, or reduce the requirements of Section 1504 for quorum or voting,
or
(3) modify any of the provisions of this Section, Section 513
or Section 1009, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby, provided, however, that this clause shall not be
-------- -------
deemed to require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section 902 and
Section 1009, or the deletion of this proviso, in accordance with the
requirements of Sections 609(b) and 901(11).
It shall not be necessary for any Act of Holders under this Section 902 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution of
---------------------------------
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder and of any coupon appertaining
thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by
62
<PAGE>
the Trustee as to any matter provided for in such supplemental indenture. If
the Company shall so determine, new Securities of any series so modified as to
conform, in the opinion of the Trustee and the Company, to any such supplemental
indenture may be prepared and executed by the Company and authenticated and
delivered by the Trustee in exchange for Outstanding Securities of such series.
ARTICLE TEN - COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
------------------------------------------------------
any; and Interest. The Company covenants and agrees for the benefit of the
- -----------------
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium or Make-Whole Amount, if any) and interest on the
Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 301 with respect to any series of
Securities, any interest due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature. Unless
otherwise specified with respect to Securities of any series pursuant to Section
301, at the option of the Company, all payments of principal may be paid by
check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a
-------------------------------
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered 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. If Securities of a
series are issuable as Bearer Securities, the Company will maintain: (A) in the
Borough of Manhattan, The City of New York, an office or agency where any
Registered Securities of that series may be presented or surrendered for
payment, where any Registered Securities of that series may be surrendered for
registration of transfer, where Securities of that series may be surrendered for
exchange, where notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be served and where Bearer
Securities of that series and related coupons may be presented or surrendered
for payment in the circumstances described in the following paragraph (and not
otherwise); (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment; provided, however, that if the Securities
-------- -------
of that series are listed on any stock exchange located outside the United
States and such stock exchange shall so require, the Company will maintain a
Paying Agent for the Securities of that series in any required city located
outside the United States, as the case may be, so long as the Securities of that
series are listed on such exchange; and (C) subject to any
63
<PAGE>
laws or regulations applicable thereto, in a Place of Payment for that series
located outside the United States an office or agency where any Registered
Securities of that series may be surrendered for registration of transfer, where
Securities of that series may be surrendered for exchange and where notices and
demands to or upon the 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 each 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, except that Bearer Securities of that
series and the related coupons may be presented and surrendered for payment at
the offices specified in the Security, in London, England, and the Company
hereby appoints the same as its agent to receive such respective presentations,
surrenders, notices and demands, and the Company hereby appoints the Trustee its
agent to receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or Make-Whole Amount or interest
on Bearer Securities shall be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
provided, however, that, if the Securities of a series are payable in Dollars,
- -------- -------
payment of principal of and any premium or Make-Whole Amount and interest on any
Bearer Security shall be made at the office of the Company's Paying Agent in the
Borough of Manhattan, The City of New York, if (but only if) payment in Dollars
of the full amount of such principal, premium or Make-Whole Amount, or interest,
as the case may be, at all offices or agencies outside the United States
maintained for the purpose by the Company in accordance with this Indenture, is
illegal or effectively precluded by exchange controls or other similar
restrictions.
The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of the Company in the Borough of Manhattan,
The City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notices and demands.
64
<PAGE>
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust. If the
-------------------------------------------------
Company shall at any time act as its own Paying Agent with respect to any series
of any Securities and any related coupons, it will, on or before each due date
of the principal of (and premium or Make-Whole Amount, 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 in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) sufficient to pay the principal
(and premium or Make-Whole Amount, 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 and any related coupons, it will, on or before each due date of
the principal of (and premium or Make-Whole Amount, if any), or interest on any
Securities of that series, deposit with a Paying Agent a sum (in the currency or
currencies, currency unit or units or composite currency or currencies described
in the preceding paragraph) sufficient to pay the principal (and premium or
Make-Whole Amount, 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
Make-Whole Amount, if any, 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, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of
(and premium or Make-Whole Amount, if any) or interest on Securities in
trust for the benefit of the Persons entitled thereto until such sums shall
be paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any such payment of
principal (and premium or Make-Whole Amount, if any) or interest on the
Securities of that series; and
65
<PAGE>
(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 trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
sums.
Except as otherwise provided in the Securities of any series, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of (and premium or Make-Whole Amount, if
any) or interest on any Security of any series and remaining unclaimed for two
years after such principal (and premium or Make-Whole Amount, if any) or
interest has become due and payable shall be paid to the Company upon Company
Request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment of such principal of (and premium
or Make-Whole Amount, if any) or interest on any Security, without interest
thereon, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
-------- -------
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Existence. Subject to Article Eight, the Company will do
---------
or cause to be done all things necessary to preserve and keep in full force and
effect its corporate existence, all material rights (by articles of
incorporation, by-laws and statute) and material franchises; provided, however,
-------- -------
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
SECTION 1005. Maintenance of Properties. The Company will cause all of
-------------------------
its material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that the Company and its
-------- -------
66
<PAGE>
Subsidiaries shall not be prevented from selling or otherwise disposing of their
properties for value in the ordinary course of business.
SECTION 1006. Insurance. The Company will cause each of its and its
---------
Subsidiaries' insurable properties to be insured against loss or damage in an
amount at least equal to their then full insurable value with insurers of
recognized responsibility.
SECTION 1007. Payment of Taxes and Other Claims. The Company will pay
---------------------------------
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
-------- -------
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1008. Statement as to Compliance. The Company will deliver
--------------------------
to the Trustee, within 120 days after the end of each fiscal year, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture and, in the
event of any noncompliance, specifying such noncompliance and the nature and
status thereof. For purposes of this Section 1008, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
SECTION 1009. Waiver of Certain Covenants. The Company may omit in
---------------------------
any particular instance to comply with any term, provision or condition set
forth in Sections 1004 to 1009, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE ELEVEN - REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series which
------------------------
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
301 for Securities of any series) in accordance with this Article.
67
<PAGE>
SECTION 1102. Election to Redeem; Notice to Trustee. The election of
-------------------------------------
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
less than all of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If
-------------------------------------------------
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series issued on such date with the same
terms not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security Registrar
(if other than itself) in writing of the Securities selected for redemption and,
in the case of any Securities selected for partial redemption, the principal
amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Security redeemed or to be redeemed only in part, to the portion of
the principal amount of such Security which has been or is to be redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be given
--------------------
in the manner provided in Section 106, not less than 30 days nor more than 60
days prior to the Redemption Date, unless a shorter period is specified by the
terms of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice that is mailed to the Holders of Registered Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives the notice.
All notices of redemption shall state:
68
<PAGE>
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption
Date payable as provided in Section 1106, if any,
(3) if less than all Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of partial redemption,
the principal amount) of the particular Security or Securities to be
redeemed,
(4) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without a charge, a new Security or Securities of authorized denominations
for the principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and
accrued interest to the Redemption Date payable as provided in Section
1106, if any, will become due and payable upon each such Security, or the
portion thereof, to be redeemed and, if applicable, that interest thereon
shall cease to accrue on and after said date,
(6) the Place or Places of Payment where such Securities,
together in the case of Bearer Securities with all coupons appertaining
thereto, if any, maturing after the Redemption Date, are to be surrendered
for payment of the Redemption Price and accrued interest, if any,
(7) that the redemption is for a sinking fund, if such is the
case,
(8) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the date fixed for
redemption or the amount of any such missing coupon or coupons will be
deducted from the Redemption Price, unless security or indemnity
satisfactory to the Company, the Trustee for such series and any Paying
Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and
any Registered Securities of such series are not to be redeemed, and if
such Bearer Securities may be exchanged for Registered Securities not
subject to redemption on this Redemption Date pursuant to Section 305 or
otherwise, the last date, as determined by the Company, on which such
exchanges may be made, and
(10) the CUSIP number of such Security, if any.
69
<PAGE>
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 1105. Deposit of Redemption Price. On or prior to any
---------------------------
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, which it may not do
in the case of a sinking fund payment under Article Twelve, segregate and hold
in trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay on
the Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
-------------------------------------
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
-------- -------
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
--------
that installments of interest on Registered Securities whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to
70
<PAGE>
save each of them and any Paying Agent harmless. If thereafter the Holder of
such Security shall surrender to the Trustee or any Paying Agent any such
missing coupon in respect of which a deduction shall have been made from the
Redemption Price, such Holder shall be entitled to receive the amount so
deducted; provided, however, that interest represented by coupons shall be
-------- -------
payable only at an office or agency located outside the United States (except as
otherwise provided in Section 1002) and, unless otherwise specified as
contemplated by Section 301, only upon presentation and surrender of those
coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium or Make-Whole Amount, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Security.
SECTION 1107. Securities Redeemed in Part. Any Registered Security
---------------------------
which is to be redeemed only in part (pursuant to the provisions of this Article
or of Article Twelve) shall be surrendered at a Place of Payment therefor (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. If a Global Security is so
surrendered, the Company shall execute and the Trustee shall authenticate and
deliver to the depository, 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 TWELVE - SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this Article
------------------------
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
71
<PAGE>
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company may, in satisfaction of all or any part of any mandatory sinking
fund payment with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto and (2) apply as a credit Securities of such series
which have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, as provided for
by the terms of such Securities, or which have otherwise been acquired by the
Company; provided that such Securities so delivered or applied as a credit have
--------
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less than
-----------------------------------------
60 days prior to each sinking fund payment date for Securities of any series,
the Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing mandatory sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if any, which is to
be satisfied by payment of cash in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities of that series pursuant to
Section 1202, and the optional amount, if any, to be added in cash to the next
ensuing mandatory sinking fund payment, and will also deliver to the Trustee any
Securities to be so delivered and credited. If such Officers' Certificate shall
specify an optional amount to be added in cash to the next ensuing mandatory
sinking fund payment, the Company shall thereupon be obligated to pay the amount
therein specified. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 1103 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 1104. Such notice having been duly
given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of any
------------------------
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.
72
<PAGE>
SECTION 1302. Repayment of Securities. Securities of any series subject
-----------------------
to repayment in whole or in part at the option of the Holders thereof will,
unless otherwise provided in the terms of such Securities, be repaid at a price
equal to the principal amount thereof, together with interest, if any, thereon
accrued to the Repayment Date specified in or pursuant to the terms of such
Securities. The Company covenants that on or prior to the Repayment Date it will
deposit with the Trustee or with a Paying Agent (or, if the Company is acting as
its own Paying Agent, segregate and hold in trust as provided in Section 1003)
an amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the principal (or, if so provided
by the terms of the Securities of any series, a percentage of the principal) of,
and (except if the Repayment Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof, as the case may be, to be
repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series subject to
------------------
repayment at the option of the Holders thereof will contain an "Option to
Elect Repayment" form on the reverse of such Securities. In order for any
Security to be repaid at the option of the Holder, the Trustee must receive at
the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (2) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc. ("NASD"), or a commercial bank or trust company in the United States
setting forth the name of the Holder of the Security, the principal amount of
the Security, the principal amount of the Security to be repaid, the CUSIP
number, if any, or a description of the tenor and terms of the Security, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security, will be
received by the Trustee not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, however, that
-------- -------
such telegram, telex, facsimile transmission or letter shall only be effective
if such Security and form duly completed are received by the Trustee by such
fifth Business Day. If less than the entire principal amount of such Security
is to be repaid in accordance with the terms of such Security, the principal
amount of such Security to be repaid, in increments of the minimum denomination
for Securities of such series, and the denomination or denominations of the
Security or Securities to be issued to the Holder for the portion of the
principal amount of such Security surrendered that is not to be repaid, must be
specified. The principal amount of any Security providing for repayment at the
option of the Holder thereof may not be repaid in part if, following such
repayment, the unpaid principal amount of such Security would be less than the
minimum authorized denomination of Securities of the series of which such
Security to be repaid is a part. Except as otherwise may be provided by the
terms of any Security providing
73
<PAGE>
for repayment at the option of the Holder thereof, exercise of the repayment
option by the Holder shall be irrevocable unless waived by the Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable. If Securities of any series providing for repayment at the option of
- -------
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
- -------- -------
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and provided further that, in the case of Registered
----------------
Securities, installments of interest, if any, whose Stated Maturity is on or
prior to the Repayment Date shall be payable (but without interest thereon,
unless the Company shall default in the payment thereof) to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after deducting from the amount payable therefor as provided in Section
1302 an amount equal to the face amount of all such missing coupons, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing coupon in respect of which a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest represented by coupons
-------- -------
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of those
coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at
74
<PAGE>
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) set forth in such Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any
-------------------------
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article: Company's Option to Effect
----------------------------------------------------
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
- ---------------------------------
made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 1402. Defeasance and Discharge. Upon the Company's exercise
------------------------
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 1405 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 1404 and as more fully
set forth in such Section, payments in respect of the principal of (and premium
or Make-Whole Amount, if any) and interest, if any, on such Securities and
75
<PAGE>
any coupons appertaining thereto when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 305, 306, 1002 and
1003, (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (D) this Article. Subject to compliance with this Article
Fourteen, the Company may exercise its option under this Section notwithstanding
the prior exercise of its option under Section 1403 with respect to such
Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise of
-------------------
the above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be released from its obligations under
Sections 1004 to 1009, inclusive, and, if specified pursuant to Section 301, its
obligations under any other covenant contained herein or in any indenture
supplemental hereto, with respect to such Outstanding Securities and any coupons
appertaining thereto on and after the date the conditions set forth in Section
1404 are satisfied (hereinafter, "covenant defeasance"), and such Securities and
any coupons appertaining thereto shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with
Sections 1004 to 1009, inclusive, or such other covenant, but shall continue to
be deemed "Outstanding" for all other purposes hereunder. For this purpose,
such covenant defeasance means that, with respect to such Outstanding Securities
and any coupons appertaining thereto, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such Section or such other covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
such other covenant or by reason of reference in any such Section or such other
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a default or an Event of Default under
Section 501(4) or 501(8) or otherwise, as the case may be, but, except as
specified above, the remainder of this Indenture and such Securities and any
coupons appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount in such currency, currencies or currency unit in which
such Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (2) Government Obligations applicable to such
Securities and coupons appertaining thereto (determined on the basis of the
currency, currencies or currency unit in which such Securities and coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with
76
<PAGE>
their terms will provide, not later than the due date of any payment of
principal of (and premium or Make-Whole Amount, if any) and interest, if any, on
such Securities and any coupons appertaining thereto, money in an amount, or (3)
a combination thereof, in any case, in an amount, sufficient, without
consideration of any reinvestment of such principal and interest, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, (i) the principal of (and premium or Make-Whole Amount, if any)
and interest, if any, on such Outstanding Securities and any coupons
appertaining thereto on the Stated Maturity of such principal or installment of
principal or interest and (ii) any mandatory sinking fund payments or analogous
payments applicable to such Outstanding Securities and any coupons appertaining
thereto on the day on which such payments are due and payable in accordance with
the terms of this Indenture and of such Securities and any coupons appertaining
thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect to such Securities
and any coupons appertaining thereto shall have occurred and be continuing on
the date of such deposit or, insofar as Sections 501(6) and 501(7) are
concerned, at any time during the period ending on the 91st day after the date
of such deposit (it being understood that this condition shall not be deemed
satisfied until the expiration of such period).
(d) In the case of an election under Section 1402, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that (i) the
Company has received from, or there has been published by, the Internal Revenue
Service a ruling, or (ii) since the date of execution of this Indenture, there
has been a change in the applicable Federal income tax law, in either case to
the effect that, and based thereon such opinion shall confirm that, the Holders
of such Outstanding Securities and any coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance had not occurred.
(e) In the case of an election under Section 1403, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
77
<PAGE>
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 1402 or Section 1403 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- ----------------------------------------
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities and any coupons appertaining
thereto of all sums due and to become due thereon in respect of principal (and
premium or Make-Whole Amount, if any) and interest, but such money need not be
segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable market exchange rate for such currency or currency
78
<PAGE>
unit in effect on the second Business Day prior to each payment date, except,
with respect to a Conversion Event, for such currency or currency unit in effect
(as nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 606, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article.
ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting
-----------------------------------------
of Holders of Securities of any series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The Trustee
----------------------------------
may at any time call a meeting of Holders of Securities of any series for any
purpose specified in Section 1501, to be held at such time and at such place as
the Trustee shall determine. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 20 nor more than 180 days
prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board
Resolution, or the Holders of at least 25% in principal amount of the
Outstanding Securities of any series shall have requested the Trustee to call a
meeting of the Holders of Securities of such series for any purpose specified in
Section 1501, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have made the
first publication of the notice of such meeting within 20 days after receipt of
such request or shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Securities of such series in
the amount above specified, as the case may be,
79
<PAGE>
may determine the time and the place for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in subsection (a) of this
Section.
SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled
------------------------------------
to vote at any meeting of Holders of Securities of any series, a Person shall be
(1) a Holder of one or more Outstanding Securities of such series, or (2) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such Holder or Holders.
The only Persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a
--------------
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
- -------- -------
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities of a series, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Securities of such
series shall constitute a quorum. In the absence of a quorum within 30 minutes
after the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at the reconvening of any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days; at the reconvening of any meeting adjourned or further
adjourned for lack of a quorum, the persons entitled to vote 25% in aggregate
principal amount of the then Outstanding Securities shall constitute a quorum
for the taking of any action set forth in the notice of the original meeting.
Notice of the reconvening of any adjourned meeting shall be given as provided in
Section 1502(a), except that such notice need be given only once not less than
five days prior to the date on which the meeting is scheduled to be reconvened.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities represented at such meeting; provided, however, that, except as
-------- -------
limited by the proviso to Section 902, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action which this Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage, which is less than a majority, in
principal amount of the Outstanding Securities of a series may be adopted at a
meeting or an adjourned meeting duly reconvened and at which a quorum is present
as aforesaid by the affirmative vote of the Holders of such specified percentage
in principal amount of the Outstanding Securities of that series.
80
<PAGE>
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for
such meeting; and
(ii) the principal amount of the Outstanding Securities
of such series that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action
shall be taken into account in determining whether such request,
demand, authorization, direction, notice, consent, waiver or other
action has been made, given or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
-------------------------------------------------------
of Meetings. (a) Notwithstanding any provisions of this Indenture, the Trustee
- -----------
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of proxies and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall deem appropriate.
Except as otherwise permitted or required by any such regulations, the holding
of Securities shall be proved in the manner specified in Section 104 and the
appointment of any proxy shall be proved in the manner specified in Section 104
or by having the signature of the Person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by Section 104 to
certify to the holding of Bearer Securities. Such regulations may provide that
written instruments appointing proxies, regular on their face, may be presumed
valid and genuine without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
81
<PAGE>
(c) At any meeting each Holder of a Security of such series or
proxy shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
--------
however, that no vote shall be cast or counted at any meeting in respect of any
- -------
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly
called pursuant to Section 1502 at which a quorum is present may be adjourned
from time to time by Persons entitled to vote a majority in principal amount of
the Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings. The
-----------------------------------------------
vote upon any resolution submitted to any meeting of Holders of Securities of
any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
Series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
82
<PAGE>
SIGNATURES AND SEALS
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed all as of the day and year first above written.
SOVRAN SELF STORAGE, INC.
By:
---------------------------------
[________________]
[________________]
Attest:
--------------------------
Title:
[___________________],
as Trustee
By:
---------------------------------
Title:
Attest:
--------------------------
Title:
83
<PAGE>
ACKNOWLEDGMENT
STATE OF [____________________])
) ss:
COUNTY OF )
On the [_______________________] 1996, before me personally came
[_________________], to me known, who, being by me duly sworn, did depose and
say that he is the [__________________] of SOVRAN SELF STORAGE, INC., one of the
parties described in and which executed the foregoing instrument, and that he
signed his name thereto by authority of the Board of Directors.
[Notarial Seal]
- --------------------------------
Notary Public
Commission Expires
STATE OF [________________])
) ss:
COUNTY OF )
On the [____________________________] 1996, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he/she is a ______________ of [___________________], one of the parties
described in and which executed the foregoing instrument, and that he/she signed
his/her name thereto by authority of the Board of Directors.
[Notarial Seal]
- --------------------------------
Notary Public
Commission Expires
84
<PAGE>
EXHIBIT A
FORM OF REDEEMABLE OR NON-REDEEMABLE SENIOR SECURITY
[Face of Security]
[If the Holder of this Security (as indicated below) is The Depository Trust
Company ("DTC") or a nominee of DTC, this Security is a Global Security and the
following two legends apply:
Unless this Security is presented by an authorized representative of The
Depository Trust Company ("DTC"), 55 Water Street, New York, New York to the
issuer or its agent for registration of transfer, exchange or payment, and such
Security issued is registered in the name of CEDE & CO., or such other name as
requested by an authorized representative of DTC, 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 Security is exchanged in whole or in part for Securities
in certificated form, this Security may not be transferred except as a whole by
DTC to a nominee thereof or by a nominee thereof to DTC or another nominee of
DTC or by DTC or any such nominee to a successor of DTC or a nominee of such
successor.]
[If this Security is an Original Issue Discount Security, insert -- FOR PURPOSES
---------------------------------------------------------------
OF SECTION 1273 and 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS ___% OF ITS PRINCIPAL AMOUNT, THE
ISSUE DATE IS _____________, 19__ [AND] THE YIELD TO MATURITY IS _____%. [THE
METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE
SHORT ACCRUAL PERIOD OF __________, 19__ TO _________, 19__, IS ___% OF THE
PRINCIPAL AMOUNT OF THIS SECURITY.]
SOVRAN SELF STORAGE, INC.
[Designation of Series]
No. $
------- -------
SOVRAN SELF STORAGE, INC., a Maryland corporation (herein referred to as the
"Company," which term includes any successor corporation 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 Date") [or
insert date fixed for
- ---------------------
A-1
<PAGE>
earlier redemption (the "Redemption Date," and together with the Stated Maturity
- ------------------
Date with respect to principal repayable on such date, the "Maturity Date.")]
[If the Security is to bear interest prior to Maturity, insert -- and to pay
-------------------------------------------------------------
interest thereon from ______________ or from 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 annum, 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 Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the ________ 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 funds
to an account maintained by such Holder within the United States]. Any such
interest not 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 Security (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, notice whereof shall be
given to Holders of Securities 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
Securities 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.]
[If the Security is not to bear interest prior to Maturity, insert -- The
-----------------------------------------------------------------
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at the
[Stated] Maturity Date and in such case the overdue principal of this Security
shall bear interest at the rate of ___% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of ___% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]
The principal of this Security payable on the Stated Maturity Date [or the
principal of, premium or Make-Whole Amount, if any, and, if the Redemption Date
is not an Interest Payment Date, interest on this Security payable on the
Redemption Date] will be paid against presentation of this Security at the
office or agency of the Company maintained for that
A-2
<PAGE>
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.
Interest payable on this Security 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 Security) 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 or Make-Whole Amount, 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 banks in __________________ are not
required or authorized by law or executive order to close.
[If this Security is a Global Security, insert -- All payments of principal,
---------------------------------------------
premium or Make-Whole Amount, if any, and interest in respect of this Security
will be made by the Company in immediately available funds.]
Reference is hereby made to the further provisions of this Security 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 Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its facsimile corporate seal.
Dated: SOVRAN SELF STORAGE, INC.
-----------------
By:
-------------------------------
Attest:
- -----------------------
Secretary
A-3
<PAGE>
[Reverse of Security]
SOVRAN SELF STORAGE, INC.
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of _____________, 199_ (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 Security is a part), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of 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 Security is one of the duly authorized series of Securities
designated on the face hereof (collectively, the "Securities"), [if applicable,
--------------
insert -- and the aggregate principal amount of the Securities to be issued
- ------
under such series is limited to $______ (except for Securities authenticated and
delivered upon transfer of, or in exchange for, or in lieu of other
Securities).] All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.
[If applicable, insert -- The Securities may not be redeemed prior to the Stated
---------------------
Maturity Date.]
[If applicable, insert -- The Securities are subject to redemption [ (l) (If
--------------------- ---
applicable, insert -- on _________ in any year commencing with the year ____ and
- ------------------
ending with the year ____ through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2) ] [If
--
applicable, insert -- at any time [on or after ___________], as a whole or in
- ------------------
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount):
If redeemed on or before _______, __% and if redeemed during the 12-month
period beginning _______ of the years indicated at the Redemption Prices
indicated below.
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
A-4
<PAGE>
and thereafter at a Redemption Price equal to __% of the principal amount,
together in the case of any such redemption [If applicable, insert -- (whether
---------------------
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date; provided, however, that installments of interest on this
-----------------
Security whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Security, or one or more Predecessor Securities,
of record at the close of business on the relevant Record Dates referred to on
the face hereof, all as provided in the Indenture.]
[If applicable, insert -- The Securities are subject to redemption (1) on
---------------------
_______ in any year commencing with the year ____ and ending with the year ____
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [on
or after _______], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning ________ of the years
indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
- -------- -------
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company
---------------------
may not, prior to _______, redeem any Securities as contemplated by [Clause (2)
of] the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than __% per annum.]
[If applicable, insert -- The sinking fund for the Securities provides
---------------------
for the redemption on _______ in each year, beginning with the year ____ and
ending with the year ____, of [not less than] $_______] [("mandatory sinking
fund") and not more than $_______] aggregate principal amount of the Securities.
[The Securities acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent
A-5
<PAGE>
[mandatory] sinking fund payments otherwise required to be made in the [describe
--------
order] order in which they become due.]]
- -----
Notice of redemption will be given by mail to Holders of Securities,
not less than 30 nor more than 60 days prior to the Redemption Date, all as
provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of all Securities issued
under the Indenture at the time Outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Securities, on behalf of the
Holders of all such Securities, to waive compliance by the Company with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit the
Holders of not less than a majority of the aggregate principal amount, in
certain instances, of the Outstanding Securities of any series to waive, on
behalf of all of the Holders of Securities of such series, certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium or Make-
Whole Amount, if any) and interest on this Security at the times, places and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein [and herein] set forth, the transfer of this Security is registrable in
the Security Register of the Company upon surrender of this Security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium or Make-Whole Amount, if any) and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or by his attorney duly authorized
in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
A-6
<PAGE>
As provided in the Indenture and subject to certain limitations
therein [and herein] set forth, this Security is exchangeable for a like
aggregate principal amount of Securities of different authorized denominations
but otherwise having the same terms and conditions, as requested by the Holder
hereof surrendering the same.
The Securities of this series are issuable only in registered form
[without coupons] in denominations of $_______ and any integral multiple
thereof.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith,
Prior to due presentment of this 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 this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of or
premium or Make-Whole Amount, if any, or the interest on this Security, or for
any claim based hereon, or otherwise in respect hereof, or based on or in
respect of the Indenture or any indenture supplemental thereto, against any
past, present or future stockholder, employee, officer or director, as such, of
the Company or of any successor, either directly or through the Company or any
successor, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of [the State of New York] applicable to agreements
made and to be performed entirely in such State.
A-7
<PAGE>
EXHIBIT B
FORMS OF CERTIFICATION
EXHIBIT B-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section 2.165-
12(c)(1)(v) are herein referred to as "financial institutions") purchasing for
their own account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise Sovran Self Storage, Inc. or its agent that such financial institution
will comply with the requirements of Section 165(j)(3)(A), (B) or (C) of the
United States Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) are owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, in
addition, if the owner is a United States or foreign financial institution
described in clause (iii) above (whether or not also described in clause (i) or
(ii)), this is to further certify that such financial institution has not
acquired the Securities for purposes of resale directly or indirectly to a
United States person or to a person within the United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
B-1
<PAGE>
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the above-
captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [U.S.$] of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ________,
----
[To be dated no earlier than the 15th day prior to (i) the Exchange Date or (ii)
the relevant Interest Payment Date occurring prior to the Exchange Date, as
applicable]
[Name of Person Making Certification]
------------------------------------
(Authorized Signature)
Name:
Title:
B-2
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that
we have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$] principal amount of
the above-captioned Securities (i) is owned by person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States person(s)"), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (financial institutions, as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v) are herein referred to as "financial
institutions") purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in either case (a) or (b),
each such financial institution has agreed, on its own behalf or through its
agent, that we may advise Sovran Self Storage, Inc. or its agent that such
financial institution will comply with the requirements of Section 165(j)(3)(A),
(B) or (C) of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder), or (iii) is owned by United States or foreign financial
institution(s) for purposes of resale during the restricted period (as defined
in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)), and, to
the further effect, that financial institutions described in clause (iii) above
(whether or not also described in clause (i) or (ii)) have certified that they
have not acquired the Securities for purposes of resale directly or indirectly
to a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "Possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary Global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member
B-3
<PAGE>
Organizations and (ii) as of the date hereof we have not received any
notification from any of our Member Organizations to the effect that the
statements made by such Member Organizations with respect to any portion of the
part submitted herewith for exchange (or, if relevant, collection of any
interest) are no longer true and cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated:
------- ----
[To be dated no earlier than the Exchange Date or the relevant Interest Payment
Date occurring prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of New York,
Brussels Office,] as Operator of the Euroclear
System [CEDEL S.A.]
By:
--------------------------------------
295641.c1
B-4
<PAGE>
EXHIBIT 4.5
- --------------------------------------------------------------------------------
SOVRAN SELF STORAGE, INC.
TO
[ ]
Trustee
------------------------------
Indenture
Dated as of [______________,] 1996
------------------------------
Subordinated Debt Securities
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
RECITALS OF THE COMPANY...................................................... 1
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION............................................................. 1
SECTION 101. Definitions............................................... 1
SECTION 102. Compliance Certificates and Opinions......................12
SECTION 103. Form of Documents Delivered to Trustee....................13
SECTION 104. Acts of Holders...........................................13
SECTION 105. Notices, etc., to Trustee and Company.....................15
SECTION 106. Notice to Holders: Waiver.................................16
SECTION 107. Counterparts; Effect of Headings and Table of
Contents...........................................................17
SECTION 108. Successors and Assigns....................................17
SECTION 109. Severability Clause.......................................17
SECTION 110. Benefits of Indenture.....................................17
SECTION 111. Governing Law.............................................17
SECTION 112. Legal Holidays............................................17
SECTION 113. Immunity of Stockholders, Directors, Officers and
Agents of the Company..............................................18
SECTION 114. Conflict with Trust Indenture Act.........................18
ARTICLE TWO - SECURITIES FORMS...............................................18
SECTION 201. Forms of Securities.......................................18
SECTION 202. Form of Trustee's Certificate of Authentication...........18
SECTION 203. Securities Issuable in Global Form........................19
ARTICLE THREE - THE SECURITIES...............................................20
SECTION 301. Amount Unlimited; Issuable in Series......................20
SECTION 302. Denominations.............................................24
SECTION 303. Execution, Authentication, Delivery and Dating............24
SECTION 304. Temporary Securities......................................26
SECTION 305. Registration, Registration of Transfer and Exchange.......29
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities..........32
SECTION 307. Payment of Interest; Interest Rights Preserved............33
SECTION 308. Persons Deemed Owners.....................................35
SECTION 309. Cancellation..............................................36
SECTION 310. Computation of Interest...................................37
(i)
<PAGE>
ARTICLE FOUR - SATISFACTION AND DISCHARGE....................................37
SECTION 401. Satisfaction and Discharge of Indenture...................37
SECTION 402. Application of Trust Funds................................38
ARTICLE FIVE - REMEDIES......................................................39
SECTION 501. Events of Default.........................................39
SECTION 502. Acceleration of Maturity; Rescission and Annulment........40
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.........................................................41
SECTION 504. Trustee May File Proofs of Claim..........................42
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons..............................................43
SECTION 506. Application of Money Collected............................43
SECTION 507. Limitation on Suits.......................................44
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium or Make-Whole Amount, if any, and Interest.................44
SECTION 509. Restoration of Rights and Remedies........................45
SECTION 510. Rights and Remedies Cumulative............................45
SECTION 511. Delay or Omission Not Waiver..............................45
SECTION 512. Control by Holders of Securities..........................45
SECTION 513. Waiver of Past Defaults...................................46
SECTION 514. Waiver of Usury, Stay or Extension Laws...................46
SECTION 515. Undertaking for Costs.....................................46
ARTICLE SIX - THE TRUSTEE....................................................47
SECTION 601. Notice of Defaults........................................47
SECTION 602. Certain Rights of Trustee.................................47
SECTION 603. Not Responsible for Recitals or Issuance of Securities....49
SECTION 604. May Hold Securities.......................................49
SECTION 605. Money Held in Trust.......................................49
SECTION 606. Compensation and Reimbursement............................49
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
Interests..........................................................50
SECTION 608. Resignation and Removal; Appointment of Successor.........50
SECTION 609. Acceptance of Appointment by Successor....................52
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business...........................................................53
SECTION 611. Appointment of Authenticating Agent.......................53
SECTION 612. Certain Duties and Responsibilities of the Trustee........55
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY............56
SECTION 701. Disclosure of Names and Addresses of Holders..............56
SECTION 702. Reports by Trustee........................................56
SECTION 703. Reports by Company........................................57
SECTION 704. Company to Furnish Trustee Names and Addresses
of Holders.........................................................57
(ii)
<PAGE>
ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR
CONVEYANCE..............................................................58
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain Conditions.....58
SECTION 802. Rights and Duties of Successor Corporation................58
SECTION 803. Officers' Certificate and Opinion of Counsel..............58
ARTICLE NINE - SUPPLEMENTAL INDENTURES.......................................59
SECTION 901. Supplemental Indentures Without Consent of Holders........59
SECTION 902. Supplemental Indentures with Consent of Holders...........60
SECTION 903. Execution of Supplemental Indentures......................62
SECTION 904. Effect of Supplemental Indentures.........................62
SECTION 905. Conformity with Trust Indenture Act.......................62
SECTION 906. Reference in Securities to Supplemental Indentures........62
ARTICLE TEN - COVENANTS......................................................62
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount,
if any; and Interest...............................................62
SECTION 1002. Maintenance of Office or Agency...........................63
SECTION 1003. Money for Securities Payments to Be Held in Trust.........64
SECTION 1004. Existence.................................................66
SECTION 1005. Maintenance of Properties.................................66
SECTION 1006. Insurance.................................................66
SECTION 1007. Payment of Taxes and Other Claims.........................66
SECTION 1008. Statement as to Compliance................................66
SECTION 1009. Waiver of Certain Covenants...............................67
ARTICLE ELEVEN - REDEMPTION OF SECURITIES....................................67
SECTION 1101. Applicability of Article..................................67
SECTION 1102. Election to Redeem; Notice to Trustee.....................67
SECTION 1103. Selection by Trustee of Securities to Be Redeemed.........67
SECTION 1104. Notice of Redemption......................................68
SECTION 1105. Deposit of Redemption Price...............................69
SECTION 1106. Securities Payable on Redemption Date.....................70
SECTION 1107. Securities Redeemed in Part...............................70
ARTICLE TWELVE - SINKING FUNDS...............................................71
SECTION 1201. Applicability of Article..................................71
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.....71
SECTION 1203. Redemption of Securities for Sinking Fund.................71
ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS........................72
SECTION 1301. Applicability of Article..................................72
SECTION 1302. Repayment of Securities...................................72
(iii)
<PAGE>
SECTION 1303. Exercise..................................................72
SECTION 1304. When Securities Presented for Repayment Become Due
and Payable........................................................73
SECTION 1305. Securities Repaid in Part.................................74
ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE........................74
SECTION 1401. Applicability of Article: Company's Option to Effect
Defeasance or Covenant Defeasance..................................74
SECTION 1402. Defeasance and Discharge..................................75
SECTION 1403. Covenant Defeasance.......................................75
SECTION 1404. Conditions to Defeasance or Covenant Defeasance...........76
SECTION 1405. Deposited Money and Government Obligations to Be Held
in Trust; Other Miscellaneous Provisions...........................77
ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES..........................78
SECTION 1501. Purposes for Which Meetings May Be Called.................78
SECTION 1502. Call, Notice and Place of Meetings........................79
SECTION 1503. Persons Entitled to Vote at Meetings......................79
SECTION 1504. Quorum; Action............................................79
SECTION 1505. Determination of Voting Rights; Conduct and
Adjournment of Meetings............................................80
SECTION 1506. Counting Votes and Recording Action of Meetings...........81
ARTICLE SIXTEEN - SUBORDINATION OF SECURITIES................................82
SECTION 1601. Agreement to Subordinate..................................82
SECTION 1602. Payment Over of Proceeds upon Dissolution, Etc............82
SECTION 1603. No Payment When Senior Indebtedness in Default............83
SECTION 1604. Reliance by Senior Indebtedness on Subordination
Provisions.........................................................84
SECTION 1605. Subrogation to Rights of Holders of Senior
Indebtedness.......................................................85
SECTION 1606. Provisions Solely to Define Relative Rights...............85
SECTION 1607. Trustee to Effectuate Subordination.......................85
SECTION 1608. No Waiver of Subordination Provisions.....................86
SECTION 1609. Notice to Trustee.........................................86
SECTION 1610. Reliance on Judicial Order or Certificate of
Liquidating Agent..................................................87
SECTION 1611. Trustee Not Fiduciary for Holders of Senior
Indebtedness.......................................................88
SECTION 1612. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights...................................88
SECTION 1613. Article Applicable to Paying Agents.......................88
ARTICLE SEVENTEEN - CONVERSION OF SECURITIES.................................88
SECTION 1701. Applicability of Article; Conversion Privilege and
Conversion Price...................................................88
SECTION 1702. Exercise of Conversion Privilege..........................89
SECTION 1703. Fractions of Shares.......................................90
<PAGE>
SECTION 1704. Adjustment of Conversion Price........................... 91
SECTION 1705. Notice of Adjustments of Conversion Price................ 95
SECTION 1706. Notice of Certain Corporate Action....................... 95
SECTION 1707. Company to Reserve Common Stock.......................... 96
SECTION 1708. Taxes on Conversion...................................... 96
SECTION 1709. Covenants as to Common Stock............................. 96
SECTION 1710. Cancellation of Converted Securities..................... 96
SECTION 1711. Provisions in Case of Consolidation, Merger or Sale
of Assets; Special Distributions.................................. 97
SECTION 1712. Trustee Adjustment Disclaimer; Company Determination
Final............................................................. 98
SECTION 1713. When No Adjustment Required.............................. 99
SECTION 1714. Equivalent Adjustments................................... 99
SIGNATURES AND SEALS........................................................100
ACKNOWLEDGMENT..............................................................101
EXHIBIT A
FORM OF REDEEMABLE OR NON-REDEEMABLE SUBORDINATED SECURITY............A-1
EXHIBIT B
FORMS OF CERTIFICATION................................................B-1
(v)
<PAGE>
SOVRAN SELF STORAGE, INC.
Reconciliation and tie between Trust Indenture Act of 1939 (the "Trust
Indenture Act" or "TIA") and Indenture, dated as of [________________,] 1996.
Trust Indenture
Act Section Indenture Section
- ----------------- -----------------
(S) 310(a)(1) ............................. 607
(a)(2) ............................. 607
(b) ............................. 607, 608
(S) 312(c) ............................. 701
(S) 313(a) ............................. 702
(c) ............................. 702
(S) 314(a) ............................. 703
(a)(4) ............................. 1009
(c)(1) ............................. 102
(c)(2) ............................. 102
(e) ............................. 102
(S) 315(b) ............................. 601
(S) 316(a) (last sentence).............. 101 ("Outstanding")
(a)(1)(A) ............................. 502, 512
(a)(1)(B) ............................. 513
(b) ............................. 508
(S) 317(a)(1) ............................. 503
(a)(2) ............................. 504
(S) 318(a) ............................. 111
(c) ............................. 111
- ---------------
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
Attention should also be directed to TIA Section 318(c), which provides
that the provisions of TIA Sections 310 to and including 317 of the Trust
Indenture Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
(vi)
<PAGE>
INDENTURE, dated as of [_________________,] 1996, between SOVRAN SELF STORAGE,
INC., a corporation organized under the laws of the State of Maryland
(hereinafter called the "Company"), having its principal office at 5166 Main
Street, Williamsville, New York 14221, and [_________________, a banking
association organized under the laws of the _____________________________ as
Trustee hereunder (hereinafter called the "Trustee"), having a Corporate Trust
Office at ________________________________].
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for its lawful
purposes subordinated debt securities (hereinafter called the "Securities")
evidencing its unsecured and subordinated indebtedness, and has duly authorized
the execution and delivery of this Indenture to provide for the issuance from
time to time of the Securities, to be issued in one or more Series as provided
in this Indenture.
This Indenture is subject to the provisions of the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act" or "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 purchase of the Securities by
the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE - DEFINITIONS AND OTHER PROVISIONS OF GENERAL
APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings assigned to them therein,
and the terms "cash transaction" and "self-liquidating paper," as used in TIA
Section 311, shall have the meanings assigned to them in the rules of the
Commission adopted under the TIA;
<PAGE>
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP; and
(4) the words "herein," "hereof "and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder, has the meaning specified in
---
Section 104.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to
--------------------
Section 611 hereof to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper, printed in the English language or
--------------------
in an official language of the country of publication, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in each place in connection with which the term is
used or in the financial community of each such place. Whenever successive
publications are required to be made in Authorized Newspapers, the successive
publications may be made in the same or in different Authorized Newspapers in
the same city meeting the foregoing requirements and in each case on any
Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
--------------
"Bearer Security" means any Security established pursuant to Section 201 which
---------------
is payable to bearer.
"Board of Directors" means the board of directors of the Company or any
------------------
committee of that board duly authorized to act hereunder.
"Board Resolution" means a copy of a resolution certified by the Secretary or
----------------
an Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment or any other
------------
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities issued pursuant to
Section 301, any day, other than a
2
<PAGE>
Saturday or Sunday, that is not 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" of any Person means any and all shares, interests,
-------------
participations, rights to purchase, warrants, options or other equivalents
(however designated) of corporate stock or other equity of such Person.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or its
-----
successor.
"Commission" means the Securities and Exchange Commission, as from time to
----------
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Common Stock" means, with respect to any Person, all shares of capital stock
------------
issued by such Person other than Preferred Stock.
"Company" means the Person named as the "Company" in the first paragraph of
-------
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written request or
--------------- -------------
order signed in the name of the Company by its Chairman of the Board, the
President or a Vice President, and by its Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company, and delivered to the
Trustee.
"Comparable Treasury Issue" means the United States Treasury security selected
-------------------------
by an Independent Investment Banker as having a maturity comparable to the
remaining term of the Notes to be redeemed that would be utilized, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of such Notes. "Independent Investment Banker" means one of the Reference
Treasury Dealers appointed by the Trustee after consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
-------------------------
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such business day, the average of
all Reference Treasury Dealer Quotations for such redemption date.
3
<PAGE>
"Consolidated Net Assets" means as of any particular time the aggregate amount
-----------------------
of assets (less applicable reserves and other properly deductible items) after
deducting therefrom all current liabilities except for (a) notes and loans
payable, (b) current maturities of long-term debt and (c) current maturities of
obligations under capital leases, all as set forth on the most recent
consolidated balance sheet of the Company and its consolidated Subsidiaries and
computed in accordance with generally accepted accounting principles and
practices as in effect on [_____________] [the date of the Senior Indenture].
"Conversion Event" means the cessation of use of (i) a Foreign Currency both
----------------
by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) any currency unit
(or composite currency) other than the ECU for the purposes for which it was
established.
"Corporate Trust Office" means the office of the Trustee at which, at any
----------------------
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at [______________________________].
"corporation" includes corporations, associations, companies and business
-----------
trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
------
"Custodian" has the meaning specified in Section 501.
---------
"Defaulted Interest" has the meaning specified in Section 307.
------------------
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
------ -
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to
---
time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels office,
---------
or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the European
--------------------
Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System established by
------------------------
the Resolution of December 5, 1978 of the Council of the European Communities.
"Event of Default" has the meaning specified in Article Five.
----------------
4
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
------------
successor statute.
"Foreign Currency" means any currency, currency unit or composite currency,
----------------
including, without limitation, the ECU issued by the government of one or more
countries other than the United States of America or by any recognized
confederation or association of such governments.
"GAAP" means, except as otherwise provided herein, generally accepted
----
accounting principles, as in effect from time to time, as used in the United
States applied on a consistent basis.
"Global Security" means a Security evidencing all or a part of a series of
---------------
Securities issued to and registered in the name of the depository for such
series, or its nominee, in accordance with Section 305, and bearing the legend
prescribed in Section 203.
"Government Obligations" means securities which are (i) direct obligations of
----------------------
the United States of America or the government which issued the Foreign Currency
in which the Securities of a particular series are payable, for the payment of
which its full faith and credit is pledged or (ii) obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America or such government which issued the Foreign Currency in
which the Securities of such series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America or such other government, which, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such Government Obligation or a specific payment of interest on
or principal of any such Government Obligation held by such custodian for the
account of the holder of a depository receipt, provided that (except as required
--------
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt.
"Guaranty" by any Person means any Obligation, contingent or otherwise, of
--------
such Person guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including, without
limitation, every Obligation of such Person (i) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Indebtedness or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Indebtedness, (ii) to purchase property, securities or services for the
purpose of assuring the holder of such Indebtedness of the payment of such
Indebtedness or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness; provided, however, that a
-------- -------
Guaranty by any Person shall not include endorsements by such Person for
collection or deposit, in either case in the ordinary course of
5
<PAGE>
business. The terms "Guaranteed," "Guaranteeing" and "Guarantor" shall have
meanings correlative to the foregoing.
"Holder" means, in the case of a Registered Security, the Person in whose name
------
a Security is registered in the Security Register and, in the case of a Bearer
Security, the bearer thereof and, when used with respect to any coupon, shall
mean the bearer thereof.
"Indebtedness" means, with respect to any Person, without duplication, (i) any
------------
Obligation of such Person relating to any indebtedness of such Person (A) for
borrowed money (whether or not the recourse of the lender is to the whole of the
assets, of such person or only to a portion thereof), (B) evidenced by notes,
debentures or similar instruments (including purchase money obligations) given
in connection with the acquisition of any property or assets (other than trade
accounts payable for inventory or similar property acquired in the ordinary
course of business), including securities, for the payment of which such Person
is liable, directly or indirectly, or the payment of which is secured by a lien,
charge or encumbrance on property or assets of such Person, (C) for goods,
materials or services purchased in the ordinary course of business (other than
trade accounts payable arising in the ordinary course of business), (D) with
respect to letters of credit or bankers acceptances issued for the account of
such Person or performance, surety or similar bonds, (E) for the payment of
money relating to a Capitalized Lease Obligation or (F) under interest rate
swaps, caps or similar agreements and foreign exchange contracts, currency swaps
or similar agreements; (ii) any liability of others of the kind described in the
preceding clause (i), which such Person has Guaranteed or which is otherwise its
legal liability; and (iii) 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) or (ii).
"Indenture" means this instrument as originally executed or as it may be
---------
supplemented or amended from time to time by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, and shall
include the terms of particular series of Securities established as contemplated
by Section 301; provided, however, that, if at any time more than one Person is
-------- -------
acting as Trustee under this instrument, "Indenture" shall mean, with respect to
any one or more series of Securities for which such Person is Trustee, this
instrument as originally executed or as it may be supplemented or amended from
time to time by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof and shall include the terms of the or those
particular series of Securities for which such Person is Trustee established as
contemplated by Section 301, exclusive, however, of any provisions or terms
which relate solely to other series of Securities for which such Person is
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.
6
<PAGE>
"Indexed Security" means a Security the terms of which provide that the
----------------
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"Interest," when used with respect to an Original Issue Discount Security
--------
which by its terms bears interest only after Maturity, shall mean interest
payable after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
---------------------
Stated Maturity of an installment of interest on such Security.
"Make-Whole Amount," when used with respect to any Security, means the amount,
-----------------
if any, in addition to principal which is required by a Security, under the
terms and conditions specified therein or as otherwise specified as contemplated
by Section 301, to be paid by the Company to the Holder thereof in connection
with any optional redemption or accelerated payment of such Security.
"Maturity," when used with respect to any Security, means the date on which
--------
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Obligation" of any Person with respect to any specified Indebtedness means
----------
any obligation of such Person to pay principal, premium, interest (including
interest accruing on or after the filing of any petition in bankruptcy or for
reorganization relating to such Person, whether or not a claim for such post-
petition interest is allowed in such Proceeding), penalties, reimbursement or
indemnification amounts, fees, expenses or other amounts relating to such
Indebtedness.
"Officers' Certificate" means a certificate signed by the Chairman of the
---------------------
Board of Directors, the President or a Vice President and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be counsel
------------------
for the Company or who may be an employee of or other counsel for the Company
and who shall be satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
--------------------------------
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the date of
-----------
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
------
7
<PAGE>
(i) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
(including repayment at the option of the Holder) money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent
(other than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the Holders of
such Securities and any coupons appertaining thereto; provided, however, that,
-------- -------
if such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1402 and 1403,
with respect to which the Company has effected defeasance and/or covenant
defeasance as provided in Article Fourteen; and
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of the Company.
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless otherwise provided
with respect to such Security pursuant to Section 301, and (iv) Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
8
<PAGE>
protected in making such calculation or in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities
owned as provided in clause (iv) 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. In case of a dispute as to
such right, the advice of counsel shall be full protection in respect of any
decision made by the Trustee in accordance with such advice.
"Paying Agent" means any Person authorized by the Company to pay the principal
------------
of (and premium or Make-Whole Amount, if any) or interest on any Securities or
coupons on behalf of the Company.
"Payment Blockage Notice" and "Payment Blockage Period" have the respective
----------------------- -----------------------
meanings specified in Section 1603.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of or within any
----------------
series, means the place or places where the principal of (and premium or Make-
Whole Amount, if any) and interest on such Securities are payable as specified
as contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
--------------------
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Stock" means, with respect to any Person, all capital stock issued
---------------
by such Person that are entitled to a preference or priority over any other
capital stock issued by such Person with respect to any distribution of such
Person's assets, whether by dividend or upon any voluntary or involuntary
liquidation, dissolution or winding up.
"Proceeding" has the meaning specified in Section 1602.
----------
"Redemption Date," when used with respect to any Security to be redeemed, in
---------------
whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
9
<PAGE>
"Redemption Price," when used with respect to any Security to be redeemed,
----------------
means the price at which it is to be redeemed pursuant to this Indenture.
"Reference Treasury Dealer" means each of [__________________], and their
-------------------------
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference
------------------------------------
Treasury Dealer and any redemption date, the average, as determined by the
Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third business day preceding such redemption date.
"Registered Security" shall mean any Security which is registered in the
-------------------
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date on
-------------------
the Registered Securities of or within any series means the date specified for
that purpose as contemplated by Section 301, whether or not a Business Day.
"Repayment Date" means, when used with respect to any Security to be repaid at
--------------
the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.
"Repayment Price" means, when used with respect to any Security to be repaid
---------------
at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer," when used with respect to the Trustee, means the
-------------------
chairman or vice-chairman of the board of directors, the chairman or vice-
chairman of the executive committee of the board of directors, the president,
any vice president (whether or not designated by a number or a word or words
added before or after the title "vice president"), the secretary, any assistant
secretary, the treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of such officer's knowledge and familiarity with the particular
subject.
"Security" has the meaning stated in the first recital of this Indenture and,
--------
more particularly, means any Security or Securities authenticated and delivered
under this Indenture; provided, however, that, if at any time there is more than
-------- -------
one Person acting as Trustee under this Indenture, "Securities" with respect to
the Indenture as to which such Person is Trustee shall have the meaning stated
in the first recital of this Indenture and shall more particularly
10
<PAGE>
mean Securities authenticated and delivered under this Indenture, exclusive,
however, of Securities of any series as to which such Person is not Trustee.
"Security Register" and "Security Registrar" have the respective meanings
----------------- ------------------
specified in Section 305.
"Senior Indebtedness" means Indebtedness of the Company, whether outstanding
-------------------
on the date of this Indenture or thereafter created, incurred, assumed or
guaranteed by the Company, other than the following: (1) any Indebtedness as to
which, in the instrument evidencing such Indebtedness or pursuant to which such
Indebtedness was issued, it is expressly provided that such Indebtedness is
subordinate in right of payment to all Indebtedness of the Company not expressly
subordinated to such Indebtedness; (2) any Indebtedness which by its terms
refers explicitly to the Securities and states that such Indebtedness shall not
be senior, shall be pari passu or shall be subordinated in right of payment to
---- -----
the Securities; and (3) with respect to any series of Securities, any
Indebtedness of the Company evidenced by Securities of the same or of another
series. Notwithstanding anything to the contrary in the foregoing, Senior
Indebtedness shall not include: (a) Indebtedness of or amounts owed by the
Company for compensation to employees, or for goods, materials or services
purchased in the ordinary course of business, or (b) Indebtedness of the Company
to a Subsidiary of the Company.
"Significant Subsidiary" means any Subsidiary which is a "significant
----------------------
subsidiary" (as defined in Article I, Rule 1-02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
-------------------
Registered Securities of or within any series means a date fixed by the Company
pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any installment
---------------
of principal thereof or interest thereon, means the date specified in such
Security or a coupon representing such installment of interest as the fixed date
on which the principal of such Security or such installment of principal or
interest is due and payable.
"Subsidiary" means a corporation a majority of the outstanding voting stock of
----------
which is owned, directly or indirectly, by the Company or by one or more other
Subsidiaries of the Company. For the purposes of this definition, "voting
stock" means stock having voting power for the election of directors, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Treasury Rate" means, with respect to any redemption date, the rate per annum
-------------
equal to the semiannual equivalent yield to maturity of the Comparable Treasury
Issue, assuming a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
11
<PAGE>
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
------------------- ---
amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
-------
this Indenture until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder; provided, however, that if
-------- -------
at any time there is more than one such Person, "Trustee" as used with respect
to the Securities of any series shall mean only the Trustee with respect to
Securities of that series.
"United States" means, unless otherwise specified with respect to any
-------------
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States Person" means, unless otherwise specified with respect to any
--------------------
Securities pursuant to Section 301, an individual who is a citizen or resident
of the United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States or an estate or trust the
income of which is subject to United States Federal income taxation regardless
of its source.
"Yield to Maturity" means the yield to maturity, computed at the time of
-----------------
issuance of a Security (or, if applicable, at the most recent redetermination of
interest on such Security) and as set forth in such Security in accordance with
generally accepted United States bond yield computation principles.
SECTION 102. 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 (including certificates delivered
pursuant to Section 1008) shall include:
(1) a statement that each individual signing such certificate or opinion has
read such condition or covenant and the definitions herein relating thereto;
12
<PAGE>
(2) 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;
(3) a statement that, in the opinion of each such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such condition or covenant has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case where
--------------------------------------
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion 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 of the Company may be based, insofar
as it relates to legal matters, upon an Opinion of Counsel, or a certificate or
representations by counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the opinion, certificate or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such Opinion of Counsel or certificate or representations may be
based, insofar as it relates to factual matters, upon a certificate or opinion
of, or representations by, an officer or officers of the Company stating that
the information as to such factual matters is in the possession of the Company,
unless such counsel knows, 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.
SECTION 104. Acts of Holders. (a) Any request, demand, authorization,
---------------
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of the Outstanding Securities of all series or one
or more series, as the case may be, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agents duly appointed in writing. If Securities of a series are issuable
as Bearer Securities, any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Holders of Securities of such series may, alternatively, be embodied in and
evidenced by the record of Holders of Securities of such series voting in favor
thereof, either in person or by proxies duly appointed in writing, at any
meeting of Holders of Securities of such series duly called and
13
<PAGE>
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture and conclusive
in favor of the Trustee and the Company and any agent of the Trustee or the
Company, if made in the manner provided in this Section. The record of any
meeting of Holders of Securities shall be proved in the manner provided in
Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register. As to any matter relating to beneficial ownership interests
in any Global Security, the appropriate depository's records shall be
dispositive for purposes of this Indenture.
(d) The ownership of Bearer Securities may be proved by the production of
such Bearer Securities or by a certificate executed, as depository, by any trust
company, bank, banker or other depository, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory, showing that at
the date therein mentioned such Person had on deposit with such depository, or
exhibited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date
14
<PAGE>
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. Notwithstanding TIA Section 316(c), such
record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Holders generally in connection therewith and not later
than the date such solicitation is completed. If such a record date is fixed,
such request, demand, authorization, direction, notice, consent, waiver or other
Act may be given before or after such record date, but only the Holders of
record at the close of business on such record date shall be deemed to be
Holders for the purposes of determining whether Holders of the requisite
proportion of Outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that purpose the Outstanding Securities shall be computed as of
such record date; provided that no such authorization, agreement or consent by
--------
the Holders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee, any
Security Registrar, any Paying Agent, any Authenticating Agent or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
SECTION 105. Notices, etc., to Trustee and Company. Any request, demand,
-------------------------------------
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee at [__________________________]; or
(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 Indenture or at any other address previously
furnished in writing to the Trustee by the Company, Attention: Chief
Financial Officer (with a copy to the Company's General Counsel), 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 (415)
391-6259.
15
<PAGE>
SECTION 106. Notice to Holders: Waiver. Where this Indenture provides for
-------------------------
notice of any event to Holders of Registered Securities by the Company or the
Trustee, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Security Register, not later than the latest date, 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 of Registered Securities is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders of Registered Securities or the sufficiency of any notice to
Holders of Bearer Securities given as provided herein. Any notice mailed to a
Holder in the manner herein prescribed shall be conclusively deemed to have been
received by such Holder, whether or not such Holder actually receives such
notice.
If by reason of the suspension of or irregularities in regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification to Holders of Registered Securities as shall be
made with the approval of the Trustee shall constitute a sufficient notification
to such Holders for every purpose hereunder.
Except as otherwise expressly provided herein or otherwise specified with
respect to any Securities pursuant to Section 301, where this Indenture provides
for notice to Holders of Bearer Securities of any event, such notice shall be
sufficiently given if published in an Authorized Newspaper in The City of New
York and in such other city or cities as may be specified in such Securities on
a Business Day, such publication to be not later than the latest date, if any,
and not earlier than the earliest date, if any, prescribed for the giving of
such notice. Any such notice shall be deemed to have been given on the date of
such publication or, if published more than once, on the date of the first such
publication.
If by reason of the suspension of publication of any Authorized Newspaper or
Authorized Newspapers or by reason of any other cause it shall be impracticable
to publish any notice to Holders of Bearer Securities as provided above, then
such notification to Holders of Bearer Securities as shall be given with the
approval of the Trustee shall constitute sufficient notice to such Holders for
every purpose hereunder. Neither the failure to give notice by publication to
any particular Holder of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of such notice with
respect to other Holders of Bearer Securities or the sufficiency of any notice
to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with
16
<PAGE>
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
SECTION 107. Counterparts; Effect of Headings and Table of Contents. This
------------------------------------------------------
Indenture may be executed in any number of counterparts, each of which so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
SECTION 108. Successors and Assigns. All covenants and agreements in this
----------------------
Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 109. Severability Clause. In case any provision in this Indenture or
-------------------
in any Security or coupon shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 110. Benefits of Indenture. Nothing in this Indenture or in the
---------------------
Securities or coupons, express or implied, shall give to any Person, other than
the parties hereto, any Security Registrar, any Paying Agent, any Authenticating
Agent and their successors hereunder and the Holders any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the Securities and coupons
-------------
shall be governed by and construed in accordance with the law of the State of
New York. This Indenture is subject to the provisions of the TIA that are
required to be part of this Indenture and shall, to the extent applicable, be
governed by such provisions.
SECTION 112. Legal Holidays. In any case where any Interest Payment Date,
--------------
Redemption Date, Repayment Date, sinking fund payment date, Stated Maturity or
Maturity of any Security or the last date on which a Holder has the right to
convert or exchange a Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or principal (and premium or Make-Whole Amount, 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 the supplemental indenture with
respect to such Security) may be made on the next succeeding Business Day at
such Place of Payment with the same force and effect as if made on the Interest
Payment Date, Redemption Date, Repayment Date or sinking fund payment date, or
at the Stated Maturity or Maturity, or on such last day for conversion or
exchange, provided that no interest shall accrue on the amount so payable for
the period from and after such Interest Payment Date, Redemption Date, Repayment
Date, sinking fund payment date, Stated Maturity or Maturity, as the case may
be.
17
<PAGE>
SECTION 113. Immunity of Stockholders, Directors, Officers and Agents of the
---------------------------------------------------------------
Company. No recourse under or upon any obligation, covenant or agreement
- -------
contained in this Indenture, or in any Security, or because of any indebtedness
evidenced thereby, shall be had against any past, present or future stockholder,
employee, officer or director, 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 issue of the Securities.
SECTION 114. 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 Trust
Indenture Act, such required provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act 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.
ARTICLE TWO - SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities, if any, of each
-------------------
series and the Bearer Securities, if any, of each series and related coupons
shall be substantially in the form of Exhibit A hereto or in such other form as
---------
shall be established in one or more indentures supplemental hereto or approved
from time to time by or pursuant to a Board Resolution in accordance with
Section 301, shall have such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture or any
indenture supplemental hereto, and may have such letters, numbers or other marks
of identification or designation and such legends or endorsements placed thereon
as the Company may deem appropriate and as are not inconsistent with the
provisions of this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Securities may be listed, or to conform to
usage.
Unless otherwise specified as contemplated by Section 301, Bearer Securities
shall have interest coupons attached.
The definitive Securities and coupons shall be printed, lithographed or
engraved or produced by any combination of these methods on a steel engraved
border or steel engraved borders or mechanically reproduced on safety paper or
may be produced in any other manner, all as determined by the officers executing
such Securities or coupons, as evidenced by their execution of such Securities
or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication. Subject to
-----------------------------------------------
Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
18
<PAGE>
This is one of the Securities of the series designated therein referred to in
the within-mentioned Indenture.
[ ]
as Trustee
Dated: By:
----------------- -------------------------------
Authorized Signatory
SECTION 203. Securities Issuable in Global Form. If Securities of or within a
----------------------------------
series are issuable in the form of one or more Global Securities, then,
notwithstanding clause (8) of Section 301 and the provisions of Section 302, any
such Global Security or 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
of such series represented thereby may from time to time be increased or
decreased 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 thereof, 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 to the Trustee
pursuant to Section 303 or 304. Subject to the provisions of Section 303 and, if
applicable, Section 304, the Trustee shall deliver and redeliver any 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. If a
Company Order pursuant to Section 303 or 304 has been, or simultaneously is,
delivered, any instructions by the Company with respect to endorsement or
delivery or redelivery of a Global Security shall be in writing but need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any Security
represented by a Global Security if such Security was never issued and sold by
the Company and the Company delivers to the Trustee the Global Security together
with written instructions (which need not comply with Section 102 and need not
be accompanied by an Opinion of Counsel) with regard to the reduction in the
principal amount of Securities represented thereby, together with the written
statement contemplated by the last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise specified as
contemplated by Section 301, payment of principal of and any premium or Make-
Whole Amount, if any, and interest on any Global Security in permanent global
form shall be made to the registered Holder thereof.
Notwithstanding the provisions of Section 308 and except as provided in the
preceding paragraph, the Company, the Trustee and any agent of the Company and
the Trustee shall treat as the Holder of such principal amount of Outstanding
Securities represented by a permanent
19
<PAGE>
Global Security (i) in the case of a permanent Global Security in registered
form, the Holder of such permanent Global Security in registered form, or (ii)
in the case of a permanent Global Security in bearer form, Euroclear or CEDEL.
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 Depository or a nominee of a Depository. This Security is
exchangeable for Securities registered in the name of a person other
than the Depository or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a
whole by the Depository to a nominee of the Depository or by a nominee
of the Depository to the Depository or another nominee of the
Depository or by the Depository or its nominee to a successor
Depository or its nominee."
ARTICLE THREE - THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate principal
------------------------------------
amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
The Securities may be issued in one or more series. There shall be established
in one or more Board Resolutions or pursuant to authority granted by one or more
Board Resolutions and, subject to Section 303, set forth 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 the Securities of the series (which shall
distinguish the Securities of such series from all other series of
Securities);
(2) Any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the series pursuant to Section 304, 305, 306, 906, 1107 or
1305);
(3) The price (expressed as a percentage of the principal amount
thereof) at which such 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
20
<PAGE>
amount of such Securities that is convertible into Common Stock or Preferred
Stock, or the method by which any such portion shall be determined;
(4) If convertible, the terms on which such Securities are
convertible, including the initial conversion price or rate and the
conversion period and any applicable limitations on the ownership or
transferability of Common Stock or Preferred Stock receivable on conversion;
(5) The date or dates, or the method for determining such date or
dates, on which the principal of such 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
Securities will bear interest, if any;
(7) The date or dates, or the method for determining such date or
dates, from which any such interest will accrue, the dates on which any such
interest will be payable, the record dates for such interest payment dates,
or the method by which such dates shall be determined, the persons to whom
such interest shall be payable, and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day months;
(8) The place or places where the principal of (and premium or
Make-Whole Amount, if any) and interest, if any, on such Securities 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;
(9) The period or periods, if any, within which, the price or
prices at which and the other terms and conditions upon which such
Securities may, pursuant to any optional or mandatory redemption provisions,
be redeemed, as a whole or in part, at the option of the Company;
(10) The obligation, if any, of the Company to redeem, repay or
purchase such Securities pursuant to any sinking fund or analogous provision
or at the option of a holder thereof, and the period or periods within
which, the price or prices at which and the other terms and conditions upon
which such Securities will be redeemed, repaid or purchased, as a whole or
in part, pursuant to such obligation;
(11) If other than Dollars, the currency or currencies in which
such 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, the manner of determining the equivalent thereof in Dollars for
purposes of the definition of "Outstanding" in Section 101, and the terms
and conditions relating thereto;
21
<PAGE>
(12) Whether the amount of payments of principal of (and premium
or Make-Whole Amount, if any, including any amount due upon redemption, if
any) or interest, if any, on such 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 the yield on or trading price of other
securities, including United States Treasury securities or on a currency,
currencies, currency unit or units, or composite currency or currencies) and
the manner in which such amounts shall be determined;
(13) Whether the principal of (and premium or Make-Whole Amount,
if any) or interest 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, and the terms and conditions upon which,
such election may be made, and the time and manner of, and identity of the
exchange rate agent with responsibility for, determining the exchange rate
between the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are denominated or stated to
be payable and the currency or currencies, currency unit or units or
composite currency or currencies in which such Securities are to be so
payable;
(14) Provisions, if any, granting special rights to the holders of
Securities of the series upon the occurrence of such events as may be
specified;
(15) Any deletions from, modifications of or additions to the
Events of Default or covenants of the Company with respect to Securities of
the series, whether or not such Events of Default or covenants are
consistent with the Events of Default or covenants set forth herein;
(16) Whether and under what circumstances the Company will pay any
additional amounts on such Securities 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;
(17) Whether Securities of the series are to be issuable as
Registered Securities, Bearer Securities (with or without coupons) or both,
any restrictions applicable to the offer, sale or delivery of Bearer
Securities and the terms upon which Bearer Securities of the series may be
exchanged for Registered Securities of the series and vice versa (if
permitted by applicable laws and regulations), whether any Securities of the
series are to be issuable initially in temporary global form and whether any
Securities of the series are to be issuable in permanent global form with or
without coupons and, if so, whether beneficial owners of interests in any
such permanent global Security may exchange such interests for Securities of
such series and of like tenor of any authorized form and denomination and
the circumstances under which any such exchanges may occur, if other than in
the manner provided in the Indenture, and, if
22
<PAGE>
Registered Securities of the series are to be issuable as a Global Security,
the identity of the depository for such series;
(18) The date as of which any Bearer Securities of the series and
any temporary Global Security representing outstanding Securities of the
series shall be dated if other than the date of original issuance of the
first Security of the series to be issued;
(19) The Person to whom any interest on any Registered Security of
the series shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, the manner in
which, or the Person to whom, any interest on any Bearer Security of the
series shall be payable, if otherwise than upon presentation and surrender
of the coupons appertaining thereto as they severally mature, and the extent
to which, or the manner in which, any interest payable on a temporary Global
Security on an Interest Payment Date will be paid if other than in the
manner provided herein;
(20) The applicability, if any, of the defeasance and covenant
defeasance provisions of Article Fourteen hereof to the Securities of the
series;
(21) If the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a temporary
Security of such series) only upon receipt of certain certificates or other
documents or satisfaction of other conditions, then the form and/or terms of
such certificates, documents or conditions;
(22) The obligation, if any, of the Company to permit the
conversion of the Securities of such series into Common Stock or Preferred
Stock, as the case may be, and the terms and conditions upon which such
conversion shall be effected (including, without limitation, the initial
conversion price or rate, the conversion period, any adjustment of the
applicable conversion price and any requirements relative to the reservation
of such shares for purposes of conversion); and
(23) Any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
23
<PAGE>
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of an appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company and delivered to the Trustee at or prior to the
delivery of the Officers' Certificate setting forth the terms of the Securities
of such series.
SECTION 302. Denominations. The Securities of each series shall be
-------------
issuable in such denominations as shall be specified as contemplated by Section
301. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Securities of such series, other than Global Securities (which may be of any
denomination), shall be issuable in denominations of $1,000 and any integral
multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating. The
----------------------------------------------
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by its Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon, and attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities and coupons may be manual or facsimile signatures of
the present or any future such authorized officer and may be imprinted or
otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided, however, that,
-------- -------
in connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
-------- -------
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or CEDEL, as the case
may be, in the form set forth in Exhibit B-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance with the terms of such temporary Security and this Indenture. If any
Security shall be represented by a permanent global Bearer Security, then, for
purposes of this Section and Section 304, the notation of a beneficial owner's
interest therein upon original issuance of such
24
<PAGE>
Security or upon exchange of a portion of a temporary Global Security shall be
deemed to be delivery in connection with its original issuance of such
beneficial owner's interest in such permanent Global Security. Except as
permitted by Section 306, the Trustee shall not authenticate and deliver any
Bearer Security unless all appurtenant coupons for interest then matured have
been detached and canceled.
If all the Securities of any series are not to be issued at one time and if
the Board Resolution or supplemental indenture establishing such series shall so
permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to TIA Section 315(a) through 315(d)) shall be fully protected in
relying upon,
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have been established
in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons appertaining thereto,
when completed by appropriate insertions and executed and delivered by the
Company to the Trustee for authentication in accordance with this
Indenture, authenticated and delivered by the Trustee in accordance with
this Indenture and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute legal,
valid and legally binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent transfer, reorganization and other similar laws of general
applicability relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of
such certificate, that no Event of Default with respect to any of the
Securities shall have occurred and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
25
<PAGE>
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order, or an Opinion of Counsel or an
Officers' Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security shall be dated as of the date specified as contemplated by
Section 301.
No Security or coupon shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such Security
or Security to which such coupon appertains a certificate of authentication
substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized signatory, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture. Notwithstanding the foregoing, if any Security
(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 309
together with a written statement (which need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel) stating that such Security has
never been issued and sold by the 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 304. Temporary Securities.
--------------------
(a) Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued, in registered form, or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Securities may determine, as conclusively evidenced by their execution of such
Securities. In the case of Securities of any series, such temporary Securities
may be in global form.
Except in the case of temporary Global Securities (which shall be exchanged
as otherwise provided herein or as otherwise provided in or pursuant to a Board
Resolution), 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
26
<PAGE>
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 (accompanied by any non-matured coupons
appertaining thereto), 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; provided,
--------
however, that no definitive Bearer Security shall be delivered in exchange for a
- -------
temporary Registered Security; and provided further that a definitive Bearer
-------- -------
Security shall be delivered in exchange for a temporary Bearer Security only in
compliance with the conditions set forth in Section 303. Until so exchanged,
the temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.
(b) Unless otherwise provided in or pursuant to a Board Resolution, the
following provisions of this Section 304(b) shall govern the exchange of
temporary Securities other than through the facilities of The Depository Trust
Company. If any such temporary Security is issued in global form, then such
temporary Global Security shall, unless otherwise provided therein, be delivered
to the London office of a depository or common depository (the "Common
Depository"), for the benefit of Euroclear and CEDEL, for credit to the
respective accounts of the beneficial owners of such Securities (or to such
other accounts as they may direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary Global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary Global Security, executed by the Company. On or after
the Exchange Date, such temporary Global Security shall be surrendered by the
Common Depository to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authenticate and deliver, in exchange for
each portion of such temporary Global Security, an equal aggregate principal
amount of definitive Securities of the same series of authorized denominations
and of like tenor as the portion of such temporary Global Security to be
exchanged. The definitive Securities to be delivered in exchange for any such
temporary Global Security shall be in bearer form, registered form, permanent
global bearer form or permanent global registered form, or any combination
thereof, as specified as contemplated by Section 301, and, if any combination
thereof is so specified, as requested by the beneficial owner thereof; provided,
--------
however, that, unless otherwise specified in such temporary Global Security,
- -------
upon such presentation by the Common Depository, such temporary Global Security
is accompanied by a certificate dated the Exchange Date or a subsequent date and
signed by Euroclear as to the portion of such temporary Global Security held for
its account then to be exchanged and a certificate dated the Exchange Date or a
subsequent date and signed by CEDEL as to the portion of such temporary Global
Security held for its account then to be exchanged, each in the form set forth
in Exhibit A-2 to this Indenture or in such other form as may be established
pursuant to Section 301; and provided further that definitive Bearer Securities
-------- -------
shall be delivered in
27
<PAGE>
exchange for a portion of a temporary Global Security only in compliance with
the requirements of Section 303.
Unless otherwise specified in such temporary Global Security, the interest
of a beneficial owner of Securities of a series in a temporary Global Security
shall be exchanged for definitive Securities of the same series and of like
tenor following the Exchange Date when the account holder instructs Euroclear or
CEDEL, as the case may be, to request such exchange on his behalf and delivers
to Euroclear or CEDEL, as the case may be, a certificate in the form set forth
in Exhibit B-1 to this Indenture (or in such other form as may be established
pursuant to Section 301), dated no earlier than 15 days prior to the Exchange
Date, copies of which certificate shall be available from the offices of
Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary Global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary Global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive
Securities in bearer form to be delivered in exchange for any portion of a
temporary Global Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary Securities
of any series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of the same series and of like tenor
authenticated and delivered hereunder, except that, unless otherwise specified
as contemplated by Section 301, interest payable on a temporary Global Security
on an Interest Payment Date for Securities of such series occurring prior to the
applicable Exchange Date shall be payable to Euroclear and CEDEL on such
Interest Payment Date upon delivery by Euroclear and CEDEL to the Trustee of a
certificate or certificates in the form set forth in Exhibit B-2 to this
Indenture (or in such other forms as may be established pursuant to Section
301), for credit without further interest on or after such Interest Payment Date
to the respective accounts of Persons who are the beneficial owners of such
temporary Global Security on such Interest Payment Date and who have each
delivered to Euroclear or CEDEL, as the case may be, a certificate dated no
earlier than 15 days prior to the Interest Payment Date occurring prior to such
Exchange Date in the form set forth as Exhibit B-1 to this Indenture (or in such
other forms as may be established pursuant to Section 301). Notwithstanding
anything to the contrary herein contained, the certifications made pursuant to
this paragraph shall satisfy the certification requirements of the preceding two
paragraphs of this Section 304(b) and of the third paragraph of Section 303 of
this Indenture and the interests of the Persons who are the beneficial owners of
the temporary Global Security with respect to which such certification was made
will be exchanged for definitive Securities of the same series and of like tenor
on the Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary Global Security will be
made unless and until such interest in such temporary Global Security shall have
been exchanged for an
28
<PAGE>
interest in a definitive Security. Any interest so received by Euroclear and
CEDEL and not paid as herein provided shall be returned to the Trustee prior to
the expiration of two years after such Interest Payment Date in order to be
repaid to the Company.
SECTION 305. Registration, Registration of Transfer and Exchange. The
---------------------------------------------------
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby initially appointed "Security Registrar" for
the purpose of registering Registered Securities and transfers of Registered
Securities on such Security Register as herein provided. In the event that the
Trustee shall cease to be Security Registrar, it shall have the right to examine
the Security Register at all reasonable times.
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the Holder,
Registered Securities of any series may be exchanged for other Registered
Securities of the same series, of any authorized denomination or denominations
and of a like aggregate principal amount, containing identical terms and
provisions, upon surrender of the Registered Securities to be exchanged at any
such office or agency. Whenever any such Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive. Unless otherwise specified with respect to any
series of Securities as contemplated by Section 301, Bearer Securities may not
be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and (subject
to Section 303) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in
29
<PAGE>
default, any such permitted exchange may be effected if the Bearer Securities
are accompanied by payment in funds acceptable to the Company in an amount equal
to the face amount of such missing coupon or coupons, or the surrender of such
missing coupon or coupons may be waived by the Company and the Trustee if there
is furnished to them such security or indemnity as they may require to save each
of them and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to any Paying Agent any such missing coupon in respect
of which such a payment shall have been made, such Holder shall be entitled to
receive the amount of such payment; provided, however, that, except as otherwise
-------- -------
provided in Section 1002, interest represented by coupons shall be payable only
upon presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case a Bearer
Security of any series is surrendered at any such office or agency in a
permitted exchange for a Registered Security of the same series and like tenor
after the close of business at such office or agency on (i) any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date, or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the coupon
relating to such Interest Payment Date or proposed date for payment, as the case
may be, and interest or Defaulted Interest, as the case may be, will not be
payable on such Interest Payment Date or proposed date for payment, as the case
may be, in respect of the Registered Security issued in exchange for such Bearer
Security, but will be payable only to the Holder of such coupon when due in
accordance with the provisions of this Indenture. Whenever any Securities are
so surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, any permanent Global Security shall be exchangeable
only as provided in this paragraph. If the depository for any permanent Global
Security is The Depository Trust Company ("DTC"), then, unless the terms of such
Global Security expressly permit such Global Security to be exchanged in whole
or in part for definitive Securities, a Global Security may be transferred, in
whole but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC,
or to a successor to DTC for such Global Security selected or approved by the
Company or to a nominee of such successor to DTC. If at any time DTC notifies
the Company that it is unwilling or unable to continue as depository for the
applicable Global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 if so
required by applicable law or regulation, the Company shall appoint a successor
depository with respect to such Global Security or Securities. If (x) a
successor depository for such Global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable series of Securities represented by such
Global Security or Securities advise DTC to cease acting as depository for such
Global Security or Securities or (z) the Company, in its sole discretion,
determines at any time that all Outstanding Securities (but not less than all)
of
30
<PAGE>
any series issued or issuable in the form of one or more Global Securities shall
no longer be represented by such Global Security or Securities, then the Company
shall execute, and the Trustee shall authenticate and deliver definitive
Securities of like series, rank, tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such Global Security
or Securities. If any beneficial owner of an interest in a permanent global
Security is otherwise entitled to exchange such interest for Securities of such
series and of like tenor and principal amount of another authorized form and
denomination, as specified as contemplated by Section 301 and provided that any
applicable notice provided in the permanent Global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver definitive Securities in
aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent Global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent Global Security
shall be surrendered for exchange by DTC or such other depository as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purpose; provided, however, that no such exchanges may
-------- -------
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevant Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that no Bearer Security delivered in
-------- -------
exchange for a portion of a permanent Global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent Global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or Defaulted Interest, as the
case may be, will not be payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will be payable on such Interest Payment Date or proposed date for payment, as
the case may be, only to the Person to whom interest in respect of such portion
of such permanent Global Security is payable in accordance with the provisions
of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
31
<PAGE>
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 304, 906, 1107 or 1305 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor, provided that such Registered Security shall be simultaneously
--------
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
------------------------------------------------
mutilated Security or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains (with all appurtenant coupons not
destroyed, lost or stolen), a new Security of the same series and principal
amount, containing identical terms and provisions and bearing a number not
contemporaneously outstanding, with coupons corresponding to the coupons, if
any, appertaining to such destroyed, lost or stolen Security or to the Security
to which such destroyed, lost or stolen coupon appertains.
32
<PAGE>
Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Security or coupon has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium or Make-
-------- -------
Whole Amount, if any), and any interest on, Bearer Securities shall, except as
otherwise provided in Section 1002, be payable only at an office or agency
located outside the United States and, unless otherwise specified as
contemplated by Section 301, any interest on Bearer Securities shall be payable
only upon presentation and surrender of the coupons appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except as
----------------------------------------------
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 1002; provided, however, that each
-------- -------
installment of interest on any Registered Security may at the Company's option
be paid by (i) mailing a check for such interest, payable to or upon the written
order of the Person entitled thereto pursuant to Section 308, to the address of
such Person as it appears on the Security Register or (ii) transfer to an
account maintained by the payee located inside the United States.
33
<PAGE>
Unless otherwise provided as contemplated by Section 301 with respect to
the Securities of any series, payment of interest may be made, in the case of a
Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every permanent
global Security will provide that interest, if any, payable on any Interest
Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case may be,
with respect to that portion of such permanent global Security held for its
account by Cede & Co. or the Common Depository, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for a
Registered Security of such series after the close of business (at an office or
agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities in
accordance with the provisions of Section 301, any interest on any Registered
Security of any series that is payable, but is not punctually paid or duly
provided for, on any Interest Payment Date (herein called "Defaulted Interest")
shall forthwith cease to be payable to the registered Holder thereof on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the 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 Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on
a Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Registered Security of such series and the date of the proposed payment
(which shall not be less than 20 days after such notice is received by the
Trustee), and at the same time the Company shall deposit with the Trustee an
amount of money in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit on or prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as in this clause provided.
Thereupon the Trustee shall fix a Special Record Date for the payment of such
34
<PAGE>
Defaulted Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and, in
the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of
Registered Securities of such series at his address as it appears in the
Security Register not less than 10 days prior to such Special Record Date.
The Trustee may, in its discretion, in the name and at the expense of the
Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each Place of Payment, but such publications shall
not be a condition precedent to the establishment of such Special Record
Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been mailed as aforesaid, such Defaulted
Interest shall be paid to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2). In case a Bearer
Security of any series is surrendered at the office or agency in a Place of
Payment for such series in exchange for a Registered Security of such series
after the close of business at such office or agency on any Special Record
Date and before the opening of business at such office or agency on the
related proposed date for payment of Defaulted Interest, such Bearer Security
shall be surrendered without the coupon relating to such proposed date of
payment and Defaulted Interest will not be payable on such proposed date of
payment in respect of the Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of such coupon when
due in accordance with the provisions of this Indenture.
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
---------------------
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium or Make-Whole Amount, if any),
and (subject to Sections 305 and 307) interest on, such
35
<PAGE>
Registered Security and for all other purposes whatsoever, whether or not such
Registered Security be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
All 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 money payable upon any such Security.
Title to any Bearer Security and any coupons appertaining thereto shall
pass by delivery. The Company, the Trustee and any agent of the Company or the
Trustee may treat the Holder of any Bearer Security and the Holder of any coupon
as the absolute owner of such Security or coupon for the purpose of receiving
payment thereof or on account thereof and for all other purposes whatsoever,
whether or not such Security or coupon be overdue, and neither the Company, the
Trustee nor any agent of the Company or the Trustee shall be affected by notice
to the contrary.
No Holder of any beneficial interest in any Global Security held on its
behalf by a depository shall have any rights under this Indenture with respect
to such Global Security and such depository 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. None of the Company, the Trustee, any
Paying Agent or the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Global Security or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
Notwithstanding the foregoing, with respect to any Global Security, nothing
herein shall prevent the Company, the Trustee, or any agent of the Company or
the Trustee, from giving effect to any written certification, proxy or other
authorization furnished by any depository, as a Holder, with respect to such
Global Security or impair, as between such depository and owners of beneficial
interests in such Global Security, the operation of customary practices
governing the exercise of the rights of such depository (or its nominee) as
Holder of such Global Security.
SECTION 309. Cancellation. All Securities and coupons surrendered for
------------
payment, redemption, repayment at the option of the Holder, conversion or
registration of transfer or exchange or for credit against any sinking fund
payment shall, if surrendered to any Person other than the Trustee, be delivered
to the Trustee, and any such Securities and coupons and Securities and coupons
surrendered directly to the Trustee for any such purpose shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and may deliver to
the Trustee (or to any other Person for delivery to the Trustee) for
cancellation any Securities previously authenticated hereunder which the Company
has not issued and sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. If the Company shall so acquire any of the
Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Securities unless and until
the same are surrendered to
36
<PAGE>
the Trustee for cancellation. No Securities shall be authenticated in lieu of
or in exchange for any Securities cancelled as provided in this Section, except
as expressly permitted by this Indenture. Cancelled Securities and coupons held
by the Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless the Trustee is otherwise
directed by a Company Order.
SECTION 310. Computation of Interest. Except as otherwise specified as
-----------------------
contemplated by Section 301 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE FOUR - SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for), and the Trustee, upon receipt of a
Company Order, and 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 as to such series when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 305, (ii) Securities
and coupons of such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306, (iii) coupons
appertaining to Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and coupons of such series for whose
payment money has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
37
<PAGE>
(ii) will become due and payable at their Stated Maturity within
one year, or
(iii) if redeemable at the option of the Company, are to be called
for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in trust
for the purpose an amount in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such
series are payable, sufficient to pay and discharge the entire indebtedness
on such Securities and such coupons not theretofore delivered to the Trustee
for cancellation, for principal (and premium or Make-Whole Amount, if any)
and interest to the date of such deposit (in the case of Securities which
have become due and payable) or to the Stated Maturity or Redemption Date, as
the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture as to
such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the provisions of
--------------------------
the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium or Make-Whole Amount, if any),
and any interest for whose payment such money has been deposited with or
received by the Trustee, but such money need not be segregated from other funds
except to the extent required by law.
38
<PAGE>
ARTICLE FIVE - REMEDIES
SECTION 501. Events of Default. "Event of Default," wherever used
-----------------
herein with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and whether or
not it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest on any Security of that
series or of any coupon appertaining thereto, when such interest or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (or premium or Make-
Whole Amount, if any, on) any Security of that series when it becomes due and
payable at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture with respect to any Security of that series
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(5) default under any bond, debenture, note, mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company (or by any
Subsidiary, the repayment of which the Company has guaranteed or for which the
Company is directly responsible or liable as obligor or guarantor), having an
aggregate principal amount outstanding of at least $25,000,000, whether such
indebtedness now exists or shall hereafter be created, which default shall have
resulted in such indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there shall have been
given, by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 10% in principal amount of
the Outstanding Securities of that series a written notice specifying such
default and requiring the Company to cause such indebtedness to be
39
<PAGE>
discharged or cause such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder; or
(6) the Company or any Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case,
(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;
or
(7) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of its property,
or
(C) orders the liquidation of the Company or any Significant
Subsidiary, and the order or decree remains unstayed and in effect for
90 days; or
(8) any other Event of Default provided with respect to Securities of
that series .
As used in this Section 501, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or state law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment. If
--------------------------------------------------
an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal amount (or, if Securities of
that Series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal as may be specified in the terms thereof) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to
40
<PAGE>
the Trustee if given by the Holders), and upon any such declaration such
principal or specified portion thereof shall become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration of acceleration and its
consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay in the currency, currency unit or composite currency in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on all Outstanding
Securities of that series and any related coupons,
(B) the principal of (and premium or Make-Whole Amount, if any, on)
any Outstanding Securities of that series which have become due otherwise
than by such declaration of acceleration and interest thereon at the rate
or rates borne by or provided for in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue installments of interest at the rate or rates borne by or
provided for in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium or Make-Whole
Amount, if any) or interest on Securities of that series which have become
due solely by such declaration of acceleration, have been cured or waived as
provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness andSuits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if:
- -------
(1) default is made in the payment of any installment of interest on
any Security of any series and any related coupon when such interest becomes
due and payable and such default continues for a period of 30 days, or
41
<PAGE>
(2) default is made in the payment of the principal of (or premium or
Make-Whole Amount, if any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium or Make-Whole Amount, if any) and interest, with interest upon any
overdue principal (and premium or Make-Whole Amount, if any) and, to the extent
that payment of such interest shall be legally enforceable, upon any overdue
installments of interest at the rate or rates borne by or provided for in such
Securities, and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series
and any related coupons by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
--------------------------------
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium or Make-Whole Amount,
if any, or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of principal
(and premium or Make-Whole Amount, if any) and interest owing and unpaid in
respect of the Securities and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the Trustee
(including any claim for the
42
<PAGE>
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee and any predecessor Trustee, their agents and counsel, and any other
amounts due the Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
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 parties to any such proceedings.
SECTION 505. Trustee May Enforce Claims Without Possession of
-------------------------------------------------
Securities or Coupons. All rights of action and claims under this Indenture or
- ---------------------
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected by
------------------------------
the Trustee pursuant to this Article shall be applied in the following order, at
the date or dates fixed by the Trustee and, in case of the distribution of such
money on account of principal (or premium or Make-Whole Amount, if any) or
interest, upon presentation of the Securities or coupons, or both, as the case
may be, and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
43
<PAGE>
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium or Make-Whole Amount, if any)
and interest, in respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any kind, according
to the aggregate amounts due and payable on such Securities and coupons for
principal (and premium or Make-Whole Amount, if any) and interest, respectively;
and
THIRD: To the payment of the remainder, if any, to the Company.
SECTION 507. Limitation on Suits. No Holder of any Security of any
-------------------
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(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 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(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 such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium or Make-Whole Amount, if any, and Interest. Notwithstanding any other
- --------------------------------------------------
provision in this Indenture, the Holder of any Security or coupon shall have the
right which is absolute and unconditional to receive payment of the principal of
(and premium or Make-Whole Amount, if
44
<PAGE>
any) and (subject to Sections 305 and 307) interest on such Security or payment
of such coupon on the respective due dates expressed in such Security or coupon
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies. If the Trustee or
----------------------------------
any Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities or coupons is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of
----------------------------
the Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 512. Control by Holders of Securities. The Holders of not
--------------------------------
less than a majority in principal amount of the Outstanding Securities of any
series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to the Securities of such series,
provided that
- --------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
45
<PAGE>
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
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 513. Waiver of Past Defaults. The Holders of not less than a
-----------------------
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the Securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on any Security of such series or any related
coupons, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
46
<PAGE>
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 or Make-Whole
Amount, if any) or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
ARTICLE SIX - THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence
------------------
of any default hereunder with respect to the Securities of any series, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
-------- -------
case of a default in the payment of the principal of (or premium or Make-Whole
Amount, if any) or interest on any Security of such series, or in the payment of
any sinking fund installment with respect to the Securities of such series, the
Trustee shall be protected in withholding such notice if and so long as
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Holders of the Securities and coupons
of such series; and provided further that in the case of any default or breach
-------- -------
of the character specified in Section 501(4) with respect to the Securities and
coupons of such series, no such notice to Holders shall be given until at least
60 days after the occurrence thereof. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to the Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of
-------------------------
TIA Section 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to
the Trustee for authentication and delivery pursuant to Section 303 which
shall be sufficiently evidenced as provided therein) and any resolution of
the Board of Directors may be sufficiently evidenced by a Board Resolution;
(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically
47
<PAGE>
prescribed) may, in the absence of bad faith on its part, rely upon an
Officers' Certificate;
(4) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction
of any of the Holders of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document, unless requested in
writing so to do by the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities of any series; provided that,
--------
if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Indenture,
the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every
such examination shall be paid by the Holders or, if paid by the Trustee,
shall be repaid by the Holders upon demand. The Trustee, in its discretion,
may make such further inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books, records
and premises of the Company, relevant to the facts or matters that are the
subject of its inquiry, personally or by agent or attorney;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of
48
<PAGE>
any of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
-------------------
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in trust
-------------------
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement. The Company agrees:
------------------------------
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the reasonable expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
49
<PAGE>
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers
or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(7) or Section 501(8), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (or premium or Make-Whole Amount,
if any) or interest on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests. There shall at all times be a Trustee hereunder which shall be
- ---------
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
Federal, state, territorial or District of Columbia supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article. Neither the Company nor any
Person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as Trustee.
SECTION 608. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days
50
<PAGE>
after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any Holder
of a Security who has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under Section 607 and shall
fail to resign after written request therefor by the Company or by any Holder
of a Security who has been a bona fide Holder of a Security for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner
51
<PAGE>
hereinafter provided, any Holder of a Security who has been a bona fide Holder
of a Security of such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to Securities of such
series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series in the
manner provided for notices to the Holders of Securities in Section 106. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In case of
--------------------------------------
the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on request of the Company or the successor
Trustee, such retiring Trustee shall, upon payment of its charges, execute and
deliver an instrument transferring to such successor Trustee all the rights,
powers and trusts of the retiring Trustee, and shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder, subject nevertheless to its claim, if any, provided for in
Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto,
pursuant to Article Nine hereof, wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
52
<PAGE>
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company or any successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section 609, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- --------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
- --------
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
SECTION 611. Appointment of Authenticating Agent. At any time when
-----------------------------------
any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Company. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and
53
<PAGE>
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 bank or trust company or corporation organized and doing business and
in good standing under the laws of the United States of America or of any state
or the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or state authorities. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. In case at any
time an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the
54
<PAGE>
Trustee's certificate of authentication, an alternate certificate of
authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
[ ]
as Trustee
Dated: By:
------------ ----------------------------
as Authenticating Agent
Dated: By:
------------ ----------------------------
Authorized Signatory
SECTION 612. Certain Duties and Responsibilities of the Trustee.
--------------------------------------------------
(a) With respect to the Securities of any series, except during the
continuance of an Event of Default with respect to the Securities of such
series:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture, but shall not be under any duty to verify the
contents or accuracy thereof.
(b) In case an Event of Default with respect to the Securities of any
series has occurred and is continuing, the Trustee shall, with respect to
Securities of such series, exercise such of the rights and powers vested in it
by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
55
<PAGE>
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of a majority in principal amount of the
Outstanding Securities of any series relating to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture with respect to the Securities of such series;
and
(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) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section 612.
ARTICLE SEVEN - HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every
--------------------------------------------
Holder of Securities or coupons, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information was derived, and that the
Trustee shall not be held accountable by reason of mailing any material pursuant
to a request made under TIA Section 312(b).
SECTION 702. Reports by Trustee. The Trustee shall transmit to
------------------
Holders such reports concerning the Trustee and its actions under this Indenture
as may be required by TIA Section 313 at the times and in the manner provided by
the TIA, which shall initially be not less than every twelve months commencing
on [_________________], 1996. A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each stock exchange,
if any, upon which any Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when any Securities are listed on
any stock exchange.
56
<PAGE>
SECTION 703. Reports by Company. The Company will:
------------------
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company is not required to file information, documents or reports
pursuant to either of such Sections, then it will file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Securities Exchange Act
of 1934 in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the
extent provided in TIA Section 313(c), such summaries of any
information, documents and reports required to be filed by the Company
pursuant to paragraphs (1) and (2) of this Section as may be required
by rules and regulations prescribed from time to time by the
Commission.
SECTION 704. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------
Holders. The Company will furnish or cause to be furnished to the Trustee:
- -------
(a) semiannually, not later than 15 days after the Regular Record Date
for interest for each series of Securities, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders of Registered
Securities of such series as of such Regular Record Date, or if there is no
Regular Record Date for interest for such series of Securities, semiannually,
upon such dates as are set forth in the Board Resolution or indenture
supplemental hereto authorizing such series, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
- -------- -------
such list shall be required to be furnished.
57
<PAGE>
ARTICLE EIGHT - CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
--------------------------------------------------------
and Conveyances Permitted Subject to Certain Conditions. The Company may
- -------------------------------------------------------
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case, (1) either the Company shall be the continuing corporation, or the
successor corporation shall be a corporation organized and existing under the
laws of the United States or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of (and
premium or Make-Whole Amount, if any) and any interest on all of the Securities,
according to their tenor, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by the
Company by supplemental indenture, complying with Article Nine hereof,
satisfactory to the Trustee, executed and delivered to the Trustee by such
corporation and (2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or any
Subsidiary as a result thereof as having been incurred by the Company or such
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or the lapse of time, or both, would become an Event of
Default, shall have occurred and be continuing.
SECTION 802. Rights and Duties of Successor Corporation. In case of
------------------------------------------
any such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of the Company, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation, instead of the
Company, and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver any
Securities which previously shall have been signed and delivered by the officers
of the Company to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All the Securities so issued shall in all respects
have the same legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Securities had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
--------------------------------------------
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that
58
<PAGE>
any such consolidation, merger, sale, lease or conveyance, and the assumption by
any successor corporation, complies with the provisions of this Article and that
all conditions precedent herein provided for relating to such transaction have
been complied with.
ARTICLE NINE - SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company contained
herein and in the Securities; or
(2) 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
(3) to add any additional Events of Default for the benefit of the
Holders of all or any series of Securities (and if such Events of Default are to
be for the benefit of less than all series of Securities, stating that such
Events of Default are expressly being included solely for the benefit of such
series); provided, however, that in respect of any such additional Events of
-------- -------
Default such supplemental indenture may provide for a particular period of grace
after default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon such
default or may limit the remedies available to the Trustee upon such default or
may limit the right of the Holders of a majority in aggregate principal amount
of that or those series of Securities to which such additional Events of Default
apply to waive such default; or
(4) to add to or change any of the provisions of this Indenture to
provide that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or premium or Make-
Whole Amount, if any, or interest on Bearer Securities, to permit Bearer
Securities to be issued in exchange for Registered Securities, to permit Bearer
Securities to be issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of Securities in
uncertificated form, provided that any such action shall not adversely affect
--------
the interests of the Holders of Securities of any series or any related coupons
in any material respect; or
59
<PAGE>
(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 secure the Securities; or
(7) to establish the form or terms of Securities of any series and
any related coupons as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of this
Indenture, provided such provisions shall not adversely affect the interests of
--------
the Holders of Securities of any series or any related coupons in any material
respect; or
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Sections 401, 1402 and 1403;
provided that any such action shall not adversely affect the interests of the
- --------
Holders of Securities of such series and any related coupons or any other series
of Securities in any material respect; or
(11) to make provisions with respect to Holders' rights of conversion
with respect to any series of Securities pursuant to Articles Seventeen.
SECTION 902. Supplemental Indentures with Consent of Holders. With
-----------------------------------------------
the consent of the Holders of not less than a majority in principal amount of
all Outstanding Securities affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
-------- -------
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium or
Make-Whole Amount, if any, on) or any installment of principal of or interest
on, any
60
<PAGE>
Security; or reduce the principal amount thereof or the rate or amount of
interest thereon, or any premium or Make-Whole Amount payable upon the
redemption thereof, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502 or the amount
thereof provable in bankruptcy pursuant to Section 504, or adversely affect any
right of repayment at the option of the Holder of any Security, or change any
Place of Payment where, or the currency or currencies, currency unit or units or
composite currency or currencies in which, any Security or any premium or Make-
Whole Amount or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption or repayment at the option of
the Holder, on or after the Redemption Date or the Repayment Date, as the case
may be), or (if Securities of such series are convertible) adversely affect the
right of the Holder to convert any Security as provided in Article Seventeen, or
modify the provisions of this Indenture with respect to the subordination of the
Securities in a manner materially adverse to the Holders; 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 reduce the requirements of Section 1504 for quorum or
voting, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1009, except to increase the required percentage to effect such action
or to provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Outstanding Security
affected thereby, provided, however, that this clause shall not be deemed to
-------- -------
require the consent of any Holder with respect to changes in the references to
"the Trustee" and concomitant changes in this Section 902 and Section 1009, or
the deletion of this proviso, in accordance with the requirements of Sections
609(b) and 901(11).
It shall not be necessary for any Act of Holders under this Section
902 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
61
<PAGE>
SECTION 903. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution
---------------------------------
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appertaining thereto shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN - COVENANTS
SECTION 1001. Payment of Principal, Premium or Make-Whole Amount, if
------------------------------------------------------
any; and Interest. The Company covenants and agrees for the benefit of the
- -----------------
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium or Make-Whole Amount, if any) and interest on the
Securities of that series in accordance with the terms of such series of
Securities, any coupons appertaining thereto and this Indenture. Unless
otherwise specified as contemplated by Section 301 with respect to any series of
Securities, any interest due on Bearer Securities on or before Maturity shall be
payable only upon presentation and surrender of the several coupons for such
interest installments as are evidenced thereby as they severally mature. Unless
otherwise specified with respect to Securities of any series pursuant to Section
301, at the option of the Company, all payments of principal may be paid by
check to the registered Holder of the Registered Security or other person
entitled thereto against surrender of such Security.
62
<PAGE>
SECTION 1002. Maintenance of Office or Agency. If Securities of a
-------------------------------
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as Bearer Securities, the Company will
maintain: (A) in the Borough of Manhattan, The City of New York, an office or
agency where any Registered Securities of that series may be presented or
surrendered for payment or conversion, where any Registered Securities of that
series may be surrendered for registration of transfer, where Securities of that
series may be surrendered for exchange, where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served and where Bearer Securities of that series and related coupons may be
presented or surrendered for payment or conversion in the circumstances
described in the following paragraph (and not otherwise); (B) subject to any
laws or regulations applicable thereto, in a Place of Payment for that series
which is located outside the United States, an office or agency where Securities
of that series and related coupons may be presented and surrendered for payment;
provided, however, that if the Securities of that series are listed on any stock
- -------- -------
exchange located outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent for the Securities of that
series in any required city located outside the United States, as the case may
be, so long as the Securities of that series are listed on such exchange; and
(C) subject to any laws or regulations applicable thereto, in a Place of Payment
for that series located outside the United States an office or agency where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange and
where notices and demands to or upon the 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 each 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, except that
Bearer Securities of that series and the related coupons may be presented and
surrendered for payment or conversion at the offices specified in the Security,
in London, England, and the Company hereby appoints the same as its agent to
receive such respective presentations, surrenders, notices and demands, and the
Company hereby appoints the Trustee its agent to receive all such presentations,
surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or Make-Whole Amount or interest
on Bearer Securities shall be made at any office or agency of the Company in the
United States or by check mailed to any address in the United States or by
transfer to an account maintained with a bank located in the United States;
provided, however, that, if the Securities of a series are payable in Dollars,
- -------- -------
payment of principal of and any premium or Make-Whole Amount and interest on any
Bearer Security shall be made at the office of the Company's Paying Agent in the
Borough of
63
<PAGE>
Manhattan, The City of New York, if (but only if) payment in Dollars of the full
amount of such principal, premium or Make-Whole Amount, or interest, as the case
may be, at all offices or agencies outside the United States maintained for the
purpose by the Company in accordance with this Indenture, is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above for Securities of
any series for such purposes. The Company will give prompt written notice to
the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency. Unless otherwise specified with
respect to any Securities pursuant to Section 301 with respect to a series of
Securities, the Company hereby designates as a Place of Payment for each series
of Securities the office or agency of the Company in the Borough of Manhattan,
The City of New York, and initially appoints the Trustee at its Corporate Trust
Office as Paying Agent in such city and as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long
as it is required under any other provision of the Indenture, then the Company
will maintain with respect to each such series of Securities, or as so required,
at least one exchange rate agent.
SECTION 1003. Money for Securities Payments to Be Held in Trust. If
-------------------------------------------------
the Company shall at any time act as its own Paying Agent with respect to any
series of any Securities and any related coupons, it will, on or before each due
date of the principal of (and premium or Make-Whole Amount, 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 in the currency or currencies,
currency unit or units or composite currency or currencies in which the
Securities of such series are payable (except as otherwise specified pursuant to
Section 301 for the Securities of such series) sufficient to pay the principal
(and premium or Make-Whole Amount, 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 and any related coupons, it will, on or before each due
date of the principal of (and premium or Make-Whole Amount, if any), or interest
on any Securities of that series, deposit with a Paying Agent a sum (in the
currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium or Make-Whole Amount, 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 Make-Whole
64
<PAGE>
Amount, if any, 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, that such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium or Make-Whole Amount, if any) or interest on Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium or Make-Whole Amount, 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 trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and premium or Make-Whole
Amount, if any) or interest on any Security of any series and remaining
unclaimed for two years after such principal (and premium or Make-Whole Amount,
if any) or interest has become due and payable shall be paid to the Company upon
Company Request or (if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment of such principal of (and premium
or Make-Whole Amount, if any) or interest on any Security, without interest
thereon, and all liability of the Trustee or such Paying Agent with respect to
such trust money, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
-------- -------
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days
65
<PAGE>
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Company.
SECTION 1004. Existence. Subject to Article Eight, the Company will
---------
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, all material rights (by articles of
incorporation, by-laws and statute) and material franchises; provided, however,
-------- -------
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company.
SECTION 1005. Maintenance of Properties. The Company will cause all
-------------------------
of its material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that the Company and its Subsidiaries
-------- -------
shall not be prevented from selling or otherwise disposing of their properties
for value in the ordinary course of business.
SECTION 1006. Insurance. The Company will cause each of its and its
---------
Subsidiaries' insurable properties to be insured against loss or damage in an
amount at least equal to their then full insurable value with insurers of
recognized responsibility.
SECTION 1007. Payment of Taxes and Other Claims. The Company will
---------------------------------
pay or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
-------- -------
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 1008. Statement as to Compliance. The Company will deliver
--------------------------
to the Trustee, within 120 days after the end of each fiscal year, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture and, in the
event of any noncompliance, specifying such noncompliance and the nature and
status thereof. For purposes of this Section 1008, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
66
<PAGE>
SECTION 1009. Waiver of Certain Covenants. The Company may omit in
---------------------------
any particular instance to comply with any term, provision or condition set
forth in Sections 1004 to 1009, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
ARTICLE ELEVEN - REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series
------------------------
which are redeemable before their Stated Maturity shall be redeemable in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of
-------------------------------------
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
less than all of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities
or elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to Be Redeemed. If
-------------------------------------------------
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series issued on such date with the same
terms not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
67
<PAGE>
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 1104. Notice of Redemption. Notice of redemption shall be
--------------------
given in the manner provided in Section 106, not less than 30 days nor more than
60 days prior to the Redemption Date, unless a shorter period is specified by
the terms of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if any,
will become due and payable upon each such Security, or the portion thereof, to
be redeemed and, if applicable, that interest thereon shall cease to accrue on
and after said date,
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price and accrued interest, if any, or for conversion,
68
<PAGE>
(7) that the redemption is for a sinking fund, if such is the case,
(8) that, unless otherwise specified in such notice, Bearer Securities
of any series, if any, surrendered for redemption must be accompanied by all
coupons maturing subsequent to the date fixed for redemption or the amount of
any such missing coupon or coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company, the Trustee for such
series and any Paying Agent is furnished,
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such Bearer
Securities may be exchanged for Registered Securities not subject to redemption
on this Redemption Date pursuant to Section 305 or otherwise, the last date, as
determined by the Company, on which such exchanges may be made,
(10) the CUSIP number of such Security, if any, and
(11) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion contained
in such Securities, the then existing conversion price or rate, the place or
places where such Securities may be surrendered for conversion, and the date and
time when the option to convert shall expire.
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 1105. Deposit of Redemption Price. On or prior to any
---------------------------
Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, which it may not do
in the case of a sinking fund payment under Article Twelve, segregate and hold
in trust as provided in Section 1003) an amount of money in the currency or
currencies, currency unit or units or composite currency or currencies in which
the Securities of such series are payable (except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay on
the Redemption Date the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date.
If any Securities called for redemption are 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 be paid to the Company upon
Company Request or, if then held by the Company, shall be discharged from such
trust.
69
<PAGE>
SECTION 1106. Securities Payable on Redemption Date. Notice of
-------------------------------------
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) (together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall, if the same were interest-bearing, cease to bear interest and the coupons
for such interest appertaining to any Bearer Securities so to be redeemed,
except to the extent provided below, shall be void. Upon surrender of any such
Security for redemption in accordance with said notice, together with all
coupons, if any, appertaining thereto maturing after the Redemption Date, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
-------- -------
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
--------
that, except as otherwise provided with respect to Securities convertible into
the Company's Common Stock or Preferred Stock, installments of interest on
Registered Securities whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
--------
however, that interest represented by coupons shall be payable only at an office
- -------
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium or Make-Whole
Amount, if any) shall, until paid, bear interest from the Redemption Date at the
rate borne by the Security.
SECTION 1107. Securities Redeemed in Part. Any Registered Security
---------------------------
which is to be redeemed only in part (pursuant to the provisions of this Article
or of Article Twelve) shall be surrendered at a Place of Payment therefor (with,
if the Company or the Trustee so requires,
70
<PAGE>
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge a
new Security or Securities of the same series, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered. If
a Global Security is so surrendered, the Company shall execute and the Trustee
shall authenticate and deliver to the depository, 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 TWELVE - SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this
------------------------
Article shall be applicable to any sinking fund for the retirement of Securities
of a series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment," and any payment in excess of such minimum amount provided for by
the terms of such Securities of any series is herein referred to as an "optional
sinking fund payment." If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
-----------------------------------------------------
The Company may, in satisfaction of all or any part of any mandatory sinking
fund payment with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto and (2) apply as a credit Securities of such series
which have been redeemed either at the election of the Company pursuant to the
terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, as provided for
by the terms of such Securities, or which have otherwise been acquired by the
Company; provided that such Securities so delivered or applied as a credit have
--------
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less
-----------------------------------------
than 60 days prior to each sinking fund payment date for Securities of any
series, the Company will deliver to the Trustee an Officers' Certificate
specifying the amount of the next ensuing mandatory
71
<PAGE>
sinking fund payment for that series pursuant to the terms of that series, the
portion thereof, if any, which is to be satisfied by payment of cash in the
currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 1202, and the optional
amount, if any, to be added in cash to the next ensuing mandatory sinking fund
payment, and will also deliver to the Trustee any Securities to be so delivered
and credited. If such Officers' Certificate shall specify an optional amount to
be added in cash to the next ensuing mandatory sinking fund payment, the Company
shall thereupon be obligated to pay the amount therein specified. Not less than
30 days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN - REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of
------------------------
any series before their Stated Maturity at the option of Holders thereof shall
be made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.
SECTION 1302. Repayment of Securities. Securities of any series
-----------------------
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at a
price equal to the principal amount thereof, together with interest, if any,
thereon accrued to the Repayment Date specified in or pursuant to the terms of
such Securities. The Company covenants that on or prior to the Repayment Date
it will deposit with the Trustee or with a Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in the currency or currencies, currency unit or
units or composite currency or currencies in which the Securities of such series
are payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series) sufficient to pay the principal (or, if so provided
by the terms of the Securities of any series, a percentage of the principal) of,
and (except if the Repayment Date shall be an Interest Payment Date) accrued
interest on, all the Securities or portions thereof, as the case may be, to be
repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series subject
------------------
to repayment at the option of the Holders thereof will contain an "Option to
Elect Repayment" form on the reverse of such Securities. In order for any
Security to be repaid at the option of the Holder, the Trustee must receive at
the Place of Payment therefor specified in the terms of such Security (or at
such other place or places of which the Company shall from time to time notify
72
<PAGE>
the Holders of such Securities) not earlier than 60 days nor later than 30 days
prior to the Repayment Date (1) the Security so providing for such repayment
together with the "Option to Elect Repayment" form on the reverse thereof duly
completed by the Holder (or by the Holder's attorney duly authorized in writing)
or (2) a telegram, telex, facsimile transmission or a letter from a member of a
national securities exchange, or the National Association of Securities Dealers,
Inc. ("NASD"), or a commercial bank or trust company in the United States
setting forth the name of the Holder of the Security, the principal amount of
the Security, the principal amount of the Security to be repaid, the CUSIP
number, if any, or a description of the tenor and terms of the Security, a
statement that the option to elect repayment is being exercised thereby and a
guarantee that the Security to be repaid, together with the duly completed form
entitled "Option to Elect Repayment" on the reverse of the Security, will be
received by the Trustee not later than the fifth Business Day after the date of
such telegram, telex, facsimile transmission or letter; provided, however, that
-------- -------
such telegram, telex, facsimile transmission or letter shall only be effective
if such Security and form duly completed are received by the Trustee by such
fifth Business Day. If less than the entire principal amount of such Security
is to be repaid in accordance with the terms of such Security, the principal
amount of such Security to be repaid, in increments of the minimum denomination
for Securities of such series, and the denomination or denominations of the
Security or Securities to be issued to the Holder for the portion of the
principal amount of such Security surrendered that is not to be repaid, must be
specified. The principal amount of any Security providing for repayment at the
option of the Holder thereof may not be repaid in part if, following such
repayment, the unpaid principal amount of such Security would be less than the
minimum authorized denomination of Securities of the series of which such
Security to be repaid is a part. Except as otherwise may be provided by the
terms of any Security providing for repayment at the option of the Holder
thereof, exercise of the repayment option by the Holder shall be irrevocable
unless waived by the Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable. If Securities of any series providing for repayment at the option of
- -------
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions thereof, as the case may be, to be repaid shall become due and
payable and shall be paid by the Company on the Repayment Date therein
specified, and on and after such Repayment Date (unless the Company shall
default in the payment of such Securities on such Repayment Date) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
repaid, except to the extent provided below, shall be void. Upon surrender of
any such Security for repayment in accordance with such provisions, together
with all coupons, if any, appertaining thereto maturing after the Repayment
Date, the principal amount of such Security so to be repaid shall be paid by the
Company, together with accrued interest, if any, to the Repayment Date;
provided, however, that coupons whose Stated Maturity is on or prior to the
- -------- -------
Repayment Date shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified pursuant to Section 301, only upon presentation and
surrender of such coupons; and provided further that, in the case of Registered
----------------
Securities, installments of
73
<PAGE>
interest, if any, whose Stated Maturity is on or prior to the Repayment Date
shall be payable (but without interest thereon, unless the Company shall default
in the payment thereof) to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of Section
307.
If any Bearer Security surrendered for repayment shall not be accompanied
by all appurtenant coupons maturing after the Repayment Date, such Security may
be paid after deducting from the amount payable therefor as provided in Section
1302 an amount equal to the face amount of all such missing coupo ns, or the
surrender of such missing coupon or coupons may be waived by the Company and the
Trustee if there be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If thereafter the
Holder of such Security shall surrender to the Trustee or any Paying Agent any
such missing coupon in respect of which a deduction shall have been made as
provided in the preceding sentence, such Holder shall be entitled to receive the
amount so deducted; provided, however, that interest represented by coupons
-------- -------
shall be payable only at an office or agency located outside the United States
(except as otherwise provided in Section 1002) and, unless otherwise specified
as contemplated by Section 301, only upon presentation and surrender of those
coupons.
If the principal amount of any Security surrendered for repayment shall not
be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
Security.
SECTION 1305. Securities Repaid in Part. Upon surrender of any Registered
-------------------------
Security which is to be repaid in part only, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of such Security, without
service charge and at the expense of the Company, a new Registered Security or
Securities of the same series, of any authorized denomination specified by the
Holder, in an aggregate principal amount equal to and in exchange for the
portion of the principal of such Security so surrendered which is not to be
repaid.
ARTICLE FOURTEEN - DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article: Company's Option to Effect
----------------------------------------------------
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
- ---------------------------------
made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto,
74
<PAGE>
and the Company may at its option by Board Resolution, at any time, with respect
to such Securities and any coupons appertaining thereto, elect to have Section
1402 (if applicable) or Section 1403 (if applicable) be applied to such
Outstanding Securities and any coupons appertaining thereto upon compliance with
the conditions set forth below in this Article.
SECTION 1402. Defeasance and Discharge. Upon the Company's exercise
------------------------
of the above option applicable to this Section with respect to any Securities of
or within a series, the Company shall be deemed to have been discharged from its
obligations with respect to such Outstanding Securities and any coupons
appertaining thereto on the date the conditions set forth in Section 1404 are
satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means
that the Company shall be deemed to have paid and discharged the entire
indebtedness represented by such Outstanding Securities and any coupons
appertaining thereto, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 1405 and the other Sections of this Indenture
referred to in clauses (A) and (B) below, and to have satisfied all of its other
obligations under such Securities and any coupons appertaining thereto and this
Indenture insofar as such Securities and any coupons appertaining thereto are
concerned (and the Trustee, at the expense of the Company, shall execute proper
instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (A) the rights of
Holders of such Outstanding Securities and any coupons appertaining thereto to
receive, solely from the trust fund described in Section 1404 and as more fully
set forth in such Section, payments in respect of the principal of (and premium
or Make-Whole Amount, if any) and interest, if any, on such Securities and any
coupons appertaining thereto when such payments are due, (B) the Company's
obligations with respect to such Securities under Sections 305, 306, 1002 and
1003, (C) the rights, powers, trusts, duties and immunities of the Trustee
hereunder and (D) this Article. Subject to compliance with this Article
Fourteen, the Company may exercise its option under this Section notwithstanding
the prior exercise of its option under Section 1403 with respect to such
Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise of
-------------------
the above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be released from its obligations under
Sections 1004 to 1009, inclusive, and, if specified pursuant to Section 301, its
obligations under any other covenant contained herein or in any indenture
supplemental hereto, with respect to such Outstanding Securities and any coupons
appertaining thereto on and after the date the conditions set forth in Section
1404 are satisfied (hereinafter, "covenant defeasance"), and such Securities and
any coupons appertaining thereto shall thereafter be deemed to be not
"Outstanding" for the purposes of any direction, waiver, consent or declaration
or Act of Holders (and the consequences of any thereof) in connection with
Sections 1004 to 1009, inclusive, or such other covenant, but shall continue to
be deemed "Outstanding" for all other purposes hereunder. For this purpose,
such covenant defeasance means that, with respect to such Outstanding Securities
and any coupons appertaining thereto, the Company may omit to comply with and
shall have no liability in respect of any term, condition or limitation set
forth in any such Section or such other covenant, whether directly or
indirectly, by reason of any reference elsewhere herein to any
75
<PAGE>
such Section or such other covenant or by reason of reference in any such
Section or such other covenant to any other provision herein or in any other
document and such omission to comply shall not constitute a default or an Event
of Default under Section 501(4) or 501(8) or otherwise, as the case may be, but,
except as specified above, the remainder of this Indenture and such Securities
and any coupons appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of Section 1402 or Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount in such currency, currencies or currency unit in which
such Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (2) Government Obligations applicable to such
Securities and coupons appertaining thereto (determined on the basis of the
currency, currencies or currency unit in which such Securities and coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than the due date of any
payment of principal of (and premium or Make-Whole Amount, if any) and interest,
if any, on such Securities and any coupons appertaining thereto, money in an
amount, or (3) a combination thereof, in any case, in an amount, sufficient,
without consideration of any reinvestment of such principal and interest, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, to pay
and discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, (i) the principal of (and premium or Make-Whole
Amount, if any) and interest, if any, on such Outstanding Securities and any
coupons appertaining thereto on the Stated Maturity of such principal or
installment of principal or interest and (ii) any mandatory sinking fund
payments or analogous payments applicable to such Outstanding Securities and any
coupons appertaining thereto on the day on which such payments are due and
payable in accordance with the terms of this Indenture and of such Securities
and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company is a party or by
which it is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Securities and any
coupons appertaining thereto shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 501(6) and 501(7) are concerned, at any
time during the period ending on
76
<PAGE>
the 91st day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such period).
(d) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling, or (ii) since the date of execution of this Indenture, there has been
a change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred.
(e) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 1402 or Section 1403 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be Held
-----------------------------------------------------
in Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- ----------------------------------------
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent)
77
<PAGE>
as the Trustee may determine, to the Holders of such Securities and any coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal (and premium or Make-Whole Amount, if any) and interest, but such
money need not be segregated from other funds except to the extent required by
law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium or Make-Whole
Amount, if any), and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable market exchange rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except, with
respect to a Conversion Event, for such currency or currency unit in effect (as
nearly as feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 1404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 606, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article.
ARTICLE FIFTEEN - MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be Called. A meeting
-----------------------------------------
of Holders of Securities of any series may be called at any time and from time
to time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent,
78
<PAGE>
waiver or other action provided by this Indenture to be made, given or taken by
Holders of Securities of such series.
SECTION 1502. Call, Notice and Place of Meetings. (a) The Trustee
----------------------------------
may at any time call a meeting of Holders of Securities of any series for any
purpose specified in Section 1501, to be held at such time and at such place as
the Trustee shall determine. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 20 nor more than 180 days
prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution,
or the Holders of at least 25% in principal amount of the Outstanding Securities
of any series shall have requested the Trustee to call a meeting of the Holders
of Securities of such series for any purpose specified in Section 1501, by
written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have made the first publication
of the notice of such meeting within 20 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as provided herein,
then the Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place for such
meeting and may call such meeting for such purposes by giving notice thereof as
provided in subsection (a) of this Section.
SECTION 1503. Persons Entitled to Vote at Meetings. To be entitled
------------------------------------
to vote at any meeting of Holders of Securities of any series, a Person shall be
(1) a Holder of one or more Outstanding Securities of such series, or (2) a
Person appointed by an instrument in writing as proxy for a Holder or Holders of
one or more Outstanding Securities of such series by such Holder or Holders.
The only Persons who shall be entitled to be present or to speak at any meeting
of Holders of Securities of any series shall be the Persons entitled to vote at
such meeting and their counsel, any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 1504. Quorum; Action. The Persons entitled to vote a
--------------
majority in principal amount of the Outstanding Securities of a series shall
constitute a quorum for a meeting of Holders of Securities of such series;
provided, however, that if any action is to be taken at such meeting with
- -------- -------
respect to a consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Securities of a series, the Persons entitled to vote such
specified percentage in principal amount of the Outstanding Securities of such
series shall constitute a quorum. In the absence of a quorum within 30 minutes
after the time appointed for any such meeting, the meeting shall, if convened at
the request of Holders of Securities of such series, be dissolved. In any other
case the meeting may be adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
meeting. In the absence of a quorum at the reconvening of any such adjourned
meeting, such adjourned meeting may be further adjourned for a period of not
less than 10 days; at the reconvening of
79
<PAGE>
any meeting adjourned or further adjourned for lack of a quorum, the persons
entitled to vote 25% in aggregate principal amount of the then Outstanding
Securities shall constitute a quorum for the taking of any action set forth in
the notice of the original meeting. Notice of the reconvening of any adjourned
meeting shall be given as provided in Section 1502(a), except that such notice
need be given only once not less than five days prior to the date on which the
meeting is scheduled to be reconvened.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting; provided, however, that, except as limited by the
-------- -------
proviso to Section 902, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which this
Indenture expressly provides may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(i) there shall be no minimum quorum requirement for such meeting; and
(ii) the principal amount of the Outstanding Securities of such series
that vote in favor of such request, demand, authorization, direction, notice,
consent, waiver or other action shall be taken into account in determining
whether such request, demand, authorization, direction, notice, consent, waiver
or other action has been made, given or taken under this Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and Adjournment
-------------------------------------------------------
of Meetings. (a) Notwithstanding any provisions of this Indenture, the Trustee
- -----------
may make such reasonable regulations as it may deem advisable for any meeting of
Holders of Securities of a series in regard to proof of the holding of
Securities of such series and of the appointment of
80
<PAGE>
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any
such regulations, the holding of Securities shall be proved in the manner
specified in Section 104 and the appointment of any proxy shall be proved in the
manner specified in Section 104 or by having the signature of the Person
executing the proxy witnessed or guaranteed by any trust company, bank or banker
authorized by Section 104 to certify to the holding of Bearer Securities. Such
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in
Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(c) At any meeting each Holder of a Security of such series or proxy
shall be entitled to one vote for each $1,000 principal amount of the
Outstanding Securities of such series held or represented by him; provided,
--------
however, that no vote shall be cast or counted at any meeting in respect of any
- -------
Security challenged as not Outstanding and ruled by the chairman of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of a Security of such series or proxy.
(d) Any meeting of Holders of Securities of any series duly called
pursuant to Section 1502 at which a quorum is present may be adjourned from time
to time by Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting, and the
meeting may be held as so adjourned without further notice.
SECTION 1506. Counting Votes and Recording Action of Meetings. The
-----------------------------------------------
vote upon any resolution submitted to any meeting of Holders of Securities of
any series shall be by written ballots on which shall be subscribed the
signatures of the Holders of Securities of such series or of their
representatives by proxy and the principal amounts and serial numbers of the
Outstanding Securities of such series held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record, at least in
duplicate, of the proceedings of each meeting of Holders of Securities of any
Series shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting
81
<PAGE>
and showing that said notice was given as provided in Section 1502 and, if
applicable, Section 1504. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Company and another to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting. Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
ARTICLE SIXTEEN - SUBORDINATION OF SECURITIES
SECTION 1601. Agreement to Subordinate. Notwithstanding anything in
------------------------
this Indenture to the contrary (other than Article Four of this Indenture), the
Company covenants and agrees, and each Holder of a Security, by his acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article, the Indebtedness represented by the
Securities and the payment of any Obligations with respect to each and all of
the Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness.
SECTION 1602. Payment Over of Proceeds upon Dissolution, Etc. In the
----------------------------------------------
event of (a) any insolvency or bankruptcy case or Proceeding, or any
receivership, liquidation, reorganization or other similar case or Proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets and liabilities of the Company, then and in any
such event specified in (a), (b) or (c) above (each such event, if any, herein
sometimes referred to as a "Proceeding")
(1) the holders of Senior Indebtedness shall first be entitled to
receive payment in full of all Obligations due or to become due on or in respect
of all Senior Indebtedness, or provision shall be made for such payment in cash
or cash equivalents or otherwise in a manner satisfactory to the holders of
Senior Indebtedness, before the Holders of the Securities are entitled to
receive any payment or distribution on account of principal of or premium, if
any, or interest on or other Obligations in respect of the Securities or on
account of any purchase, redemption or other acquisition of Securities by the
Company or any Subsidiary (individually and collectively, a "Securities
Payment"), and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than Capital Stock
or securities of the Company as reorganized or readjusted, or securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinate, at least to the extent
provided in this Article Sixteen with respect to the Securities, to the payment
in full, without diminution or
82
<PAGE>
modification by such plan, of all Senior Indebtedness), to which the
Holders would be entitled except for the provisions of this Article
Sixteen, shall be paid by the liquidating trustee or agent or other person
making such a payment or distribution, directly to the holders of Senior
Indebtedness) (or their representative(s) or trustee(s) acting on their
behalf), ratably according to the aggregate amounts remaining unpaid on
account of the principal of or interest on and other amounts due on the
Senior Indebtedness held or represented by each, to the extent necessary to
make payment in full of all Senior Indebtedness remaining unpaid, after
giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness.
In the event that, notwithstanding the foregoing provisions of this
Section 1601, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (other than Capital Stock or securities
of the Company as reorganized or readjusted, or securities of the Company or any
other corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinate, at least to the extent provided in this Article
with respect to the Securities, to the payment in full, without diminution or
modification by such plan, of Senior Indebtedness), before all Senior
Indebtedness is paid in full or payment thereof provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, such payment or distribution shall be held in trust for the
benefit of, and be paid over to, the holders of the Senior Indebtedness
remaining unpaid (or their representative(s) or trustee(s) acting on their
behalf), ratably as aforesaid, for application to the payment of such Senior
Indebtedness until such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution to the holders of such
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 all or substantially all of its properties and
assets as an entirety to another Person upon the terms and conditions set forth
in Article Eight shall not be deemed a Proceeding for the purposes of this
Section 1602 if the Person formed by such consolidation or into which the
Company is merged or the Person which acquires by conveyance or transfer such
properties and assets as an entirety, as the case may be, shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
set forth in Article Eight.
SECTION 1603. No Payment When Senior Indebtedness in Default.
----------------------------------------------
Anything in this Indenture to the contrary notwithstanding, no payment on
account of principal of or redemption of, interest on or other amounts due on
the Securities, and no redemption, purchase, or other acquisition of the
Securities, shall be made by or on behalf of the Company (i) unless full payment
of amounts then due for principal and interest and of all other obligations then
due on all Senior Indebtedness has been made or duly provided for pursuant to
the terms of the instrument governing such Senior Indebtedness, (ii) if, at the
time of such payment, redemption, purchase or other acquisition, or immediately
after giving effect thereto, there shall exist under any Senior Indebtedness, or
any agreement pursuant to which any
83
<PAGE>
Senior Indebtedness is issued, any default, which default shall not have been
cured or waived and which default shall have resulted in the full amount of such
Senior Indebtedness being declared due and payable or (iii) if, at the time of
such payment, redemption, purchase or other acquisition, the Trustee shall have
received written notice from the holder or holders of any Senior Indebtedness or
their representative or representatives (a "Payment Blockage Notice") that there
exists under such Senior Indebtedness, or any agreement pursuant to which such
Senior Indebtedness is issued, any default, which default shall not have been
cured or waived, permitting the holders thereof to declare the full amount of
such Senior Indebtedness due and payable, but only for the period (the "Payment
Blockage Period") commencing on the date of receipt of the Payment Blockage
Notice and ending (unless earlier terminated by notice given to the Trustee by
the Holders of such Senior Indebtedness) on the earlier of (A) the date on which
such event of default shall have been cured or waived or (B) 180 days from the
receipt of the Payment Blockage Notice. Upon termination of a Payment Blockage
Period, payments on account of principal of or interest on the Securities and
redemptions, purchases or other acquisitions may be made by or on behalf of the
Company. Notwithstanding anything herein to the contrary, (A) only one Payment
Blockage Notice may be given during any period of 360 consecutive days with
respect to the same event of default and any other events of default on the same
issue of Senior Indebtedness existing and known to the person giving such notice
at the time of such notice and (B) no new Payment Blockage Period may be
commenced by the holder or holders of the same issue of Senior Indebtedness or
their representative or representatives during any period of 360 consecutive
days unless all events of default which were the object of the immediately
preceding Payment Blockage Notice, and any other event of default on the same
issue of Senior Indebtedness existing and known to the person giving such notice
at the time of such notice, have been cured or waived.
In the event that, notwithstanding the provisions of this Section
1603, payments are made by or on behalf of the Company in contravention of the
provisions of this Section 1603, such payments shall be held by the Trustee, any
Paying Agent or the Holders, as applicable, in trust for the benefit of, and
shall be paid over to and delivered to, the holders of Senior Indebtedness or
their representative or the trustee under the indenture or other agreement (if
any), 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 accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
The provisions of this Section shall not apply to any payment with respect
to which Section 1602 would be applicable.
SECTION 1604. Reliance by Senior Indebtedness on Subordination
------------------------------------------------
Provisions. Each Holder of any Security by his acceptance thereof acknowledges
- ----------
and agrees that the foregoing subordination provisions are, and are intended to
be, an inducement and a consideration for each holder of any Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of the Securities, to acquire and continue to hold, or to
84
<PAGE>
continue to hold, such Senior Indebtedness, and such holder of Senior
Indebtedness shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold or in continuing to hold such
Senior Indebtedness.
SECTION 1605. Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Subject to the payment in full of all Obligations due or to become due on or in
respect of Senior Indebtedness, or the provision for such payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article Sixteen to the rights of the holders
of such Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Senior Indebtedness until the
principal of and premium, if any, and interest on the Securities shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article Sixteen, and no payments over pursuant to the
provisions of this Article Sixteen to the holders of Senior Indebtedness by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
SECTION 1606. Provisions Solely to Define Relative Rights. The
-------------------------------------------
provisions of this Article Sixteen are and are intended solely for the purpose
of defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article Sixteen of the holders of Senior Indebtedness, is intended to
rank equally with all other general obligations of the Company), to pay to the
Holders of the Securities the principal of and premium, if any, and interest on
the Securities as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
SECTION 1607. Trustee to Effectuate Subordination. Each Holder of a
-----------------------------------
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate, as
between the Holders of the Securities and the holders of Senior Indebtedness,
the subordination provided in this Article Sixteen and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding up or liquidation or reorganization under any applicable
bankruptcy law
85
<PAGE>
of the Company (whether in bankruptcy, insolvency or receivership Proceedings or
otherwise), the timely filing of a claim for the unpaid balance of such Holder's
Securities in the form required in such Proceedings and the causing of such
claim to be approved. If the Trustee does not file a claim or proof of debt in
the form required in such Proceedings prior to 30 days before the expiration of
the time to file such claims or proofs, then the holders of Senior Indebtedness,
jointly, or their representatives shall have the right to file an appropriate
claim for and on behalf of the Holders and to demand, sue for, collect, receive
and receipt for the payments and distributions in respect of the Securities
which are required to be paid or delivered to the holders of Senior Indebtedness
as provided in this Article Sixteen and to take all such other action in the
name of the Holders or otherwise, as such holder of Senior Indebtedness or
representative thereof may determine to be necessary or appropriate for the
enforcement of the provisions of this Article Sixteen.
SECTION 1608. No Waiver of Subordination Provisions. No right of any
-------------------------------------
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder or any representative or trustee
therefor, or by any non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article Sixteen or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise 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 settle or compromise Senior Indebtedness (which, to the extent
so settled and compromised, shall be deemed to have been paid in full for all
purposes hereof); (iv) apply any amounts received to any liability of the
Company owing to holders of Senior Indebtedness; and (v) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 1609. Notice to Trustee. The Company shall give prompt
-----------------
written notice to the Trustee of any default or event of default with respect to
any Senior Indebtedness or of any fact known to the Company which would prohibit
the making of any payment to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article Sixteen. Notwithstanding the
provisions of this Article Sixteen or any other provision of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts which
would
86
<PAGE>
prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice
thereof from the Company or a holder of Senior Indebtedness or from any
representative or trustee acting on their behalf; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 612,
shall be entitled in all respects to assume that no such facts exist; provided,
--------
however, that if the Trustee shall not have received the notice provided for in
- -------
this Section at least three Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of and premium, if any, or interest on
any Security), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purpose for which such money was received and shall not be
affected by any notice to the contrary which may be received by it within three
Business Days prior to such date. Nothing contained in this Article Sixteen or
any other Article of this Indenture or in any of the Securities shall prevent
(a) the Company, at any time except during the pendency of any Proceeding, or
under the conditions described in Section 1603, from making payments at any time
in respect of the Securities, or (b) the application by the Trustee of any money
deposited with it hereunder to the payment of or on account of the Securities,
or the retention thereof by any Holder, if the Trustee did not have notice, as
provided in this Section 1609, that such payment would have been prohibited by
the provisions of this Article Sixteen.
Subject to the provisions of Section 612, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a representative or trustee therefor)
to establish that such notice has been given by a holder of Senior Indebtedness
(or a trustee therefor). 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 Sixteen, 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 Sixteen, 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 1610. Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent. Upon any payment or distribution of assets of the Company referred to in
- -----
this Article Sixteen, the Trustee, subject to the provisions of Section 612, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which any Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the 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.
87
<PAGE>
SECTION 1611. Trustee Not Fiduciary for Holders of Senior
-------------------------------------------
Indebtedness. The Trustee shall not be deemed to owe any fiduciary duty to the
- ------------
holders of Senior Indebtedness. Nothing contained in this Article Sixteen or
elsewhere in this Indenture, or in any of the Securities, shall prevent the
application by the Trustee of any moneys which were deposited with it hereunder,
prior to its receipt of written notice of facts which would prohibit such
application, for the purpose of the payment of or on account of the principal of
or interest on, the Securities unless, prior to the date on which such
application is made by the Trustee, the Trustee shall be charged with notice
under Section 1609 hereof of the facts which would prohibit the making of such
application.
SECTION 1612. Rights of Trustee as Holder of Senior Indebtedness;
---------------------------------------------------
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
- --------------------------------
be entitled to all the rights set forth in this Article Sixteen with respect to
any Senior Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder. Nothing in this
Article shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 606.
SECTION 1613. Article Applicable to Paying Agents. In 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
Sixteen shall in such case (unless the context otherwise requires) 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 in
addition to or in place of the Trustee; provided, however, that Section 1612
-------- -------
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as Paying Agent.
ARTICLE SEVENTEEN - CONVERSION OF SECURITIES
SECTION 1701. Applicability of Article; Conversion Privilege and
--------------------------------------------------
Conversion Price.
- -----------------
Securities of any series which are convertible shall be convertible in
accordance with their terms and (except as otherwise specified as contemplated
by Section 301 for Securities of any series) in accordance with this Article
Seventeen. Subject to and upon compliance with the provisions of this Article
Seventeen, at any time during the period specified in the Securities, at the
option of the Holder thereof, any Security or any portion of the principal
amount thereof which is $1,000 or an integral multiple of $1,000 may be
converted at the principal amount thereof, or of such portion thereof, into
fully paid and nonassessable shares (calculated as to each conversion to the
nearest 1/100 of a share) of Common Stock of the Company, at the Conversion
Price, determined as hereinafter provided, in effect at the time of conversion.
In case a Security or portion thereof is called for redemption, such conversion
right in respect of the Security or portion so called shall expire at the close
of business on the Business Day immediately preceding the Redemption Date,
unless the Company defaults in making the payment due upon redemption, in which
case such conversion right shall terminate on the date such default is cured.
88
<PAGE>
The price at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Price") of Securities of any series
shall be specified in such Securities. The Conversion Price shall be adjusted in
certain instances as provided in Section 1704.
In case the Company shall, by dividend or otherwise, declare or make a
distribution on its Common Stock referred to in paragraph (4) of Section 1704,
the Holder of each Security, upon the conversion thereof pursuant to this
Article Seventeen subsequent to the close of business on the date fixed for the
determination of stockholders entitled to receive such distribution and prior to
the effectiveness of the Conversion Price adjustment in respect of such
distribution pursuant to paragraph (4) of Section 1704, shall be entitled to
receive for each share of Common Stock into which such Security is converted,
the portion of the evidence of indebtedness, shares of Capital Stock or assets
so distributed applicable to one share of Common Stock; provided, however, that,
at the election of the Company (whose election shall be evidenced by a Board
Resolution filed with the Trustee) with respect to all Holders so converting,
the Company may, in lieu of distributing to such Holder any portion of such
distribution not consisting of cash or securities of the Company, pay such
Holder an amount in cash equal to the fair market value thereof (as determined
in good faith by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee). If any conversion
of a Security entitled to the benefits described in the immediately preceding
sentence occurs prior to the payment date for a distribution to holders of
Common Stock which the Holder of the Security so converted is entitled to
receive in accordance with the immediately preceding sentence, the Company may
elect (such election to be evidenced by a Board Resolution filed with the
Trustee) to distribute to such Holder a due bill for the evidences of
indebtedness, shares of Capital Stock or assets to which such Holder is so
entitled, provided that such due bill (i) meets any applicable requirements of
the principal national securities exchange or other market on which the Common
Stock is then traded, and (ii) requires payment or delivery of such evidences of
indebtedness or assets no later than the date of payment or delivery thereof to
holders of Common Stock receiving such distribution.
SECTION 1702. Exercise of Conversion Privilege.
-----------------------------------------------
In order to exercise the conversion privilege, the Holder of any Security
to be converted shall surrender such Security, duly endorsed or assigned to the
Company or in blank, at any office or agency maintained by the Company pursuant
to Section 1002, accompanied by written notice to the Company at such office or
agency that the Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted, the portion thereof to be
converted and shall comply with any additional requirements set forth in such
Security. Securities surrendered for conversion during the period from the close
of business on any Regular Record Date next preceding any Interest Payment Date
to the opening of business on such Interest Payment Date shall (except for
Securities the Maturity of which is prior to such Interest Payment Date) be
accompanied by payment in New York Clearing House funds or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of Securities being surrendered
for conversion and such interest shall be paid on such Interest Payment Date as
provided in
89
<PAGE>
Section 307. Except as provided in the preceding sentence, no payment or
adjustment shall be made upon any conversion on account of any interest accrued
on the Securities surrendered for conversion or on account of any dividends on
the Common Stock issued upon conversion.
The Company's delivery to the Holder of the fixed number of shares of the
Common Stock of the Company (and any cash in lieu of any fractional share of
Common Stock) into which the Security is convertible shall be deemed to satisfy
the Company's obligation to pay the principal amount of the Security and all
accrued interest and original issue discount that has not previously been paid.
The shares of Common Stock of the Company so delivered shall be treated as
issued first in payment of accrued interest and original issue discount and then
in payment of principal. Thus, accrued interest and original issue discount
shall be treated as paid, rather than canceled, extinguished or forfeited.
Securities shall be deemed to have been converted immediately prior to the
close of business on the day of surrender of such Securities for conversion in
accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion date, the Company
shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 1703.
In the case of any Security which is converted in part only, as promptly as
practicable on or after the conversion date the Company shall execute and the
Trustee shall authenticate and make available for delivery to the Holder thereof
(or the Depositary in the case of a Global Security), at the expense of the
Company, a new Security or Securities, of authorized denominations in aggregate
principal amount equal to the unconverted portion of the principal amount of
such Security.
SECTION 1703. Fractions of Shares.
-------------------
No fractional shares of Common Stock shall be issued upon conversion of
Securities. If more than one Security shall be surrendered for conversion at one
time by the same Holder, the number of full shares of Common Stock which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall pay a cash adjustment (rounded to
the nearest cent) in respect of such fraction in an amount equal to the same
fraction of the Closing Price per share of the Common Stock on the day of
conversion (or, if such day is not a Trading Day, on the Trading Day immediately
preceding such day).
90
<PAGE>
SECTION 1704. Adjustment of Conversion Price.
------------------------------
The Conversion Price shall be subject to adjustment from time to time as
follows:
(1) If the Company pays or makes a dividend or other distribution (a)
on its Common Stock exclusively in Common Stock or (b) on any other class of
Capital Stock of the Company, which dividend or distribution includes Common
Stock of the Company, the Conversion Price in effect at the opening of business
on the day following the date fixed for the determination of stockholders
entitled to receive such dividend or other distribution (the "Dividend Record
Date") shall be reduced by multiplying such Conversion Price by a fraction of
which the numerator shall be the number of shares of Common Stock of the Company
outstanding at the close of business on the Dividend Record Date 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 shall
become effective immediately after the opening of business on the day following
the date fixed for such determination. For the purposes of this paragraph (1),
the number of shares of Common Stock of the Company 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 Common Stock. The Company shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
(2) Subject to paragraph (6) of this Section, if the Company pays or
makes a dividend or other distribution on its Common Stock consisting
exclusively of Short Term Rights (as defined below), or otherwise issues Short
Term Rights to all holders of its Common Stock, the Conversion Price in effect
at the opening of business on the day following the record date for the
determination of holders of Common Stock entitled to receive such Short Term
Rights (the "Rights Record Date") shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock of the Company outstanding at the close of business on
the Rights Record Date plus the number of shares of Common Stock of the Company
which the aggregate of the offering price of the total number of shares of
Common Stock so offered for subscription or purchase would purchase at such
current market price and the denominator shall be the number of shares of Common
Stock of the Company outstanding at the close of business on the Rights Record
Date plus the number of shares of Common Stock so offered for subscription or
purchase. Such reduction shall become effective immediately after the opening
of business on the day following the Rights Record Date. For the purposes of
this paragraph (2), the number of shares of Common Stock of the Company 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 Common Stock of the Company. The Company shall
not issue any rights, options or warrants in respect of shares of its Common
Stock held in the treasury of the Company. When used in this Section 1704, the
term "Short Term Rights" shall mean rights, warrants or options
91
<PAGE>
entitling the holders thereof (for a period commencing no earlier than the
Rights Record Date and expiring not more than 45 days after the Rights Record
Date) to subscribe for or purchase shares of Common Stock of the Company at a
price per share less than the current market price per share (determined as
provided in paragraph (7) of this Section 1704) of the Common Stock of the
Company on the Rights Record Date.
(3) In case outstanding shares of Common Stock of the Company shall be
subdivided into a greater number of shares of Common Stock, the Conversion Price
in effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and,
conversely, in case outstanding shares of Common Stock of the Company shall be
combined into a smaller number of shares of Common Stock, the Conversion Price
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) Subject to the last sentence of this paragraph (4) of this
Section, if the Company, by dividend or otherwise, (a) distributes to all
holders of its Common Stock evidences of its indebtedness, shares of any class
of Capital Stock of the Company or other assets (other than cash dividends out
of current or retained earnings), or (b) distributes to substantially all
holders of Common Stock rights or warrants to subscribe for securities (other
than Short Term Rights to which paragraph (2) of this Section 1704 applies), the
Conversion Price shall be reduced by multiplying such Conversion Price by a
fraction of which the numerator shall be the current market price per share
(determined as provided in paragraph (7) of this Section 1704) of the Common
Stock of the Company on the Reference Date (as defined below) less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution filed with
the Trustee), on the Reference Date, of the portion of the evidences of
indebtedness and other assets so distributed or of such subscription rights or
warrants applicable to one share of Common Stock (collectively, the "Market
Value of the Distribution") and the denominator shall be such current market
price per share of the Common Stock of the Company. Such reduction shall become
effective immediately prior to the opening of business on the day (the
"Reference Date") following the later of (a) the date fixed for the payment of
such distribution and (b) the date 20 days after notice relating to such
distribution is required to be given pursuant to Section 1706(a). If the Board
of Directors determines the fair market value of any distribution for purposes
of this paragraph (4) by reference to the actual or when issued trading market
for any securities comprising such distribution, it must in doing so consider
the prices in such market over the same period used in computing the current
market price per share pursuant to paragraph (7) of this Section 1704. In the
event that, with respect to any distribution to which this paragraph (4) of
Section 1704 would otherwise apply, the Market Value of the Distribution is
greater than the current market price per share of
92
<PAGE>
the Common Stock (such distribution being referred to herein as an "Unadjusted
Distribution"), then the adjustment provided by this paragraph (4) shall not be
made and in lieu thereof the provisions of Section 1711 shall apply with respect
to such Unadjusted Distribution.
(5) The Company may, but shall not be required to, make such
reductions in the Conversion Price, in addition to those required by paragraphs
(1), (2), (3), and (4) of this Section 1704, as it considers to be advisable in
order that any event treated for Federal income tax purposes as a dividend of
stock or stock rights shall not be taxable to the recipients. In addition, the
Company, from time to time, may decrease the Conversion Price by any amount and
for any reason, temporarily or otherwise, including situations where the Board
of Directors determines such decrease to be fair and appropriate with respect to
transactions in which holders of Common Stock have the right to participate.
(6) Rights or warrants issued or distributed by the Company to all
holders of its Common Stock entitling the holders thereof to subscribe for or
purchase shares of Common Stock or Preferred Stock, which rights or warrants (i)
are deemed to be transferred with such shares of Common Stock, (ii) are not
exercisable and (iii) are also issued or distributed in respect of future
issuances of Common Stock, in each case in clauses (i) through (iii) until the
occurrence of a specified event or events ("Trigger Events"), shall for purposes
of this Section 1704 not be deemed issued or distributed until the occurrence of
the earliest Trigger Event. Each share of Common Stock issued upon conversion
of Securities pursuant to this Article Seventeen shall be entitled to receive
the appropriate number of Common Stock purchase rights (the "Rights"), if any,
and the certificates representing the Common Stock issued upon conversion shall
bear such legends, if any[, in each case as provided by and subject to the terms
of the [Stockholders Rights Plan] adopted by the Board of Directors on
______________ (the "Rights Plan") as in effect at the time of such conversion].
Notwithstanding anything to the contrary in this Article Seventeen, there shall
not be any adjustment to the Conversion Price as a result of (i) the
distribution of separate certificates representing the Rights; (ii) the
occurrence of certain events entitling holders of Rights to receive, upon
exercise thereof, Common Stock or other securities of the Company or other
securities of another corporation; or (iii) the exercise of such Rights, all in
accordance with the Rights Plan. No adjustment in the Conversion Price need be
made for rights to purchase or the sale of Common Stock pursuant to a Company
plan providing for reinvestment of dividends or interest.
(7) For the purpose of any computation under paragraph (2), (4) or
(5) of this Section 1704, the "current market price" per share of Common Stock
of the Company on any date shall be deemed to be the average of the daily
Closing Prices for the 15 consecutive Trading Days selected by the Company
commencing not more than 30 Trading Days before, and ending not later than, the
date in question.
93
<PAGE>
(8) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason of
this paragraph (8) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Article Seventeen shall be made to the nearest cent or to the nearest one-
hundredth of a share of Common Stock, as the case may be.
(9) Anything herein to the contrary notwithstanding, in the event
the Company shall declare any dividend or distribution requiring an adjustment
in the Conversion Price hereunder and shall, thereafter and before the payment
of such dividend or distribution to stockholders, legally abandon its plan to
pay such dividend or distribution, the Conversion Price then in effect
hereunder, if changed to reflect such dividend or distribution, shall upon the
legal abandonment of such plan be changed to the Conversion Price which would
have been in effect at the time of such abandonment (after giving effect to all
other adjustments not so legally abandoned pursuant to the provisions of this
Article Seventeen) had such dividend or distribution never been declared.
(10) Notwithstanding any other provision of this Section 1704, no
adjustment to the Conversion Price shall reduce the Conversion Price below the
then par value per share of the Common Stock of the Company, and any such
purported adjustment shall instead reduce the Conversion Price to such par
value. Notwithstanding the foregoing sentence, the Company hereby covenants that
it will from time to time take all such action as may be required to assure that
the par value per share of the Common Stock is at all times equal to or less
than the Conversion Price.
(11) In the event that this Article Seventeen requires adjustments
to the Conversion Price under more than one of paragraphs (1), (2), (3) or (4)
of this Section 1704, and the record or effective dates for the transaction
giving rise to such adjustments shall occur on the same date, then such
adjustments shall be made by applying (to the extent they are applicable),
first, the provisions of paragraph (3) of this Section 1704, second, the
provisions of paragraph (1) of this Section 1704, third, the provisions of
paragraph (4) of this Section 1704 and, fourth, the provisions of paragraph (2)
of this Section 1704. Anything herein to the contrary notwithstanding, no single
event shall require or result in duplicative adjustments in the Conversion Price
pursuant to this Section 1704. After an adjustment to the Conversion Price under
this Article Seventeen, any subsequent event requiring an adjustment under this
Article Seventeen shall cause an adjustment to the Conversion Price as so
adjusted. If, after an adjustment, a Holder of a Security upon conversion of
such Security receives shares of two or more classes of Capital Stock of the
Company, the Conversion Price shall thereafter be subject to adjustment upon the
occurrence of an action taken with respect
94
<PAGE>
to any such class of Capital Stock as is contemplated by this Article Seventeen
with respect to the Common Stock in this Article Seventeen.
SECTION 1705. Notice of Adjustments of Conversion Price.
-----------------------------------------
Whenever the Conversion Price is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Price in
accordance with Section 1704 or Section 1711 and shall prepare an Officer's
Certificate setting forth the adjusted Conversion Price and showing in
reasonable detail the facts upon which such adjustment is based, and such
certificate shall forthwith be filed (with a copy to the Trustee) at each office
or agency maintained for the purpose of conversion of any Securities pursuant to
Section 1002; and
(2) a notice stating that the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall forthwith be required, and
as soon as practicable after it is required, such notice shall be mailed by the
Company to all Holders at their last addresses as they shall appear in the
Security Register.
SECTION 1706. Notice of Certain Corporate Action.
----------------------------------
In case:
(1) the Company shall take any action that would require a
Conversion Price adjustment pursuant to Section 1704 or Section 1711; or
(2) there shall occur any reclassification of the Common Stock of
the Company (other than a subdivision or combination of its outstanding shares
of Common Stock), or any consolidation or merger to which the Company is a
party, or the sale, transfer or lease of all or substantially all of the assets
of the Company and for which approval of any stockholders of the Company is
required; or
(3) there shall occur the voluntary or involuntary dissolution,
liquidation or winding up of the Company,
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 1002, and shall
cause to be mailed to all Holders at their last addresses as they shall appear
in the Security Register, at least 10 days prior to the applicable record,
effective or expiration date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of any dividend,
distribution or granting of rights, warrants or options, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options 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
95
<PAGE>
become effective, and, if applicable, the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their shares of
Common Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
SECTION 1707. Company to Reserve Common Stock.
-------------------------------
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, a number of shares of Common
Stock for the conversion of all outstanding Securities of any series which is
convertible into Common Stock.
SECTION 1708. Taxes on Conversion.
-------------------
The Company will pay any and all taxes that may be payable in respect
of the issue or delivery of shares of Common 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 issue and
delivery of shares of Common Stock in a name other than that of the Holder of
the Security or Securities to be converted, and no such issue or delivery shall
be made unless and until the Person requesting such issue 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 1709. Covenants as to Common Stock.
----------------------------
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities will upon issue be duly and validly issued,
fully paid and nonassessable, free of preemptive or any similar rights, and,
except as provided in Section 1708, the Company will pay all taxes, liens and
charges with respect to the issue thereof.
The Company will endeavor promptly to comply with all Federal and
state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Securities, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or in
the over-the-counter market or such other market on which the Common Stock is
then listed or quoted.
SECTION 1710. Cancellation of Converted Securities.
------------------------------------
All Securities delivered for conversion shall be delivered to the
Trustee to be cancelled by or at the direction of the Trustee, which shall
dispose of the same as provided in Section 309.
96
<PAGE>
SECTION 1711. Provisions in Case of Consolidation, Merger or Sale of
------------------------------------------------------
Assets; Special Distributions.
-----------------------------
If any of the following shall occur, namely: (i) any reclassification
or change of outstanding shares of Common Stock issuable upon conversion of
Securities (other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination), (ii) any consolidation or merger to which the Company is a party
other than a merger in which the Company is the continuing corporation and which
does not result in any reclassification of, or change (other than a change in
name, or par value, or from par value to no par value, or from no par value to
par value or as a result of a subdivision or combination) in, outstanding shares
of Common Stock or (iii) any sale or conveyance of all or substantially all of
the property or business of the Company as an entirety, then the Person formed
by such consolidation or resulting from such merger or which acquires such
properties or assets, as the case may be, shall as a condition precedent to such
transaction execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then outstanding shall have the right
thereafter, during the period such Security shall be convertible as specified in
Section 1701, to convert such Security only into the kind and amount of
securities, cash and other property receivable, if any, upon such consolidation,
merger, sale, transfer or lease by a holder of the number of shares of Common
Stock of the Company into which such Security might have been converted
immediately prior to such consolidation, merger, sale, transfer or lease;
provided that the kind and amount of securities, cash and other property so
receivable shall be determined on the basis of the following assumptions. The
holder of Common Stock referred to in the foregoing sentence:
(1) is not (a) a Person with which the Company consolidated, (b) a
Person into which the Company merged or which merged into the
Company, or (c) a Person to which such sale, transfer or lease
was made (any Person described in the foregoing clauses (a),
(b), or (c), hereinafter referred to as a "Constituent
Person"), or (d) an Affiliate of a Constituent Person; and
(2) failed to exercise his rights of election, if any, as to the
kind or amount of securities, cash and other property
receivable upon such consolidation, merger, sale, transfer or
lease (provided that if the kind or amount of securities, cash
and other property receivable upon such consolidation, merger,
sale transfer or lease is not the same for each share of Common
Stock of the Company in respect of which such rights of
election shall not have been exercised, then for the purpose of
this Section 1711 the kind and amount of securities, cash and
other property receivable upon such consolidation, merger,
sale, transfer or lease shall be deemed to be the kind and
amount so receivable per share by a plurality of such shares of
Common Stock).
97
<PAGE>
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 Seventeen. If, in the case of any such consolidation, merger, sale
transfer or lease the stock or other securities and property (including cash)
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities and property of a corporation other than the successor or
purchasing corporation, as the case may be, in such consolidation, merger, sale,
transfer or lease then such supplemental indenture shall also be executed by
such other corporation and shall contain such additional provisions to protect
the interests of the Holders of the Securities as the Board of Directors of the
Company shall reasonably consider necessary by reason of the foregoing. The
above provisions of this Section 1711 shall similarly apply to successive
consolidations, mergers, sales, transfers or leases.
In the event the Company shall execute a supplemental indenture pursuant
to this Section 1711, the Company shall promptly file with the Trustee an
Officers' Certificate briefly stating the reasons therefor, the kind or amount
of shares of stock or securities or property (including cash) receivable by
Holders of the Securities upon the conversion of their Securities after any such
reclassification, change, consolidation, merger, sale, transfer or lease and any
adjustment to be made with respect thereto.
If the Company makes a distribution to all holders of its Common Stock
that constitutes an Unadjusted Distribution pursuant to the last sentence of
paragraph (4) of Section 1704, then, from and after the record date for
determining the holders of Common Stock entitled to receive such distribution
(the "Distribution Record Date"), a Holder of a Security who converts such
Security in accordance with the provisions of this Indenture shall, upon
conversion, be entitled to receive, in addition to the shares of Common Stock
into which the Security is convertible, the kind and amount of evidences of
indebtedness, shares of Capital Stock, or other assets or subscription rights or
warrants, as the case may be, comprising the distribution that such Holder would
have received if such Holder had converted the Security immediately prior to the
Distribution Record Date.
SECTION 1712. Trustee Adjustment Disclaimer; Company Determination
----------------------------------------------------
Final.
-----
The Trustee has no duty to determine when an adjustment under this
Article Seventeen should be made, how it should be made or what it should be.
The Trustee has no duty to determine whether a supplemental indenture under
Section 1711 need be entered into or whether any provisions of any supplemental
indenture are correct. The Trustee shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities. The Trustee shall not be responsible for the
Company's failure to comply with this Article Seventeen. Any determination that
the Company or the Board of Directors must make pursuant to this Article
Seventeen is conclusive, absent manifest error.
98
<PAGE>
SECTION 1713. When No Adjustment Required.
---------------------------
(a) Except as expressly set forth in Section 1704, no adjustment in
the Conversion Price shall be made because the Company issues, in exchange for
cash, property or services, shares of its Common Stock, or any securities
convertible into or exchangeable for shares of its Common Stock, or securities
(including warrants, rights and options) carrying the right to subscribe for or
purchase shares of its Common Stock or such convertible or exchangeable
securities.
(b) Notwithstanding anything herein to the contrary, no adjustment
in the Conversion Price shall be made pursuant to Section 1704 in respect of any
dividend or distribution if the Holders may participate therein (on a basis to
be determined in good faith by the Board of Directors) and receive the same
consideration they would have received if they had converted the Securities
immediately prior to the record date with respect to such dividend or
distribution.
SECTION 1714. Equivalent Adjustments.
----------------------
In the event that, as a result of an adjustment made pursuant to Section
1704 above, the holder of any Security thereafter surrendered for conversion
shall become entitled to receive any shares of Capital Stock of the Company
other than shares of its Common Stock, thereafter the Conversion Price of such
other shares so receivable upon conversion of any Securities shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Common Stock contained in this
Article Seventeen.
99
<PAGE>
SIGNATURES AND SEALS
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
SOVRAN SELF STORAGE, INC.
By:
------------------------------------
[________________]
[________________]
Attest:_____________________________
Title:
[ ],
as Trustee
By:
------------------------------------
Title:
Attest:________________________________
Title:
100
<PAGE>
ACKNOWLEDGMENT
STATE OF [____________________])
) ss:
COUNTY OF )
On the [_______________________] 1996, before me personally came
[_________________], to me known, who, being by me duly sworn, did depose and
say that he is the [__________________] of SOVRAN SELF STORAGE, INC., one of the
parties described in and which executed the foregoing instrument, and that he
signed his name thereto by authority of the Board of Directors.
[Notarial Seal]
________________________________
Notary Public
Commission Expires
STATE OF [________________])
) ss:
COUNTY OF )
On the [____________________________] 1996, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he/she is a ______________ of [ ], one of the parties
described in and which executed the foregoing instrument, and that he/she signed
his/her name thereto by authority of the Board of Directors.
[Notarial Seal]
________________________________
Notary Public
Commission Expires
101
<PAGE>
EXHIBIT A
FORM OF REDEEMABLE OR NON-REDEEMABLE SUBORDINATED SECURITY
[Face of Security]
[If the Holder of this Security (as indicated below) is The Depository Trust
Company ("DTC") or a nominee of DTC, this Security is a Global Security and the
following two legends apply:
Unless this Security is presented by an authorized representative of The
Depository Trust Company ("DTC"), 55 Water Street, New York, New York to the
issuer or its agent for registration of transfer, exchange or payment, and such
Security issued is registered in the name of CEDE & CO., or such other name as
requested by an authorized representative of DTC, 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 Security is exchanged in whole or in part for Securities
in certificated form, this Security may not be transferred except as a whole by
DTC to a nominee thereof or by a nominee thereof to DTC or another nominee of
DTC or by DTC or any such nominee to a successor of DTC or a nominee of such
successor.]
[If this Security is an Original Issue Discount Security, insert -- FOR PURPOSES
---------------------------------------------------------------
OF SECTION 1273 and 1275 OF THE UNITED STATES INTERNAL REVENUE CODE, THE AMOUNT
OF ORIGINAL ISSUE DISCOUNT ON THIS SECURITY IS ___% OF ITS PRINCIPAL AMOUNT, THE
ISSUE DATE IS _____________, 19__ [AND] THE YIELD TO MATURITY IS _____%. [THE
METHOD USED TO DETERMINE THE AMOUNT OF ORIGINAL ISSUE DISCOUNT APPLICABLE TO THE
SHORT ACCRUAL PERIOD OF __________, 19__ TO _________, 19__, IS ___% OF THE
PRINCIPAL AMOUNT OF THIS SECURITY.]
SOVRAN SELF STORAGE, INC.
[Designation of Series]
No. _______ $_______
SOVRAN SELF STORAGE, INC., a Maryland corporation (herein referred to as the
"Company," which term includes any successor corporation 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 Date") [or
insert date fixed for earlier redemption (the "Redemption Date," and together
- ----------------------------------------
with the Stated Maturity Date with respect to principal repayable on such date,
the "Maturity Date.")]
A-1
<PAGE>
[If the Security is to bear interest prior to Maturity, insert -- and to pay
-------------------------------------------------------------
interest thereon from ______________ or from 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 annum, 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 Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the ________ 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 funds
to an account maintained by such Holder within the United States]. Any such
interest not 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 Security (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, notice whereof shall be
given to Holders of Securities 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
Securities 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.]
[If the Security is not to bear interest prior to Maturity, insert -- The
-----------------------------------------------------------------
principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at the
[Stated] Maturity Date and in such case the overdue principal of this Security
shall bear interest at the rate of ___% per annum (to the extent that the
payment of such interest shall be legally enforceable), which shall accrue from
the date of such default in payment to the date payment of such principal has
been made or duly provided for. Interest on any overdue principal shall be
payable on demand. Any such interest on any overdue principal that is not so
paid on demand shall bear interest at the rate of ___% per annum (to the extent
that the payment of such interest shall be legally enforceable), which shall
accrue from the date of such demand for payment to the date payment of such
interest has been made or duly provided for, and such interest shall also be
payable on demand.]
The principal of this Security payable on the Stated Maturity Date [or the
principal of, premium or Make-Whole Amount, if any, and, if the Redemption Date
is not an Interest Payment Date, interest on this Security payable on the
Redemption Date] will be paid against presentation of this Security 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.
Interest payable on this Security 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
A-2
<PAGE>
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 Security) 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 or Make-Whole Amount, 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 banks in __________________ are not required or authorized by law or
executive order to close.
[If this Security is a Global Security, insert -- All payments of principal,
---------------------------------------------
premium or Make-Whole Amount, if any, and interest in respect of this Security
will be made by the Company in immediately available funds.]
Reference is hereby made to the further provisions of this Security 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 Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
under its facsimile corporate seal.
Dated: SOVRAN SELF STORAGE, INC.
----------------------
By:
--------------------------------------
Attest:
- ----------------------------
Secretary
A-3
<PAGE>
[Reverse of Security]
SOVRAN SELF STORAGE, INC.
This Security is one of a duly authorized issue of securities of the Company
(herein called the "Securities"), issued and to be issued in one or more series
under an Indenture, dated as of _____________, 199__ (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 Security is a part), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of 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 Security is one of the duly authorized series of Securities
designated on the face hereof (collectively, the "Securities"), [if applicable,
-------------
insert -- and the aggregate principal amount of the Securities to be issued
- ------
under such series is limited to $______ (except for Securities authenticated and
delivered upon transfer of, or in exchange for, or in lieu of other
Securities).] All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
If an Event of Default, as defined in the Indenture, shall occur and be
continuing, the principal of the Securities of this series may be declared due
and payable in the manner and with the effect provided in the Indenture.
[If applicable, insert -- The Securities may not be redeemed prior to the Stated
---------------------
Maturity Date.]
[If applicable, insert -- The Securities are subject to redemption [ (l) (If
--------------------- ---
applicable, insert -- on _________ in any year commencing with the year ____ and
- ------------------
ending with the year ____ through operation of the sinking fund for this series
at a Redemption Price equal to 100% of the principal amount, and (2) ] [If
--
applicable, insert -- at any time [on or after ___________], as a whole or in
- ------------------
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount):
If redeemed on or before _______, __% and if redeemed during the 12-month
period beginning _______ of the years indicated at the Redemption Prices
indicated below.
Year Redemption Price Year Redemption Price
---- ---------------- ---- ----------------
and thereafter at a Redemption Price equal to __% of the principal amount,
together in the case of any such redemption [If applicable, insert -- (whether
---------------------
through operation of the sinking
A-4
<PAGE>
fund or otherwise)] with accrued interest to the Redemption Date; provided,
---------
however, that installments of interest on this Security whose Stated Maturity is
- -------
on or prior to such Redemption Date will be payable to the Holder of this
Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert -- The Securities are subject to redemption (1) on
---------------------
_______ in any year commencing with the year ____ and ending with the year ____
through operation of the sinking fund for this series at the Redemption Prices
for redemption through operation of the sinking fund (expressed as percentages
of the principal amount) set forth in the table below, and (2) at any time [on
or after _______], as a whole or in part, at the election of the Company, at the
Redemption Prices for redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning ________ of the years
indicated,
Redemption Price for Redemption Price for
Redemption Through Redemption Otherwise
Operation of the Than Through Operation
Year Sinking Fund of the Sinking Fund
---- ------------ -------------------
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Security whose Stated
- -------- -------
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Security, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert -- Notwithstanding the foregoing, the Company
---------------------
may not, prior to _______, redeem any Securities as contemplated by [Clause (2)
of] the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of moneys borrowed having
an interest cost to the Company (calculated in accordance with generally
accepted financial practice) of less than __% per annum.]
[If applicable, insert -- The sinking fund for the Securities provides
---------------------
for the redemption on _______ in each year, beginning with the year ____ and
ending with the year ____, of [not less than] $_______] [("mandatory sinking
fund") and not more than $_______] aggregate principal amount of the Securities.
[The Securities acquired or redeemed by the Company otherwise than through
[mandatory] sinking fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made in the [describe order]
--------------
order in which they become due.]]
A-5
<PAGE>
Notice of redemption will be given by mail to Holders of Securities,
not less than 30 nor more than 60 days prior to the Redemption Date, all as
provided in the Indenture.
In the event of redemption of this Security in part only, a new
Security or Securities for the unredeemed portion hereof shall be issued in the
name of the Holder hereof upon the cancellation hereof.
[If applicable, insert conversion provisions set forth in any Board
Resolution or indenture supplemental to the Indenture.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of all Securities issued
under the Indenture at the time Outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Securities, on behalf of the
Holders of all such Securities, to waive compliance by the Company with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit the
Holders of not less than a majority of the aggregate principal amount, in
certain instances, of the Outstanding Securities of any series to waive, on
behalf of all of the Holders of Securities of such series, certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and other Securities issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium or Make-
Whole Amount, if any) and interest on this Security at the times, places and
rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein [and herein] set forth, the transfer of this Security is registrable in
the Security Register of the Company upon surrender of this Security for
registration of transfer at the office or agency of the Company in any place
where the principal of (and premium or Make-Whole Amount, if any) and interest
on this Security are payable, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar duly executed by, the Holder hereof or by his attorney duly authorized
in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
A-6
<PAGE>
As provided in the Indenture and subject to certain limitations
therein [and herein] set forth, this Security is exchangeable for a like
aggregate principal amount of Securities of different authorized denominations
but otherwise having the same terms and conditions, as requested by the Holder
hereof surrendering the same.
This Security is subordinated to the prior payment in full in cash of
Senior Indebtedness to the extent set forth in Article Sixteen of the Indenture.
The Securities of this series are issuable only in registered form
[without coupons] in denominations of $_______ and any integral multiple
thereof.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith,
Prior to due presentment of this 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 this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of or
premium or Make-Whole Amount, if any, or the interest on this Security, or for
any claim based hereon, or otherwise in respect hereof, or based on or in
respect of the Indenture or any indenture supplemental thereto, against any
past, present or future stockholder, employee, officer or director, as such, of
the Company or of any successor, either directly or through the Company or any
successor, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of [the State of New York] applicable to agreements
made and to be performed entirely in such State.
A-7
<PAGE>
EXHIBIT B
FORMS OF CERTIFICATION
EXHIBIT B-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set
forth below, the above-captioned Securities held by you for our account (i) are
owned by person(s) that are not citizens or residents of the United States,
domestic partnerships, domestic corporations or any estate or trust the income
of which is subject to United States Federal income taxation regardless of its
source ("United States person(s)"), (ii) are owned by United States person(s)
that are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section 2.165-
12(c)(1)(v) are herein referred to as "financial institutions") purchasing for
their own account or for resale, or (b) United States person(s) who acquired the
Securities through foreign branches of United States financial institutions and
who hold the Securities through such United States financial institutions on the
date hereof (and in either case (a) or (b), each such United States financial
institution hereby agrees, on its own behalf or through its agent, that you may
advise TriNet Corporate Realty Trust, Inc. or its agent that such financial
institution will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the United States Internal Revenue Code of 1986, as amended, and the
regulations thereunder), or (iii) are owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, in addition, if the owner is a United States or foreign financial
institution described in clause (iii) above (whether or not also described in
clause (i) or (ii)), this is to further certify that such financial institution
has not acquired the Securities for purposes of resale directly or indirectly to
a United States person or to a person within the United States or its
possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
B-1
<PAGE>
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the above-
captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to [U.S.$] of such
interest in the above-captioned Securities in respect of which we are not able
to certify and as to which we understand an exchange for an interest in a
permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: ________, ____
[To be dated no earlier than the 15th day prior to (i) the Exchange Date or (ii)
the relevant Interest Payment Date occurring prior to the Exchange Date, as
applicable]
[Name of Person Making Certification]
____________________________________
(Authorized Signature)
Name:
Title:
B-2
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR
AND CEDEL S.A. IN CONNECTION WITH THE EXCHANGE OF
A PORTION OF A TEMPORARY GLOBAL SECURITY OR TO
OBTAIN INTEREST PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, based solely on written certifications that
we have received in writing, by tested telex or by electronic transmission from
each of the persons appearing in our records as persons entitled to a portion of
the principal amount set forth below (our "Member Organizations") substantially
in the form attached hereto, as of the date hereof, [U.S.$] principal amount of
the above-captioned Securities (i) is owned by person(s) that are not citizens
or residents of the United States, domestic partnerships, domestic corporations
or any estate or trust the income of which is subject to United States Federal
income taxation regardless of its source ("United States person(s)"), (ii) is
owned by United States person(s) that are (a) foreign branches of United States
financial institutions (financial institutions, as defined in U.S. Treasury
Regulations Section 1.165-12(c)(1)(v) are herein referred to as "financial
institutions") purchasing for their own account or for resale, or (b) United
States person(s) who acquired the Securities through foreign branches of United
States financial institutions and who hold the Securities through such United
States financial institutions on the date hereof (and in either case (a) or (b),
each such financial institution has agreed, on its own behalf or through its
agent, that we may advise TriNet Corporate Realty Trust, Inc. or its agent that
such financial institution will comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder), or (iii) is owned by United States or foreign
financial institution(s) for purposes of resale during the restricted period (as
defined in United States Treasury Regulations Section 1.163-5(c)(2)(i)(D)(7)),
and, to the further effect, that financial institutions described in clause
(iii) above (whether or not also described in clause (i) or (ii)) have certified
that they have not acquired the Securities for purposes of resale directly or
indirectly to a United States person or to a person within the United States or
its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its "Possessions"
include Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake Island
and the Northern Mariana Islands.
We further certify that (i) we are not making available herewith for
exchange (or, if relevant, collection of any interest) any portion of the
temporary Global Security representing the above-captioned Securities excepted
in the above-referenced certificates of Member Organizations and (ii) as of the
date hereof we have not received any notification from any of
B-3
<PAGE>
our Member Organizations to the effect that the statements made by such Member
Organizations with respect to any portion of the part submitted herewith for
exchange (or, if relevant, collection of any interest) are no longer true and
cannot be relied upon as of the date hereof.
We understand that this certification is required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: _______ ____
[To be dated no earlier than the Exchange Date or the relevant Interest Payment
Date occurring prior to the Exchange Date, as applicable]
[Morgan Guaranty Trust Company of New York,
Brussels Office,] as Operator of the Euroclear
System [CEDEL S.A.]
By:
-------------------------------------
B-4
<PAGE>
September 4, 1996
Sovran Self Storage, Inc.
5166 Main Street
Williamsville, New York 14221
Re: Legality of Securities to be Registered Under
Registration Statement on Form S-3
Ladies and Gentlemen:
This opinion is delivered in our capacity as counsel to Sovran
Self Storage, Inc. a Maryland corporation (the "Company") in connection with the
Company's registration statement on Form S-3 (the "Registration Statement")
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended (the "Securities Act"), relating to an indeterminate amount of
Debt Securities, Preferred Stock and Common Stock (as such terms are defined in
the Registration Statement) authorized for issuance under the Company's Amended
and Restated Articles of Incorporation (the "Articles of Incorporation"), with
an aggregate public offering price of up to $150,000,000 (such securities being
referred to collectively as the "Securities"). The Registration Statement
provides that the Securities may be offered separately or together, in separate
series, in amounts, at prices and on terms to be set forth in one or more
prospectus supplements (each a "Prospectus Supplement") to the Prospectus
contained in the Registration Statement.
In connection with rendering this opinion, we have examined
the Articles of Incorporation, as amended to the date hereof and on file with
the Maryland State Department of Assessments and Taxation; the Bylaws of the
Company, such records of corporate proceedings of the Company as we deem
appropriate for the purposes of this opinion; and the Registration Statement and
the exhibits thereto.
We are attorneys admitted to practice in the State of New
York. We express no opinion concerning the laws of any jurisdictions other than
the laws of the United States of America and the State of New York. With respect
to matters of Maryland law, we have relied on the opinion of Hogan & Hartson
L.L.P. of Baltimore, Maryland.
<PAGE>
Sovran Self Storage, Inc.
September __, 1996
Page 2
Based upon the foregoing, we are of the opinion that, when
specifically authorized for issuance by the Company's Board of Directors or an
authorized committee thereof (the "Authorizing Resolution") and when issued as
described in the Registration Statement and a Prospectus Supplement that is
consistent with the Authorizing Resolution, and upon receipt by the Company of
the consideration provided for in the Authorizing Resolution (which
consideration is not less than the $.01 par value per share in the case of
Common Stock or Preferred Stock), the Securities will be legally issued, fully
paid and nonassessable, and in the case of Debt Securities, binding obligations
of the Company.
The foregoing assumes that all requisite steps will be taken
to comply with the requirements of the Securities Act and applicable
requirements of state laws regulating the offer and sale of securities.
We hereby consent to being named as counsel to the Company in
the Registration Statement, to the references therein to our firm under the
caption "Legal Matters" and to the inclusion of this opinion as an exhibit to
the Registration Statement.
Very truly yours,
PHILLIPS, LYTLE, HITCHCOCK, BLAINE & HUBER
<PAGE>
September 3, 1996
Phillips, Lytle Hitchcock, Blaine & Huber
3400 Marine Midland Center
Buffalo, New York 14203
Board of Directors
Sovran Self Storage, Inc.
5166 Main Street
Williamsville, New York 14221
Ladies and Gentlemen:
We are acting as special Maryland counsel to Sovran Self Storage, Inc.,
a Maryland corporation (the "Company"), in connection with its registration
statement on Form S-3, as amended (the "Registration Statement") filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended
(the "Act"), relating to the proposed public offering of up to $150,000,000 in
aggregate amount of one or more series of (i) debt securities of the Company
(the "Debt Securities"), (ii) shares of the Company's preferred stock, par value
$.01 per share (the "Preferred Stock"), and (iii) shares of the Company's common
stock, par value $.01 per share (the "Common Stock"), all of which securities
(the "Securities") may be sold by the Company from time to time. The
Registration Statement provides that the Securities may be offered separately or
together, in separate classes or series, in amounts, at prices and on terms to
be set forth in one or more prospectus supplements (each a "Prospectus
Supplement"). This opinion letter is furnished to you at your request to enable
the Company to fulfill the requirements of Item 601(b)(5) of Regulation S-K,
17 C.F.R.(S) 229.601(b)(5), in connection with the Registration Statement.
We assume that the issuance sale, amount and terms of the Securities to
be offered from time to time will be duly authorized and determined by proper
action of the Board of Directors of the Company consistent with the procedures
and terms described in the Registration Statement (each, a "Board Action") and
in accordance with the Company's Amended and Restated Articles of Incorporation,
as amended (the "Charter"), and applicable Maryland law. We further assume that
<PAGE>
Phillips, Lytle Hitchcock, Blaine & Huber
Sovran Self Storage
September 3, 1996
Page 2
prior to any issuance of Preferred Stock, appropriate articles supplementary
shall be filed for recordation with the Maryland State Department of Assessments
and Taxation (each, "Articles Supplementary"). We further assume that the
amount of Preferred Stock to be offered from time to time will not exceed the
number of shares of Preferred Stock authorized for issuance in accordance with
the Charter and the Articles Supplementary. We further assume that the amount
of Common Stock to be offered from time to time will not exceed the number of
shares of Common Stock authorized and available for issuance in accordance with
the Charter.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Charter of the Company, as certified by the Maryland State
Department of Assessments and Taxation ("SDAT") on August 6, 1996
and by the Secretary of the Company on the date hereof as then being
complete, accurate and in effect.
3. The Bylaws of the Company, as certified by the Secretary of the
Company on the date hereof as then being complete, accurate
and in effect.
4. Resolutions of the Board of Directors of the Company adopted on
July 16, 1996 and August 8, 1996, as certified by the Secretary
of the Company on the date hereof as then being complete,
accurate and in effect, relating to the filing of the Registration
Statement and related matters.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
accuracy and completeness of all documents submitted to us, the authenticity of
all original documents and the conformity to authentic original documents of all
documents submitted to us as copies (including telecopies). This opinion letter
is given, and all statements herein are made, in the context of the foregoing.
This opinion letter is based as to matters of law solely on the General
Corporation Law of the State of Maryland. We express no opinion herein as to
any other laws, statutes, regulations, or ordinances.
<PAGE>
Phillips, Lytle Hitchcock, Blaine & Huber
Sovran Self Storage
September 3, 1996
Page 3
Based upon, subject to and limited by the foregoing, we are of the
opinion that, as of the date hereof:
1. When the Registration Statement has become effective under the
Securities Act of 1933 (the "Act") and when a series of the Preferred Stock
has been classified by applicable Board Action, in accordance with the
terms of the Charter and applicable law, and appropriate Articles
Supplementary have been filed, and when issuance of such Preferred Stock
has been appropriately authorized by applicable Board Action and, following
issuance of any such series of Preferred Stock against payment of valid
consideration therefor in accordance with the terms of such Board Action
and any applicable underwriting or purchase agreement, as contemplated by
the Registration Statement and/or the applicable Prospectus Supplement,
such Preferred Stock will be validly issued, fully paid and non-assessable.
2. When the Registration Statement has become effective under the
Act, upon due authorization by Board Action of an issuance of Common Stock,
and following issuance of any such Common Stock against payment of valid
consideration therefor in accordance with the terms of such Board Action
and any applicable underwriting or purchase agreement, as contemplated by
the Registration Statement and/or the applicable Prospectus Supplement,
such Common Stock will be validly issued, fully paid and non-assessable.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with the filing by the Company of the
Registration Statement on the date of this opinion letter and should not be
quoted in whole or in part or otherwise be referred to, nor filed with or
furnished to any governmental agency or other person or entity, without the
prior written consent of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5.2 to
the Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus constituting a part of the Registration
Statement. In giving this consent, we do not thereby admit that we are an
"expert" within the meaning of the Securities Act of 1933, as amended.
<PAGE>
Phillips, Lytle Hitchcock, Blaine & Huber
Sovran Self Storage
September 3, 1996
Page 4
Very truly yours,
Hogan & Hartson L.L.P.
<PAGE>
September 4, 1996
Sovran Self Storage, Inc.
5166 Main Street
Williamsville, New York 14221
Re: Certain Federal Income Tax Matters
---------------------------------
Ladies and Gentlemen:
This opinion is delivered to you in our capacity as counsel to Sovran Self
Storage, Inc. (the "Company") in connection with the Company's registration
statement on Form S-3 (the "Registration Statement") filed by the Company with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to an indeterminate amount of Debt Securities, Preferred
Stock and Common Stock (as such terms are defined in the Registration Statement)
authorized for issuance under the Company's Amended and Restated Articles of
Incorporation and with an aggregate public offering price of $150,000,000. This
opinion relates to the Company's qualification for federal income tax purposes
as a real estate investment trust ("REIT") under the Internal Revenue Code of
1986, as amended (the "Code").
In rendering the following opinion, we have examined the Amended and
Restated Articles of Incorporation and Bylaws of the Company, and such other
records, certificates and documents as we have deemed necessary or appropriate
for purposes of rendering the opinions set forth herein.
We have reviewed the Registration Statement and the descriptions set forth
therein of the Company and its investments and activities. We have relied upon
the representations of the Company and its affiliates and certain officers
thereof (including, without limitation, representations contained in a
representation letter dated as of this date) regarding the manner in which the
Company has been and will continue to be owned and operated. We have neither
independently investigated nor verified such representations, and we assume that
such representations are true, correct and complete and that all representations
made "to the best of the knowledge and belief" of any person(s) or party(ies)
are and will be true, correct and complete as if made without such
qualification. We assume that the Company has been and
<PAGE>
CF
Page 2
will be operated in accordance with applicable laws and the terms and conditions
of applicable documents, and that the descriptions of the Company and its
investments, and the proposed investments, activities, operations and governance
of the Company set forth in the Registration Statement continue to be true. In
addition, we have relied on certain additional facts and assumptions described
below.
In rendering the opinions set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to us as originals, (iii) the conformity
of final documents to all documents submitted to us as drafts, (v) the authority
and capacity of the individual or individuals who executed any such documents on
behalf of any person, (vi) the accuracy and completeness of all records made
available to us, an (vii) the factual accuracy of all representations,
warranties and other statements made by all parties. We have also assumed,
without investigation, that all documents, certificates, warranties and
covenants on which we have relied in rendering the opinion set forth below and
that were given or dated earlier than the date of this letter continue to remain
accurate, insofar as relevant to the opinion set forth herein, from such earlier
date through and including the date of this letter.
The discussion and conclusions set forth below are based upon the Code, the
Income Tax Regulations and Procedure and Administration Regulations promulgated
thereunder and existing administrative and judicial interpretations thereof, all
of which are subject to change. No assurance can therefore be given that the
federal income tax consequences described below will not be altered in the
future.
Based upon and subject to the foregoing, and provided that the Company
continues to meet the applicable asset composition, source of income,
shareholder diversification, distribution, recordkeeping and other requirements
of the Code necessary for a corporation to qualify as a REIT, we are of the
opinion that:
1. Commencing with the Company's first taxable year ended December 31,
1995, the Company has been organized in conformity with the requirements
for qualification as a "real estate investment trust" under the Code,
and its method of operation, as described in the representations
referred to above, will enable it to continue to meet the requirements
for qualification and taxation as a "real estate investment trust" under
the Code.
<PAGE>
CF
Page 3
2. The Statements in the Registration Statement set forth under the
caption "Certain Federal Income Tax Considerations" to the extent
such information constitutes matters of law, summaries of legal
matters, or legal conclusions, have been reviewed by us and are
accurate in all material respects.
We express no opinion with respect to the transactions described in the
Registration Statement other than those expressly set forth herein. You should
recognize that our opinion is not binding on the IRS and that IRS may disagree
with the opinion contained herein. Although we believe that our opinion will be
sustained if challenged, there can be no assurance that this will be the case.
Except as specifically discussed above, the opinion expressed herein is based
upon the law as it currently exists. Consequently, future changes in the law
may cause the federal income tax treatment of the transactions described herein
to be materially and adversely different from that described above.
We consent to being named as Counsel to the Company in the Registration
Statement, to the references in the Registration Statement to our firm and to
the inclusion of a copy of this opinion letter as an exhibit to the Registration
Statement.
Very truly yours,
PHILLIPS, LYTLE, HITCHCOCK, BLAINE & HUBER
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the captions "Experts" in the
Amendment No. 1 to the Registration Statement (Form S-3, No. 333-08883) and
related Prospectus of Sovran Self Storage, Inc. for the registration of
$150,000,000 of its debt securities, preferred stock, or common stock and to the
incorporation by reference therein of our reports (a) dated February 2, 1996,
with respect to the consolidated financial statements of Sovran Self Storage,
Inc. incorporated by reference in its Annual Report (Form 10-K) for the period
ended December 31, 1995, (b) dated February 2, 1996 on the related financial
statement schedule included therein, and (c) dated August 30, 1996 with respect
to the historical summaries of combined gross revenue and direct operating
expenses of the Acquisition Facilities included in its Current Report on Form
8-K/A dated September 3, 1996, all three filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
Buffalo, New York
September 3, 1996
