<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 17, 1998
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
MERIDIAN INDUSTRIAL TRUST, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
MARYLAND 94-3224765
(State of Organization) (I.R.S. Employer
Identification Number)
</TABLE>
455 MARKET STREET, 17TH FLOOR
SAN FRANCISCO, CALIFORNIA 94105
(415) 281-3900
(Address of principal executive offices)
------------------------
Allen J. Anderson Copies to:
Chairman and Chief Executive Officer Michael D. Wortley, Esq.
Meridian Industrial Trust, Inc. Vinson & Elkins L.L.P.
455 Market Street, 17th Floor 2001 Ross Avenue, Suite 3700
San Francisco, California 94105 Dallas, Texas 75201
(Name and address of agent for (214) 220-7700
service)
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the 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 filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
BE REGISTERED BE REGISTERED PER UNIT(1) OFFERING PRICE(2) FEE
<S> <C> <C> <C> <C>
Debt Securities(4)..........................
Preferred Stock, par value $0.001 per
share(5).................................. (3) (3) (3) (3)
Common Stock, par value $0.001 per
share(6)..................................
Warrants(7).................................
Total..................................... $600,000,000(8) 100% $600,000,000(8) $177,000(9)
</TABLE>
FOOTNOTES TO TABLE ON NEXT PAGE
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 SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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<PAGE>
FOOTNOTES FROM PREVIOUS PAGE
(1) The proposed maximum offering price per unit will be determined from time to
time by the registrant in connection with the issuance by the registrant of
the securities registered hereunder.
(2) The proposed maximum aggregate offering price has been estimated solely for
the purpose of calculating the registration fee pursuant to Rule 457(o)
under the Securities Act of 1933.
(3) Not applicable pursuant to General Instruction II.D. of Form S-3.
(4) Subject to note (8) below, there is being registered hereunder an
indeterminate principal amount of Debt Securities. If any Debt Securities
are issued at an original issue discount, then the offering price shall be
in such greater principal amount as shall result in an aggregate initial
offering price not to exceed $600,000,000 less the dollar amount of any
securities previously issued hereunder.
(5) Subject to note (8) below, there is being registered hereunder an
indeterminate number of shares of Preferred Stock as may be sold, from time
to time, by the registrant.
(6) Subject to note (8) below, there is being registered hereunder an
indeterminate number of shares of Common Stock as may be sold, from time to
time, by the registrant. There is also being registered hereunder an
indeterminate number of shares of Common Stock as shall be issuable upon
conversion or redemption of Preferred Stock or Debt Securities registered
hereunder.
(7) Subject to note (8) below, there is being registered hereunder an
indeterminate amount and number of Warrants, representing rights to purchase
Debt Securities, Preferred Stock, or Common Stock registered hereunder.
(8) In no event will the aggregate initial offering price of all securities
issued from time to time pursuant to this Registration Statement exceed
$600,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies. The aggregate amount of
Common Stock registered hereunder is further limited to that which is
permissible under Rule 415(a)(4) under the Securities Act of 1933. The
securities registered hereunder may be sold separately or as units with
other securities registered hereunder.
(9) Previously paid as a portion of the registration fee for the Registrant's
Registration Statement on Form S-3 (Reg. No. 333-24579).
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 17, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
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DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
MERIDIAN INDUSTRIAL TRUST, INC.
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Meridian Industrial Trust, Inc. (the "Company") may from time to time offer
in one or more series its (a) debt securities ("Debt Securities"), (b) warrants
to purchase Debt Securities ("Debt Warrants"), (c) Preferred Stock, par value
$0.001 per share ("Preferred Stock"), (d) warrants to purchase Preferred Stock
("Preferred Stock Warrants"), (e) Common Stock, par value $0.001 per share
("Common Stock"), or (f) warrants to purchase Common Stock ("Common Stock
Warrants"), all having an aggregate initial offering price not to exceed
$600,000,000 or the equivalent thereof in one or more foreign currencies,
foreign currency units, or composite currencies, including European Currency
Units. The Debt Warrants, Preferred Stock Warrants and Common Stock Warrants are
collectively referred to herein as the "Warrants." The Debt Securities,
Preferred Stock, Common Stock and Warrants offered by the Company hereby
(collectively referred to herein as the "Offered Securities") may be offered,
separately or together, in separate series, in amounts, at prices and on terms
to be set forth in a supplement to this Prospectus (a "Prospectus Supplement").
Certain holders (the "Selling Stockholders") of the Company's Common Stock and
Series B Preferred Stock may also offer and sell certain shares of Common Stock
held by them or issuable upon the conversion or exchange of shares of Series B
Preferred Stock ("Selling Stockholder Offered Securities" and together with the
Company Offered Securities, the "Offered Securities").
The specific terms of the Offered Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable: (a) in the case of Debt
Securities, the specific title, aggregate principal amount, 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, and any
initial public offering price, (b) in the case of Preferred Stock, the
designation and stated value, any dividend, liquidation, redemption, conversion,
voting and other rights, and the number of shares and the terms or the offering
and sale thereof, (c) in the case of Common Stock, the number of shares and the
terms of the offering and sale thereof, (d) in the case of Warrants, the number
and terms thereof, the designation and the number of securities issuable upon
exercise, the exercise price, the terms of the offering and sale thereof, and
where applicable, the duration and detachability thereof, and (e) in the case of
all Offered Securities, whether such Offered Securities will be offered
separately or as a unit with other Offered Securities. The Selling Stockholder
Offered Securities may be offered in amounts, at prices and on terms to be
determined at the time of sale and set forth in a Prospectus Supplement. In
addition, such specific terms may include limitations on direct or beneficial
ownership and restrictions on transfer of the Offered Securities, in each case
as may be appropriate to preserve the status of the Company as a real estate
investment trust ("REIT") for federal income tax purposes.
The applicable Prospectus Supplement will also contain information, where
applicable, about certain United States federal income tax considerations
relating to, and any listing on a securities exchange of, the Offered Securities
covered by such Prospectus Supplement.
The Company may sell the Offered Securities in or outside the United States
through underwriters, brokers or dealers, directly to one or more purchasers, or
through agents. The Selling Stockholder Offered Securities may be offered to or
through underwriters either separately or in connection with offerings of
Offered Securities by the Company. If any agents or underwriters are involved in
the sale of any of the Offered Securities, their names, and any applicable
purchase price, fee, commission or discount arrangement between or among them,
will be set forth, or will be calculable from the information set forth, in the
applicable Prospectus Supplement. See "Plan of Distribution." No Offered
Securities may be sold without delivery of the applicable Prospectus Supplement
describing the method and terms of the offering of such series of Offered
Securities. The Company will not receive any of the proceeds from the sale of
any of the Selling Stockholder Offered Securities by any of the Selling
Stockholders.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549; Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New
York 10048. Copies of such material can be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such material can also be obtained from the Commission's
worldwide web site at http://www.sec.gov. The Company's outstanding shares of
Common Stock are listed on the New York Stock Exchange (the "NYSE") under the
symbol "MDN" and all such reports, proxy statements and other information filed
by the Company with the NYSE may be inspected at the NYSE's offices at 20 Broad
Street, New York, New York 10005. In addition, warrants to purchase shares of
the Company's Common Stock are listed on the American Stock Exchange ("ASE") and
such reports, proxy statements and other information filed by the Company with
the ASE may be inspected at the ASE's offices at 86 Trinity Place, New York, New
York 10006-1881.
This Prospectus constitutes part of a registration statement on Form S-3
(together with all amendments and exhibits, the "Registration Statement") filed
by the Company with the Commission under the Securities Act. This Prospectus
does not contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. For further information, reference is hereby made to the
Registration Statement.
INCORPORATION BY REFERENCE
There are incorporated herein by reference the following documents
heretofore filed by the Company with the Commission (File No. 1-14166):
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31, 1998;
(c) Current Report on Form 8-K filed February 23, 1998;
(d) Current Report on Form 8-K filed March 16, 1998;
(e) Current Report on Form 8-K filed May 29, 1998; and
(f) The description of the Common Stock contained in the Company's
registration statement on Form 8-A filed on January 4, 1996 for registration
of the Common Stock pursuant to Section 12(b) of the Exchange Act, including
any amendment or report filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
of the Offered 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. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, or in any subsequently filed document which is incorporated or
deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom a copy of this Prospectus is delivered, upon the
written or oral request of such person, a copy of any or all of the documents
incorporated herein by reference, other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into such documents.
Requests should be addressed to General Counsel, Meridian Industrial Trust,
Inc., 455 Market Street, 17th Floor, San Francisco, California 94105.
2
<PAGE>
AS USED HEREIN THE TERM "COMPANY" INCLUDES MERIDIAN INDUSTRIAL TRUST, INC.,
A MARYLAND CORPORATION, AND ONE OR MORE OF ITS SUBSIDIARIES, AS APPROPRIATE.
CERTAIN ADDITIONAL TERMS CONTAINED HEREIN ARE DEFINED IN THE GLOSSARY OF THIS
PROSPECTUS.
THE COMPANY
Meridian Industrial Trust, Inc. is a self-administered and self-managed real
estate operating company engaged primarily in the business of owning, acquiring,
developing, managing and leasing income-producing warehouse/distribution and
light industrial properties. Based on the total square feet of leasable space
and management's knowledge of the industrial real estate market, the Company
believes it is one of the largest owners and managers of industrial space for
lease in the United States. The Company's strategy is to be a demand-driven,
competitively priced, nationwide provider of warehouse/distribution space.
The Company's fundamental business objective is to maximize total return to
its stockholders by increasing cash flow per share and increasing the long-term
value of the Company's properties. In order to achieve this objective, the
Company will seek to add value to the Company's Properties, build market share,
achieve name recognition and continue to improve its operating efficiency. The
Company places a high priority on disciplined portfolio management and
anticipating customers' needs. The Company intends to achieve its primary
business objective by applying its corporate strategies to achieve growth in its
portfolio of Properties. The Company will seek to grow through (a) acquiring
warehouse/distribution properties, (b) developing warehouse/distribution
properties to meet customer demand, (c) selectively acquiring land parcels in
anticipation of development projects, (d) repositioning the Company's existing
portfolio by selling Properties which no longer meet its investment objectives
and reinvesting the proceeds and (e) maximizing cash flow from its operating
Properties by increasing occupancy levels and releasing space at higher levels.
The Company's executive offices are located at 455 Market Street, 17th
Floor, San Francisco, California 94105, and its telephone number at those
offices is (415) 281-3900.
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the net
proceeds from the sale of the Offered Securities will be used for the
acquisition and development of additional industrial properties, as suitable
opportunities arise, for the repayment of certain outstanding indebtedness at
such time, for capital improvements to properties and for general corporate
purposes. None of the proceeds from the sale of any of the Selling Stockholder
Offered Securities by any of the Selling Stockholders will be received by the
Company.
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS
For the three months ended March 31, 1998 and for the years ended December
31, 1996 and 1997, the Company's ratio of earnings to fixed charges was 2.75x,
2.73x and 2.60x, respectively. For the same periods, the ratio of earnings to
combined fixed charges and preferred dividends was 2.42x, 2.24x and 1.91x,
respectively. For the period from May 18, 1995 (inception) to December 31, 1995,
except for interest earned on its investments and general and administrative
expenses incurred and accrued the Company had no activities. During this period
the Company's fixed charges were in excess of earnings by $1.29 million and
combined fixed charges and preferred dividends were in excess of earnings of
$1.32 million.
For purposes of computing these ratios, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income (loss) before
extraordinary items. Fixed charges consist of interest costs, whether expensed
or capitalized, the interest component of rental expense, and amortization of
capitalized loan fees.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities being offered and the extent to which
such general provisions may apply will be described in a Prospectus Supplement
relating to such Debt Securities.
The Debt Securities will be issued under an indenture, dated as of a date
prior to the issuance of the Debt Securities, as amended or supplemented from
time to time (the "Indenture"), between the Company and a trustee (the
"Trustee") chosen by the Company and qualified to act as Trustee under the Trust
Indenture Act of 1939, as amended (the "TIA"). The form of Indenture has been
filed as an exhibit to the Registration Statement of which this Prospectus is a
part and is available for inspection as described above under "Available
Information." The Indenture is subject to, and governed by, the TIA. The
statements made hereunder relating to the Indenture and the Debt Securities to
be issued thereunder are summaries of certain provisions thereof and do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Indenture and such Debt Securities.
Capitalized terms used but not defined herein shall have the respective meanings
set forth in the Indenture. All Section references appearing herein are to
sections of the Indenture.
Wherever particular Sections or defined terms of the Indenture are referred
to herein or in a Prospectus Supplement, such Sections or defined terms are
incorporated by reference herein or therein, as the case may be.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Company and
will rank PARI PASSU with all other unsecured and unsubordinated indebtedness of
the Company. The Debt Securities are non-convertible and will be effectively
subordinated to any secured indebtedness of the Company and any indebtedness of
the Company's Subsidiaries. At least one nationally-recognized statistical
rating organization will have assigned an investment grade rating to the Debt
Securities at the time of sale. At March 31, 1998, the Company and its
Subsidiaries had $94.0 million of secured indebtedness and $251.9 million of
unsecured indebtedness outstanding. The Debt Securities may be issued without
limit as to aggregate principal amount, in one or more series, in each case as
established from time to time in or pursuant to authority granted by a
resolution of the Board as established in the Indenture or in one or more
indentures supplemental to the Indenture. All Debt Securities of one series need
not be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series (Section
301).
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the 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 (Section 610). 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 (Section 609) and, except as
otherwise indicated herein, any action described herein to be taken by a 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 applicable Prospectus Supplement will set forth the price or prices at
which the Debt Securities to be offered will be issued and will describe the
following terms of such Debt Securities:
(a) the title of such Debt Securities;
(b) any limit on the aggregate principal amount of such Debt Securities
or the series of which they are a part;
4
<PAGE>
(c) the Person to whom any interest on a Debt Security shall be payable,
if other than the Person in whose name the Debt Security is registered;
(d) the date or dates on which the principal of any of such Debt
Securities will be payable;
(e) the rate or rates at which any of such Debt Securities will bear
interest, if any, the date or dates from which any such interest will
accrue, the Interest Payment Dates on which any such interest will be
payable and the Regular Record Date for any such interest payable on any
Interest Payment Date;
(f) the place or places where the principal of and any premium and
interest on any of such Debt Securities will be payable;
(g) the period or periods within which, the price or prices at which and
the terms and conditions on which any of such Debt Securities may be
redeemed, in whole or in part, at the option of the Company;
(h) the obligation, if any, of the Company to redeem or purchase any of
such Debt Securities pursuant to any sinking fund or analogous provision or
at the option of the Holder thereof, and the period or periods within which,
the price or prices at which, and the terms and conditions on which, any of
such Debt Securities will be redeemed or purchased, in whole or in part,
pursuant to any such obligation;
(i) the denominations in which any of such Debt Securities will be
issuable, if other than denominations of $1,000 and any integral multiple
thereof;
(j) if the amount of principal of or any premium or interest on any of
such Debt Securities may be determined with reference to an index or
pursuant to a formula, the manner in which such amounts will be determined;
(k) if other than the entire principal amount thereof, the portion of
the principal amount of any of such Debt Securities which will be payable
upon declaration of acceleration of the Maturity thereof;
(l) if the principal amount payable at the Stated Maturity of any of
such Debt Securities will not be determinable as of any one or more dates
prior to the Stated Maturity, the amount which will be deemed to be such
principal amount as of any such date for any purpose, including the
principal amount thereof which will be due and payable upon any Maturity
other than the Stated Maturity or which will be deemed to be Outstanding as
of any such date (or, in any such case, the manner in which such deemed
principal amount is to be determined);
(m) if applicable, that such Debt Securities, in whole or any specified
part, are defeasible pursuant to the provisions of the Indenture described
under "--Defeasance and Covenant Defeasance--Defeasance and Discharge" or
"--Defeasance and Covenant Defeasance--Defeasance of Certain Covenants," or
under both such captions;
(n) whether any of such Debt Securities will be issuable in whole or in
part in the form of one or more Global Debt Securities and, if so, the
respective Depositaries for such Global Debt Securities, the form of any
legend or legends to be borne by any such Global Debt Security in addition
to or in lieu of the legend referred to under "--Global Debt Securities"
and, if different from those described under such caption, any circumstances
under which any such Global Debt Security may be exchanged in whole or in
part for Debt Securities registered, and any transfer of such Global Debt
Security in whole or in part may be registered, in the names of Persons
other than the Depositary for such Global Debt Security or its nominee;
(o) any addition to or change in the Events of Default applicable to any
of such Debt Securities and any change in the right of the Trustee or the
Holders thereof to declare the principal amount of any of such Debt
Securities due and payable;
5
<PAGE>
(p) any addition to or change in the covenants in the Indenture
described under "--Certain Covenants" applicable to any of such Debt
Securities; and
(q) any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture (Section 301).
Debt Securities, including Original Issue Discount Securities, may be sold
at a substantial discount below their principal amount. Certain special United
States federal income tax considerations (if any) applicable to Debt Securities
sold at an original issue discount may be described in the applicable Prospectus
Supplement.
Except as described under "--Merger, Consolidation or Sale" or "--Certain
Covenants" or as may be set forth in any Prospectus Supplement, the Indenture
does not contain any provisions that would limit the ability of the Company to
incur indebtedness or that would afford Holders of the Debt Securities
protection in the event of (a) a highly leveraged or similar transaction
involving the Company, the management of the Company or any affiliate of any
such party, (b) a change of control or (c) a reorganization, restructuring,
merger or similar transaction involving the Company that may adversely affect
the Holders of the Debt Securities. In addition, subject to the limitations set
forth under "--Merger, Consolidation or Sale," the Company may, in the future,
enter into certain transactions, such as the sale of all or substantially all of
its assets or the merger or consolidation of the Company, that would increase
the amount of the Company's indebtedness or substantially reduce or eliminate
the Company's assets, which may have an adverse effect on the Company's ability
to service its indebtedness, including the Debt Securities. However,
restrictions on ownership and transfers of the Company's Common Stock designed
to preserve its status as a REIT and the provisions of the Company's Stockholder
Rights Plan each may act to prevent or hinder a change of control. Reference is
made to the applicable Prospectus Supplement for information with respect to any
deletions from, modifications of or additions to the events of default or
covenants that are described below, including any addition of a covenant or
other provision providing event risk or similar protection.
DENOMINATIONS, REGISTRATION AND TRANSFER
The Debt Securities of each series will be issuable only in fully registered
form, without coupons, and, unless otherwise specified in the applicable
Prospectus Supplement, only in denominations of $1,000 and integral multiples
thereof (Section 302).
At the option of the Holder, subject to the terms of the Indenture and the
limitations applicable to Global Debt Securities, Debt Securities of each series
will be exchangeable for other Debt Securities of the same series of any
authorized denomination and of a like tenor and aggregate principal amount
(Section 305).
Subject to the terms of the Indenture and the limitations applicable to
Global Debt Securities, Debt Securities may be presented for exchange as
provided above or for registration of transfer (duly endorsed or with the form
of transfer endorsed thereon duly executed) at the office of the Security
Registrar or at the office of any transfer agent designated by the Company for
such purpose. No service charge will be made for any registration of transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith. Such transfer or exchange will be effected upon the Security
Registrar or such transfer agent, as the case may be, being satisfied with the
documents of title and identity of the person making the request. The Company
has appointed the Trustee as Security Registrar. Any transfer agent (in addition
to the Security Registrar) initially designated by the Company for any Debt
Securities will be named in the applicable Prospectus Supplement (Section 305).
The Company may at any time designate additional transfer agents or rescind
the designation of any transfer agent or approve a change in the office through
which any transfer agent acts, except that the
6
<PAGE>
Company will be required to maintain a transfer agent in each Place of Payment
for the Debt Securities of each series (Section 1002).
If the Debt Securities of any series (or of any series and specified terms)
are to be redeemed in part, the Company will not be required to (a) issue,
register the transfer of or exchange any Debt Security of that series (or of
that series and specified terms, as the case may be) during a period beginning
at the opening of business 15 days before the day of mailing of a notice of
redemption of any such Debt Security that may be selected for redemption and
ending at the close of business on the day of such mailing, (b) register the
transfer of or exchange any Debt Security so selected for redemption, in whole
or in part, except the unredeemed portion of any such Debt Security being
redeemed in part or (c) to issue, register the transfer of or exchange any Debt
Security that has been surrendered for payment at the option of the Holder,
except the portion, if any, of such Debt Security not to be so repaid (Section
305).
GLOBAL DEBT SECURITIES
Some or all of the Debt Securities of any series may be represented, in
whole or in part, by one or more Global Debt Securities which will have an
aggregate principal amount equal to that of the Debt Securities represented
thereby. Each Global Debt Security will be registered in the name of a
Depositary or a nominee thereof identified in the applicable Prospectus
Supplement, will be deposited with such Depositary or nominee or a custodian
therefor and will bear a legend regarding the restrictions on exchanges and
registration of transfer thereof referred to below and any such other matters as
may be provided for pursuant to the Indenture (Section 305).
Notwithstanding any provision of the Indenture or any Debt Security
described herein, no Global Debt Security may be exchanged in whole or in part
for Debt Securities registered, and no transfer of a Global Debt Security in
whole or in part may be registered, in the name of any Person other than the
Depositary for such Global Debt Security or any nominee of such Depositary
unless (a) the Depositary has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Debt Security or has ceased to
be qualified to act as such as required by the Indenture, (b) there shall have
occurred and be continuing an Event of Default with respect to the Debt
Securities represented by such Global Debt Security or (c) there shall exist
such circumstances, if any, in addition to or in lieu of those described above
as may be described in the applicable Prospectus Supplement (Section 305). All
securities issued in exchange for a Global Debt Security or any portion thereof
will be registered in such names as the Depositary may direct (Sections 204 and
305).
As long as the Depositary, or its nominee, is the registered Holder of a
Global Debt Security, the Depositary or such nominee, as the case may be, will
be considered the sole owner and Holder of such Global Debt Security and the
Debt Securities represented thereby for all purposes under the Debt Securities
and the Indenture (Section 308). Except in the limited circumstances referred to
above, owners of beneficial interests in a Global Debt Security will not be
entitled to have such Global Debt Security or any Debt Securities represented
thereby registered in their names, will not receive or be entitled to receive
physical delivery of certificated Debt Securities in exchange therefor and will
not be considered to be the owners or Holders of such Global Debt Security or
any Debt Securities represented thereby for any purpose under the Debt
Securities or the Indenture. All payments of principal of and any premium and
Interest on a Global Debt Security will be made to the Depositary or its
nominee, as the case may be, as the Holder thereof. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in definitive form. These laws may impair the
ability to transfer beneficial interests in a Global Debt Security.
Ownership of beneficial interests in a Global Debt Security will be limited
to institutions that have accounts with the Depositary or its nominee
("participants") and to persons that may hold beneficial interests through
participants. In connection with the issuance of any Global Debt Security, the
Depositary will credit, on its book-entry registration and transfer system, the
respective principal amounts of Debt
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Securities represented by the Global Debt Security to the accounts of its
participants. Ownership of beneficial interests in a Global Debt Security will
be shown only on, and the transfer of those ownership interests will be effected
only through, records maintained by the Depositary (with respect to
participants' interests) or any such participant (with respect to interests of
persons held by such participants on their behalf). Payments, transfers,
exchanges and other matters relating to beneficial interests in a Global Debt
Security may be subject to various policies and procedures adopted by the
Depositary from time to time. None of the Company, the Trustee or any agent of
the Company or the Trustee will have any responsibility or liability for any
aspect of the Depositary's or any participant's records relating to, or for
payments made on account of, beneficial interests in a Global Debt Security, or
for maintaining, supervising or reviewing any records relating to such
beneficial interests.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing-house or next-day funds. In contrast, beneficial interests
in a Global Debt Security, in all cases, will trade in the Depositary's
settlement system, in which secondary market trading activity in those
beneficial interests will be required by the Depositary to settle in immediately
available funds. The Company cannot predict the effect, if any, that settlement
in immediately available funds would have on trading activity in such beneficial
interests. Also, settlement for purchases of beneficial interests in a Global
Debt Security upon the original issuance thereof will be required to be made in
immediately available funds.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, payment
of interest on a Debt Security on any Interest Payment Date will be made to the
Person in whose name such Debt Security (or one or more Predecessor Debt
Securities) is registered at the close of business on the Regular Record Date
for such interest (Section 307).
Unless otherwise indicated in the applicable Prospectus Supplement,
principal of and any premium and interest on the Debt Securities of a particular
series will be payable at the office of such Paying Agent or Paying Agents as
the Company may designate for such purpose from time to time, except that at the
option of the Company payment of any interest may be made by check mailed to the
address of the Person entitled thereto as such address appears in the Security
Register. Unless otherwise indicated in the applicable Prospectus Supplement,
the corporate trust office of the Trustee will be designated as the Company's
sole Paying Agent for payments with respect to Debt Securities of each series.
Any other Paying Agents initially designated by the Company for the Debt
Securities of a particular series will be named in the applicable Prospectus
Supplement. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agent or approve a change in the office
through which any Paying Agent acts, except that the Company will be required to
maintain a Paying Agent in each Place of Payment for the Debt Securities of a
particular series (Section 1002).
All moneys paid by the Company to a Paying Agent for the payment of the
principal of, or any premium or interest on, any Debt Security that remain
unclaimed at the end of two years after such principal, premium or interest has
become due and payable will be repaid to the Company, and the Holder of such
Debt Security thereafter may look only to the Company for payment thereof
(Section 103).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable regular record
date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of such Debt Security not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner, all as more completely described in the applicable
Prospectus Supplement (Section 307).
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MERGER, CONSOLIDATION OR SALE
The Company may not consolidate with or merge into, or convey, transfer or
lease its properties and assets substantially as an entirety to, any Person (a
"successor Person"), and may not permit any Person to merge into, or convey,
transfer or lease its properties and assets substantially as an entirety to, the
Company, unless (a) the successor Person (if any) is a corporation, partnership
or trust organized and validly existing under the laws of any domestic
jurisdiction and assumes, by a supplemental indenture, the Company's obligations
on the Debt Securities and under the Indenture, (b) immediately after giving
effect to the transaction, and treating any indebtedness which becomes an
obligation of the Company or any Subsidiary as a result of the transaction as
having been incurred by it at the time of the transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would become an Event
of Default, shall have occurred and be continuing and (c) certain other
conditions are met (Section 801).
CERTAIN COVENANTS
EXISTENCE. Except as permitted under "--Merger, Consolidation or Sale," the
Company will be required to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
provided, however, that the Company shall not be required to preserve any right
or franchise if it determines that the preservation thereof is no longer
desirable in the conduct of its business and that the loss thereof is not
disadvantageous in any material respect to the Holders of the Debt Securities
(Section 1005).
MAINTENANCE OF PROPERTIES. The Company will be required to cause all
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 to 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 shall not be prevented from discontinuing
the operation or maintenance of any of its properties if such discontinuance is,
in the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders (Section 1006).
INSURANCE. The Company will be required to, and to cause each of its
Subsidiaries to, keep all of its insurable properties insured against loss or
damage with insurers of recognized responsibility in commercially reasonable
amounts and types (Section 1008).
PAYMENT OF TAXES AND OTHER CLAIMS. The Company will be required to pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (b) 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 1007).
PROVISION OF FINANCIAL INFORMATION. Whether or not the Company is subject
to Section 13 or Section 15(d) of the Exchange Act and for so long as any Debt
Securities are outstanding, the Company will, to the extent permitted under the
Exchange Act, file with the Commission the annual reports, quarterly reports and
other documents which the Company would have been required to file with the
Commission pursuant to such Section 13 or Section 15(d) (the "Financial
Statements") if the Company were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates") by
which the Company would have been required so to file such documents if the
Company were so subject. The Company will also in any event (a) within 15 days
of each Required Filing
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Date (i) transmit by mail to all Holders of Debt Securities whose names appear
in the Security Register for such Debt Securities, as their names and addresses
appear in the Security Register for such Debt Securities, without cost to such
Holders, copies of the annual reports and quarterly reports which the Company
would have been required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act if the Company were subject to such Sections
and (ii) file with any Trustee copies of the annual reports, quarterly reports
and other documents which the Company would have been required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act if the
Company were subject to such Sections and (b) if filing such documents by the
Company with the Commission is not permitted under the Exchange Act, promptly
upon written request and payment of the reasonable cost of duplication and
delivery, supply copies of such documents to any prospective Holder (Section
1010).
LIMITATIONS ON INCURRENCE OF INDEBTEDNESS. The Company will not, and will
not permit any Subsidiary to, incur any Indebtedness (as defined below), other
than intercompany debt representing Indebtedness to which the only parties are
the Company, the Company and any of their Subsidiaries (but only so long as such
Indebtedness is held solely by any of the Company, the Company and any
Subsidiary) that is subordinate in right of payment to Outstanding Debt
Securities, if, immediately after giving effect to the incurrence of such
additional Indebtedness, the aggregate principal amount of all outstanding
Indebtedness of the Company and its Subsidiaries on a consolidated basis is
greater than 60% of the sum of (a) Total Assets (as defined below) as of the end
of the calendar quarter covered in the Company's Annual Report on Form 10-K or
Quarterly Report on Form 10-Q, as the case may be, most recently filed with the
Trustee (or such reports of the Company if filed by the Company with the Trustee
in lieu of filing its own reports) prior to the incurrence of such additional
Indebtedness and (b) the increase in Total Assets from the end of such quarter
including, without limitation, any increase in Total Assets resulting from the
incurrence of such additional Indebtedness (such increase, together with the
Total Assets, is referred to as "Adjusted Total Assets") (Section 1009).
In addition to the foregoing limitation on the incurrence of Indebtedness,
the Company will not, and will not permit any Subsidiary to, incur any
Indebtedness if the ratio of Consolidated Income Available for Debt Service to
the Annual Service Charge (in each case as defined below) for the four
consecutive fiscal quarters most recently ended prior to the date on which such
additional Indebtedness is to be incurred shall have been less than 1.5 to 1, on
a pro forma basis, after giving effect to the incurrence of such Indebtedness
and to the application of the proceeds therefrom and calculated on the
assumption that (a) such Indebtedness and any other Indebtedness incurred by the
Company or its Subsidiaries since the first day of such four-quarter period and
the application of the proceeds therefrom, including to refinance other
Indebtedness, had occurred at the beginning of such period, (b) the repayment or
retirement of any other Indebtedness by the Company or its Subsidiaries since
the first day of such four- quarter period had occurred at the beginning of such
period (except that, in making such computation, the amount of Indebtedness
under any revolving credit facility shall be computed based upon the average
daily balance of such Indebtedness during such period), (c) the income earned on
any increase in Adjusted Total Assets since the end of such four-quarter period
had been earned on an annualized basis, during such period, and (d) in the case
of any acquisition or disposition by the Company or any Subsidiary of any asset
or group of assets since the first day of such four-quarter period, including,
without limitation, by merger, stock purchase or sale, or asset purchase or
sale, such acquisition or disposition or any related repayment of Indebtedness
had occurred as of the first day of such period with appropriate adjustments
with respect to such acquisition or disposition being included in such pro forma
calculation (Section 1009). Further, the Company will not, and will not permit
any Subsidiary to, incur any Secured Indebtedness of the Company or any
Subsidiary if, immediately after giving effect to the incurrence of such
additional Secured Indebtedness, the aggregate principal amount of all
outstanding Secured Indebtedness of the Company and its Subsidiaries on a
consolidated basis would be greater than 40% of Adjusted Total Assets. As used
herein, "Secured Indebtedness" means Indebtedness secured by any mortgage, lien,
charge, encumbrance, trust, deed, deed of trust, deed to secure debt, security
agreement, pledge, conditional sale or other title
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retention agreement, capitalized lease, or other like agreement granting or
conveying security title to or a security interest in real property or other
tangible assets.
For purposes of the foregoing provisions regarding the limitation on the
incurrence of Indebtedness, Indebtedness shall be deemed to be "incurred" by the
Company or a Subsidiary whenever the Company and its Subsidiary shall create,
assume, guarantee or otherwise become liable in respect thereof (Section 1009).
Maintenance of Total Unencumbered Assets. For so long as there are
Outstanding any Debt Securities (other than Debt Securities that are not, by
their terms, entitled to the benefit of this covenant), the Company is required
to maintain Total Unencumbered Assets (as defined below) of not less than 150%
of the aggregate outstanding principal amount of all outstanding Unsecured
Indebtedness (as defined below) (Section 1009).
As used herein:
"Annual Service Charge" as of any date means the amount which is expensed in
any 12-month period for interest on Indebtedness of the Company and its
Subsidiaries.
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (a) plus amounts which have been deducted for (i)
interest on Indebtedness of the Company and its Subsidiaries, (ii) provision for
taxes of the Company and its Subsidiaries based on income, (iii) amortization of
Indebtedness discount, (iv) losses and provisions for losses on properties, (v)
depreciation and amortization, (vi) the effect of any noncash charge resulting
from a change in accounting principles in determining Consolidated Net Income
for such period, (vii) amortization of deferred charges and (viii) the effect of
net losses of joint ventures in which the Company or any Subsidiary owns an
interest to the extent not requiring a use of cash, and (b) less amounts which
have been included for (i) gains from sales or dispositions of properties and
(ii) the effect of net income of joint ventures in which the Company or any
Subsidiary owns an interest to the extent not providing a source of cash.
"Consolidated Net Income" for any period means the amount of consolidated
net income (or loss) of the Company and its Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Indebtedness" of the Company or any Subsidiary means any indebtedness of
the Company or such Subsidiary, as applicable, whether or not contingent, in
respect of (a) borrowed money evidenced by bonds, notes, debentures or similar
instruments, (b) indebtedness secured by a mortgage, pledge, lien, charge,
encumbrance of any security interest existing on property owned by the Company
or such Subsidiary, (c) the reimbursement obligations, contingent or otherwise,
in connection with any letters of credit actually issued or amounts representing
the balance that constitutes an accrued expense or trade payable or (d) any
lease of property by the Company or such Subsidiary as lessee which is reflected
in the Company's consolidated balance sheet as a capitalized lease in accordance
with generally accepted accounting principles, in the case of items of
indebtedness under (a) through (c) above to the extent that any such items
(other than letters of credit) would appear as a liability on the Company's
consolidated balance sheet in accordance with generally accepted accounting
principles, and also includes, to the extent not otherwise included, any
obligation by the Company or such Subsidiary to be liable for, or to pay, as
obligor, guarantor or otherwise (other than for purposes of collection in the
ordinary course of business), indebtedness of another person (other than the
Company or any Subsidiary).
"Recourse Indebtedness" means Indebtedness, other than Secured Indebtedness
as to which Secured Indebtedness the liability of the obligor thereon is limited
to its interest in the collateral securing such Secured Indebtedness, provided
that no such Secured Indebtedness shall constitute Recourse Indebtedness by
reason of provisions therein for imposition of full recourse liability on the
obligor for certain wrongful acts, environmental liabilities, or other customary
exclusions from the scope of so-called "non-recourse" provisions.
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"Secured Indebtedness" means Indebtedness secured by any mortgage, lien,
charge, encumbrance, trust, deed, deed of trust, deed to secure debt, security
agreement, pledge, conditional sale or other title retention agreement,
capitalized lease, or other like agreement granting or conveying security title
to or a security interest in real property or other tangible assets. Secured
Indebtedness shall be deemed to be incurred (a) on the date the Company or any
Subsidiary creates, assumes, guarantees or otherwise becomes liable in respect
thereof if it is secured in the manner described in the preceding sentence on
such date or (b) on the date the Company or any Subsidiary first secures such
Indebtedness in the manner described in the preceding sentence if such
Indebtedness was not so secured on the date it was incurred.
"Subsidiary" means (a) a corporation, partnership, limited liability
company, trust, real estate investment trust or other entity a majority of the
voting power of the voting equity securities of which are owned, directly or
indirectly, by the Company or by one or more Subsidiaries of the Company; (b) a
partnership, limited liability company, trust, real estate investment trust or
other entity not treated as a corporation for federal income tax purposes the
majority of the value of the equity interests of which are owned, directly or
indirectly, by the Company or by one or more other Subsidiaries of the Company;
and (c) which would be a Significant Subsidiary (as defined herein, except that
the investment, asset and equity thresholds for purposes of this definition
shall be 5%), the majority of the value of the equity interests of which are
owned, directly or indirectly, by the Company or by one or more Subsidiaries of
the Company.
"Total Assets" as of any date means the sum of (a) Undepreciated Real Estate
Assets and (b) all other assets of the Company and its Subsidiaries on a
consolidated basis determined in accordance with generally accepted accounting
principles (but excluding intangibles and straight-line rents receivable).
"Total Unencumbered Assets" means the sum of (a) those Undepreciated Real
Estate Assets which have not been pledged, mortgaged or otherwise encumbered by
the owner thereof to secure Indebtedness, excluding infrastructure assessment
bonds and (b) all other assets of the Company and its Subsidiaries determined in
accordance with generally accepted accounting principles (but excluding
intangibles and straight-line rents receivable) which have not been pledged,
mortgaged or otherwise encumbered by the owner thereof to secure Indebtedness.
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of the Company and its
Subsidiaries on such date, before depreciation and amortization, determined on a
consolidated basis in accordance with generally accepted accounting principles.
"Unsecured Indebtedness" means Indebtedness which is (a) not subordinated to
any other Indebtedness and (b) not secured by any mortgage, lien, charge,
pledge, encumbrance or security interest of any kind upon any of the properties
of the Company or any Subsidiary.
ADDITIONAL COVENANTS. Any additional or different covenants of the Company
with respect to any series of Debt Securities will be set forth in the
applicable Prospectus Supplement.
EVENTS OF DEFAULT
Each of the following will constitute an Event of Default under the
Indenture with respect to Debt Securities of any series: (a) failure to pay any
interest on any Debt Securities of that series when due, and continuance of such
failure for a period of 30 days; (b) failure to pay principal of or any premium
on any Debt Security of that series when due; (c) failure to deposit any sinking
fund payment, when due, in respect of any Debt Security of that series; (d)
failure to perform any other covenant of the Company in the Indenture (other
than a covenant included in the Indenture solely for the benefit of a series
other than that series), that has continued for 60 days after written notice has
been given by the Trustee, or the Holders of at least 25% in aggregate principal
amount of the Outstanding Debt Securities of that series, as provided in the
Indenture; (e) failure to pay when due (subject to any applicable grace period)
the principal of, or acceleration of, any Recourse Indebtedness of the Company,
if, in the case of any such
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failure, such Recourse Indebtedness has not been discharged or, in the case of
any such acceleration, such indebtedness has not been discharged or such
acceleration has not been rescinded or annulled, in each case within 10 days
after written notice has been given by the Trustee, or the Holders of at least
25% in aggregate principal amount of the Outstanding Debt Securities of that
series, as provided in the Indenture, if the aggregate outstanding principal
amount of such Recourse Indebtedness under the instrument with respect to which
such default or acceleration has occurred exceeds $5 million; (f) certain events
of bankruptcy, insolvency or reorganization of the Company or any Significant
Subsidiary or any of their respective property; and (g) any other event of
default provided with respect to a particular series of Debt Securities (Section
501).
If an Event of Default (other than an Event of Default described in clause
(f) above) with respect to the Debt Securities of any series at the time
Outstanding shall occur and be continuing, either the Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Debt Securities of
that series by notice as provided in the Indenture may declare the principal
amount of the Debt Securities of that series (or, in the case of any Debt
Security that is an Original Issue Discount Security or the principal amount of
which is not then determinable, such portion of the principal amount of such
Debt Security, or such other amount in lieu of such principal amount, as may be
specified in the terms of such Debt Security) to be due and payable immediately.
If an Event of Default described in clause (f) above with respect to the Debt
Securities of any series at the time Outstanding shall occur, the principal
amount of all the Debt Securities of that series (or, in the case of any such
Original Issue Discount Security or other Debt Security, such specified amount)
will automatically, and without any action by the Trustee or any Holder, become
immediately due and payable. After any such acceleration, but before a judgment
or decree based on acceleration, the Holders of a majority in aggregate
principal amount of the Outstanding Debt Securities of that series may, under
certain circumstances, rescind and annul such acceleration if all Events of
Default, other than the non-payment of accelerated principal (or other specified
amount), have been cured or waived as provided in the Indenture (Section 502).
For information as to waiver of defaults, see "--Modification and Waiver."
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the Holders, unless such Holders
shall have offered to the Trustee reasonable indemnity (Section 603). Subject to
such provisions for the indemnification of the Trustee, the Holders of a
majority in aggregate principal amount of the Outstanding Debt Securities of any
series will 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 Debt Securities of that
series (Section 512).
No Holder of a Debt Security of any series will have any right to institute
any proceeding with respect to the Indenture, or for the appointment of a
receiver or a trustee, or for any other remedy thereunder, unless (a) such
Holder has previously given to the Trustee written notice of a continuing Event
of Default with respect to the Debt Securities of that series, (b) the Holders
of at least 25% in aggregate principal amount of the Outstanding Debt Securities
of that series have made written request, and such Holder or Holders have
offered reasonable indemnity, to the Trustee to institute such proceeding as
trustee and (c) the Trustee has failed to institute such proceeding, and has not
received from the Holders of a majority in aggregate principal amount of the
Outstanding Debt Securities of that series a direction inconsistent with such
request, within 60 days after such notice, request and offer (Section 507).
However, such limitations do not apply to a suit instituted by a Holder of a
Debt Security for the enforcement of payment of the principal of or any premium
or interest on such Debt Security on or after the applicable due date specified
in such Debt Security (Section 508).
Within 120 days after the close of each fiscal year, the Company will be
required to furnish to the Trustee a statement by certain of the Company's
officers as to whether the Company, to their knowledge, is
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in default in the performance or observance of any of the terms, provisions and
conditions of the Indenture and, if so, specifying all such known defaults
(Section 1004).
MODIFICATION AND WAIVER
Modifications and amendments of the Indenture may be made by the Company and
the Trustee with the consent of the Holders of a majority in principal amount of
the Outstanding Debt Securities of each series affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the Holder of each Outstanding Debt Security affected
thereby, (a) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Debt Security, (b) reduce the principal
amount of, or any premium or interest on, any Debt Security, (c) reduce the
amount of principal of an Original Issue Discount Security or any other Debt
Security payable upon acceleration of the Maturity thereof, (d) change the place
or currency of payment of principal of, or any premium or interest on, any Debt
Security, (e) impair the right to institute suit for the enforcement of any
payment on or with respect to any Debt Security, (f) reduce the percentage in
principal amount of Outstanding Debt Securities of any series, the consent of
whose Holders is required for modification or amendment of the Indenture, (g)
reduce the percentage in principal amount of Outstanding Debt Securities of any
series necessary for waiver of compliance with certain provisions of the
Indenture or for waiver of certain defaults or (h) modify such provisions with
respect to modification and waiver (Section 902).
The Holders of a majority in principal amount of the Outstanding Debt
Securities of any series may waive compliance by the Company with certain
restrictive provisions of the Indenture (Section 1011). The Holders of a
majority in principal amount of the Outstanding Debt Securities of any series
may waive any past default under the Indenture, except a default in the payment
of principal, premium or interest and certain covenants and provisions of the
Indenture that cannot be amended without the consent of the Holder of each
Outstanding Debt Security of such series affected (Section 513).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of the Outstanding Debt Securities have given or
taken any direction, notice, consent, waiver or other action under the Indenture
as of any date (a) the principal amount of an Original Issue Discount Security
that will be deemed to be Outstanding will be the amount of the principal
thereof that would be due and payable as of such date upon acceleration of the
Maturity thereof to such date and (b) if, as of such date, the principal amount
payable at the Stated Maturity of a Debt Security is not determinable (for
example, because it is based on an index), the principal amount of such Debt
Security deemed to be Outstanding as of such date will be an amount determined
in the manner prescribed for such Debt Security. Certain Debt Securities,
including those for whose payment or redemption money has been deposited or set
aside in trust for the Holders and those that have been fully defeased pursuant
to Section 1302, will not be deemed to be Outstanding (Section 101).
Except in certain limited circumstances, the Company will be entitled to set
any day as a record date for the purpose of determining the Holders of
Outstanding Debt Securities of any series entitled to give or take any
direction, notice, consent, waiver or other action under the Indenture, in the
manner and subject to the limitations provided in the Indenture. In certain
limited circumstances, the Trustee will be entitled to set a record date for
action by Holders. If a record date is set for any action to be taken by Holders
of a particular series, such action may be taken only by persons who are Holders
of Outstanding Debt Securities of that series on the record date. To be
effective, such action must be taken by Holders of the requisite principal
amount of such Debt Securities within a specified period following the record
date. For any particular record date, this period will be 180 days or such
shorter period as may be specified by the Company (or the Trustee, if it set the
record date), and may be shortened or lengthened (but not beyond 180 days) from
time to time (Section 104).
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Modifications and amendments of the Indenture may be made by the Company and
the Trustee without the consent of any Holders of Debt Securities for any of the
following purposes: (a) to evidence the succession of another person to the
Company and the assumption by such successor of the covenants of the Company in
the Indenture and the Debt Securities; (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 the Indenture;
(c) to add events of default for the benefit of the Holders of all or any series
of Debt Securities; (d) to add to or change any provisions of the Indenture as
necessary to permit or facilitate the issuance of Debt Securities in
uncertificated form; (e) to add to, change or eliminate any of the provisions of
the Indenture with respect to one or more series of Debt Securities, so long as
the changes (i) do not (x) apply to any Debt Securities of any series created
prior to such modification or amendment and entitled to the benefit of such
provision or (y) modify the rights of the holder of any such Debt Security with
respect to such provision, or (ii) will only become effective when there is no
such Debt Security Outstanding; (f) to secure the Debt Securities; (g) to
establish the form or terms of Debt Securities of any series as permitted in the
Indenture; or (h) to provide for the acceptance of appointment by a successor
Trustee (Section 901).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities (Section 1501). A meeting will be permitted to be called at any
time by the Trustee, and also, upon request, by the Company or the Holders of at
least 10% in principal amount of the Outstanding Debt Securities, in any such
case upon notice given as provided in the Indenture (Section 1502). Except for
any consent that must be given by the Holder of each Debt Security affected by
certain modifications and amendments of the Indenture, any resolution presented
at a meeting or adjourned meeting duly reconvened at which a quorum is present
will be permitted to 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 may be adopted at a meeting or adjourned meeting
duly reconvened at which a quorum is present by the affirmative vote of the
Holders of such specified percentage in principal amount of the Outstanding Debt
Securities. Any resolution passed or decision taken at any meeting of Holders of
Debt Securities duly held in accordance with the Indenture will be binding on
all Holders of Debt Securities of such 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;
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 (Section 1504).
Notwithstanding the foregoing provisions, if any action is to be taken at a
meeting of Holders of Debt Securities of any series with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
the 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 that vote in favor
of such request, demand, authorization, direction, notice, consent, waiver or
other action shall be taken into account in determining whether such request,
demand, authorization, direction, notice, consent, waiver or other action has
been made, given or taken under the Indenture (Section 1504).
DEFEASANCE AND COVENANT DEFEASANCE
If and to the extent indicated in the applicable Prospectus Supplement, the
Company may elect, at its option at any time, to have the provisions of Section
1302 of the Indenture, relating to defeasance and
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<PAGE>
discharge of indebtedness, or Section 1303, relating to defeasance of certain
restrictive covenants in the Indenture, applied to the Debt Securities of any
series, or to any specified part of a series (Section 1301).
DEFEASANCE AND DISCHARGE
The Indenture provides that, upon the Company's exercise of its option (if
any) to have Section 1302 applied to any Debt Securities, the Company will be
discharged from all its obligations with respect to such Debt Securities (except
for certain obligations to exchange or register the transfer of Debt Securities,
to replace stolen, lost or mutilated Debt Securities, to maintain paying
agencies and to hold moneys for payment in trust) upon the deposit in trust for
the benefit of the Holders of such Debt Securities of money or U.S. Government
Obligations, or both, which, through the payment of principal and interest in
respect thereof in accordance with their terms, will provide money in an amount
sufficient to pay the principal of and any premium and interest on such Debt
Securities on the respective Stated Maturities in accordance with the terms of
the Indenture and such Debt Securities. Such defeasance or discharge may occur
only if, among other things, the Company has delivered to the Trustee an Opinion
of Counsel to the effect that the Company has received from, or there has been
published by, the United States Internal Revenue Service a ruling, or there has
been a change in tax law, in either case to the effect that Holders of such Debt
Securities will not recognize gain or loss for federal income tax purposes as a
result of such deposit, defeasance and discharge and will be subject to federal
income tax on the same amount, in the same manner and at the same times as would
have been the case if such deposit, defeasance and discharge were not to occur
(Sections 1302 and 1304).
DEFEASANCE OF CERTAIN COVENANTS
The Indenture provides that, upon the Company's exercise of its option (if
any) to have Section 1303 applied to any Debt Securities, the Company may omit
to comply with certain restrictive covenants, including those described under
"Certain Covenants," in the last sentence under "--Merger, Consolidation or
Sale" and any that may be described in the applicable Prospectus Supplement, and
the occurrence of certain Events of Default, which are described above in clause
(d) (with respect to such restrictive covenants) and clauses (e) and (g) under
"--Events of Default" and any that may be described in the applicable Prospectus
Supplement, will be deemed not to be or result in an Event of Default, in each
case with respect to such Debt Securities. The Company, in order to exercise
such option, will be required to deposit, in trust for the benefit of the
Holders of such Debt Securities, money or U.S. Government Obligations, or both,
which, through the payment of principal and interest in respect thereof in
accordance with their terms, will provide money in an amount sufficient to pay
the principal of and any premium and interest on such Debt Securities on the
respective Stated Maturities in accordance with the terms of the Indenture and
such Debt Securities. The Company will also be required, among other things, to
deliver to the Trustee an Opinion of Counsel to the effect that Holders of such
Debt Securities will not recognize gain or loss for federal income tax purposes
as a result of such deposit and defeasance of certain obligations and will be
subject to federal income tax on the same amount, in the same manner and at the
same times as would have been the case if such deposit and defeasance were not
to occur. In the event the Company exercised this option with respect to any
Debt Securities and such Debt Securities were declared due and payable because
of the occurrence of any Event of Default, the amount of money and U.S.
Government Obligations so deposited in trust would be sufficient to pay amounts
due on such Debt Securities at the time of their respective Stated Maturities
but may not be sufficient to pay amounts due on such Debt Securities upon any
acceleration resulting from such Event of Default. In such case, the Company
would remain liable for such payments (Sections 1303 and 1304).
"U.S. Government Obligations" means securities which are (a) direct
obligations of the United States of America 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 a agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall
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<PAGE>
also include a depository receipt issued by a bank or trust company as custodian
with respect to any such U.S. Government Obligation or a specific payment of
interest on or principal of any such U.S. Government Obligation held by such
custodian of 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 U.S. Government
Obligation or the specific payment of interest on or principal of the U.S.
Government Obligation evidenced by such depository receipt (Section 1304).
NOTICES
Notices to Holders of Debt Securities will be given by mail to the addresses
of such Holders as they may appear in the Security Register (Sections 101 and
106).
TITLE
The Company, the Trustee and any agent of the Company or the Trustee may
treat the Person in whose name a Debt Security is registered as the absolute
owner thereof (whether or not such Debt Security may be overdue) for the purpose
of making payment and for all other purposes (Section 308).
NO CONVERSION RIGHTS
The Debt Securities will not be convertible into or exchangeable for any
capital stock of the Company or equity interest in the Company.
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<PAGE>
DESCRIPTION OF STOCK
The following is a summary of certain features of the Company's stock. This
summary does not purport to be complete and is subject to and is qualified in
its entirety by reference to the Charter and Bylaws, copies of which are
exhibits to the Registration Statement of which this Prospectus is a part. See
"Available Information."
GENERAL
Under the Charter, the Company is authorized to issue a total of 200 million
shares of stock, consisting of 175 million shares of Common Stock, par value
$.001 per share, and 25 million shares of Preferred Stock, par value $.001 per
share. The Company is a Maryland corporation. Under Maryland law, stockholders
generally are not responsible for the corporation's debts or obligations.
COMMON STOCK
All the shares of Common Stock offered by this Prospectus will be duly
authorized, fully paid and nonassessable. They will also be subject to the
ownership and transfer restrictions contained in the Charter (described under
"--Restrictions on Ownership and Transfer").
Subject to the preferential rights of any other shares or series of stock
and the REIT ownership provisions set forth in the Charter, holders of shares of
Common Stock are entitled to receive dividends on shares if, as and when
authorized and declared by the Board out of assets legally available for
distribution. Under the MGCL, a dividend or other distribution may not be made
if after giving effect to it (a) the corporation would not be able to pay its
debts as they become due in the usual course of business or (b) the
corporation's total assets would be less than the corporation's total
liabilities plus (unless the corporation's charter provides otherwise, which the
Charter does not) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of stockholders whose preferential rights upon dissolution are
superior to those receiving the distribution. Holders of shares of Common Stock
also are entitled to share ratably in the assets of the Company legally
available for distribution to its stockholders in the event of the Company's
liquidation, dissolution or winding-up after payment of, or adequate provision
for, all known debts and liabilities of the Company.
Subject to the REIT ownership provisions set forth in the Charter, 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. Except
as otherwise required by law or except as provided with respect to the Series B
Preferred Stock or any other class or series of stock, the holders of shares of
Common Stock possess the exclusive voting power of the Company. There is no
cumulative voting for the election of directors of the Company, which means that
the holders of a majority of the outstanding shares of Common Stock will be able
to elect all the directors for whom such holders vote, and the holders of the
remaining shares of Common Stock will not be able to elect any directors. As
explained under "--Preferred Stock," the holders of shares of Series B Preferred
Stock will have certain rights to elect directors.
Holders of shares of Common Stock have no conversion, sinking fund or
redemption rights or any preemptive rights to subscribe for any additional
securities of the Company. All shares of Common Stock have equal distribution,
liquidation and other rights, and have no preference or exchange rights.
Under the Maryland General Corporation Law (the "MGCL"), a corporation
generally cannot dissolve, amend its charter, merge, sell all or substantially
all of its assets, engage in a share exchange or engage in similar transactions
outside the ordinary course of business unless approved by the affirmative vote
of holders of at least two-thirds of the shares entitled to vote on the matter
or such lesser percentage (but not less than a majority of all of the votes to
be cast on the matter) as is set forth in the corporation's charter. The Charter
provides that, subject to the rights of any series of Preferred Stock then
outstanding,
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<PAGE>
such extraordinary transactions may be approved by the affirmative vote of a
majority of all of the votes entitled to be cast on such matters.
The transfer agent and registrar for the shares of Common Stock is First
Chicago Trust Company of New York.
PREFERRED STOCK
The following description of the terms of the Preferred Stock sets forth
certain general terms and provisions of the Preferred Stock to which a
Prospectus Supplement may relate. Specific terms of any series of Preferred
Stock offered by a Prospectus Supplement will be described in the Prospectus
Supplement relating to such series. The description set forth below is subject
to and qualified in its entirety by reference to the articles supplementary
establishing a particular series of Preferred Stock, which will be filed with
the SEC in connection with the offering of such series.
Under the Charter, the Board is authorized, without further stockholder
action, to provide for the issuance of up to 25 million shares of Preferred
Stock in one or more series (of which 2,272,727 shares are currently classified
as Series B Preferred Stock). Shares of Preferred Stock may be issued from time
to time, in one or more series, as authorized by the Board, subject to the
rights of holders of any series of Preferred Stock then outstanding. Prior to
the issuance of shares of each series, the Board is required by the MGCL and the
Charter to fix (subject to the express terms of any class or series of the
Company stock outstanding at the time and the ownership and transfer
restrictions contained in the Charter, described under "--Restrictions on
Transfer and Ownership") the terms, preferences, conversion, other rights,
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications and terms and conditions of redemption for each series. Such
rights, powers, restrictions and limitations could include the right to receive
specified dividend payments and payments on liquidation prior to any such
payments being made to the holders of shares of Common Stock. The Board could
also authorize the issuance of shares of Preferred Stock with terms and
conditions that could have the effect of discouraging a takeover or other
transaction in which holders of shares of Common Stock might receive a premium
for their shares over the then market price of such shares.
The rights, preferences, privileges, and restrictions, including dividend
rights, voting rights, conversion rights, terms of redemption, and liquidation
preferences, of the Preferred Stock of each series will be fixed or designated
by the Board pursuant to the articles supplementary. The specific terms of a
particular series of Preferred Stock offered hereby will be described in a
Prospectus Supplement relating to such series and will include the following:
(a) the maximum number of shares to constitute the series and the distinctive
designation thereof; (b) the annual dividend rate, if any, on shares of the
series (or the method of calculating such rate), whether such rate is fixed or
variable or both, the date or dates from which dividends will begin to accrue or
accumulate, and whether dividends will be cumulative; (c) whether the shares of
the series will be redeemable and, if so, the price at and the terms and
conditions on which such shares may be redeemed, including the time during which
such shares may be redeemed and any accumulated dividends thereon that the
holders of such shares shall be entitled to receive upon the redemption thereof;
(d) the liquidation preference, if any, applicable to shares of the series; (e)
whether the shares of the series will be subject to operation of a retirement or
sinking fund and, if so, the extent to and manner in which any such fund shall
be applied to the purchase or redemption of such shares for retirement or for
other corporate purposes, and the terms and provisions relating to the operation
of such fund; (f) the terms and conditions, if any, on which the shares of the
series will be convertible into, or exchangeable for, shares of any other class
or classes of capital stock of the Company or another corporation or any series
of any other class or classes, or of any other series of the same class,
including the price or rate of conversion or exchange and the method, if any, of
adjusting the same; (g) the voting rights, if any, on the shares of the series;
and (h) any other preferences and relative, participating, optional, or other
special rights or qualifications, limitations, or restrictions thereof.
The Preferred Stock will, when issued, be fully paid and nonassessable.
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<PAGE>
The transfer agent, registrar, and dividend disbursement agent for a series
of Preferred Stock will be selected by the Company and will be described in the
applicable Prospectus Supplement. The registrar for shares of Preferred Stock
will send notices to stockholders of any meetings at which holders of the
Preferred Stock have the right to elect directors of the Company or to vote on
any other matter.
DESIGNATED PREFERRED STOCK
In connection with the formation and initial capitalization of the Company,
the Company issued a total of one million shares of Series A Preferred to the
Merged Trusts and Trust 83. These shares were cancelled or redeemed in
connection with the Merger and no shares of the Series A Preferred Stock are
outstanding.
The Company issued a total of 2,272,727 shares of Series B Preferred Stock
for a total purchase price of $35 million or $15.40 per share on February 23,
1996. The Board has established the rights, powers, restrictions and limitations
of the Series B Preferred Stock. The holders of shares of Series B Preferred
Stock are entitled to receive cumulative dividends: (a) for the first eight
quarterly dividend periods after issuance, in an amount per share equal to the
greater of (i) $0.31 per quarter or (ii) 103% (as adjusted from time to time by
the Board as the conversion price of the Series B Preferred Stock is adjusted
from time to time) of the quarterly dividend payable per share of Common Stock
during that period (determined as of the date on which the applicable Common
Stock dividend is authorized) and (b) beginning with the ninth quarterly
dividend period after issuance, in an amount per share equal to the greater of
(i) the quarterly dividend payable on the Series B Preferred Stock for the
eighth quarterly dividend period after issuance or (ii) the dividend paid per
share of Common Stock (determined as of the date on which the Common Stock
dividend for the corresponding Common Stock dividend period is authorized and as
adjusted from time to time by the Board as the conversion price of the Series B
Preferred Stock is adjusted from time to time). If the annual dividend rate is
$1.24 per share on the Series B Preferred Stock, the total dividend would equal
approximately $2.8 million per year.
The holders of shares of Series B Preferred Stock also are entitled to a
liquidation preference of $15.40 per share (equivalent to the initial purchase
price) plus accumulated unpaid dividends if the Company is liquidated or sold
prior to the redemption or conversion of those shares. The rights of holders of
Series B Preferred Stock to cumulative dividends and the liquidation preference
are senior to the rights of holders of Common Stock to dividends or any
distributions upon liquidation or sale of the Company.
Each share of Series B Preferred Stock is convertible at the option of its
holder at any time into shares of Common Stock at a conversion price of $15.40
per share of Common Stock (the "Conversion Price") (equivalent to an initial
conversion rate of one share of Common Stock per share of Series B Preferred),
subject to adjustment to reflect stock dividends, splits, combinations and
issuances of stock by reclassification of Common Stock. In addition, if the
Company issues for cash or other consideration shares of Common Stock or any
security convertible into or exchangeable or exercisable for Common Stock (other
than securities issued to directors, officers or employees of the Company and
securities issued in connection with property acquisitions that are approved by
the Investment Committee of the Board and the designee, if any, of the Series B
Preferred Stock then sitting on the Board) at a price, including any additional
consideration payable upon any such conversion, exchange or exercise (before
deduction of any reasonable and customary discounts, commissions, fees and other
expenses of issuance and marketing) that is less than $16.00 as adjusted from
time to time by the Board upon certain other adjustments to the conversion
price, there will be a reduction in the conversion price of the Series B
Preferred Stock equal to the amount by which $16.00 (as adjusted) exceeds the
purchase, exchange or conversion price. If the Company engages in more than one
such issuance, the amount of the adjustment to the Conversion Price will be
equal to the greatest individual reduction. However, such adjustments will not
be cumulative. The number of shares of Common Stock actually issuable upon the
conversion of the Series B Preferred Stock will be determined by dividing the
total liquidation preference of such shares (plus all unpaid accumulated
dividends, except any dividends accumulated on shares of Series B Preferred
Stock presented for
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<PAGE>
conversion after the end of the last-completed quarterly dividend period) by the
conversion price in effect at that time.
At any time on or after January 1, 1999 and on or before December 31, 2004,
the Company, at its option, may convert the outstanding shares of Series B
Preferred Stock, in whole but not in part, into shares of Common Stock at the
then effective conversion price per share (currently equivalent to an initial
conversion rate of one share of Common Stock per share of Series B Preferred
Stock), subject to certain adjustments, so long as: (a) the average closing
price of Common Stock on the NYSE during any 20 trading days in a period of 30
consecutive trading days ending on the trading day immediately preceding the
date the Company provides notice of exercise of its right to convert the Series
B Preferred Stock meets or exceeds the following percentages of the
then-applicable Conversion Price (the "Conversion Price Premium"):
<TABLE>
<CAPTION>
YEAR PERCENTAGE
- ---------------------------------------------------------------------------------- -----------
<S> <C>
1999.............................................................................. 115.0%
2000.............................................................................. 119.0
2001.............................................................................. 123.0
2002.............................................................................. 127.5
2003 and 2004..................................................................... 132.0
</TABLE>
and (b) the closing price of the Common Stock on the trading day immediately
preceding the date the Company provides notice of exercise of this option equals
or exceeds the applicable Conversion Price Premium.
At any time on or after January 1, 1999 and on or before December 31, 2004,
the Company, at its option, may redeem the Series B Preferred Stock, in whole or
in part (but in no event for a total consideration that is less than $1
million), for a per share cash price as follows:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- --------------------------------------------------------------------------------- -----------
<S> <C>
1999............................................................................. $ 16.95
2000............................................................................. 17.35
2001............................................................................. 17.80
2002............................................................................. 18.25
2003 and 2004.................................................................... 18.70
</TABLE>
plus, in each case, accumulated unpaid dividends to and including the date fixed
for redemption. If the Company exercises its right to redeem the Series B
Preferred Stock, the holder's conversion right will terminate five days before
the redemption date.
The holders of Series B Preferred Stock vote together with the holders of
the Common Stock on an as-converted basis on all matters submitted to a vote of
the Company's common stockholders. In addition, for so long as Ameritech and OTR
collectively hold shares of Series B Preferred Stock representing on an
as-converted basis more than 15% of the publicly-traded shares of Common Stock
(excluding shares owned by Hunt, USAA, officers and directors of the Company or
Ameritech and OTR and as otherwise defined in the agreement with Ameritech and
OTR), the holders of Series B Preferred Stock will be entitled to require the
Company to increase the size of the Board by one person (there currently are
nine Company directors) and to elect that additional director. That percentage
will be reduced to one-half of the then-effective percentage in the event of a
partial redemption or conversion of the Series B Preferred Stock. (The
applicable percentage is referred to in this Prospectus as the "Minimum
Ownership Level".) At the Company's next annual meeting following any such
election, the size of the Board will be reduced to nine persons and, at that
meeting and each succeeding annual meeting for so long as Ameritech and OTR
collectively hold shares of Series B Preferred Stock representing on an
as-converted basis more than the Minimum Ownership Level and the holders of the
Series B Preferred Stock elect to exercise such right, the holders of the Series
B Preferred Stock, voting as a separate class, will be entitled to elect one
director to
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<PAGE>
serve on the Board by majority vote. If dividends on the Series B Preferred
Stock are in arrears for six consecutive quarterly dividend periods, and
Ameritech and OTR collectively hold all the outstanding shares of Series B
Preferred Stock, then the Board will be increased by two (in addition to the
director referred to previously), and Ameritech will have the right to designate
one such director and OTR will have the right to designate the other such
director. If Ameritech and OTR do not then hold all of the outstanding shares of
Series B Preferred Stock, then the holders of a majority of the Series B
Preferred Stock voting separately as a class will have the right to elect one
director to serve on the Board until all such dividend arrearages are
eliminated. According to Ameritech's Form 13D dated October 10, 1997, Ameritech
stated that it does not currently intend to exercise its right to appoint a
director. At the next annual meeting of stockholders of the Company after the
election of such director or directors if necessary, the size of the Board will
be reduced to: (a) nine persons if one director is so elected; and (b) ten
directors if two directors are so elected. In either case, that shall be the
maximum membership of the Board until such time as all arrearages in dividends
shall have been paid. The Company may not amend the provisions of the Series B
Preferred Stock without the affirmative vote of holders of at least 75% of the
outstanding shares of Series B Preferred Stock. The holders of the Series B
Preferred Stock also have the right to approve certain extraordinary corporate
transactions by a majority vote, including a merger in which the Company is not
the surviving entity and any sale of all or substantially all of the Company's
assets.
The Company has agreed in connection with the Stock Purchase Agreement with
Ameritech and OTR that until such time as Ameritech and OTR cease to hold shares
of Series B Preferred Stock (or Common Stock in the event of a conversion of
Series B Preferred) representing on an as-converted basis in the aggregate at
least the Minimum Ownership Level, the Company is subject to a number of
operating covenants, including: (a) the Company may not repurchase more than $5
million of Common Stock in the aggregate; (b) the Company may not incur debt
that, at the time the debt is incurred, would result in the Company having a
debt-to-total-debt-and-equity-capitalization ratio above 60%; (c) the Company
may engage in transactions with affiliates only with the approval of a majority
of its disinterested directors and upon terms no less favorable than those that
could be obtained in an arms' length transaction and, if the value of any such
transaction exceeds 10% of the fair market value of the Company's assets as
determined by the Board, the Company must obtain a third-party appraisal or
other confirmation that such transaction is on terms no less favorable to the
Company than those that could be obtained in an arm's-length transaction; (d)
the Company must continue to qualify as a real estate operating company; and (e)
until such time as the market value of the Company's publicly traded shares
exceeds $250 million for at least 60 consecutive days, the Company may not
engage in any issuances of equity securities in private placements unless, after
the private placement, the market value of the Company's publicly-traded shares
(as defined herein) would equal or exceed 50% of the Company's total equity
capitalization and unless the purchasers in any such private placement agree to
certain restrictions on the transfer of the stock purchased in the private
placement for a period of one year.
RESTRICTIONS ON OWNERSHIP AND TRANSFER
For the Company to qualify as a REIT under the Code, beginning with calendar
year 1996, generally not more than 50% of the value of its outstanding stock may
be owned, directly or indirectly, by five or fewer individuals (as defined in
the Code to include certain entities), and its outstanding stock must be
beneficially owned by at least 100 persons. See "Federal Income Tax
Considerations--REIT Qualification" To help the Company meet these requirements
and otherwise maintain its REIT status, the Charter includes three basic
protective provisions affecting the ownership and transfer of the Company's
issued and outstanding shares of any class or series of Common Stock or
Preferred Stock ("Equity Stock"): (a) a general prohibition against actual or
constructive ownership by any person (other than persons designated by the Board
as "Excepted Holders", described further below) of more than 8.5% of the lesser
of the number or value of the outstanding shares of any class or series of
Equity Stock; (b) a prohibition against ownership of Equity Stock that would
cause the Company to be "closely held" or to otherwise fail to qualify as a REIT
(such as ownership that would result in the Company being treated as owning an
interest
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<PAGE>
in a tenant if income derived by the Company from that tenant would cause the
Company to fail to satisfy any of the REIT gross income requirements); and (c) a
prohibition against transfers that would result in the Equity Stock being owned
by less than 100 persons. In addition, in January, 1996, the Company issued
shares of Common Stock that, prior to the end of that month, were held by 100
individuals in order to meet the 100-person requirement.
These ownership restrictions took effect on February 23, 1996 and may be
terminated if the Board determines that it is no longer in the best interests of
the Company to attempt to, or continue to, qualify as a REIT or that compliance
with the ownership limits and restrictions on transfer is no longer required in
order for the Company to qualify as a REIT.
These restrictions on ownership and transfer may have the effect of
precluding acquisition of control of the Company or otherwise limit the
opportunity for stockholders to receive a premium for their shares of Common
Stock that might otherwise exist if an investor attempted to assemble a block of
shares of Common Stock in excess of the 8.5% ownership limit or the higher
ownership limits set for certain stockholders. See "Risk Factors--Limits on
Ownership and Changes in Control May Deter Changes in Management and Third Party
Acquisition Proposals."
TRANSFERS IN TRUST. The Charter provides that, upon any attempted transfer
of Equity Stock (including warrants or options to acquire Equity Stock) that
would cause any person to be treated as owning Equity Stock in violation of the
ownership restrictions (other than the prohibition against transfers that would
result in less than 100 owners), the number of shares that would cause the
violation are automatically transferred to a trustee for the benefit of a
charitable beneficiary as "Shares-in-Trust." The person who otherwise would have
been considered the owner (the "Prohibited Owner") will have no rights or
economic interest in those shares. For these purposes, potentially violative
"ownership" is evaluated by taking into account the broad constructive ownership
rules of Sections 544 and 318 of the Code, with certain modifications. In
addition, a "transfer" that is subject to these restrictions includes any
issuance, sale, transfer, gift, assignment, devise or other disposition as well
as any other event that causes any person to have or acquire ownership (applying
the constructive ownership rules) of Equity Stock.
The trustee is entitled to vote all Shares-in-Trust and to receive all
distributions on Shares-in-Trust, and will hold such distributions for the
benefit of the charitable beneficiary. If any distributions with respect to
Shares-in-Trust are paid to the Prohibited Owner before the Company discovers
the violation of the ownership limit, the Prohibited Owner must pay that amount
to the trustee. Distributions on Shares-in-Trust will be used by the trustee
first to pay any expenses of the trust, second to pay any expenses of the
Company incurred in connection with the trust and third to pay any excess to the
charitable beneficiary. The Prohibited Owner is not to receive any benefit from
distributions.
The trustee is obligated to sell the Shares-in-Trust promptly to a person
who would not cause a violation of the ownership restrictions (at which time the
shares will cease to be Shares-in-Trust) and to distribute the net sale proceeds
first to pay any expenses of the trust, second to pay any expenses of the
Company incurred in connection with the trust, third to pay the Prohibited Owner
an amount intended to ensure that the Prohibited Owner will not realize any
appreciation in value of the shares and fourth to pay any excess to the
charitable beneficiary. If a Prohibited Owner sells Shares-in-Trust before the
Company discovers the transfer, such shares are deemed to have been sold on
behalf of the trust. To the extent that the Prohibited Owner received more in
that sale than the Prohibited Owner would otherwise be entitled to receive under
these provisions, the excess must immediately be delivered to the trustee.
COMPANY PURCHASE RIGHT. The Company also will have the right to purchase
all or any portion of the Shares-in-Trust, and the Shares-in-Trust are deemed to
have been offered to the Company, at the lesser of: (a) the price per share paid
for such shares in the transaction that created the Shares-in-Trust (or if no
price was paid, the market price at the time of that event); and (b) the market
price on the date the Company or its designee accepts the offer. This purchase
right exists for a period of 90 days after the later of: (a) the date of the
purported transfer that created the Shares-in-Trust, if the Company receives
notice
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<PAGE>
of the event; and (b) the date the Company determines in good faith that a
purported transfer creating Shares-in-Trust has occurred, if the Company does
not receive notice of the event. The Company may not, however, exercise this
right after the trustee has sold the Shares-in-Trust to a person whose ownership
will not cause a violation of the ownership restrictions.
REPORTING OF TRANSFERS AND OWNERSHIP. To assist in the enforcement of the
ownership restrictions, the Charter requires any person who acquires or attempts
to acquire Equity Stock in violation of the ownership restrictions (or who would
own shares of Equity Stock but for the automatic transfer to the trust) to give
the Company immediate written notice of that event. In the case of a proposed or
attempted violative transfer, the purported transferee must give at least 15
days' prior written notice of the event and provide any other information the
Company requests in order to determine whether such transfer affects the
Company's REIT status.
In addition, the Charter generally requires every person who owns more than
5% (or such lower percentage as is required under the applicable Treasury
Regulations) of the number or value of the outstanding shares of any class or
series of the Equity Stock to give the Company written notice, within 30 days
after the close of each taxable year, stating the owner's name and address, the
number of shares of each class or series of Equity Stock owned and a description
of how the shares are held. These owners must generally provide any additional
information the Company requests in order to determine whether such ownership
affects the Company's REIT status and to ensure compliance with the ownership
restrictions. All remaining owners must generally provide ownership information
upon request. The Charter allows the Board to determine the information that
must be delivered by each owner of Equity Stock.
TRANSFERS VOID. The Charter also provides that if, for any reason, a
transfer to the trust described above would not effectively prevent the
Prohibited Owner from violating the ownership restrictions, then the purported
transfer is void ab initio and the Prohibited Owner does not acquire any rights
in the excess Equity Stock.
EXCEPTED HOLDERS. In order to permit ownership in excess of the specified
8.5% ownership limit for persons who will not jeopardize the Company's REIT
status, the Charter permits the Board to designate certain "Excepted Holders."
Excepted Holders must supply appropriate representations and undertakings
designed to protect the Company's REIT status (such as information establishing
that the Excepted Holder is treated as a "look-through" entity in applying the
REIT stock ownership tests and that the deemed ownership of the Company shares
through the entity will be appropriately dispersed so as not to jeopardize the
Company's REIT status). Each Excepted Holder will be subject to a separate
ownership limit as specified by the Board.
The only current Excepted Holders (and their respective Excepted Holder
Limits for Common Stock) are Ameritech (29%), Prudential (29%), Hunt (23.7%),
USAA (20%), OTR (8.5%), and Morgan Stanley (1,600,000 shares), six of the
principal shareholders of the Company. Ameritech, Prudential, Hunt, USAA, OTR
and Morgan Stanley have entered into separate "Excepted Holder Agreements" with
the Company under which they have given representations and undertakings
designed to protect the Company's REIT status. Prudential has represented and
covenanted to the Company that the shares that it beneficially owns, including
shares held on behalf of certain insurance company separate accounts, will be
treated as being held proportionately by its policyholders. USAA has represented
and covenanted to the Company that shares that it owns will be treated as held
proportionately by the shareholders of its ultimate parent corporation and that
no individual will be treated as owning more than the "basic" 8.5% ownership
limit. Hunt's shares are held by a partnership that also has represented and
covenanted to the Company that the shares it owns will be held so that no
individual will be treated as owning more than the basic 8.5% ownership limit,
except that up to 15.3% of the lesser of the number or value of any outstanding
class of Equity Stock may be treated as owned by one individual and such
individual's family as defined in Code Section 544(a)(2). Accordingly, under the
basic 8.5% ownership limit and the existing Excepted Holder
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Limits, no five or fewer individuals would be permitted to own more than 49.3%
of the outstanding Equity Stock. One individual, owning through Hunt, may own up
to 15.3%.
The Excepted Holder Agreements with Ameritech and OTR permit Ameritech and
OTR to own up to 100% of the outstanding shares of Series B Preferred Stock and
permit Ameritech to own up to 29% of the outstanding shares of Common Stock and
OTR to own up to 8.5% of the outstanding shares of Common Stock. The Excepted
Holder Agreement with Morgan Stanley permits Morgan Stanley acting on its own
behalf and on behalf of its clients accounts over which it has investment
discretion to own shares of Common Stock equal to the greater of 1,600,000
shares or 8.5% of the outstanding shares of Common Stock. These agreements and
the Hunt and USAA Excepted Holder Agreement also provide for certain adjustments
to the ownership limits if the Company engages in certain types of redemptions
or repurchases of Common Stock. Ameritech and OTR have represented and
covenanted that they are "qualified trusts" entitled to "look-through" treatment
in applying the REIT ownership restrictions and that none of their beneficiaries
has been treated as owning a significant portion of the shares it owns.
Under the Excepted Holder Agreements, the Excepted Holders have made
representations with respect to their actual or constructive ownership of
interests in tenants of the Company. These representations are designed to
assist the Company to qualify as a REIT. A breach of any of these
representations, except as determined by the Board with respect to a particular
Excepted Holder, may result in certain shares of Equity Stock held by such
Excepted Holder becoming Shares-in-Trust. The Excepted Holder Agreement entered
into with Prudential and Ameritech provide that a tenant ownership issue of this
type will be resolved other than through the creation of Shares-in-Trust.
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
The Company has adopted a dividend reinvestment and stock purchase plan
designed to provide holders of Common Stock with a convenient and economical
means to reinvest all or a portion of their cash dividends in shares of Common
Stock and to acquire additional shares of Common Stock through voluntary
purchases. First Chicago Trust Company of New York, which serves as the
Company's transfer agent, administers the dividend reinvestment and stock
purchase plan.
DESCRIPTION OF WARRANTS
The Company may issue Warrants for the purchase of Debt Securities,
Preferred Stock or Common Stock. Warrants may be issued independently or
together with Debt Securities, Preferred Stock, or Common Stock offered by any
Prospectus Supplement and may be attached to or separate from any such Offered
Securities. Each series of Warrants will be issued under a separate warrant
agreement (a "Warrant Agreement") to be entered into between the Company and a
bank or trust company, as warrant agent (the "Warrant Agent"). The Warrant Agent
will act solely as an agent of the Company in connection with the Warrants and
will not assume any obligation or relationship of agency or trust for or with
any holders or beneficial owners of Warrants. The following summary of certain
provisions of the Warrants does not purport to be complete and is subject to,
and qualified in its entirety by reference to, the provisions of the Warrant
Agreement that will be filed with the SEC in connection with the offering of
such Warrants.
DEBT WARRANTS
The Prospectus Supplement relating to a particular issue of Debt Warrants
will describe the terms of such Debt Warrants, including the following: (a) the
title of such Debt Warrants; (b) the offering price of such Debt Warrants, if
any; (c) the aggregate number of such Debt Warrants; (d) the designation and
terms of the Debt Securities purchasable upon exercise of such Debt Warrants;
(e) if applicable, the designation and terms of the Debt Securities with which
such Debt Warrants are issued and the number of such Debt Warrants issued with
each such Debt Security; (f) if applicable, the date from and after which such
Debt Warrants and any Debt Securities issued therewith will be separately
transferable; (g) the principal amount of Debt Securities purchasable upon
exercise of a Debt Warrant and the price at which such principal
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<PAGE>
amount of Debt Securities may be purchased upon exercise (which price may be
payable in cash, securities, or other property); (h) the date on which the right
to exercise such Debt Warrants shall commence and the date on which such right
shall expire; (i) if applicable, the minimum or maximum amount of such Debt
Warrants that may be exercised at any one time; (j) whether the Debt Warrants
represented by the Debt Warrant certificates or Debt Securities that may be
issued upon exercise of the Debt Warrants will be issued in registered or bearer
form; (k) information with respect to book-entry procedures, if any; (l) the
currency or currency units in which the offering price, if any, and the exercise
price are payable; (m) if applicable, a discussion of material United States
federal income tax considerations; (n) the antidilution provisions of such Debt
Warrants, if any; (o) the redemption or call provisions, if any, applicable to
such Debt Warrants; and (p) any additional terms of the Debt Warrants, including
terms, procedures, and limitations relating to the exchange and exercise of such
Debt Warrants.
STOCK WARRANTS
The Prospectus Supplement relating to any particular issue of Preferred
Stock Warrants or Common Stock Warrants will describe the terms of such
Warrants, including the following: (a) the title of such Warrants; (b) the
offering price for such Warrants, if any; (c) the aggregate number of such
Warrants; (d) the designation and terms of the Common Stock or Preferred Stock
purchasable upon exercise of such Warrants; (e) if applicable, the designation
and terms of the Offered Securities with which such Warrants are issued and the
number of such Warrants issued with each such Offered Security; (f) if
applicable, the date from and after which such Warrants and any Offered
Securities issued therewith will be separately transferable; (g) the number of
shares of Common Stock or Preferred Stock purchasable upon exercise of a Warrant
and the price at which such shares may be purchased upon exercise (which price
may be payable in cash, securities, or other property); (h) the date on which
the right to exercise such Warrants shall commence and the date on which such
right shall expire; (i) if applicable, the minimum or maximum amount of such
Warrants that may be exercised at any one time; (j) the currency or currency
units in which the offering price, if any, and the exercise price are payable;
(k) if applicable, a discussion of material United States federal income tax
considerations; (l) the antidilution provisions of such Warrants, if any; (m)
the redemption or call provisions, if any, applicable to such Warrants; and (n)
any additional terms of the Warrants, including terms, procedures, and
limitations relating to the exchange and exercise of such Warrants.
OUTSTANDING WARRANTS
The Company issued 553,000 Merger Warrants on April 8, 1996. Each Merger
Warrant entitles the holder to receive one share of Common Stock upon its
exercise. The Merger Warrants are listed for trading on the American Stock
Exchange. The Merger Warrants are exercisable during the period May 23, 1997
through February 24, 1999. The exercise price of the Merger Warrants is $16.23
(the average of the closing prices of the Common Stock for the first 20 trading
days after the Merger).
The exercise price of the Merger Warrants and the number of shares of Common
Stock issuable upon exercise of the Merger Warrants are subject to adjustment in
the event of stock dividends, stock splits, subdivisions, reclassifications,
reorganizations, consolidations and mergers. If a holder of Merger Warrants
fails to exercise his or her Merger Warrants before their expiration, those
warrants will expire and the holder will have no further rights with respect to
Merger Warrants. A holder of Merger Warrants will not have any rights,
privileges or liabilities of a stockholder of the Company prior to exercise of
the Merger Warrants, including the rights to vote and to receive distributions.
On February 23, 1996, the Company issued a warrant to purchase shares of
Common Stock to USAA (the "USAA Warrant"). The USAA Warrant was issued as
consideration for the grant by USAA to the Company of the USAA Option. The USAA
Warrant has an exercise price of $14.60 per share and covers 184,900 shares of
Common Stock. On April 3, 1966, USAA sold the USAA Warrant to an affiliate of
Morgan Stanley for $300,000.
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<PAGE>
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder and
relationship, if any, with the Company and (a) the number of shares of Common
Stock beneficially owned by each Selling Stockholder as of June 1, 1998,
(assuming no shares have been sold under this Prospectus as of such date), (b)
the maximum number of shares of Common Stock which may be offered for the
account of such Selling Stockholder under the Prospectus, and (c) the amount and
percentage of Common Stock to be owned by the Selling Stockholder assuming the
sale of all the Common Stock which may be offered hereunder.
<TABLE>
<CAPTION>
AMOUNT AND
PERCENTAGE OF
SHARES OF MAXIMUM COMMON STOCK
COMMON STOCK NUMBER OF SHARES BENEFICIALLY OWNED
BENEFICIALLY OF COMMON STOCK AFTER THE
OWNED PRIOR TO WHICH MAY BE OFFERING(1)
NAME OF SELLING STOCKHOLDER AND RELATIONSHIP TO COMPANY OFFERING SOLD HEREUNDER AMOUNT - %
- ---------------------------------------------------------- -------------- ----------------- -------------------
<S> <C> <C> <C>
Hunt Acquisitions Partners, Ltd.(2) ...................... 1,027,581 1,027,581 --
1445 Ross at Field Dallas, Texas 75202
The Prudential Insurance Company of America(3) . 7,491,650 7,491,650 --
8 Campus Drive Parsippany, New Jersey 07054
The Prudential Variable Contract Real Property 506,894 506,894 --
Partnership ............................................
8 Campus Drive Parsippany, New Jersey 07054
Strategic Performance Fund--II, Inc. ..................... 1,013,788 1,013,788 --
8 Campus Drive Parsippany, New Jersey 07054
Multi-Market Special Investment Fund II .................. 493,642 493,642 --
J.P. Morgan Investment Management, Inc. 522 Fifth Avenue
New York, New York 10036
Commingled Trust Fund Special Situation Investments--Real 493,642 493,642 --
Estate .................................................
J.P. Morgan Investment Management, Inc. 522 Fifth Avenue
New York, New York 10036
USAA Real Estate Company ................................. 1,148,430 1,148,430 --
8000 Robert F. McDermott Freeway
Suite 600 San Antonio, Texas 98230
State Street Bank and Trust Company, as Trustee for 8,888,598 8,888,598 --
Ameritech Pension Trust(4) .............................
One Enterprise Drive
Solomon Willard Building (W6C)
North Quincy, Massachusetts 02171
OTR(5) ................................................... 649,351 649,351 --
275 East Broad Street
Columbus, Ohio 43215
</TABLE>
- ------------------------
(1) Assumes the sale of all shares of Common Stock registered hereunder,
although none of the Selling Stockholders are under any obligation known to
the Company to sell any shares of Common Stock.
(2) Also reporting beneficial ownership of the same shares are Ray L. Hunt and
RLH Investments, Inc. Their address is the same as that of Hunt.
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<PAGE>
(3) Includes 3,689,947 shares of Common Stock held by The Prudential Insurance
Company of America on behalf of three insurance company separate accounts.
(4) Assumes that Ameritech converts all its shares of Series B Preferred Stock
into shares of Common Stock on a one-share-for-one-share basis (the initial
conversion rate).
(5) Assumes that OTR converts all its shares of Series B Preferred Stock into
shares of Common Stock on a one-share-for-one-share basis (the initial
conversion rate).
The Company and the Selling Stockholders are parties to various agreements
(the "Registration Rights Agreements"), copies of which are incorporated by
reference as exhibits to the Registration Statement of which this Prospectus is
a part, pursuant to which the Company agreed, among other things, to register
the offer and sale of the Selling Stockholder Offered Securities under the
Securities Act, and the Selling Stockholders and the Company agreed to indemnify
each other against certain liabilities, including liabilities under the
Securities Act in connection with the sale of the shares pursuant to a
registered public offering contemplated by the Registration Rights Agreements.
Pursuant to the Registration Rights Agreements, the Selling Stockholders are
required to pay the underwriting discounts and commissions and expenses of their
legal counsel and accountants associated with the offering contemplated hereby,
and the Company is generally required to pay all of the other expenses directly
associated with the offering, including, without limitation, the cost of
registering the shares offered hereby, including applicable registration and
filing fees, printing expenses and applicable expenses for legal counsel and
accountants incurred by the Company. The Company may from time to time grant
registration rights to other stockholders of the Company. The names of and other
information regarding any such stockholders will be set forth in a Prospectus
Supplement pursuant to which any Selling Stockholder Offered Securities of such
stockholders are offered for sale.
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities in or outside the United States
through underwriters, brokers or dealers, directly to one or more purchasers, or
through agents. Any of the Selling Stockholders may sell any of the Selling
Stockholder Offered Securities through underwriters, either separately or in
connection with offerings of Offered Securities by the Company or through
brokers or dealers either separately in connection with block trades by the
Selling Stockholders or in connection with offerings of Offered Securities by
the Company. The Prospectus Supplement with respect to the Offered Securities
will set forth the terms of the offering of the Offered Securities, including
the name or names of any underwriters, dealers, or agents, the purchase price of
the Offered Securities and the proceeds to the Company from such sale, any
delayed delivery arrangements, any underwriting discounts and other items
constituting underwriters' compensation, the initial public offering price, any
discounts or concessions allowed or reallowed or paid to dealers, and any
securities exchanges on which the Offered Securities may be listed.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering, and if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters or agents to purchase the Offered Securities will be subject to
conditions precedent and the underwriters will be obligated to purchase all the
Offered Securities if any are purchased. The initial public offering
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<PAGE>
price and any discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
The Company may also sell the Offered Securities pursuant to one or more
standby agreements with one or more underwriters in connection with the call for
redemption of a specified class or series of any securities of the Company or
any subsidiary of the Company. In such a standby agreement, the underwriter or
underwriters would agree either (a) to purchase from the Company up to the
number of shares of Common Stock that would be issuable upon conversion of all
of the shares of such class or series of securities of the Company or its
subsidiary at an agreed price per share of Common Stock or (b) to purchase from
the Company up to a specified dollar amount of Offered Securities at an agreed
price per Offered Security which price may be fixed or may be established by
formula or other method and which may or may not relate to market prices of the
Common Stock or any other security of the Company then outstanding. The
underwriter or underwriters would also agree, if applicable, to convert into
Common Stock or other security of the Company any securities of such class or
series held or purchased by the underwriter or underwriters. The underwriter or
underwriters may assist in the solicitation of conversions by holders of such
class or series of securities.
If dealers are used in the sale of Offered Securities with respect to which
this Prospectus is delivered, the Company, or with respect to any block trades
the Selling Stockholders, will sell such Offered Securities to the dealers as
principals. The dealers may then resell such Offered Securities to the public at
varying prices to be determined by such dealers at the time of resale. The name
of the dealers and the terms of the transaction will be set forth in the
Prospectus Supplement relating thereto.
Offered Securities may be sold directly by the Company or through agents
designated by the Company from time to time at fixed prices, which may be
changed, or at varying prices determined at the time of sale. Any agent involved
in the offer or sale of the Offered Securities with respect to which this
Prospectus is delivered will be named, and any commissions payable by the
Company to such agent will be set forth, in the Prospectus Supplement relating
thereto. Unless otherwise indicated in the Prospectus Supplement, any such agent
will be acting on a best efforts basis for the period of its appointment.
In connection with the sale of the Offered Securities, underwriters or
agents may receive compensation from the Company or the Selling Stockholders or
from purchasers of Offered Securities for whom they may act as agents in the
form of discounts, concessions, or commissions. Underwriters, agents, and
dealers participating in the distribution of the Offered Securities may be
deemed to be underwriters, and any discounts or commissions received by them
from the Company or the Selling Stockholders and any profit on the resale of the
Offered Securities by them may be deemed to be underwriting discounts or
commissions under the Securities Act.
Upon the Company's being notified by the Selling Stockholder of any change
in the identity of the Selling Stockholder or that any material arrangement has
been entered into with an underwriter, broker or dealer for the sale of any
Selling Stockholder Offered Securities through a secondary distribution, or a
purchase by a broker or dealer, a Prospectus Supplement will be filed, if
required, pursuant to Rule 424(b) under the Securities Act, disclosing (a) the
names of such brokers or dealers; (b) the number of Selling Stockholder Offered
Securities to be sold; (c) the price at which such Selling Stockholder Offered
Securities are being sold; (d) the commissions paid or the discounts or
concessions allowed to such brokers or dealers; (e) where applicable, that such
broker or dealer did not conduct any investigation to verify the information set
out or incorporated by reference in this Prospectus, as supplemented or amended;
(f) any change in the identity of the Selling Stockholder, and (g) other facts
material to the transaction.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or dealers to solicit offers from certain types of
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to
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<PAGE>
those conditions set forth in the Prospectus Supplement, and the Prospectus
Supplement will set forth the commission payable for solicitation of such
contracts.
Agents, dealers and underwriters may be entitled under agreements entered
into with the Company to indemnification by the Company and/or the Selling
Stockholders against certain civil liabilities, including liabilities under the
Securities Act, or to contribution with respect to payments that such agents,
dealers, or underwriters may be required to make with respect thereto. Agents,
dealers, and underwriters may be customers of, engage in transactions with, or
perform services for the Company and/or the Selling Stockholders in the ordinary
course of business.
The Offered Securities may or may not be listed on a national securities
exchange. No assurances can be given that there will be a market for the Offered
Securities.
CERTAIN PROVISIONS OF MARYLAND LAW AND OF THE CHARTER AND BYLAWS
The following summary of certain provisions of Maryland law and of the
Charter and Bylaws does not purport to be complete and is subject to and
qualified in its entirety by reference to Maryland law and the Charter and
Bylaws, copies of which are exhibits to the Registration Statement of which this
Prospectus is a part. See "Additional Information."
BOARD OF DIRECTORS
The Company's Organizational Documents specify that the initial number of
directors is nine and allow a majority of the entire Board to increase or
decrease the number of directors within a range of three to 15. The tenure of
office of a sitting director will not be affected by any decrease in the number
of directors. These provisions are in accord with Section 2-402 of the MGCL,
which fixes the minimum number of directors at three and allows a range to be
specified in a corporation's bylaws. As described below (see "--Amendment to
Organizational Documents"), the Bylaws may be amended only by the Board, not by
its stockholders. The Board could, therefore, amend the Bylaws to increase or
decrease the number of directors within the specified range, without stockholder
approval, but could not reduce the number of directors below three. The holders
of shares of Series B Preferred Stock are entitled to require, at least
temporarily, that the Board be expanded and be entitled to fill the additional
position or positions on the Board. See "Description of Stock--Preferred Stock."
As permitted by the MGCL, the Charter provides that, subject to the rights
of the holders of any series of Preferred Stock then outstanding, the Company's
stockholders may remove any director, with or without cause, by the affirmative
vote of a majority of all votes entitled to be cast for the election of
directors. If the stockholders of any class or series are entitled separately to
elect one or more directors, a majority vote of all votes of that class or
series is required in order to remove without cause a director elected by that
class or series.
MERGERS, CONSOLIDATIONS AND SALES OF ASSETS
In general, under the MGCL, any proposed merger or consolidation of the
Company with another company or companies, or any sale of all or substantially
all the assets of the Company, must be approved by the affirmative vote of
two-thirds of all the votes entitled to be cast on the matter or such lesser
percentage (subject to a specified minimum) as is set forth in the corporation's
charter. The Charter provides that such transactions may be approved by the
affirmative vote of a majority of all votes entitled to be cast on such matters.
BUSINESS COMBINATIONS
Under the MGCL, certain "business combinations" (including a merger,
consolidation, share exchange or, in certain circumstances, an asset transfer or
issuance or reclassification of equity securities)
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<PAGE>
between a Maryland corporation and any person who beneficially owns 10% or more
of the voting power of the corporation's shares or an affiliate of the
corporation who, at any time within the two-year period prior to the date in
question, was the beneficial owner of ten percent or more of the voting power of
the then-outstanding voting stock of the corporation (an "Interested
Stockholder") or an affiliate of such Interested Stockholder are prohibited for
five years after the most recent date on which the Interested Stockholder
becomes an Interested Stockholder. Thereafter, any such business combination
must be recommended by the board of directors of such corporation and approved
by the affirmative vote of at least (i) 80% of the votes entitled to be cast by
holders of outstanding shares of voting stock of the corporation and (ii)
two-thirds of the votes entitled to be cast by holders of voting stock of the
corporation other than shares held by the Interested Stockholder with whom (or
with whose affiliate) the business combination is to be effected, unless, among
other conditions, the corporation's common stockholders receive a minimum price
(as defined in the MGCL) for their shares and the consideration is received in
cash or in the same form as previously paid by the Interested Stockholder for
its shares. These provisions of the MGCL do not apply, however, to business
combinations that are approved or exempted by the board of directors of the
corporation prior to the time that the Interested Stockholder becomes an
Interested Stockholder. Hunt, RLH Corporation (and its affiliates), Ray L. Hunt
(and his affiliates), USAA, United States Automobile Association (and its direct
and indirect subsidiaries), Ameritech and Prudential, beneficially own more than
10% of the Company's voting shares and would, therefore, be Interested
Stockholders under the business combination provisions of the MGCL. However,
pursuant to the statute, the Company has exempted any business combinations
involving these stockholders and affiliates and, consequently, the five-year
prohibition and the super-majority vote requirements will not apply to business
combinations between any of them and the Company. As a result, these
stockholders and affiliates may be able to enter into business combinations with
the Company that may not be in the best interest of its stockholders without
compliance by the Company with the super-majority vote requirements and the
other provisions of the statute.
CONTROL SHARE ACQUISITIONS
The MGCL provides that "control shares" of a Maryland corporation acquired
in a "control share acquisition" have no voting rights except to the extent
approved by a vote of two-thirds of the votes entitled to be cast on the matter,
excluding shares of stock owned by the acquiror, by officers or by directors who
are employees of the corporation. "Control Shares" are voting shares of stock
which, if aggregated with all other such shares of stock previously acquired by
the acquiror or in respect of which the acquiror is able to exercise or direct
the exercise of voting power (except solely by virtue of a revocable proxy),
would entitle the acquiror to exercise voting power in electing directors within
one of the following ranges of voting power: (a) one-fifth or more but less than
one-third; (b) one-third or more but less than a majority; or (c) a majority or
more of all voting power. Control Shares do not include shares the acquiring
person is then entitled to vote as a result of having previously obtained
stockholder approval. A "control share acquisition" means the acquisition of
Control Shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition, upon
satisfaction of certain conditions (including an undertaking to pay expenses),
may compel the board of directors of the corporation to call a special meeting
of stockholders to be held within 50 days of demand to consider the voting
rights of the shares. If no request for a meeting is made, the corporation may
itself present the question at any stockholders meeting.
If voting rights are not approved at the meeting or if the acquiring person
does not deliver an acquiring person statement as required by the statute, then,
subject to certain conditions and limitations, the corporation may redeem any or
all of the Control Shares (except those for which voting rights have previously
been approved) for fair value determined, without regard to the absence of
voting rights for the Control Shares, as of the date of the last control share
acquisition by the acquiror or of any meeting of stockholders at which the
voting rights of such shares are considered and not approved. If voting rights
for
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control shares are approved at a stockholders meeting and the acquiror becomes
entitled to vote a majority of the shares entitled to vote, all other
stockholders may exercise appraisal rights. The fair value of the shares as
determined for purposes of such appraisal rights may not be less than the
highest price per share paid by the acquiror in the control share acquisition.
The control share acquisition statute does not apply (a) to shares acquired
in a merger, consolidation or share exchange if the corporation is a party to
the transaction or (b) to acquisitions approved or exempted by the charter or
bylaws of the corporation.
As permitted by the MGCL, the Bylaws exempt any acquisitions of shares of
the Company's stock by Hunt, RLH Corporation (and its affiliates), Ray L. Hunt
(and his affiliates), USAA and United States Automobile Association (and its
direct and indirect subsidiaries), Ameritech and Prudential. There can be no
assurance that such provision will not be amended or eliminated at any time in
the future.
RELATED PARTY TRANSACTIONS
Although it is the Company's policy not to engage in transactions with its
directors or officers, the Charter does not place specific restrictions on
related party transactions. The Company is subject to the provisions of the MGCL
concerning "interested director transactions," that is, transactions between the
Company and a member of the Board or between the Company and another
corporation, firm or other entity in which any of its directors is a director or
has a material financial interest. Under the MGCL, a contract or transaction
between a corporation and any of its directors, or between a corporation and any
other corporation, firm or other entity in which any of its directors is a
director or has a material financial interest, is not void or voidable solely
for this reason, or solely because the director is present at or participates in
the meeting of the board or committee that authorizes the contract or
transaction, or solely because his or her votes are counted for such purpose,
if:
1. The fact of the common directorship or interest is disclosed or known to
the board of directors or the committee, and the board or committee authorizes,
approves or ratifies the contract or transaction by the affirmative vote of a
majority of the disinterested directors, even if the disinterested directors
constitute less than a quorum;
2. The fact of the common directorship or interest is disclosed or known to
the stockholders entitled to vote thereon, and the contract or transaction is
authorized, approved or ratified by a majority of the votes cast by the
stockholders entitled to vote, excluding the votes of shares owned by the
interested director or other interested party; or
3. The contract or transaction is fair and reasonable to the corporation.
SPECIAL MEETINGS OF STOCKHOLDERS
The Bylaws provide that special meetings of the Company's stockholders may
be called: (a) by the Chairman of the Board, the President or the Board; or (b)
upon the written request of stockholders holding not less than 10% of all the
votes entitled to be cast at the meeting. The request must state the purpose of
the meeting and the matters proposed to be acted on at the meeting. Upon payment
by the requesting stockholders of the cost of preparing and mailing notice of
the meeting, the Secretary of the Company must give notice to each stockholder
entitled to notice. Unless requested by stockholders entitled to cast a majority
of the votes entitled to be cast at the meeting, a special meeting need not be
called to consider any matter that is substantially the same as one voted on at
any special meeting during the preceding 12 months. Under the Bylaws, if the
Company calls a special meeting for the purpose of electing one or more
directors, any stockholder of record at the time the notice is given who is
entitled to vote at the meeting may nominate a person or persons for election by
giving notice containing specified information to the Secretary not earlier than
the 90th day before the meeting and not later than the later of the 60th day
before the meeting or the 10th day after the day on which a public announcement
is first
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made of the date of the meeting and the nominees proposed by the Board. Only
persons nominated in accordance with procedures specified in the Bylaws are
eligible to serve as directors and only the business specified in the notice of
the meeting may be conducted at the meeting.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
The Bylaws establish procedures for nominations or other business brought by
stockholders at annual meetings. Under these procedures, a stockholder entitled
to vote in the election of directors generally may nominate one or more persons
for election to the Board or propose other business at an annual meeting only if
the stockholder gives notice to the Secretary of the Company not less than 60
nor more than 90 days before the first anniversary of the preceding year's
annual meeting. If, however, the date of the annual meeting is advanced by more
than 30 days or delayed by more than 60 days from the anniversary date, to be
timely, notice by the stockholder must be delivered not earlier than the 90th
day before such annual meeting and not later than the close of business on the
later of the 60th day before such annual meeting or the tenth day following the
day on which public announcement of the date of such meeting was first made.
Such notice must contain specified information. For example, in the case of a
nomination by a stockholder, the notice must include the information about each
nominee that is required to be disclosed pursuant to the proxy rules under the
Exchange Act. The Company's next stockholders' meeting is expected to take place
in mid-1997.
AMENDMENTS TO ORGANIZATIONAL DOCUMENTS
Section 2-604 of the MGCL and Article 7 of the Charter govern amendments to
the Charter. After the Board proposes a charter amendment, the affirmative vote
of the holders of a majority of the outstanding voting stock, voting together as
a single class, is required to amend the Charter. The Bylaws provide that the
Board has the exclusive power to adopt, alter or repeal any provision of the
Bylaws, except for the provision relating to the application of the control
share acquisition provisions of the MGCL, which may not be amended or repealed,
in whole or in part, without the prior written consent of Ray L. Hunt (or any
affiliate of Ray L. Hunt), USAA, Ameritech and Prudential. See "Certain
Provisions of Maryland Law and of the Charter and Bylaws--Control Share
Acquisitions."
LIABILITY AND INDEMNIFICATION OF CERTAIN PERSONS
The MGCL permits a Maryland corporation to include in its charter a
provision limiting the liability of its directors and officers to the
corporation and its stockholders for money damages except for liability
resulting from (a) actual receipt of an improper benefit or profit in money,
property or services or (b) active and deliberate dishonesty established by a
final judgment as being material to the cause of action. The Charter contains
such a provision which eliminates such liabilities to the maximum extent
permitted by Maryland law.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Charter does not), to indemnify a director or officer who has been
successful on the merits or otherwise, in defense of any proceeding to which he
is made a party by reason of his service in that capacity. The MGCL permits a
corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other capacities unless it
is established that (a) the act or omission of the director or officer was
material to the matter giving rise to the proceeding and (i) was committed in
bad faith or (ii) was a result of an active and deliberate dishonesty, (b) the
director or officer actually received an improper personal benefit in money,
property or services or (c) in the case of a criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was
unlawful. However, a Maryland corporation may not indemnify for any adverse
judgment in a suit by or in the right of a corporation. In addition, the MGCL
requires the Company, as a condition to advancing expenses, to obtain (a) a
written affirmation by the director or
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officer of his good faith belief that he has met the standard of conduct
necessary for indemnification by the Company as authorized by the Bylaws and (b)
a written statement by or on his behalf to repay the amount paid or reimbursed
by the Company if it shall ultimately be determined that the standard of conduct
was not met.
The Charter obligates the Company to the maximum extent permitted by
Maryland law to indemnify and to pay or reimburse reasonable expenses in advance
of final disposition of a proceeding to (a) any present or former director or
officer of the Company or (b) any individual who, while a director of the
Company and at the request of the Company, serves or has served as a director,
officer, partner or trustee of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise. The Charter also permits the
Company to indemnify and advance expenses to any person who served a predecessor
of the Company in any other capacity as described above and to any employee or
agent of the Company or a predecessor of the Company.
The Company has entered into indemnification agreements with each of its
officers and directors. The indemnification agreements require, among other
matters, that the Company indemnify its executive officers and directors to the
fullest extent permitted by law and advance to the officers all related
expenses, subject to reimbursement, if it is subsequently determined that
indemnification is not permitted. Under these agreements, the Company must also
indemnify and advance all expenses incurred by executive officers and directors
seeking to enforce their rights under the indemnification agreements and may
cover executive officers and directors under the Company's directors' and
officers' liability insurance. Although the indemnification agreement offers
substantially the same scope of coverage afforded by law, it provides greater
assurance to directors and executive officers that indemnification will be
available, because, as a contract, it cannot be modified unilaterally in the
future by the Board of Directors or stockholders to eliminate the rights it
provides. It is the position of the SEC that indemnification of directors and
officers for liability under the Securities Act is against public policy and
unenforceable pursuant to Section 14 of the Securities Act.
COMMON STOCK
Article 4 of the Charter authorizes the Company to issue up to 175 million
shares of Common Stock, of which 30,166,984 shares were outstanding at March 31,
1998. The holders of shares of Common Stock have the right to vote on all
matters for which a common stockholder is entitled to vote at all meetings of
the stockholders of the Company, and will be entitled to one vote for each share
of Common Stock entitled to vote at such a meeting. Common Stock is subject to
ownership limits and restrictions on transfer. See "Description of Stock."
PREFERRED STOCK
Article 4 of the Charter authorizes the Company to issue up to 25 million
shares of Preferred Stock, of which 2,272,727 shares of Series B Preferred Stock
are presently outstanding. Preferred Stock, like Common Stock, is subject to
ownership limits and restrictions on transfer. See "Description of Stock--
Restrictions on Ownership and Transfer."
Subject to any limitations imposed by the NYSE and the rights of the holders
of shares of Series B Preferred Stock, the Company may, without stockholder
approval, issue shares of Preferred Stock in classes and series, and may
establish from time to time the number of shares to be included in each such
class or series, and fix the designation, powers, preferences and the rights of
the shares of each such class or series and the qualifications, limitations and
restrictions of each. Except as otherwise provided by law, the holders of the
Preferred Stock have and will have only such voting rights as are provided for
or expressed in the resolutions of the Board relating to such Preferred Stock.
The Board believes it is desirable for the Company to have Preferred Stock
available for possible future financing and acquisition transactions, stock
dividends or distributions and other general corporate
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purposes. The availability of such shares for issuance in the future will give
the Company greater flexibility in obtaining financing or in acquiring
Properties by permitting such shares to be issued without the expense and delay
of a special stockholders' meeting.
The availability of Preferred Stock, however, entails risks. Under certain
circumstances, shares of Preferred Stock could be used to create voting
impediments or to frustrate persons seeking to effect a takeover, engage in
proxy contests, or otherwise gain control of the Company. The Board could
authorize holders of Preferred Stock to vote as a class, either separately or
with the holders of Common Stock, and with voting rights that are the same as or
different from the voting rights of Common Stock, on the election of directors,
or approval of a merger, sale or exchange of assets by the Company or any other
extraordinary corporate transaction. See "Description of Stock--Preferred Stock"
for a description of the voting rights of the Series B Preferred Stock. In
addition, the shares of Preferred Stock could be privately placed with
purchasers who might side with the Board in opposing a hostile takeover bid.
Such uses could enhance the Board's ability to deal with attempts to gain
control of, or impose transactions upon, the Company that the Board believes are
coercive, unfair or otherwise not in the best interests of the Company and all
of its stockholders, but which certain stockholders may find attractive. It is
also possible that the dividend requirements and sinking fund, conversion or
redemption provisions, if any, which may be fixed by the Board for any class or
series of Preferred Stock at the time of issuance may have an adverse effect on
the availability of earnings for distribution to holders of Common Stock or for
other corporate purposes.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of the material federal income tax
considerations affecting the Company and holders of Common Stock. Vinson &
Elkins L.L.P., counsel to the Company, has reviewed the following discussion and
is of the opinion that it fairly summarizes the material federal income tax
considerations to a holder of the Common Stock based on current law. This
discussion is directed principally at stockholders who are individual United
States citizens or residents. No attempt has been made to comment on all federal
income tax consequences of the ownership of Common Stock. The summary does not
address considerations that may be relevant to particular stockholders,
including stockholders who are subject to special treatment under the federal
income tax laws (such as insurance companies, financial institutions or
broker-dealers), nor does it address any tax consequences under the laws of any
state, local or foreign jurisdiction. No rulings will be sought from the IRS or
any other tax authorities concerning the federal, state, local or other tax
considerations relevant to the Company's operations or REIT status, or to the
purchase, ownership or disposition of Common Stock. Because the following is
only a summary, it is qualified in its entirety by the applicable provisions of
the Code and the regulations adopted under the Code, court decisions, and the
rulings and other pronouncements of the IRS, all of which are subject to change,
possibly with retroactive effect.
EACH PROSPECTIVE STOCKHOLDER OF THE COMPANY IS ADVISED TO CONSULT HIS OR HER
OWN TAX ADVISOR ABOUT THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX
CONSEQUENCES OF THE OWNERSHIP OR DISPOSITION OF SHARES OF COMMON STOCK,
PARTICULARLY IN LIGHT OF THAT STOCKHOLDER'S SPECIFIC CIRCUMSTANCES.
FEDERAL INCOME TAXATION OF THE COMPANY
The Company believes that since its formation, it has been organized and
operated in a manner that permits it to satisfy the various requirements for
taxation as a REIT under the applicable provisions of the Code. The rules
governing REIT's are highly technical and require ongoing compliance with a
variety of tests that depend, among other things, on operating results. While
the Company believes it has satisfied these tests since its formation and plans
to use its best efforts to do so on a continuing basis, no assurance can be
given that such requirements will be met or that the Company will qualify as a
REIT for any particular year.
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In the opinion of Vinson & Elkins L.L.P., commencing with the Company's
initial taxable year ended December 31, 1995, if the Company is organized and
operated as described in this Prospectus, the Company will be able to qualify as
a REIT. It must be emphasized that this opinion is based and conditioned on
various assumptions and representations of the Company and its officers that are
described below. The Company's qualification as a REIT depends upon its ability
to meet, through actual annual operating results, the various qualification
tests imposed under the Code that are discussed below, the results of which will
not be monitored or reviewed by Vinson & Elkins L.L.P. While the Company expects
to satisfy these tests and plans to use its best efforts to do so, no assurance
can be given that actual operations will meet these requirements and that the
Company will qualify as a REIT for any particular year. The opinion of Vinson &
Elkins L.L.P. is not binding on the IRS or any court. The opinion of Vinson &
Elkins L.L.P. is based upon existing law, IRS regulations and currently
published administrative positions of the IRS and judicial decisions, all of
which are subject to change either prospectively or retroactively.
If the Company qualifies for taxation as a REIT, it generally will not be
subject to Federal corporate income tax on that portion of its ordinary income
or net capital gain that is currently distributed to stockholders. The REIT
provisions of the Code generally allow a REIT to deduct dividends paid to its
stockholders. This deduction for dividends paid to stockholders substantially
eliminates the Federal "double taxation" on earnings (once at the corporate
level and once again at the stockholder level) that usually results from
investments in a corporation.
Even if the Company qualifies for taxation as a REIT, however, the Company
may be subject to Federal income or excise tax, including the following: First,
the Company will be taxed at regular corporate rates on its undistributed REIT
taxable income, including undistributed net capital gain. Second, under certain
circumstances, the Company may be subject to the "alternative minimum tax."
Third, if the Company has net income from the sale or other disposition of
"foreclosure property" (which is, in general, property acquired by the Company
by foreclosure or otherwise on default on a loan secured by such 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 (currently 35%). Fourth, if the
Company has net income from prohibited transactions (which are, in general,
certain sales or other dispositions of property held primarily for sale to
customers in the ordinary course of business, other than foreclosure property),
such income will be subject to a 100% tax. Fifth, if the Company should fail to
satisfy 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 either of
the 75% or 95% test, multiplied by a fraction intended to reflect the Company's
profitability. Sixth, if the Company fails to distribute during a year at least
the sum of (a) 85% of its REIT ordinary income for such year, (b) 95% of its
REIT capital gain net income for such year and (c) any undistributed taxable
income from prior years, the Company will be subject to a 4% excise tax on the
excess of such required distribution over the amounts actually distributed.
However, to the extent the Company elects to retain and pay income tax on net
long term capital gains it received during the year, such amounts will be
treated as having been distributed for purposes of the 4% excise tax. Seventh,
if the Company should acquire any asset from a C corporation (i.e., a
corporation generally subject to full corporate-level tax) in a carryover-basis
transaction and the Company subsequently recognizes gain on the disposition of
such asset during the ten-year period beginning on the date on which the asset
was acquired by the Company, then, to the extent of the excess of the fair
market value of the asset over its adjusted basis upon its acquisition by the
Company, such gain will be subject to tax at the highest regular corporate rate,
pursuant to guidelines issued by the IRS.
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REQUIREMENTS FOR QUALIFICATION
The Code defines a REIT as a corporation, trust or association: (a) that is
managed by one or more directors or trustees, (b) the beneficial ownership of
which is evidenced by transferable shares or by transferable certificates of
beneficial interest, (c) that would be taxable as a domestic corporation but for
the REIT provisions of the Code, (d) that is neither a financial institution nor
an insurance company subject to certain provisions of the Code, (e) the
beneficial ownership of which is held by 100 or more persons, and (f) during the
last half of each taxable year not more than 50% in value of the outstanding
stock 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). The Company expects to meet each of these
requirements. In addition, certain other tests, described below, regarding the
nature of its income and assets also must be satisfied, which the Company
anticipates. The Code provides that conditions (a) through (d), inclusive, must
be met during the entire taxable year and that conditions (e) and (f) must be
met during at least 335 days of a taxable year of 12 months, or during a
proportionate part of a taxable year of less than 12 months. Conditions (e) and
(f) (the "100-Stockholder Requirement" and "Five-or-Fewer Requirement") do not
apply for the first taxable year for which an election is made to be taxed as a
REIT. For purposes of conditions (e) and (f), pension funds and certain other
tax-exempt entities are treated as individuals, subject to a "look-through"
exception in the case of conditions (f).
To protect against violations of the stock ownership requirements, the
Charter provides that no person (other than an "Excepted Holder") is permitted
to own, applying certain constructive ownership tests, more than 8.5% of the
lesser of the number or value of the outstanding shares of any class of the
Company's stock (the "Ownership Limit"). An Excepted Holder is a person who the
Board has determined will be permitted to hold shares in excess of the Ownership
Limit, based upon appropriate representations and undertakings designed to
protect the Company's REIT status (such as information establishing that the
Excepted Holder is treated as a "look-through" entity in applying the REIT stock
ownership tests and that the deemed ownership of the Company shares through it
will be appropriately dispersed so as not to jeopardize the Company's REIT
status). Each Excepted Holder will be subject to a separate ownership limit as
specified by the Board. Attempted transfers of shares of the Company's stock
that would violate the ownership limits (or related restrictions contained in
the Charter or Excepted Holder Agreements) generally will cause the number of
shares in excess of the limit to be transferred automatically to a trust for the
benefit of a charitable beneficiary rather than to the purported transferee.
To monitor the Company's compliance with the share ownership requirements,
the Company is required to maintain records disclosing the actual ownership of
its stock. To do so, the Company must demand written statements each year from
the record holders of 5% or more of its shares. (If the Company were to have
less than 2,000 record stockholders, the demand would have to be made to record
holders of smaller percentages of the shares.) In those statements, the record
holders are to disclose who actually owns the shares (that is, the persons
required to include the Company's dividends in their gross incomes). The Company
must maintain a list of those persons who fail or refuse to comply with this
demand. Such stockholders must submit a statement with their tax returns
disclosing the actual ownership of the shares of stock and certain other
information.
GROSS INCOME TESTS. In order to qualify as a REIT for a particular year,
the Company also must meet two tests governing the sources of its gross income
that are designed to ensure that the Company earns its income principally from
passive real estate investments. In evaluating a REIT's income under the income
tests, the REIT will be treated as receiving its proportionate share of the
income produced by any partnership in which the REIT invests, and any such
income will retain the character that it has in the hands of the partnership.
The Company may, from time to time, own and operate a number of its properties
through "qualified REIT subsidiaries." The Code provides that a qualified REIT
subsidiary is not treated as a separate corporation, and all of its assets,
liabilities and items of income, deduction and credit are treated as assets,
liabilities and such items of the REIT.
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SEVENTY-FIVE PERCENT GROSS INCOME TEST. At least 75% of a REIT's gross
income for each taxable year must be derived from specified classes of income
that principally are real estate related. The key permitted categories are: (a)
rents from real property; (b) interest on loans secured by real property; (c)
gain from the sale of real property or real property loans (excluding gain from
the sale of property that is held primarily for sale to customers in the
ordinary course of a trade or business, which is referred to below as "dealer
property"); (d) income from the operation and gain from the sale of certain
property acquired in connection with the foreclosure of a mortgage securing that
property or upon a default on a lease of the property ("foreclosure property");
(e) distributions on, or gain from the sale of, shares of other REITs; and (f)
"qualified temporary investment income" (described below).
In evaluating the Company's compliance with the 75% income test (as well as
the 95% income test described below), gross income does not include gross income
from "prohibited transactions." A prohibited transaction is a sale of dealer
property, not including foreclosure property and certain dealer property held by
the Company for at least four years.
The Company expects that substantially all of its operating gross income
from its properties will be considered rent from real property. Rent from real
property is qualifying income for purposes of the 75% income test only if
certain conditions are satisfied. Rent from real property includes charges for
services customarily rendered to tenants, and rent attributable to personal
property leased together with the real property so long as the personal property
rent is less than 15% of the total rent. The Company does not expect to earn
material amounts of income from services rendered to tenants or from personal
property.
Rent from real property generally does not include rent based on the income
or profits derived from the property, unless the computation is based only on a
fixed percentage of receipts or sales. Also excluded is rent received from a
person or corporation in which the Company (or any of its 10% or greater owners)
owns a 10% or greater interest. The Company does not expect to earn income in
these two excluded categories.
A third exclusion covers amounts received with respect to real property if
the Company furnishes services to the tenants or manages or operates the
property, other than through an "independent contractor" from whom the Company
does not derive any income. The obligation to operate through an independent
contractor generally does not apply, however, if any services provided by the
Company are "usually or customarily rendered" in connection with the rental of
space for occupancy only and are not considered rendered primarily for the
convenience of the tenant (applying standards that govern in evaluating whether
rent from real property would be unrelated business taxable income when received
by a tax-exempt owner of the property). A DE MINIMIS exception allows the
Company to provide non-customary services to its tenants and not disqualify
income as rents from real property so long as the value of the impermissible
services does not exceed 1% of the Company's gross income from the property. The
amount the Company receives that is attributable to impermissible services
cannot be valued at less than 150% of the direct cost to the Company providing
the services. The Company generally will directly operate and manage its
properties without using an "independent contractor," although independent
contractors may be employed to perform certain day-to-day property management
duties, such as collection of rents and routine maintenance. The Company
believes that the only material services to be provided to tenants will be those
usually or customarily rendered in connection with the rental of space for
occupancy only. The Company does not provide services that might be considered
rendered primarily for the convenience of the tenants. The Company believes that
substantially all its income from the properties will be qualifying income under
the 75% income test.
A portion of the proceeds of the Offering may be invested in
interest-bearing accounts and an investment fund or funds that invest
substantially all their assets in diversified portfolios of U.S. dollar-
denominated "money market" instruments (such as bank certificates of deposit and
bankers acceptances, commercial paper and repurchase agreements) and obligations
issued or guaranteed by the U.S. government or its agencies or
instrumentalities. The interest and dividend income earned on those funds should
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be includable under the 75% income test as "qualified temporary investment
income" (which includes income earned on stock or debt instruments acquired with
the proceeds of a stock offering, not including amounts received under a
dividend reinvestment plan). Qualified temporary investment income treatment
only applies during the one-year period beginning when a REIT receives the new
capital.
Upon the Company's ultimate sale of its properties, any gains realized are
expected to constitute qualifying income, as gain from the sale of real property
(not involving a prohibited transaction).
NINETY-FIVE PERCENT GROSS INCOME TEST. In addition to earning 75% of its
gross income from the sources listed above, at least an additional 20% of the
Company's gross income for each taxable year must come either from those
sources, or from dividends, other interest or gains from the sale or other
disposition of stock or other securities that do not constitute dealer property.
This test permits a REIT to earn a significant portion of its income from
traditional "passive" investment sources that are not necessarily real estate
related. The term "interest" (under both the 75% and 95% tests) does not include
amounts that are based on the income or profits of any person, unless the
computation is based only on a fixed percentage of receipts or sales.
FAILING THE BASIC GROSS INCOME TESTS. As a result of the 75% and 95% tests,
REITs generally are not permitted to earn more than 5% of their gross income
from active sources (such as brokerage commissions or other fees for services
rendered). While the Company does not anticipate that it will earn substantial
amounts of nonqualifying income, if nonqualifying income exceeds 5% of the
Company's gross income, the Company could lose its status as a REIT. If a REIT
fails to meet either the 75% or 95% income tests during any taxable year, it may
still qualify as a REIT for that year if the failure was due to reasonable cause
and certain relief provisions apply, although a special penalty tax may be owed.
See "--Federal Income Taxation of the Company."
ASSET TESTS. In order to qualify as a REIT for a particular year, on the
last day of each calendar quarter the Company also must meet two tests
concerning the nature of its investments. First, at least 75% of the value of
the Company's total assets generally must consist of real estate assets, cash,
cash items (including receivables) and government securities. For this purpose,
"real estate assets" include interests in real property, interests in loans
secured by mortgages on real property or by interests in real property, shares
in other REITs, certain options, and for the one-year period following receipt
of new capital, stock and debt instruments acquired with that new capital. Real
estate assets do not include mineral, oil or gas royalty interests. Second,
although the balance of the Company's assets generally may be invested without
restriction, except for securities that are considered real estate assets, the
Company will not be permitted to own: (a) securities of any one nongovernmental
issuer that represent more than 5% of the value of the Company's total assets;
or (b) more than 10% of the outstanding voting securities of any single issuer.
A REIT may, however, own 100% of the stock of a qualified REIT subsidiary, in
which case the assets, liabilities and items of income, deduction and credit of
the subsidiary are treated as those of the REIT. The Company may, from time to
time, hold certain properties through qualified REIT subsidiaries. In evaluating
a REIT's assets, if the REIT invests in a partnership, it is deemed to own its
proportionate share of the assets of the partnership.
The Company anticipates that it will comply with these asset tests. As was
described above, for a temporary period, some of the proceeds of the Offering
may be invested principally in interest-bearing accounts and an investment fund
or funds that invest substantially all their assets in diversified portfolios of
U.S. dollar-denominated "money market" instruments (such as bank certificates of
deposit and bankers acceptances, commercial paper and repurchase agreements) and
obligations issued or guaranteed by the U.S. government or its agencies or
instrumentalities, which should constitute qualifying assets, at least during
the initial one-year period following the Offering. Substantially all of the
Company's other investments will be in properties that should represent
qualifying real estate assets.
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ANNUAL DISTRIBUTION REQUIREMENT. To maintain REIT status, the Company
generally must distribute to its stockholders in each taxable year at least 95%
of its net ordinary income (capital gain is not required to be distributed).
More precisely, the Company must distribute an amount equal to: (a) 95% of the
sum of (i) its "REIT Taxable Income" before the deduction for dividends paid and
excluding any net capital gain and (ii) any net income from foreclosure property
less the tax on such income, minus (b) certain limited categories of "excess
non-cash income." REIT Taxable Income is defined to be the taxable income of the
REIT, computed as if it were an ordinary corporation, with certain
modifications. For example, net income from foreclosure property and net income
from prohibited transactions are excluded. In addition, the REIT may carry over,
but not carry back, a net operating loss for 15 years after the year in which it
was incurred.
A REIT may satisfy the 95% distribution test with dividends paid during the
taxable year and with certain dividends paid after the end of the taxable year.
Dividends paid in January that were declared during the last calendar quarter of
the prior year and were payable to stockholders of record during the last
calendar quarter of that prior year are treated as paid on December 31 of the
prior year (both for the Company and its stockholders). Because dividends that
are paid in a subsequent year and fail to meet this test will be subject to a
nondeductible 4% excise tax, the Company anticipates distributing its fourth
quarter dividends within the taxable year, or by January 31 of the following
year. Dividends declared before the due date of the Company's tax return for the
taxable year (including extensions) also will be treated as paid in the prior
year (although subject to the excise tax) if they are paid: (a) within 12 months
of the end of such taxable year; and (b) no later than the Company's next
regular distribution payment. Dividends that are paid after the close of a
taxable year and do not qualify under the rule governing payments made in
January will be taxable to the stockholders in the year paid, even though they
may be taken into account by the Company for a prior year.
The Company will be taxed at regular corporate rates to the extent that it
retains any portion of its taxable income. For example, if the Company only
distributes the required 95% of its taxable income, it would be taxed on the
retained 5%. The Company currently intends to distribute sufficient income to
satisfy the annual 95% distribution requirement. Under certain circumstances,
however, the Company may not have sufficient cash or other liquid assets to meet
the distribution requirement. This could arise because of competing demands for
the Company's funds, or due to timing differences between tax reporting and cash
receipts and disbursements (income may have to be reported before cash is
received, or expenses may have to be paid before a deduction is allowed).
Although the Company does not anticipate difficulties in meeting this
requirement, no assurance can be given that the necessary funds will be
available. If the Company fails to make a required distribution, it would lose
its REIT status.
If the Company fails to meet the 95% distribution requirement because of an
adjustment to the Company's taxable income by the IRS, the Company may be able
to cure the failure retroactively by paying to its stockholders a "deficiency
dividend" (as well as paying applicable interest and penalties to the IRS)
within a specified period.
SPECIAL DISTRIBUTION REQUIREMENT; BUILT-IN GAIN RULES. The Code and
regulations provide that a corporation may be taxed as a REIT only if it has no
earnings and profits accumulated in any non-REIT year (including amounts
attributable to entities merged into the REIT). The Company expects to be
treated as a REIT from inception and does not believe that it inherited any
earnings and profits from any of the Merged Trusts that were accumulated during
any non-REIT years. Pursuant to IRS Notice 88-19, if a REIT acquires the assets
of a C corporation in a tax-free transaction, unless the REIT makes a special
election to recognize any built-in gain over a ten-year period, the C
corporation is treated as having disposed of the assets in a taxable transaction
immediately before the transfer to the REIT. Due to the REIT status of the
Merged Trusts, the Company does not believe that these requirements apply to the
Company or the Merged Trusts. If the IRS were to challenge successfully the REIT
status of one or more of the Merged Trusts during any period prior to the
Merger, depending upon the specific circumstances,
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the rules applicable to transfers from C corporations to REITs might adversely
affect the Company's ability to qualify as a REIT.
FAILURE TO QUALIFY AS A REIT
For any taxable year in which the Company fails to qualify as a REIT, it
would be taxed at the usual corporate rates on all of its taxable income.
Distributions to its stockholders would not be deductible in computing that
taxable income and distributions would no longer be required under the Code. Any
corporate level taxes generally would reduce the amount of cash available to the
Company for distribution to its stockholders or for reinvestment. Because the
stockholders would continue to be taxable on the distributions they receive, the
net after-tax yield to the stockholders from their investment in the Company
likely would be reduced substantially. As a result, the Company's failure to
qualify as a REIT during any taxable year could have a material adverse effect
on the Company and its stockholders. If the Company loses its REIT status,
unless certain relief provisions apply, the Company would not be eligible to
elect REIT status again until the fifth taxable year that begins after the first
year for which the Company's election was terminated.
If, after forfeiting its REIT status, the Company later qualifies and elects
to be taxed as a REIT again, the Company may face additional adverse tax
consequences. Prior to the end of the year in which the Company sought to
qualify again as a REIT, the Company would be required to make distributions
sufficient to eliminate any earnings and profits accumulated during its period
of non-REIT status. Moreover, under IRS Notice 88-19, immediately prior to the
effectiveness of the election to return to REIT status, the Company would be
treated as having disposed of all of its assets in a taxable transaction,
triggering taxable gain with respect to the Company's appreciated assets. In
that event, however, under current law the Company would be permitted to elect
an alternative treatment under which those gains would be taken into account
only as and when they actually were recognized upon sales of the appreciated
property occurring within a ten-year period (certain proposed legislation might
eliminate this alternative treatment, in which case the Company might choose to
remain a C corporation). The Company would be required to distribute at least
95% of any such recognized gains, but it would not receive the benefit of a
dividends-paid deduction to reduce those taxable gains. Thus, any such gains on
appreciated assets would be subject to double taxation (that is, at the
corporate level as well as the stockholder level).
TAXATION OF TAXABLE DOMESTIC STOCKHOLDERS
Distributions generally will be taxable to stockholders as ordinary income
to the extent of the Company's earnings and profits. Dividends declared during
the last quarter of a calendar year and actually paid during January of the
immediately following calendar year will generally be treated as if received by
the stockholders on December 31 of the calendar year during which they were
declared. Distributions paid to stockholders will not constitute passive
activity income and, as a result, generally cannot be offset by losses from
passive activities of a stockholder who is subject to the passive activity
rules.
Distributions designated by the Company as capital gains dividends generally
will be taxed as long-term capital gains to stockholders to the extent that the
distributions do not exceed the Company's actual net capital gain for the
taxable year. The IRS has announced that it will issue regulations providing
that a REIT may designate a capital gain dividend distribution as coming from
three sources: (a) a 20% capital gain rate distribution in the case of capital
assets held for more than 18 months prior to disposition, (b) a 28% capital gain
rate distribution in the case of capital assets held for more than 12 months but
less than 18 months prior to disposition, or (c) a 25% capital gain rate
distribution in the case of depreciable real property held for more than 12
months prior to disposition to the extent of "unrecaptured section 1250 gain"
with respect to the property. If no designation is made regarding the capital
gain dividend, it is treated as a 28% rate gain distribution. Corporate
stockholders may be required to treat up to 20% of any such capital gains
dividends as ordinary income. Distributions by the Company, whether
characterized as ordinary income or as capital gains, are not eligible for the
70% dividends received deduction for
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corporations. Stockholders are not permitted to deduct losses or loss
carryforwards of the Company. Future regulations may require that stockholders
take into account, for purposes of computing their individual alternative
minimum tax liability, certain tax preference items of the Company.
The Company may generate cash in excess of its net earnings. If the Company
distributes cash to stockholders in excess of the Company's current and
accumulated earnings and profits, the excess cash will be deemed to be a
nontaxable return of capital to each stockholder to the extent of the adjusted
tax basis of the stockholder's shares, and the distribution will reduce the
stockholder's basis (but not below zero). Distributions in excess of the
adjusted tax basis will be treated as gain from the sale or exchange of the
shares. A stockholder who has received a distribution in excess of the current
and accumulated earnings and profits of the Company may, upon the sale of the
shares, realize a higher taxable gain or a smaller loss because the basis of the
shares as reduced by that distribution will be used for purposes of computing
the amount of the gain or loss.
For taxable years beginning after December 31, 1997, the Company may
designate a certain amount as undistributed capital gains upon which the Company
must pay tax within 30 days after the close of such year, and the amount
designated must also be reported by the Company's stockholders as long-term
capital gains for their tax years in which the last day of the Company's tax
year falls. Such designation must be made in a written notice mailed to the
stockholders within 60 days of the close of the Company's taxable year (or
mailed to its stockholders with its annual report for the taxable year). The
stockholders are treated as having paid the capital gains tax imposed on the
Company on the designated amounts and are allowed a credit or refund for the tax
deemed paid. Stockholders can increase the adjusted bases of their shares by the
difference between the designated amounts included in their long-term capital
gains and tax deemed paid with respect to their shares. The Company's earnings
and profits will be adjusted for any such undistributed capital gains in
accordance with regulations to be prescribed by the IRS.
Generally, gain or loss realized by a stockholder upon the sale of shares
will be reportable as capital gain or loss. If a stockholder receives a capital
gain dividend from the Company and sells the shares before holding them for more
than six months, any loss incurred on the sale or exchange of the shares is
treated as a long-term capital loss to the extent of the corresponding capital
gain dividend received.
In any year in which the Company fails to qualify as a REIT, its
stockholders generally will continue to be treated in the same fashion described
above, except that the Company dividends will not be eligible for treatment as
capital gains dividends, corporate stockholders will qualify for the dividends
received deduction and the stockholders will not be required to report any share
of the Company's tax preference items.
BACKUP WITHHOLDING
The Company will report to its stockholders and the IRS the amount of
dividends paid during each calendar year and the amount of tax withheld, if any.
If a stockholder is subject to backup withholding, the Company will be required
to deduct and withhold from any dividends payable to that stockholder a tax of
31%. These rules may apply: (a) when a stockholder fails to supply a correct
taxpayer identification number; (b) when the IRS notifies the Company that the
stockholder is subject to the rules or has furnished an incorrect taxpayer
identification number; or (c) in the case of corporations or others within
certain exempt categories, when they fail to demonstrate that fact when
required. A stockholder who does not provide a correct taxpayer identification
number may also be subject to penalties imposed by the IRS. Any amount withheld
as backup withholding may be creditable against the stockholder's federal income
tax liability. The Company also may be required to withhold a portion of capital
gain distributions made to stockholders who fail to certify their non-foreign
status to the Company.
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TAXATION OF DOMESTIC TAX-EXEMPT STOCKHOLDERS
In 1993, the federal income tax laws were changed to facilitate investments
by pension funds in REITs. As described above, a corporation cannot be a REIT if
more than 50% of the value of its stock is owned by five or fewer individuals at
any time during the last half of a taxable year. In applying this test, pension
trusts (and certain other tax-exempt stockholders) formerly were treated as
single individuals. Beginning in 1994, however, a qualified pension trust
generally has not been considered a single individual in evaluating a REIT's
ownership. Instead, beneficiaries of the pension trust are treated as holding
the pension trust's stock investment in the REIT in proportion to their
actuarial interests in the pension trust.
In general, a tax-exempt entity that is a stockholder of the Company will
not be subject to tax on distributions from the Company or gain realized on the
sale of shares. In Revenue Ruling 66-106, the IRS ruled that a REIT's
distributions to a tax-exempt employees' pension trust did not constitute
unrelated business taxable income. However, when the law was changed to relax
the stock ownership restrictions applicable to pension plan investors, a related
change was made for unrelated business income tax purposes. This provision
applies only if a REIT is a "Pension-Held REIT." In that case, those pension
trusts owning more than 10% of the value of the REIT's stock may be required to
report a portion of any dividends they receive from the REIT as unrelated
business taxable income. One aspect of the definition of a Pension-Held REIT
requires that either one pension trust must own more than 25% of the value of
the REIT's stock, or one or more pension trusts (each of which owns more than
10%) must own in the aggregate more than 50% of the value of the REIT's stock.
The Company intends to operate such that, if it were classified as a
Pension-Held REIT, these provisions would not cause its stockholders that are
pension trusts to receive dividends that would be considered unrelated business
taxable income, however there can be no assurance that the Company will be able
to operate in such a manner. A tax-exempt entity, however, may be subject to the
unrelated business income tax on dividends from or gain on the Company's shares
to the extent that the tax-exempt entity financed the acquisition of its shares
with "acquisition indebtedness" within the meaning of the Code.
For social clubs, voluntary employee benefit associations, supplemental
unemployment benefit trusts and qualified group legal services plans exempt from
federal income taxation under Sections 501(c)(7), (9), (17) and (20) of the
Code, respectively, income from an investment in the Company will constitute
unrelated business taxable income unless the organization is able to deduct
amounts properly set aside or placed in reserve for certain purposes so as to
offset the unrelated business taxable income generated by the investment in the
Company. These investors must consult their own tax advisors concerning the "set
aside" and reserve requirements.
TAXATION OF FOREIGN STOCKHOLDERS
The rules governing United States income, gift and estate taxation of
foreign entities and individuals who are neither citizens nor residents of the
U.S. are complex. They depend not only upon U.S. tax principles, but also upon
the treaties, if any, between the U.S. and the countries of the foreign
investors. The following discussion is only a summary of certain U.S. federal
income tax considerations potentially affecting foreign stockholders of the
Company, who must consult with their own advisors to evaluate all relevant tax
considerations.
The character of distributions on the Company's shares generally will be
determined in the same fashion for foreign stockholders as for domestic
stockholders (that is, a distribution may be categorized as a taxable ordinary
income dividend paid out of the Company's current or accumulated earnings and
profits, a nontaxable return of capital, a distribution in excess of the
stockholder's basis that is taxable as gain from sale of the shares or a capital
gain dividend). See "--Taxation of Taxable Domestic Stockholders."
If income or gain from the shares is effectively connected with a U.S. trade
or business conducted by a foreign stockholder ("effectively connected income"),
it generally will be subject to regular U.S. income
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taxes at graduated rates rather than to the withholding tax described below.
Foreign stockholders whose income from the shares is effectively connected
income may file an IRS Form 4224 with the Company certifying to that effect.
Such income may be subject to the alternative minimum tax, and a special
alternative minimum tax may apply to nonresident alien individuals. Foreign
corporate stockholders receiving effectively connected income from the shares
also may be subject to an additional 30% branch profits tax, unless certain
exemptions apply.
Foreign stockholders whose income from the shares is not effectively
connected income generally will be subject to withholding at a 30% rate on
ordinary income dividends paid by the Company, unless an applicable tax treaty
reduces that rate. For this purpose, however, ordinary income distributions will
be presumed to represent dividends paid out of earnings and profits, rather than
nontaxable returns of capital or capital gains. If such a distribution is later
determined to have exceeded earnings and profits, an affected foreign
stockholder may claim a refund for excess withholdings.
Any distributions that are attributable to gain from the sale of United
States real property interests (whether or not specifically designated as
capital gain dividends) will be subject to the Foreign Investment in Real
Property Tax Act ("FIRPTA"). Under FIRPTA, those distributions will be treated
as gains that are effectively connected income and generally will be taxed at
regular U.S. capital gains tax rates. As a means of collecting this tax, the
Treasury Regulations require the Company to withhold 35% of any distributions to
foreign stockholders that the Company could designate as capital gains
dividends. If the amount of the FIRPTA withholding exceeds the applicable tax,
the foreign stockholder may obtain a refund.
Gain from the sale of shares generally will not be subject to U.S. taxation.
The sale of shares generally will not be subject to FIRPTA because the Company
should qualify as a "domestically-controlled REIT" (only a minority, if any, of
the Company's stockholders are expected to be foreign stockholders). If any
capital gain dividends or gains from the sale of shares constitute effectively
connected income, however, regular U.S. taxes may apply as described above. If a
nonresident alien stockholder is present in the U.S. for 183 days or more during
the year for which the gains are reportable and has a "tax home" in the U.S., a
30% tax may apply to the capital gains.
Upon the death of a foreign individual stockholder, the stockholder's shares
will be treated as part of the stockholder's U.S. estate for purposes of the
U.S. estate tax, except as may be otherwise provided in an applicable estate tax
treaty.
POSSIBLE TAX LAW CHANGES
The anticipated income tax treatment described in this Prospectus may be
changed, perhaps retroactively, by legislative, administrative or judicial
action at any time. Congress at any time may consider changes to the tax laws,
and any such legislation may affect the treatment of real estate investments, in
general, or REITs in particular. For example, in 1996 the Clinton administration
proposed certain legislation (that has not been enacted) that would require
immediate recognition of built-in gains of certain large C corporations (with a
stock value in excess of $5 million) that elect to be taxed as REITs
(potentially applicable if a REIT loses its REIT status and then seeks to
requalify) or of large C corporations the assets of which are acquired by REITs
in tax-free transactions (effectively repealing the ability to elect under IRS
Notice 88-19 to report any such built-in gains only to the extent that they are
recognized when and if the appreciated assets are sold during a ten-year
period). The Clinton administration's budget proposal announced on February 2,
1998 includes a proposal to amend the REIT asset tests with respect to
non-qualified REIT subsidiaries, such as certain the Company's corporate
subsidiaries. The proposal would prohibit a REIT from owning more than 10% of
the vote or value of the outstanding stock of any non-qualified REIT subsidiary.
Existing non-qualified REIT subsidiaries would be grandfathered, and therefore
subject only to the 5% asset test and 10% voting securities test of current law,
except that such grandfathering would terminate if the subsidiary engaged in a
new trade or business or acquired substantial net assets. As a result, if the
proposal were to be enacted, certain of the Company's subsidiaries
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would become subject to the new 10%-vote-and-value limitation if they commenced
new trade or business activities or acquired substantial new assets after the
specified effective date. The Company could not satisfy the new test because it
would be considered to own more than 10% of the value of the stock of such
subsidiaries. Accordingly, the proposal, if enacted, would materially impede the
ability of certain of the Company's corporate subsidiaries to engage in other
activities without jeopardizing the Company's REIT status. No prediction can be
made as to whether these or any other changes to the REIT tax rules will be
implemented, or whether any changes that might take effect would adversely
affect the Company's ability to qualify as a REIT or the treatment of the
Company's stockholders.
STATE AND LOCAL TAXES
The Company will be subject to the taxing jurisdiction of each state in
which it owns properties or otherwise engages in business. Stockholders also may
be subject to state or local taxes in various jurisdictions, including those in
which they reside or transact business. The state or local tax treatment may
differ from the federal income tax treatment described above. As a general
matter, however, stockholders receiving dividends from the Company are likely to
be taxable on those amounts only in their states of residence. Because of the
potential diversity of the state and local rules, this Prospectus does not
include a discussion of state or local taxation of the Company or the
stockholders, nor is any representation made as to the tax status of the Company
or the stockholders in any state or local jurisdiction. All stockholders must
consult their own tax advisors concerning the possible application of any state
or local tax laws.
EXPERTS
The consolidated financial statements and schedules incorporated by
reference herein and in the Registration Statement to the extent and for the
periods indicated in their reports, have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto and have been included herein and in the Registration Statement in
reliance upon the authority of said firm as experts in giving said reports.
LEGAL MATTERS
The legality of the Offered Securities will be passed upon for the Company
by Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland. Certain legal matters
described under "Federal Income Tax Considerations" will be passed upon for the
Company by Vinson & Elkins L.L.P., Dallas, Texas.
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GLOSSARY
"AMERITECH" means State Street Bank and Trust Company, as trustee for the
Ameritech Pension Trust (or any successor trustee).
"ASSET PURCHASE" means the sale by Trust 83 to the Company of all of Trust
83's properties (except the Charleston Business Park property) and certain other
assets, in accordance with the Amended and Restated Asset Purchase Agreement
between the Company and Trust 83 dated as of November 10, 1995.
"BOARD" means the board of directors of the Company.
"BYLAWS" means the Second Amended and Restated Bylaws of the Company.
"CHARTER" means the Third Amended and Restated Articles of Incorporation of
the Company.
"CODE" means the Internal Revenue Code of 1986, as amended, together with
its predecessor.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON STOCK" means the Company's common stock, par value $.001 per share.
"COMPANY" means Meridian Industrial Trust, Inc., a Maryland corporation.
"CONSOLIDATION TRANSACTIONS" means the Merger and the Asset Purchase.
"CONTROL SHARE" means voting shares of stock that, if aggregated with all
other such shares of stock previously acquired by the acquiror thereof or in
respect of which the acquiror is able to exercise or direct the exercise of
voting power (except solely by virtue of a revocable proxy) would entitle the
acquiror to exercise voting power in electing directors within any of the
following ranges of voting power: (i) one-fifth or more but less than one-third;
(ii) one-third or more but less than a majority; or (iii) a majority of all
voting power. Control Shares do not include shares the acquiring person is then
entitled to vote as a result of having previously obtained stockholder approval.
"CONTROL SHARE LAW" means Sections 3-701 through 3-709 of the MGCL.
"CONVERSION PRICE" means the price at which the Series B Preferred Stock may
be converted into Common Stock at the option of the holder.
"EQUITY STOCK" means Common and Preferred Stock of the Company.
"EXCEPTED HOLDERS" means a person whom the Board has determined will be
permitted to hold shares in excess of the Ownership Limit, based upon
appropriate representations and undertakings designed to protect the Company's
REIT status.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FIRPTA" means the Foreign Investment in Real Property Act.
"FIVE OR FEWER REQUIREMENT" means the requirement under the Code that not
more than 50% in value of the Company's outstanding shares of capital stock may
be owned, directly or indirectly, by five or fewer individuals (as defined in
the Code) during the last half of a taxable year (other than the first year).
"FUNDS FROM OPERATION" means, in accordance with the resolution adopted by
the Board of Governors of NAREIT, net income (loss) (computed in accordance with
generally accepted accounting principles), excluding gains (or losses) from debt
restructuring and sales of property, plus depreciation and amortization, and
after adjustment from unconsolidated partnerships and joint ventures.
"HUNT" means Hunt Acquisitions Partners, Ltd., a Delaware limited
partnership.
"HUNT REALTY" means Hunt Realty Corporation, a Delaware corporation.
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"INDEPENDENT DIRECTOR" means a director of the Company who is not an
officer, full-time employee or member of the immediate family of an officer in
full-time employment of the Company.
"INTERESTED STOCKHOLDER LAW" means the provisions of the MGCL (Sections
3-601 through 3-604) that place restrictions on transactions between Maryland
corporations and stockholders who have acquired 10% or more of a corporation's
stock.
"INTERESTED STOCKHOLDERS" means, in accordance with the MGCL, any person who
owns 10% or more of the voting power of a corporation's shares.
"IRS" means the Internal Revenue Service.
"LIBOR" means the London Interbank Offered Rate.
"MERGED TRUSTS" means Trust IV, Trust VI and Trust VII all of which were
merged into the Company on February 23, 1996.
"MERGER" means the merger of Trusts IV, VI and VII into the Company in
accordance with the Merger Agreement and applicable law.
"MERGER AGREEMENT" means the Amended and Restated Agreement and Plan of
Merger dated as of November 10, 1995 among the Merged Trusts and the Company.
"MERGER WARRANTS" means the warrants to purchase shares of Common Stock to
be issued by the Company to the holders of Trust VI common stock and Trust VII
common stock in connection with the Merger.
"MORTGAGE LOAN" means the Loan Administration Agreement between the
Prudential Insurance Company of America and the Company, as amended.
"MGCL" means the Maryland General Corporation Law, as amended from time to
time.
"NYSE" means the New York Stock Exchange.
"ORGANIZATIONAL DOCUMENTS" means the Charter and Bylaws.
"OTR" means OTR, an Ohio general partnership acting on behalf of and as
nominee for The State Teachers Retirement Board of Ohio.
"OWNERSHIP LIMIT" means the restriction contained in the Charter providing
that, subject to certain exceptions, no holder may own, or be deemed to own by
virtue of the attribution provisions of the Code, more than 8.5% of the lesser
of the number or value of the outstanding shares of any class of the Company's
stock.
"PREFERRED STOCK" means all series of preferred stock of the Company.
"PREFERRED STOCK PRIVATE PLACEMENT" means the private placement of shares of
the Series B Preferred Stock to Ameritech and OTR.
"PROHIBITED OWNER" means the person who would otherwise be considered the
owner of Shares-in-Trust had such shares not been transferred to a trustee
because such owner violated the Ownership Limit.
"PROPERTIES" means all of the properties owned by the Company.
"PROSPECTUS" means this prospectus.
"RECAPITALIZATION" means the May 31, 1995 closing of the transactions under
the stock purchase agreements between Hunt and each of the Merged Trusts and the
stock purchase agreements between USAA and each of the Merged Trusts, and the
concurrent restructuring or retirement of the Trusts' indebtedness.
47
<PAGE>
"REFINANCING" means (i) the retirement of certain Trust indebtedness that
took place when the Consolidation Transactions closed using the net proceeds of
the Preferred Stock Private Placement and (ii) the availability of funds under
the Unsecured Credit Facility.
"REIT" means a real estate investment trust meeting the requirements of
Sections 856 through 860 of the Code.
"REIT TAXABLE INCOME" means taxable income of a REIT, computed as if it were
an ordinary corporation, with certain modifications.
"RULE 144" means Rule 144 adopted by the SEC under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERIES A PREFERRED STOCK" means the Series A Preferred Stock, par value
$.001 per share of the Company that was redeemed or canceled in the Merger.
"SERIES B PREFERRED STOCK" means the Series B Preferred Stock, par value
$.001 per share, of the Company issued in the Preferred Stock Private Placement.
"SHARES-IN-TRUST" means shares of Equity Stock (including warrants or
options to acquire Equity Stock) that would be automatically transferred to a
trustee for the benefit of a charitable beneficiary because they would cause a
person to be treated as owning Equity Stock in violation of the Company's
Ownership Limit.
"STOCK PLAN" means the Amended and Restated Employee and Director Incentive
Stock Plan of the Company.
"TRUST 83" means Meridian Point Realty Trust '83, a California business
trust.
"TRUST IV" means Meridian Point Realty Trust IV Co., a Missouri corporation
that merged into the Company on February 23, 1996.
"TRUST VI" means Meridian Point Realty Trust VI Co., a Missouri corporation
that merged into the Company on February 23, 1996.
"TRUST VII" means Meridian Point Realty Trust VII Co., a Missouri
corporation that merged into the Company on February 23, 1996.
"TRUSTS" means Trust VI, Trust VI, Trust VII and Trust 83, collectively.
"USAA" means USAA Real Estate Company, a Delaware corporation which is an
indirect, wholly-owned subsidiary of United Services Automobile Association, a
reciprocal interinsurance exchange formed under the Texas Insurance Code.
"USAA OPTION" means the option USAA granted to the Company to purchase
certain industrial property located in Lakeland, Florida and the right of first
refusal to purchase certain land and improvements located in Chicago, Illinois.
"USAA WARRANT" means the warrant to purchase shares of Common Stock that the
Company issued to USAA as consideration for the USAA Option.
48
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS OR IN A PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. NEITHER THIS PROSPECTUS NOR ANY
PROSPECTUS SUPPLEMENT CONSTITUTES AN OFFER TO SELL OR A SOLICITATION OF ANY
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES, NOR
DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY SUCH
SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT ANY INFORMATION CONTAINED HEREIN OR
THEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation by Reference................................................ 2
The Company............................................................... 3
Use of Proceeds........................................................... 3
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends....... 3
Description of Debt Securities............................................ 4
Description of Stock...................................................... 18
Description of Warrants................................................... 25
Selling Stockholders...................................................... 27
Plan of Distribution...................................................... 28
Certain Provisions of Maryland Law and of the Charter and Bylaws.......... 30
Federal Income Tax Considerations......................................... 35
Experts................................................................... 45
Legal Matters............................................................. 45
Glossary.................................................................. 46
</TABLE>
[LOGO]
DEBT SECURITIES
PREFERRED STOCK
COMMON STOCK
WARRANTS
---------------------
PROSPECTUS
---------------------
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses in connection with the
issuance and distribution of the securities registered hereby, which will be
borne by the Company:
<TABLE>
<S> <C>
SEC registration fee............................................ $ 177,000
Printing and duplicating expenses............................... 125,000
Legal fees and expenses......................................... 150,000
Blue sky fees and expenses (including legal fees)............... 25,000
Accounting fees and expenses.................................... 100,000
Rating agency fees.............................................. 225,000
Trustee and transfer agent fees (including counsel fees)........ 50,000
Miscellaneous expenses.......................................... 148,000
---------
Total....................................................... $1,000,000
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS
The Maryland General Corporation Law ("MGCL") permits a Maryland corporation
to include in its charter a provision limiting the liability of its directors
and officers to the corporation and its stockholders for money damages except
for liability resulting from (a) actual receipt of improper benefit or profit in
money, property or services or (b) active and deliberate dishonesty established
by a final judgment as being material to the cause of action. The Company's
Charter (the "Charter") contains such a provision which eliminates such
liabilities to the maximum extent permitted by Maryland law.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Charter does not) to indemnify a director or officer who has been
successful on the merits or otherwise, in defense of any proceeding to which he
is made a party by reason of his service in that capacity. The MGCL permits a
corporation to indemnify its present and former directors and officers, among
others, against judgments, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service in those or other capacities unless it
is established that (a) the act or omission of the director or officer was
material to the matter giving rise to the proceeding and (i) was committed in
bad faith or (ii) was the result of an active and deliberate dishonesty, (b) the
director or officer actually received an improper personal benefit in money,
property or services or (c) in the case of a criminal proceeding, the director
or officer had reasonable cause to believe that the act or omission was
unlawful. However, under the MGCL, a Maryland corporation may not indemnify for
any adverse judgment in a suit by or in the right of a corporation. In addition,
the MGCL requires the Company, as a condition to advancing expenses, to obtain
(a) a written affirmation by the director or officer of his good faith belief
that he has met the standard of conduct necessary for indemnification by the
Company as authorized by the Company's bylaws and (b) a written statement by or
on his behalf to repay the amount paid or reimbursed by the Company if it shall
ultimately be determined that the standard of conduct was not met.
The Charter obligates the Company to the maximum extent permitted by
Maryland law to indemnify and to pay or reimburse reasonable expenses in advance
of final disposition of a proceeding to (a) any present or former director or
officer of the Company or (b) any individual who, while a director of the
Company and at the request of the Company, serves or has served as a director,
officer, partner or trustee of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise from and against any claim or
liability which such person may become subject or which such person may incur by
reason of his or her status as a current or former director or officer of the
Company. The Charter also
II-1
<PAGE>
permits the Company to indemnify and advance expenses to any person who served a
predecessor of the Company in any of the capacities described above and to any
employee or agent of the Company or a predecessor of the Company.
The Company has entered into indemnification agreements with each of its
officers and directors. The indemnification agreements require, among other
matters, that the Company indemnify its executive officers and directors to the
fullest extent permitted by law and advance to the officers all related
expenses, subject to reimbursement, if it is subsequently determined that
indemnification is not permitted. Under these agreements, the Company must also
indemnify and advance all expenses incurred by executive officers and directors
seeking to enforce their rights under the indemnification agreements and may
cover executive officers and directors under the Company's directors' and
officers' liability insurance. Although the indemnification agreement offers
substantially the same scope of coverage afforded by law, it provides greater
assurance to directors and executive officers that indemnification will be
available, because, as a contract, it cannot be modified unilaterally in the
future by the Board of Directors of the Company or its stockholders to eliminate
the rights it provides.
It is the position of the SEC that indemnification of directors and officers
for liability under the Securities Act is against public policy and
unenforceable pursuant to Section 14 of the Securities Act.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ --------------------------------------------------------------------------
<S> <C> <C>
1.1+ -- Underwriting Agreement.
3.1 -- The Company's Third Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-11, Registration No. 333-02322).
3.2 -- Second Amended and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997.
3.3 -- Amendment to Second Amended and Restated Bylaws adopted January 26, 1996
(incorporated by reference to Exhibit 3.2 to the Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1997.
3.4 -- Second Amendment to Second Amended and Restated Bylaws adopted September
17, 1997 (incorporated by reference to Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1997).
3.5 -- Amendment to Second Amended and Restated Bylaws adopted January 20, 1998
(incorporated by reference to the Company's Annual Report on Form 10-K
for the year ended December 31, 1997).
4.1 -- Form of Certificate of Common Stock, par value $.001 per share, of the
Company (incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-11, Registration No. 333-02322).
4.2* -- Form of Indenture.
4.3+ -- Form of Senior Debt Security.
4.4+ -- Form of Deposit Agreement.
4.5+ -- Form of Depositary Receipt.
4.6+ -- Form of Warrant Agreement.
4.7+ -- Form of Warrant Certificate.
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ --------------------------------------------------------------------------
<S> <C> <C>
4.8 -- Amended and Restated Investor Rights Agreement dated as of February 23,
1996 by and among the Company, Hunt, USAA, Ameritech and OTR
(incorporated by reference to Exhibit 10.5 to the Company's Registration
Statement on Form S-11, Registration No. 333-02322)
4.9 -- Registration Rights Agreement dated September 24, 1997, by and among the
Company, Prudential, Strategic Performance Fund-II, Inc. and The
Prudential Variable Contract Real Property Partnership (incorporated by
reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997).
4.10 -- Amended and Restated Registration Rights Agreement dated September 24,
1997, by and between the Company and Prudential on behalf of certain
insurance company separate accounts (incorporated by reference to
Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1997).
4.11 -- Registration Rights Agreement dated September 30, 1997, between the
Company and Ameritech (incorporated by reference to Exhibit 10.6 to the
Company's Quarterly Report on Form 10-Q for the period ended September
30, 1997).
5.1* -- Opinion of Ballard Spahr Andrews & Ingersoll
8.1* -- Opinion of Vinson & Elkins L.L.P. regarding certain tax matters.
12.1* -- Computation of consolidated ratios of earnings to combined fixed charges
and Preferred Stock dividends.
23.1* -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Ballard Spahr Andrews & Ingersoll (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
23.3 -- Consent of Vinson & Elkins L.L.P. (included in the opinion filed as
Exhibit 8.1 to this Registration Statement).
24.1 -- Power of Attorney of directors and officers (included in the signature
pages to this Registration Statement).
25.1* -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
trustee.
</TABLE>
- ------------------------
* Filed herewith.
+ To be filed.
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement; notwithstanding the foregoing, any increase
or decrease in the volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
II-3
<PAGE>
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 a 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(i) and (a)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Exchange
Act that are incorporated by reference in the Registration Statement.
(b) 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.
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 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.
The undersigned registrant hereby undertakes to supplement the prospectus,
after the expiration of the subscription period, to set forth the results of the
subscription offer, the transactions by the underwriters during the subscription
period, the amount of unsubscribed securities to be purchased by the
underwriters, and the terms of any subsequent reoffering thereof. If any public
offering by the underwriters is to be made on terms differing from those set
forth on the cover page of the prospectus, a post-effective amendment will be
filed to set forth the terms of such offering.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to Trustees, officers and controlling persons of the registrant
pursuant to the provisions set forth or described in Item 15 of this
Registration Statement, 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 Trustee, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Trustee, 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.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of San Francisco, California, on June 16, 1998.
<TABLE>
<S> <C> <C>
MERIDIAN INDUSTRIAL TRUST, INC.
By: /s/ ALLEN J. ANDERSON
-----------------------------------------
Allen J. Anderson
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
</TABLE>
KNOW ALL MEN BY THESE PRESENTS, that each of Meridian Industrial Trust,
Inc., a Maryland corporation, and each of the undersigned directors and officers
of Meridian Industrial Trust, Inc., hereby constitutes and appoints Allen J.
Anderson and Milton K. Reeder and each of them its or his true and lawful
attorneys-in-fact and agents, for it or him and in its or his name, place and
stead, in any and all capacities (unless revoked in writing), with full power to
act alone, to sign any and all amendments to this registration statement
(including post-effective amendments thereto, and other documents in connection
therewith) and any registration statement to register additional securities
pursuant to Rule 462 under the Securities Act, and to file the same, with all
exhibits thereto, with the Securities and Exchange Commission, hereby granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform any and all acts and things requisite and necessary
to be done in and about the premises, as fully and to all intents and purposes
as it or he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, or any of them, may lawfully do or cause
to be done by virtue hereof.
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>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------------------------------------------- ------------------------------------------- ----------------------
<C> <S> <C>
/s/ ALLEN J. ANDERSON
----------------------------------- Chairman and Chief Executive Officer June 16, 1998
Allen J. Anderson (Principal Executive Officer)
/s/ MILTON K. REEDER
----------------------------------- President and Chief Financial Officer June 16, 1998
Milton K. Reeder (Principal Financial Officer)
/s/ RICHARD L. VALLADAO
----------------------------------- Controller (Principal Accounting Officer) June 16, 1998
Richard L. Valladao
/s/ C.E. CORNUTT
----------------------------------- Director June 16, 1998
C.E. "Doc" Cornutt
/s/ T. PATRICK DUNCAN
----------------------------------- Director June 16, 1998
T. Patrick Duncan
/s/ PETER O. HANSON
----------------------------------- Director June 16, 1998
Peter O. Hanson
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
- --------------------------------------------- ------------------------------------------- ----------------------
<C> <S> <C>
/s/ JOHN S. MOODY
----------------------------------- Director June 16, 1998
John S. Moody
----------------------------------- Director
Kenneth N. Stensby
/s/ LEE W. WILSON
----------------------------------- Director June 16, 1998
Lee W. Wilson
</TABLE>
II-6
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ --------------------------------------------------------------------------
<S> <C> <C>
1.1+ -- Underwriting Agreement.
3.1 -- The Company's Third Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3.1 to the Company's Registration
Statement on Form S-11, Registration No. 333-02322).
3.2 -- Second Amended and Restated Bylaws of the Company (incorporated by
reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997).
3.3 -- Amendment to Second Amended and Restated Bylaws adopted January 26, 1996
(incorporated by reference to Exhibit 3.2 to the Company's Quarterly
Report on Form 10-Q for the period ended September 30, 1997).
3.4 -- Second Amendment to Second Amended and Restated Bylaws adopted September
17, 1997 (incorporated by reference to Exhibit 3.3 to the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1997).
3.5 -- Amendment to Second Amended and Restated Bylaws adopted January 20, 1998
(incorporated by reference to Exhibit 3.5 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1997).
4.1 -- Form of Certificate of Common Stock, par value $.001 per share, of the
Company (incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form S-11, Registration No. 333-02322).
4.2* -- Form of Indenture.
4.3+ -- Form of Senior Debt Security.
4.4+ -- Form of Deposit Agreement.
4.5+ -- Form of Depositary Receipt.
4.6+ -- Form of Warrant Agreement.
4.7+ -- Form of Warrant Certificate.
4.8 -- Amended and Restated Investor Rights Agreement dated as of February 23,
1996 by and among the Company, Hunt, USAA, Ameritech and OTR
(incorporated by reference to Exhibit 10.5 to the Company's Registration
Statement on Form S-11, Registration No. 333-02322).
4.9 -- Registration Rights Agreement dated September 24, 1997, by and among the
Company, Prudential, Strategic Performance Fund-II, Inc. and The
Prudential Variable Contract Real Property Partnership (incorporated by
reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1997).
4.10 -- Amended and Restated Registration Rights Agreement dated September 24,
1997, by and between the Company and Prudential on behalf of certain
insurance company separate accounts (incorporated by reference to
Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the
period ended September 30, 1997).
4.11 -- Registration Rights Agreement dated September 30, 1997, between the
Company and Ameritech (incorporated by reference to Exhibit 10.6 to the
Company's Quarterly Report on Form 10-Q for the period ended September
30, 1997).
5.1* -- Opinion of Ballard Spahr Andrews & Ingersoll
8.1* -- Opinion of Vinson & Elkins L.L.P. regarding certain tax matters.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
- ------ --------------------------------------------------------------------------
<S> <C> <C>
12.1* -- Computation of consolidated ratios of earnings to combined fixed charges
and Preferred Stock dividends.
23.1* -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Ballard Spahr Andrews & Ingersoll (included in the opinion
filed as Exhibit 5.1 to this Registration Statement).
23.3 -- Consent of Vinson & Elkins L.L.P. (included in the opinion filed as
Exhibit 8.1 to this Registration Statement).
24.1 -- Power of Attorney of directors and officers (included in the signature
pages to this Registration Statement).
25.1* -- Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 of
trustee.
</TABLE>
- ------------------------
* Filed herewith.
+ To be filed.
<PAGE>
- -------------------------------------------------------------------------------
MERIDIAN INDUSTRIAL TRUST, INC.,
ISSUER
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
TRUSTEE
INDENTURE
Dated as of June __, 1998
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
----
<S> <C>
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION . . . 2
SECTION 101. DEFINITIONS.. . . . . . . . . . . . . . . . . . . . . . 2
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS. . . . . . . . . . 9
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. . . . . . . . . 9
SECTION 104. ACTS OF HOLDERS; RECORD DATES.. . . . . . . . . . . . . 10
SECTION 105. NOTICES, ETC., TO TRUSTEE AND COMPANY.. . . . . . . . . 11
SECTION 106. NOTICE TO HOLDERS; WAIVER.. . . . . . . . . . . . . . . 12
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.. . . . . . . . . . . 12
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. . . . . . . . 12
SECTION 109. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . 12
SECTION 110. SEPARABILITY CLAUSE.. . . . . . . . . . . . . . . . . . 12
SECTION 111. BENEFITS OF INDENTURE.. . . . . . . . . . . . . . . . . 13
SECTION 112. GOVERNING LAW.. . . . . . . . . . . . . . . . . . . . . 13
SECTION 113. LEGAL HOLIDAYS. . . . . . . . . . . . . . . . . . . . . 13
SECTION 114. INDEBTEDNESS OF SUBSIDIARIES. . . . . . . . . . . . . . 13
SECTION 115. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . 13
SECTION 116. NONRECOURSE . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE TWO SECURITY FORMS. . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 201. FORMS GENERALLY.. . . . . . . . . . . . . . . . . . . . 14
SECTION 202. FORM OF FACE OF SECURITY. . . . . . . . . . . . . . . . 14
SECTION 203. FORM OF REVERSE OF SECURITY.. . . . . . . . . . . . . . 15
SECTION 204. FORM OF LEGEND FOR GLOBAL SECURITIES. . . . . . . . . . 18
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION . . . . 18
SECTION 206. SECURITIES ISSUABLE IN GLOBAL FORM. . . . . . . . . . . 19
ARTICLE THREE THE SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. . . . . . . . . . 20
SECTION 302. DENOMINATIONS.. . . . . . . . . . . . . . . . . . . . . 22
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. . . . . 22
SECTION 304. TEMPORARY SECURITIES. . . . . . . . . . . . . . . . . . 23
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE . . 24
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. . . . 25
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. . . . . 26
SECTION 308. PERSONS DEEMED OWNERS.. . . . . . . . . . . . . . . . . 27
SECTION 309. CANCELLATION. . . . . . . . . . . . . . . . . . . . . . 27
SECTION 310. COMPUTATION OF INTEREST.. . . . . . . . . . . . . . . . 27
ARTICLE FOUR SATISFACTION AND DISCHARGE . . . . . . . . . . . . . . . . . 27
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.. . . . . . . . 27
SECTION 402. APPLICATION OF TRUST MONEY. . . . . . . . . . . . . . . 28
ARTICLE FIVE REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 501. EVENTS OF DEFAULT.. . . . . . . . . . . . . . . . . . . 29
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. . . 30
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR
ENFORCEMENT BY TRUSTEE. . . . . . . . . . . . . . . . . 31
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM. . . . . . . . . . . . 32
<PAGE>
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF SECURITIES . . . . . . . . . . . . . . . . . . . . . 32
SECTION 506. APPLICATION OF MONEY COLLECTED. . . . . . . . . . . . . 32
SECTION 507. LIMITATION ON SUITS . . . . . . . . . . . . . . . . . . 33
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE
PRINCIPAL, PREMIUM AND INTEREST . . . . . . . . . . . . 33
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES. . . . . . . . . . . 34
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. . . . . . . . . . . . . 34
SECTION 511. DELAY OR OMISSION NOT WAIVER. . . . . . . . . . . . . . 34
SECTION 512. CONTROL BY HOLDERS. . . . . . . . . . . . . . . . . . . 34
SECTION 513. WAIVER OF PAST DEFAULTS . . . . . . . . . . . . . . . . 34
SECTION 514. UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . . . 35
SECTION 515. WAIVER OF USURY, STAY OR EXTENSION LAWS.. . . . . . . . 35
ARTICLE SIX THE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES.. . . . . . . . . . 35
SECTION 602. NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . . . 36
SECTION 603. CERTAIN RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . 36
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF
SECURITIES. . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 605. MAY HOLD SECURITIES . . . . . . . . . . . . . . . . . . 37
SECTION 606. MONEY HELD IN TRUST . . . . . . . . . . . . . . . . . . 37
SECTION 607. COMPENSATION AND REIMBURSEMENT. . . . . . . . . . . . . 38
SECTION 608. CONFLICTING INTERESTS . . . . . . . . . . . . . . . . . 38
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY . . . . . . . . 38
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR . . . 38
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. . . . . . . . . 40
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY . . . 41
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT . . . . . . . . . . 41
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY . . . . . 42
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES
OF HOLDERS. . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 703. REPORTS BY TRUSTEE. . . . . . . . . . . . . . . . . . . 43
SECTION 704. REPORTS BY COMPANY. . . . . . . . . . . . . . . . . . . 43
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE. . . . 43
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. . 43
SECTION 802. SUCCESSOR SUBSTITUTED . . . . . . . . . . . . . . . . . 44
ARTICLE NINE SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . 44
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. . . 44
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS . . . . 46
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES. . . . . . . . . . 46
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES . . . . . . . . . . . 47
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT . . . . . . . . . . 47
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. . . 47
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<PAGE>
ARTICLE TEN COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST . . . . . . 47
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . 47
SECTION 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. . . 48
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT. . . . . . . . . . 48
SECTION 1005. EXISTENCE. . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1006. MAINTENANCE OF PROPERTIES. . . . . . . . . . . . . . . 49
SECTION 1007. PAYMENT OF TAXES AND OTHER CLAIMS. . . . . . . . . . . 49
SECTION 1008. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 1009. RESTRICTIONS ON INDEBTEDNESS . . . . . . . . . . . . . 49
SECTION 1010. PROVISION OF FINANCIAL INFORMATION.. . . . . . . . . . 51
SECTION 1011. WAIVER OF CERTAIN COVENANTS. . . . . . . . . . . . . . 51
ARTICLE ELEVEN REDEMPTION OF SECURITIES . . . . . . . . . . . . . . . . . 51
SECTION 1101. APPLICABILITY OF ARTICLE. . . . . . . . . . . . . . . . 51
SECTION 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. . . . . . . . . 51
SECTION 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED. . . 52
SECTION 1104. NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . 52
SECTION 1105. DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . 53
SECTION 1106. SECURITIES PAYABLE ON REDEMPTION DATE. . . . . . . . . 53
SECTION 1107. SECURITIES REDEEMED IN PART. . . . . . . . . . . . . . 53
ARTICLE TWELVE SINKING FUNDS. . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 1201. APPLICABILITY OF ARTICLE.. . . . . . . . . . . . . . . 54
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. 54
SECTION 1203. REDEMPTION OF SECURITIES FOR SINKING FUND. . . . . . . 54
ARTICLE THIRTEEN DEFEASANCE AND COVENANT DEFEASANCE . . . . . . . . . . . 55
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 1302. DEFEASANCE AND DISCHARGE . . . . . . . . . . . . . . . 55
SECTION 1303. COVENANT DEFEASANCE. . . . . . . . . . . . . . . . . . 55
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. . . . 55
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO
BE HELD IN TRUST; MISCELLANEOUS PROVISIONS . . . . . . 57
SECTION 1306. REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . 58
ARTICLE FOURTEEN REPAYMENT AT THE OPTION OF HOLDERS . . . . . . . . . . . 58
SECTION 1401. APPLICABILITY OF ARTICLE . . . . . . . . . . . . . . . 58
SECTION 1402. REPAYMENT OF SECURITIES. . . . . . . . . . . . . . . . 58
SECTION 1403. EXERCISE OF OPTION . . . . . . . . . . . . . . . . . . 58
SECTION 1404. WHEN SECURITIES PRESENTED FOR RECIPIENT BECOME
DUE AND PAYABLE. . . . . . . . . . . . . . . . . . . . 59
SECTION 1405. SECURITIES REPAID IN PART. . . . . . . . . . . . . . . 59
ARTICLE FIFTEEN MEETINGS OF HOLDERS OF SECURITIES . . . . . . . . . . . . 60
SECTION 1501. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. . . . . . . 60
SECTION 1502. CALL, NOTICE AND PLACE OF MEETINGS . . . . . . . . . . 60
SECTION 1503. PERSONS ENTITLED TO VOTE AT MEETINGS . . . . . . . . . 60
SECTION 1504. QUORUM; ACTION . . . . . . . . . . . . . . . . . . . . 60
SECTION 1505. DETERMINATION OF VOTING RIGHTS; CONDUCT AND
ADJOURNMENT OF MEETINGS. . . . . . . . . . . . . . . . 61
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<PAGE>
SECTION 1506. COUNTING VOTES AND RECORDING ACTION OF MEETINGS. . . . 62
SECTION 1507. EVIDENCE OF ACTION TAKEN BY HOLDERS. . . . . . . . . . 62
SECTION 1508. PROOF OF EXECUTION OF INSTRUMENTS. . . . . . . . . . . 63
</TABLE>
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<PAGE>
INDENTURE, dated as of June __, 1998 (this "Indenture"), between
MERIDIAN INDUSTRIAL TRUST, INC., a corporation duly organized and existing
under the laws of the State of Maryland (herein called the "Company"), having
its principal office at 455 Market Street, 17th Floor, San Francisco,
California, and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking
association, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of senior, unsubordinated indebtedness
(herein called the "Securities"), to be issued in one or more series as in
this Indenture provided.
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 agreed, for the equal and
proportionate benefit of all Holders of the Securities or of series thereof,
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 Trust Indenture
Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting
principles, and, except as otherwise herein expressly provided, the
term "generally accepted accounting principles" with respect to any
computation required or permitted hereunder shall mean such accounting
principles as are generally accepted in the United States at the date
of such computation applied on a consistent basis;
(4) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or a Section, as the case may be,
of this Indenture; and
(5) 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.
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<PAGE>
"ADJUSTED TOTAL ASSETS" has the meaning specified in Section 1009(1).
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"ANNUAL SERVICE CHARGE" as of any date means the amount which is
expensed in any 12-month period for interest on Indebtedness of the Company
and its Subsidiaries.
"AUTHENTICATING AGENT" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"BOARD OF DIRECTORS" means either the board of directors of the Company,
the executive committee thereof or any other 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, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
"COMMISSION" means the Securities and Exchange Commission, from time to
time constituted, created under the Exchange Act, or, if at any time after
the 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 at such time.
"COMPANY" means the Person named as the "Company" in the first paragraph
of this instrument until a successor Person shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Company"
shall mean such successor Person.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order of
the Company signed by its Chairman of the Board, its President, its Chief
Financial Officer or a Vice President, and by its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"CONSOLIDATED INCOME AVAILABLE FOR DEBT SERVICE" for any period means
Consolidated Net Income (i) plus amounts which have been deducted for (a)
interest on Indebtedness of the Company and its Subsidiaries (including the
interest component of rentals or leases reflected in accordance with
generally accepted accounting principles as capitalized leases on the
Company's consolidated balance sheet, letter of credit fees, commitment fees
and other like financial charges), (b) provision for taxes of the Company and
its Subsidiaries based on income, (c) amortization of Indebtedness discount,
(d) losses and provisions for losses on properties, (e) depreciation and
amortization (other than amortization of Indebtedness discount), (f) the
effect of any noncash charge resulting from a change in accounting principles
in determining Consolidated Net Income for such period, (g) amortization of
deferred charges and (h) the effect of net losses of joint ventures in which
the Company or any Subsidiary owns an interest to the extent not requiring a
use of cash, and (ii) less amounts which have been included for (a) gains
from sales or dispositions of properties and (b) the effect of net income of
joint ventures in which the Company or any Subsidiary owns an interest to the
extent not providing a source of Cash.
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<PAGE>
"CONSOLIDATED NET INCOME" for any period means the amount of consolidated
net income (or loss) of the Company and its Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"CONTROL" means the ability, directly or indirectly, unilaterally to cause
a Person to take or refrain from taking any of the actions required, prohibited
or otherwise restricted by this Indenture, whether through ownership of voting
securities, contractually or otherwise.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
administered, which office at the date hereof is located at 600 Travis
Street, Suite 1150, Houston, Texas 77002; Attention: Corporate Trust
Division (Phone: 713-216-5811; Fax: 713-216-5470).
"CORPORATION" means a corporation, association, company, joint-stock
company or business trust.
"COVENANT DEFEASANCE" has the meaning specified in Section 1303.
"DEFAULTED INTEREST" has the meaning specified in Section 307.
"DEFEASANCE" has the meaning specified in Section 1302.
"DEPOSITARY" means, with respect to Securities of any series issuable in
whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 301.
"EVENT OF DEFAULT" has the meaning specified in Section 501.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and any statute
successor thereto, in each case as amended from time to time.
"EXPIRATION DATE" has the meaning specified in Section 104.
"FINANCIAL STATEMENTS" has the meaning specified in Section 1010.
"GLOBAL SECURITY" means a Security that evidences all or part of the
Securities of any series and bears the legend set forth in Section 204 (or
such legend as may be specified as contemplated by Section 301 for such
Securities).
"HOLDER" means a Person in whose name a Security is registered in the
Security Register.
"INDEBTEDNESS" of the Company or any Subsidiary means any indebtedness
of the Company or such Subsidiary, as applicable, whether or not contingent,
in respect of (i) borrowed money evidenced by bonds, notes, debentures or
similar instruments, (ii) indebtedness secured by a mortgage, pledge, lien,
charge, encumbrance of any security interest existing on property owned by
the Company or such Subsidiary, (iii) the reimbursement obligations,
contingent or otherwise, in connection with any letters of credit actually
issued or amounts representing the balance that constitutes an accrued
expense or trade payable or (iv) any lease of property by the Company or such
Subsidiary as lessee which is reflected in the Company's consolidated balance
sheet as a capitalized lease in accordance with generally accepted accounting
principles; in the case of items of indebtedness under (i) through (iii)
above to the extent that any such items (other than letters of credit) would
appear as a liability on the Company's consolidated balance sheet in
accordance with generally accepted accounting principles, and also includes,
to the extent not otherwise included, any
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<PAGE>
obligation by the Company or such Subsidiary to be liable for, or to pay, as
obligor, guarantor or otherwise (other than for purposes of collection in the
ordinary course of business), indebtedness of another person (other than the
Company or any Subsidiary), (it being understood that "Indebtedness" shall be
deemed to be incurred by the Company and its Subsidiaries on a consolidated
basis whenever the Company and its Subsidiaries on a consolidated basis shall
create, assume, guarantee or otherwise become liable in respect thereof;
Indebtedness of a Subsidiary of the Company existing prior to the time it
became a Subsidiary of the Company shall be deemed to be incurred upon such
Subsidiary's becoming a Subsidiary of the Company, and Indebtedness of a
Person existing prior to a merger or consolidation of such Person with the
Company or any Subsidiary of the Company in which such Person is the
successor of the Company or such Subsidiary shall be deemed to be incurred
upon the consummation of such merger or consolidation); PROVIDED, HOWEVER,
that the term Indebtedness shall not include any such indebtedness that has
been the subject of an "in substance" defeasance in accordance with generally
accepted accounting principles.
"INDENTURE" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions
hereof, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively. The term "Indenture" shall also include the terms
of particular series of Securities established as contemplated by Section 301.
"INTEREST," when used with respect to an Original Issue Discount
Security which by its terms bears interest only after Maturity, means
interest payable after Maturity.
"INTEREST PAYMENT DATE," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940 and
any statute successor thereto, in each case as amended from time to time.
"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, call for redemption or otherwise.
"NASD" has the meaning specified in Section 1403.
"NOTICE OF DEFAULT" means a written notice of the kind specified in
Section 501(4) or 501(5).
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of
the Board, the President, the Chief Financial Officer 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. One of the officers
signing an Officers' Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the Company.
"OPINION OF COUNSEL" means a written opinion of counsel for the Company,
and who shall be acceptable 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.
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<PAGE>
"OUTSTANDING," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(1) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(2) Securities, or portions thereof, for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set
aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities; PROVIDED
that, if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(3) Securities as to which Defeasance has been effected pursuant to
Section 1302; and
(4) 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, made or taken any request, demand, authorization, direction,
notice, consent, waiver or other action hereunder as of any date, (A)
the principal amount of an Original Issue Discount Security which
shall be deemed to be Outstanding shall be the amount of the principal
thereof which would be due and payable as of such date upon
acceleration of the Maturity thereof to such date pursuant to Section
502, (B) if, as of such date, the principal amount payable at the
Stated Maturity of a Security is not determinable, the principal
amount of such Security which shall be deemed to be Outstanding shall
be the amount as specified or determined as contemplated by Section
301, (C) the principal amount of a Security denominated in one or more
foreign currencies or currency units which shall be deemed to be
Outstanding shall be the U.S. dollar equivalent, determined as of such
date in the manner provided as contemplated by Section 301, of the
principal amount of such Security (or, in the case of a Security
described in Clause (A) or (B) above, of the amount determined as
provided in such Clause), and (D) Securities owned by the Company or
any other obligor upon the Securities, or any Affiliate of the Company
or of such other obligor, shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization,
direction, notice, consent, waiver or other action, only Securities
which the Trustee knows to be so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other
obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of or any premium or interest on any Securities on behalf of the
Company.
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<PAGE>
"PAYMENT OFFICE" means the Office of the Trustee located at 1201 Main
Street, Dallas, Texas 75202; Attention: Corporate Trust Services.
"PERSON" means any individual, corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"PLACE OF PAYMENT," when used with respect to the Securities of any
series, means the place or places where the principal of and any premium and
interest on the Securities of that series are payable as specified as
contemplated by Section 301.
"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 shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"RECOURSE INDEBTEDNESS" means Indebtedness, other than Secured
Indebtedness as to which Secured Indebtedness the liability of the obligor
thereon is limited to its interest in the collateral securing such Secured
Indebtedness, provided that no such Secured Indebtedness shall constitute
Recourse Indebtedness by reason of provisions therein for imposition of full
recourse liability on the obligor for certain wrongful acts, environmental
liabilities, or other customary exclusions from the scope of so-called
"non-recourse" provisions.
"REDEMPTION DATE," when used with respect to any Security to be
redeemed, 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.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that
purpose as contemplated by Section 301.
"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.
"REQUIRED FILING DATES" has the meaning specified in Section 1010.
"RESPONSIBLE OFFICER," when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
assistant 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 assistant
controller or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers
and also means, with respect to a particular corporate trust matter, any
other officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"SECURED INDEBTEDNESS" means Indebtedness secured by any mortgage, lien,
charge, encumbrance, trust, deed, deed of trust, deed to secure debt,
security agreement, pledge, conditional sale or other title retention
agreement, capitalized lease, or other like agreement granting or conveying
security title to or a security interest in real property or other tangible
assets. Secured Indebtedness shall be deemed to be incurred (i) on the date
the Issuer or any Subsidiary creates, assumes, guarantees or otherwise
becomes liable in respect thereof if it is secured in the
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<PAGE>
manner described in the preceding sentence on such date or (ii) on the date
the Issuer or any Subsidiary first secures such Indebtedness in the manner
described in the preceding sentence if such Indebtedness was not so secured
on the date it was incurred.
"SECURITIES" has the meaning specified in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"SECURITIES ACT" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"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 1, Rule 1-02 of Regulation S-X,
promulgated under the Securities Act) of the Company.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"STATED MATURITY," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal of such
Security or such installment of principal or interest is due and payable.
"SUBSIDIARY" means (i) a corporation, partnership, limited liability
company, trust, real estate investment trust or other entity a majority of
the voting power of the voting equity securities of which are owned, directly
or indirectly, by the Company or by one or more Subsidiaries of the Company;
(ii) a partnership, limited liability company, trust, real estate investment
trust or other entity not treated as a corporation for federal income tax
purposes the majority of the value of the equity interests of which are
owned, directly or indirectly, by the Company or by one or more other
Subsidiaries of the Company; and (iii) a corporation which would be
Significant Subsidiary (as defined herein, except that the investment, asset
and equity thresholds for purposes of this definition shall be 5%), the
majority of the value of the equity interests of which are owned, directly or
indirectly, by the Company or by one or more Subsidiaries of the Company.
"TOTAL ASSETS" as of any date means the sum of (i) Undepreciated Real
Estate Assets and (ii) all other assets of the Company and its Subsidiaries
on a consolidated basis determined in accordance with generally accepted
accounting principles (but excluding intangibles and straight-line rents
receivable).
"TOTAL UNENCUMBERED ASSETS" means the sum of (i) those Undepreciated
Real Estate Assets not securing Secured Indebtedness, and (ii) all other
assets of the Company and its Subsidiaries determined in accordance with
generally accepted accounting principles (but excluding intangibles and
straight-line rents receivable) not securing Secured Indebtedness.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; PROVIDED, HOWEVER, that
if the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"TRUSTEE" means the Person named as the "Trustee" in the first paragraph
of this instrument until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee"
shall mean or include each Person who is then a Trustee
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hereunder, and if at any time there is more than one such Person, "Trustee"
as used with respect to the Securities of any series shall mean the Trustee
with respect to Securities of that series.
"U.S. GOVERNMENT OBLIGATION" has the meaning specified in Section 1304.
"UNDEPRECIATED REAL ESTATE ASSETS" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the
Company and its Subsidiaries on such date, before depreciation and
amortization, determined on a consolidated basis in accordance with generally
accepted accounting principles.
"UNSECURED INDEBTEDNESS" means Indebtedness which is (i) not
subordinated to any other Indebtedness and (ii) not Secured Indebtedness.
"VICE PRESIDENT," when used with respect to the Company, or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"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
such certificates and opinions as may be required under the Trust Indenture
Act. Each such certificate or opinion shall be given in the form of an
Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirements set forth
in this Indenture.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or opinion
has read such covenant or condition 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 covenant or
condition 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
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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 a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company
stating that the information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. ACTS OF HOLDERS; RECORD DATES. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given, made or taken by Holders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee
and, where it is hereby expressly required, to the Company. Such instrument
or instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of the Holders signing such
instrument or instruments. Proof of execution of any such instrument or of a
writing appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 601) conclusive in favor of the Trustee and
the Company, if made in the manner provided in this Section.
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 manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
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 or
the Company in reliance thereon, whether or not notation of such action is
made upon such Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series; PROVIDED that
the Company may not set a record date for, and the provisions of this
paragraph shall not apply with respect to, the giving or making of any
notice, declaration, request or direction referred to in the next paragraph.
If any record date is set pursuant to this paragraph, the Holders of
Outstanding
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Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date; PROVIDED that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration
Date by Holders of the requisite principal amount of Outstanding Securities
of such series on such record date. Nothing in this paragraph shall be
construed to prevent the Company from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be canceled and of no effect), and nothing in
this paragraph shall be construed to render ineffective any action taken by
Holders of the requisite principal amount of Outstanding Securities of the
relevant series on the date such action is taken. Promptly after any record
date is set pursuant to this paragraph, the Company, at its own expense,
shall cause notice of such record date, the proposed action by Holders and
the applicable Expiration Date to be given to the Trustee in writing and to
each Holder of Securities of the relevant series in the manner set forth in
Section 106.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any
declaration of acceleration referred to in Section 502, (iii) any request to
institute proceedings referred to in Section 507(2) or (iv) any direction
referred to in Section 512, in each case with respect to Securities of such
series. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities of such series on such record date, and no other
Holders, shall be entitled to join in such notice, declaration, request or
direction, whether or not such Holders remain Holders after such record date;
PROVIDED that no such action shall be effective hereunder unless taken on or
prior to the applicable Expiration Date by Holders of the requisite principal
amount of Outstanding Securities of such series on such record date. Nothing
in this paragraph shall be construed to prevent the Trustee from setting a
new record date for any action for which a record date has previously been
set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be canceled and of no
effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date,
the proposed action by Holders and the applicable Expiration Date to be given
to the Company in writing and to each Holder of Securities of the relevant
series in the manner set forth in Section 106.
With respect to any record date set pursuant to this Section, the party
hereto which sets such record date may designate any day as the "Expiration
Date" and from time to time may change the Expiration Date to any earlier or
later day; PROVIDED that no such change shall be effective unless notice of
the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities of the relevant series in the
manner set forth in Section 106, on or prior to the existing Expiration Date.
If an Expiration Date is not designated with respect to any record date set
pursuant to this Section, the party hereto which set such record date shall
be deemed to have initially designated the 180th day after such record date
as the Expiration Date with respect thereto, subject to its right to change
the Expiration Date as provided in this paragraph. Notwithstanding the
foregoing, no Expiration Date shall be later than the 180th day after the
applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Security may do so with regard
to all or any part of the principal amount of such Security or by one or more
duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
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,
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(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 its Corporate Trust Office, with a copy to
the Trustee's Payment Office, 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 instrument or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at 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 is given
by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of
such notice with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the Person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act which is required under such Act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act which
may be so modified or excluded, the latter provision shall be deemed to apply
to this Indenture as so modified or shall be deemed to be excluded, as the
case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 109. 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 110. SEPARABILITY CLAUSE. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions of such
instrument or instruments shall not in any way be affected or impaired
thereby.
SECTION 111. BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
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SECTION 112. GOVERNING LAW. This Indenture and the Securities shall be
governed by and construed in accordance with the laws of the State of New
York.
SECTION 113. LEGAL HOLIDAYS. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Security shall not be a
Business Day at any Place of Payment, then (notwithstanding any other
provision of this Indenture or of the Securities (other than a provision of
any Security which specifically states that such provision shall apply in
lieu of this Section)) payment of interest or principal (and premium, if any)
need not be made at such Place of Payment on such date, but may be made on
the next succeeding Business Day at such Place of Payment with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at
the Stated Maturity.
SECTION 114. INDEBTEDNESS OF SUBSIDIARIES. The Company hereby
represents and warrants that (i) as of the date of this Indenture, no
Subsidiary has any outstanding unsecured Indebtedness, and (ii) each of the
Subsidiaries has agreed not to incur any additional unsecured Indebtedness
other than (A) intercompany debt representing Indebtedness to which the only
parties are the Company and any of its Subsidiaries that is subordinate in
right of payment to any Outstanding Securities, and (B) trade payables
incurred in the ordinary course of such Subsidiaries' business.
SECTION 115. COUNTERPARTS. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
SECTION 116. NONRECOURSE. Unless otherwise provided in the Board
Resolution authorizing a particular series of Securities in accordance with
Section 301, no recourse under or upon any obligation, covenant or agreement
contained in this Indenture, in any Security or coupon appertaining thereto,
or because of any Indebtedness evidenced thereby (including, without
limitation, any obligation or indebtedness relating to the principal of, or
premium, if any, interest or any other amounts due, or claimed to be due, on
any Security issued hereunder), or for any claim based thereon or otherwise
in respect thereof, shall be had (i) against any promoter, as such, or
against any past, present or future shareholder, officer or director, as
such, of the Company or of any successor, either directly or through the
Company 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 thereof and
as part of the consideration for the issue of the Securities. Unless
otherwise provided in the Board Resolution authorizing a particular series of
Securities in accordance with Section 301, the Holders of the Securities
hereunder acknowledge by the acceptance of the Securities that their sole
remedies under this Indenture for any default by the Company in the payment
of the principal of, or any premium, interest or any amounts due, or claimed
to be due, on any Security, or otherwise, are limited to claims against the
property of the Company as provided in Section 503 hereof.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY. The Securities of each series shall be
in substantially the form set forth in this Article, or in such other form as
shall be established by or pursuant to a Board Resolution or in one or more
indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed thereon as
may be required to comply with the rules of any
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securities exchange or Depositary therefor or as may, consistently herewith,
be determined by the officers executing such Securities, as evidenced by
their execution thereof. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior
to the delivery of the Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202. FORM OF FACE OF SECURITY.
{INSERT ANY LEGEND REQUIRED BY THE INTERNAL REVENUE CODE AND THE
REGULATIONS THEREUNDER.}
NO. $
------------------- ----------
Meridian Industrial Trust, Inc., a corporation duly organized and
existing under the laws of Maryland (herein called the "Company," which term
includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to __________, or registered
assigns, the principal sum of ___________________ Dollars on ____________ {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, commencing ____________, at the rate
of ___% per annum, until the principal hereof is paid or made available for
payment {IF APPLICABLE, INSERT --; PROVIDED that any principal and premium,
and any such installment of interest, which is overdue shall bear interest at
the rate of ___ % per annum (to the extent that the payment of such interest
shall be legally enforceable), from the dates such amounts are due until they
are paid or made available for payment, and such interest shall be payable on
demand}. 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 Person 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. Any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and
may either be paid to the Person 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 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 said Indenture}.
{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
Stated Maturity and in such case the overdue principal and any overdue
premium shall bear interest at the rate of ___% per annum (to the extent that
the payment of such interest shall be legally enforceable), from the dates
such amounts are due until they are paid or made available for payment.
Interest on any overdue principal or premium shall be payable on demand.
{Any such interest on overdue principal or premium which is not paid on
demand shall bear interest at the rate of ____% per annum (to the extent that
the payment of such interest on interest shall be legally enforceable), from
the date of such demand until the amount
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so demanded is paid or made available for payment. Interest on any overdue
interest shall be payable on demand.
Payment of the principal of (and premium, if any) and {IF APPLICABLE,
INSERT -- any such} interest on this Security will be made 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 payment of public and private debts {IF APPLICABLE, INSERT
- --; PROVIDED, HOWEVER, 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
such address shall appear in the Security Register}.
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 referred to on the reverse hereof by manual signature, 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 corporate seal.
Dated: MERIDIAN INDUSTRIAL TRUST, INC.
-----------------------
By:
----------------------------------
Name:
Title:
Attest:
-----------------------
SECTION 203. FORM OF REVERSE OF SECURITY. 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,"
which term shall have the meaning assigned to it in such instrument), between
the Company and ____________________, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture),
and reference is hereby made to the Indenture 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 series designated on the face hereof {IF
APPLICABLE, INSERT --, limited in aggregate principal amount to
$______________}.
{IF APPLICABLE, INSERT -- The Securities of this series are subject to
redemption upon not less than 30 days' notice by mail, {IF APPLICABLE, INSERT
- --(1) 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)} at any
time {IF APPLICABLE, INSERT -- on or after ____________, 19__}, 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 {IF
APPLICABLE, INSERT -- on or before _________, ___%, and if redeemed} during
the 12-month period beginning ______ of the years indicated,
Year Redemption Price Year Redemption Price
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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, but interest installments whose Stated
Maturity is on or prior to such Redemption Date will be payable to the
Holders of such Securities, 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 of this series are subject to
redemption upon not less than 30 days' notice by mail, (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 {IF APPLICABLE, INSERT -- 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 REDEMPTION PRICE FOR
FOR REDEMPTION REDEMPTION OTHERWISE
THROUGH OPERATION THAN THROUGH OPERATION YEAR
OF THE 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, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, 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 of this series as
contemplated by {IF APPLICABLE, INSERT -- 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 this series provides for
the redemption on ___________ in each year beginning with the year ________
and ending with the year ________ of {IF APPLICABLE, INSERT -- not less than
$___________ ("mandatory sinking fund") and not more than} $___________
aggregate principal amount of Securities of this series. Securities of this
series acquired or redeemed by the Company otherwise than through {IF
APPLICABLE, INSERT -- mandatory} sinking fund payments may be credited
against subsequent {IF APPLICABLE, INSERT -- mandatory} sinking fund payments
otherwise required to be made {IF APPLICABLE, INSERT -- , in the inverse
order in which they become due}.}
{IF THE SECURITY IS SUBJECT TO REDEMPTION OF ANY KIND, INSERT -- In the
event of redemption of this Security in part only, a new Security or
Securities of this series and of like tenor for the unredeemed portion hereof
will be issued in the name of the Holder hereof upon the cancellation hereof.}
{IF APPLICABLE, INSERT PARAGRAPH REGARDING SUBORDINATION OF THE
SECURITY.}
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{IF APPLICABLE, INSERT -- The Indenture contains provisions for
defeasance at any time of {the entire indebtedness of this Security} {or}
{certain restrictive covenants and Events of Default with respect to this
Security} {, in each case} upon compliance with certain conditions set forth
in the Indenture.}
{IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT --
If an Event of Default with respect to Securities of this series 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 THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT -- If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING
THE AMOUNT. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal, premium and interest
(in each case to the extent that the payment of such interest shall be
legally enforceable), all of the Company's obligations in respect of the
payment of the principal of and premium and interest, if any, on the
Securities of this series shall terminate.}
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 of each series to be
effected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in principal amount of the
Securities at the time Outstanding of each series to be affected by such
amendment or modification. The Indenture also contains provisions permitting
the Holders of specified percentages in principal amount of the Securities of
each series at the time Outstanding, on behalf of the Holders of all
Securities of such series, to waive compliance by the Company with certain
provisions of the Indenture and 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 of any Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee
or for any other remedy thereunder, unless (i) such Holder shall have
previously given the Trustee written notice of a continuing Event of Default
with respect to the Securities of this series, (ii) the Holders of not less
than 25% in principal amount of the Securities of this series at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, (iii) the Trustee shall not have received from
the Holders of a majority in principal amount of Securities of this series at
the time Outstanding a direction inconsistent with such request, and (iv) the
Trustee shall have failed to institute any such proceeding, for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall
not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest
hereon on or after the respective due dates expressed herein.
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 any premium
and interest on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
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As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, 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 any
premium 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 his
attorney duly authorized in writing, and thereupon one or more new Securities
of this series and of like tenor, of authorized denominations and for the
same aggregate principal amount, will be issued to the designated transferee
or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000.00 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series and of like tenor of
a different authorized denomination, as requested by the Holder surrendering
the same.
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.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
SECTION 204. FORM OF LEGEND FOR GLOBAL SECURITIES. Unless otherwise
specified as contemplated by Section 301 for the Securities evidenced
thereby, every Global Security authenticated and delivered hereunder shall
bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR
A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART
MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A
NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
SECTION 205. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificates of authentication shall be in substantially the
following form:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
(TRUSTEE) as trustee
By:
----------------------------
AUTHORIZED OFFICER
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SECTION 206. SECURITIES ISSUABLE IN GLOBAL FORM. If Securities of or
within a series are issuable in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (9) of Section 301 and the
provisions of Section 302, any such Security shall represent such of the
Outstanding Securities of such series as shall be specified therein and may
provide that it or any number of such Securities shall represent the
aggregate amount of Outstanding Securities of such series 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 a
Security in global form to reflect the amount, or any increase or decrease in
the amount, of Outstanding Securities represented thereby shall be made in
such manner and by such Person or Persons as shall be specified therein or in
the Company Order to be delivered pursuant to Section 303 or 304. Subject
to the provisions of Section 303 and, if applicable, Section 304, the Trustee
shall deliver and redeliver any Security in permanent global form in the
manner and upon instructions given by the Person or Persons specified therein
or in the applicable 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 Security
in global form shall be in writing but need not comply with Section 102 and
need not be accompanied by an Opinion of Counsel.
The provisions of the last sentence of Section 303 shall apply to any
Security represented by a Security in global form if such Security was never
issued and sold by the Company and the Company delivers to the Trustee the
Security in global form together with written instructions (which need not
comply with Section 102 and need not be accompanied by an Opinion of Counsel)
with regard to the reduction in the principal amount of Securities
represented thereby, together with the written statement contemplated by the
last sentence of Section 303.
Notwithstanding the provisions of Section 307, unless otherwise
specified as contemplated by Section 301, payment of principal of, and any
premium and interest on any Security in temporary or permanent global form
shall be made to the Person or Persons specified therein.
Notwithstanding the provisions of Section 308 and except as provided in
the preceding paragraph, the 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 global Security (a) in the case of a
global Security in registered form, the Holder of such global Security in
registered form, or (b) in the case of a global Security in bearer form, the
Person or Persons specified pursuant to Section 301.
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 or pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an Officers' Certificate,
or established in one or more indentures supplemental hereto, prior to the
issuance of Securities of any series,
(1) the title of the Securities of the series (which shall distinguish the
Securities of the series from Securities of any other series);
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(2) any limit upon the aggregate principal amount of the Securities of the
series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of
the series pursuant to Section 304, 305, 306, 906, 1107 or 1405 and
except for any Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered hereunder);
(3) the Person to whom any interest on a 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;
(4) the date or dates on which the principal of any Securities of the
series is payable;
(5) the rate or rates at which any Securities of the series shall bear
interest, if any, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for any such interest payable on
any Interest Payment Date;
(6) the place or places where the principal of and any premium and
interest on any Securities of the series shall be payable;
(7) the period or periods within which, the price or prices at which and
the terms and conditions upon which any Securities of the series may
be redeemed, in whole or in part, at the option of the Company and, if
other than by a Board Resolution, the manner in which any election by
the Company to redeem the Securities shall be evidenced;
(8) the obligation, if any, of the Company to redeem, repay or purchase
any Securities of the series pursuant to any sinking fund or analogous
provisions or at the option of the Holder thereof upon the occurrence
of specified circumstances or otherwise, and the period or periods
within which or the date or dates on which, the price or prices at
which and the other terms and conditions upon which any Securities of
the series shall be redeemed, repaid or purchased, in whole or in
part, pursuant to such obligation and any provisions in modification
of, in addition to or in lieu of any of the provisions of Articles
Eleven, Twelve or Fourteen;
(9) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Securities of the series shall
be issuable;
(10) if the amount of principal of or any premium or interest on any
Securities of the series may be determined with reference to an index
or pursuant to a formula, the manner in which such amounts shall be
determined;
(11) the percentage of the principal amount at which Securities of such
series will be issued and, if other than the entire principal amount
thereof, the portion of the principal amount of any Securities of the
series which shall be payable upon declaration of acceleration of the
Maturity thereof pursuant to Section 502;
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(12) if the principal amount payable at the Stated Maturity of any
Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such
date for any purpose thereunder or hereunder, including the principal
amount thereof which shall be due and payable upon any Maturity other
than the Stated Maturity or which shall be deemed to be Outstanding as
of any date prior to the Stated Maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be
determined);
(13) if applicable, that the Securities of the series, in whole or any
specified part, shall be defeasible pursuant to Section 1302 or
Section 1303 or both such Sections and, if other than by a Board
Resolution, the manner in which any election by the Company to defease
such Securities shall be evidenced;
(14) if applicable, that any Securities of the series shall be issuable in
whole or in part in the form of one or more Global Securities and, in
such case, the respective Depositaries for such Global Securities, the
form of any legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in Section 204
and any circumstances in addition to or in lieu of those set forth in
Clause (2) of the last paragraph of Section 305 in which any such
Global Security may be exchanged in whole or in part for Securities
registered, and any transfer of such Global Security in whole or in
part may be registered, in the name or names of Persons other than the
Depositary for such Global Security or a nominee thereof;
(15) any addition to or change in the Events of Default which apply to any
Securities of the series and any change in the right of the Trustee or
the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 502;
(16) any addition to or change in the covenants set forth in Article Ten
which applies to Securities of the series;
(17) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture, except as permitted by Section
901(5)); and
(18) if other than the Trustee named in the first paragraph of this
Indenture, the identity of the Person to act as Trustee for such
series; provided that any such Person shall in writing agree to act as
Trustee with respect to said series of Securities subject to the
provisions hereof and of any other agreement affecting said series.
All Securities of any one series shall be substantially identical except
as to denomination and except as may otherwise be provided in or pursuant to
the Board Resolution referred to above and (subject to Section 303) set
forth, or determined in the manner provided, in the Officers' Certificate
referred to above or in any such indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
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All Securities of one series need not be issued at the same time and,
unless otherwise provided in the Board Resolution or the Officers'
Certificate establishing the terms of a series, any series may be reopened,
without the consent of the holders of Securities of such series, for issuance
of additional Securities of such series.
SECTION 302. DENOMINATIONS. The Securities of each series shall be
issuable only in registered form without coupons and only in such
denominations as shall be specified as contemplated by Section 301. In the
absence of any such specified denomination with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations
of $1,000 and any integral multiple thereof.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by the Chairman of the
Board, its President, its Chief Financial Officer or one of its Vice
Presidents, and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be manual
or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did
not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed on
behalf of 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, upon receipt of an Officer's Certificate and an Opinion of
Counsel, each complying with Sections 314(c) and 314(e) of the Trust
Indenture Act. If the form or terms of the Securities of the series have
been established by or pursuant to one or more Board Resolutions or
supplemental indentures as permitted by Sections 201 and 301, in
authenticating such Securities, and accepting the additional responsibilities
under this Indenture in relation to such Securities, the Trustee shall be
entitled to receive, and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or pursuant to
Board Resolution or supplemental indenture as permitted by Section
201, that such form has been established in conformity with the
provisions of this Indenture;
(2) if the terms of such Securities have been established by or pursuant
to Board Resolution or supplemental indenture as permitted by Section
301, that such terms have been established in conformity with the
provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any conditions
specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable in accordance
with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles.
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
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Trustee's own rights, duties 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 Securities of a series are not to be originally issued at
one time, it shall not be necessary to deliver the Officers' Certificate
otherwise required pursuant to Section 301 or the Company Order and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the authentication of each Security of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
Notwithstanding the foregoing, if any Security shall have been authenticated
and delivered hereunder but never issued and sold by the Company, and the
Company shall deliver such Security to the Trustee for cancellation as
provided in Section 309, 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. Pending the preparation of
definitive Securities of any series, the Company may cause to be executed,
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 and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for that
series, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Securities of any series, the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor one or more
definitive Securities of the same series, of any authorized denominations and
of like tenor and aggregate principal amount. 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
and tenor.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The
Company shall cause to be kept at the Corporate Trust Office of the Trustee a
register (the register maintained in such office and in any other office or
agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of a series
at the 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
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or more new Securities of the same series, of any authorized denominations
and of like tenor and aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of the same series, of any authorized denominations and
of like tenor and aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities,
other than exchanges pursuant to Section 304, 906, 1107 or 1405 not involving
any transfer.
If the Securities of any series (or of any series and specified tenor)
are to be redeemed in part, the Company shall not be required (A) to issue,
register the transfer of or exchange any Securities of that series (or of
that series and specified tenor, as the case may be) during a period
beginning at the opening of business 15 days before the day of the mailing of
a notice of redemption of any such Securities selected for redemption under
Section 1103 and ending at the close of business on the day of such mailing,
or (B) to register the transfer of or exchange any Security so selected for
redemption in whole or in part, except the unredeemed portion of any Security
being redeemed in part.
The provisions of Clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Each Global Security authenticated under this Indenture shall be
registered in the name of the Depositary designated for such Global
Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security
shall constitute a single Security for all purposes of this Indenture.
(2) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part
may be registered, in the name of any Person other than the Depositary
for such Global Security or a nominee thereof unless (A) such
Depositary (i) has notified the Company that it is unwilling or unable
to continue as Depositary for such Global Security or (ii) has ceased
to be a clearing agency registered under the Exchange Act, (B) there
shall have occurred and be continuing an Event of Default with respect
to such Global Security or (C) there shall exist such circumstances,
if any, in addition to or in lieu of the foregoing as have been
specified for this purpose as contemplated by Section 301.
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(3) Subject to Clause (2) above, any exchange of a Global Security for
other Securities may be made in whole or in part, and all Securities
issued in exchange for a Global Security or any portion thereof shall
be registered in such names as the Depositary for such Global Security
shall direct.
(4) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or
any portion thereof, whether pursuant to this Section, Section 304,
306, 906, 1107 or 1405 or otherwise, shall be authenticated and
delivered in the form of, and shall be, a Global Security, unless such
Security is registered in the name of a Person other than the
Depositary for such Global Security or a nominee thereof.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any
mutilated Security is surrendered to the Trustee, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security and
(ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice
to the Company or the Trustee that such Security has been acquired by a bona
fide purchaser, the Company shall execute and the Trustee shall authenticate
and deliver, in lieu of any such destroyed, lost or stolen Security, a new
Security of the same series and of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
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 issued pursuant to this Section in lieu
of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally
and proportionately with any and all other Securities of that series duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Except as
otherwise provided as contemplated by Section 301 with respect to any series
of Securities, interest on any Security which is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
Person in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall
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forthwith cease to be payable to the Holder on the relevant Regular Record
Date by virtue of having been such Holder, and such Defaulted Interest may be
paid by the Company, at its election in each case, as provided in Clause (1)
or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause 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 given to each
Holder of Securities of such series in the manner set forth in Section
106, not less than 10 days prior to such Special Record Date. Notice
of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by
such exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this Clause, such manner of payment
shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, 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
Security for registration of transfer, the Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and any premium and (subject to Section
307) any interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to
the contrary.
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SECTION 309. CANCELLATION. All Securities surrendered for payment,
redemption, registration of transfer or exchange or for credit against any
sinking fund payment shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by it.
The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee
(or to any other Person for delivery to the Trustee) for cancellation any
Securities previously authenticated hereunder which the Company has not
issued and sold, and all Securities so delivered shall be promptly canceled
by the Trustee. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of in accordance with the Trustee's procedures,
subject to its record retention policy.
SECTION 310. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of a 360-day year of
twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall upon Company Request cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306 and
(ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from such
trust, as provided in Section 1003) have been delivered to the
Trustee for cancellation; or
(B) all such Securities 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) 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
deposited or caused to be deposited with the Trustee
funds in trust for such purpose in an amount
sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore
delivered to the Trustee for
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cancellation, for principal and any premium 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 have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607, the obligations
of the Trustee to any Authenticating Agent under Section 614 and, if money
shall have been deposited with 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 MONEY. 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 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 any premium and interest for whose
payment such money has been deposited with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT. "Event of Default," wherever used
herein with respect to Securities of any series, means any one of the
following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) unless such event is
specifically deleted or modified in or pursuant to the supplemental
indenture, Board Resolution or Officers' Certificate establishing the terms
of such series pursuant to this Indenture:
(1) default in the payment of any interest upon any Security of that
series when it 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 any premium on any
Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as due by
the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this
Section specifically dealt with or which has expressly been included
in this Indenture solely for
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the benefit of a series of Securities other than that series),
and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying
such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) a default under any evidence of Indebtedness of the Company, or under
any Mortgage, Indenture or other instrument of the Company (including
a default with respect to Securities of any series other than that
series) under which there may be issued or by which there may be
secured any Recourse Indebtedness of 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), whether such indebtedness now exists or shall hereafter be
created, which default shall constitute a failure to pay an aggregate
principal amount exceeding $5,000,000 of such indebtedness when due
and payable after the expiration of any applicable grace period with
respect thereto and shall have resulted in such indebtedness in an
aggregate principal amount exceeding $5,000,000 becoming or being
declared due and payable prior to the date on which it would otherwise
have become due and payable, without such indebtedness having been
discharged or such acceleration having been rescinded or annulled,
within a period of 10 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% 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 entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or (B) a decree or order adjudging the Company or
any Significant Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive
days; or
(7) the commencement by the Company or any Significant Subsidiary of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by it to the entry of a decree or order for relief in
respect of the Company or any Significant Subsidiary in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement
of any bankruptcy or insolvency case or
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proceeding against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or
any Significant Subsidiary or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due, or the taking of
corporate action by the Company or any Significant Subsidiary in
furtherance of any such action; or
(8) any other Event of Default provided with respect to Securities of that
series.
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default (other than an Event of Default specified in Section 501(6)
or 501(7)) with respect to Securities of any series at the time Outstanding
occurs and is continuing, then in every such case the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Securities of
that series may declare the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders),
and upon any such declaration such principal amount (or specified amount)
shall become immediately due and payable. If an Event of Default specified
in Section 501(6) or 501(7) with respect to Securities of any series at the
time Outstanding occurs, the principal amount of all the Securities of that
series (or, if any Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such Securities as may be
specified by the terms thereof) shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and
the Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient to
pay
(A) all overdue interest on all Securities of that series,
(B) the principal of (and premium, if any, on) any Securities of that
series which have become due otherwise than by such declaration
of acceleration and any interest thereon at the rate or rates
prescribed therefor in such Securities,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate or rates prescribed therefor in
such Securities, and
(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
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(2) all Events of Default with respect to Securities of that series, other
than the non-payment of the principal of Securities of that series
which have become due solely by such declaration of acceleration, have
been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company covenants that if
(1) default is made in the payment of any interest on any Security when
such interest becomes due and payable and such default continues for a
period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, the Company will, upon
demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, the whole amount then due and payable on such
Securities for principal and any premium and interest and, to the
extent that payment of such interest shall be legally enforceable,
interest on any overdue principal and premium and on any overdue
interest, at the rate or rates prescribed therefor in such Securities,
and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, 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
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 any judicial
proceeding relative to the Company (or any other obligor upon the Securities)
its property or its creditors, the Trustee shall be entitled and empowered,
by intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to sit on a committee of creditors and 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 to make such payments
to the Trustee and, in the event that the Trustee shall consent to the making
of such payments directly to the Holders, to pay to the Trustee any amount
due it for the reasonable compensation, expenses, disbursements and
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advances of the Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 607.
No provision of this Indenture shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; PROVIDED,
HOWEVER, that the Trustee may, on behalf of the Holders, vote for the
election of a trustee in bankruptcy or similar official and be a member of a
creditors' or other similar committee.
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been recovered.
SECTION 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 any premium or interest, upon
presentation of the Securities and the notation thereon of the payment if
only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal and any premium 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 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 reasonable
indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
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(5) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series; it
being understood and intended that no one or more of such Holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other of such Holders, or to obtain or to
seek to obtain priority or preference over any other of such Holders
or to enforce any right under this Indenture, except in the manner
herein provided and for the equal and ratable benefit of all of such
Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture,
the Holder of any Security shall have the right, which is absolute and
unconditional, to receive payment of the principal of and any premium and
(subject to Section 307) interest on such Security on the respective Stated
Maturities expressed in such Security (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 has instituted any proceeding to enforce any right or remedy under
this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to such Holder,
then and in every such case, subject to any determination in such proceeding,
the Company, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 306, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing
at law or in equity or otherwise. The assertion or employment of any right
or remedy hereunder, or otherwise, shall not prevent the concurrent assertion
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 Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. CONTROL BY HOLDERS. The Holders of a majority in
principal amount of the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred on the Trustee, with respect to the Securities of such series,
PROVIDED that
(1) such direction shall not be in conflict with any rule of law or with
this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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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 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 any premium or interest on any
Security of such series, 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 impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, a court may
require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant, in
the manner and to the extent provided in the Trust Indenture Act; PROVIDED
that neither this Section nor the Trust Indenture Act shall be deemed to
authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company.
SECTION 515. 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.
ARTICLE SIX
THE TRUSTEE
SECTION 601. CERTAIN DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture
Act.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise the rights and powers vested in it by this Indenture
and use the same degree of care and skill in their exercise as a
prudent Person would exercise or use under the circumstances in the
conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee 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
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture.
Notwithstanding the foregoing, 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. Whether or not therein
expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.
SECTION 602. NOTICE OF DEFAULTS. Within 90 days after the occurrence
of any default hereunder with respect to the Securities of any series for
which it is acting as Trustee, the Trustee shall give the Holders of
Securities of such series notice of such default as and to the extent
provided by the Trust Indenture Act; PROVIDED, HOWEVER, that in the case of
any default of the character specified in Section 501(4) with respect to
Securities of such series, no such notice to Holders shall be given until at
least 30 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 Securities of such
series.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of
Section 601:
(1) the Trustee may rely upon 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, other evidence of indebtedness 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, and any
resolution of the Board of Directors shall 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 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 pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and
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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, other evidence of indebtedness or other
paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or
attorney;
(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;
(8) the Trustee shall not be charged with notice or knowledge of any event
or matter (including the occurrence of a default or Event of Default)
the occurrence of which would require it to take any action or omit to
take action hereunder unless such event or matter is actually known to
a Responsible Officer of the Trustee or unless written notice thereof
(making reference to this Agreement or the Securities of any series)
has been received by the Trustee at its Corporate Trust Office, with a
copy to the Trustee's Payment Office;
(9) the Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company;
(10) money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law;
(11) the Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its
rights or powers; and
(12) if different Trustees have been appointed with respect to different
series of Securities, no Trustee shall be responsible for the actions
or omissions of any other Trustee nor have any liability to the
Holders of any series of Securities for which it is not acting;
SECTION 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the
Company and neither the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities,
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 605. MAY HOLD SECURITIES. The Trustee, any Authenticating
Agent, any Paying Agent, any Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become the owner or
pledgee of Securities and, subject to Sections 608 and 613, may otherwise
deal with the Company with the same rights it would have if it were not
Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other
agent.
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SECTION 606. 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 607. 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 the
Trustee upon its request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee in accordance with any
provision of this Indenture (including the reasonable compensation and
the expenses 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 the Trustee for, and to hold it harmless against, any
loss, liability or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or
administration of 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.
SECTION 608. CONFLICTING INTERESTS. If the Trustee has or shall
acquire a conflicting interest within the meaning of the Trust Indenture Act,
the Trustee shall either eliminate such interest or resign, to the extent and
in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture. To the extent permitted by the Trust
Indenture Act, the Trustee shall not be deemed to have a conflicting interest
by virtue of being a trustee under this Indenture with respect to Securities
of more than one series.
SECTION 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at
all times be one (and only one) Trustee hereunder with respect to the
Securities of each series, which may be Trustee hereunder for Securities of
one or more other series. Each Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section and
to the extent permitted by the Trust Indenture Act, the combined capital and
surplus of such Person 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 with respect to the Securities of any series shall cease to
be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. 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 611.
Subject to the foregoing paragraph, 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 the
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instrument of acceptance by a successor Trustee required by Section 611 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 with
respect to the Securities of such series.
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.
If at any time:
(1) the Trustee shall fail to comply with Section 608 after written
request therefor by the Company or by any Holder 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 609 and shall
fail to resign after written request therefor by the Company or by any
such Holder, 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,
(A) the Company by a Board Resolution may remove the Trustee with
respect to all Securities, or (B) subject to Section 514, any Holder
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.
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 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) and
shall comply with the applicable requirements of Section 611. 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 in accordance with the applicable
requirements of Section 611, 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 and accepted appointment in the manner required by Section 611, any
Holder 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 the Securities of such series.
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 to all
Holders of Securities of such series in the manner provided 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.
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SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. 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 the 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.
In case of the appointment hereunder of a successor Trustee with respect
to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to
all Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees 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.
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 the first or second preceding paragraph, as the case may be.
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 612. 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 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 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
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adopt such authentication and deliver the Securities so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions
of the Trust Indenture Act regarding the collection of claims against the
Company (or any such other obligor).
SECTION 614. APPOINTMENT OF AUTHENTICATING AGENT. 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 original issue and upon
exchange, registration of transfer or partial redemption thereof or pursuant
to Section 306, 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. 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 corporation
organized and doing business under the laws of the United States of America,
any State thereof or the District of Columbia, authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus of not
less than $50,000,000 and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent publishes reports of condition
at least annually, pursuant to law or to the requirements of said supervising
or examining authority, then for the purposes of this Section, the combined
capital and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease
to be eligible in accordance with the provisions of this Section, 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
any further act on the part of the Trustee or the Authenticating Agent. An
Authenticating Agent may resign at any time by giving written notice thereof
to the Trustee and to the Company. The Trustee may at any time terminate the
agency of an Authenticating Agent by giving written notice thereof 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 may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment in the manner provided in Section 106 to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve. 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. 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 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 the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
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This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS TRUSTEE
By:
------------------------------
AS AUTHENTICATING AGENT
By:
------------------------------
AUTHORIZED OFFICER
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the Trustee
(1) semi-annually, not later than _________ and _________ in each year, a
list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of Securities of each series as of the
preceding _________ or _________ , as the case may be, and
(2) 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, EXCLUDING from any such list names
and addresses received by the Trustee in its capacity as Security
Registrar.
SECTION 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS.
The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished. The rights of Holders
to communicate with other Holders with respect to their rights under this
Indenture or under the Securities, and the corresponding rights and
privileges of the Trustee, shall be as provided by the Trust Indenture Act.
Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure
of information as to names and addresses of Holders made pursuant to the
Trust Indenture Act, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Section
312(b) of the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE. The Trustee shall transmit to Holders
such reports concerning the Trustee and its actions under this Indenture as
may be required pursuant to Sections 313(a) and (b) of the Trust Indenture
Act promptly after each May 15, beginning with the May 15 commencing in 1999,
and in the manner provided pursuant thereto. A copy of each such report
shall, at the time of such transmission to Holders, be filed by the Trustee
with each stock exchange upon which any Securities are listed, with the
Commission and with the
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Company. The Company will notify the Trustee when any Securities are listed
on any stock exchange.
SECTION 704. REPORTS BY COMPANY. The Company shall:
(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 Exchange Act; 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 Exchange Act in respect of a security listed and registered on a
national securities exchange as may be prescribed from time to time in
such rules and regulations;
(2) file with the Trustee and the 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 hereof with the Trustee, in the manner and to the extent
provided in Section 313(c) of the Trust Indenture Act, 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.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. The
Company shall not consolidate with or merge into any other Person or convey,
transfer or lease its properties and assets substantially as an entirety to
any Person, and the Company shall not permit any Person to consolidate with
or merge into the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties
and assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the due and punctual payment of
the
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principal of and any premium and interest on all the Securities
and the performance or observance of every covenant of this Indenture
on the part of the Company to be performed or observed;
(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 of such transaction 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 lapse of time or
both, would become an Event of Default, shall have happened and be
continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company
would become subject to a mortgage, pledge, lien, security interest or
other encumbrance which would not be permitted by this Indenture, the
Company or such successor Person, as the case may be, shall take such
steps as shall be necessary effectively to secure the Securities
equally and ratably with (or prior to) all indebtedness secured
thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental
indenture, comply with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with.
SECTION 802. SUCCESSOR SUBSTITUTED. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any
conveyance, transfer or lease of the properties and assets of the Company
substantially as an entirety in accordance with Section 801, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been
named as the Company herein, and thereafter, except in the case of a lease,
the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS.
Without the consent of any Holders, the Company, when authorized by 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
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
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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 additional Events of
Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are
expressly being included solely for the benefit of such series); or
(4) to add to or change any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the issuance of
Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons, or to permit or
facilitate the issuance of Securities in uncertificated form; or
(5) to add to, change or eliminate any of the provisions of this Indenture
in respect of one or more series of Securities, provided that any such
addition, change or elimination (A) shall neither (i) apply to any
Security of any series created prior to the execution of such
supplemental indenture and entitled to the benefit of such provision
nor (ii) modify the rights of the Holder of any such Security with
respect to such provision or (B) shall become effective only when
there is no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series 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, pursuant to the
requirements of Section 611; 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, PROVIDED that such action
pursuant to this Clause (9) shall not adversely affect the interests
of the Holders of Securities of any series 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 the
Outstanding Securities of each series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee,
the Company, when authorized by 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 of such series 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 any installment of
principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable
upon the redemption
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thereof, or reduce the amount of the principal of an Original
Issue Discount Security or any other Security which would be due
and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502, or change any Place of Payment where,
or the coin or currency in which, any Security or any premium or
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, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver (of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences)
provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or Section
1011, except to increase any such percentage 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 and Section 1011, or the deletion of this proviso, in
accordance with the requirements of Sections 611 and 901(8).
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of the Holders of Securities of such series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
accepting the additional trusts created by, any supplemental indenture
permitted by this Article or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive, and (subject to
Section 601) 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 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.
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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 AND INTEREST. The Company
covenants and agrees for the benefit of each series of Securities that it
will duly and punctually pay (by no later than 12:00 noon, New York City
time, on each payment date) the principal of and any premium and interest on
the Securities of that series in accordance with the terms of the Securities
and this Indenture.
SECTION 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will
maintain in each Place of Payment for any series of Securities an office or
agency where Securities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company
in respect of the Securities of that series and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its
agent to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be
presented or surrendered for any or all such purposes and may from time to
time rescind such designations; PROVIDED, HOWEVER, that no such designation
or rescission shall in any manner relieve the Company of its obligation to
maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
SECTION 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 Securities, it will, on or before each due date of the principal of
or any premium or interest on any of the Securities of that series, segregate
and hold in trust for the benefit of the Persons entitled thereto a sum
sufficient to pay the principal and any premium and interest so becoming due
until such sums shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its action or failure
so to act.
Whenever the Company shall have one or more Paying Agents for any series
of Securities, it will, prior to each due date of the principal of or any
premium or interest on any Securities of that series, deposit with a Paying
Agent a sum sufficient to pay such amount, such sum to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to act.
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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) comply with the
provisions of the Trust Indenture Act applicable to it as a Paying Agent and
(2) during the continuance of any default by the Company (or any other
obligor upon the Securities of that series) in the making of any payment in
respect of the Securities of that series, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent for payment in respect of the Securities of that series.
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 money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or any premium
or interest on any Security of any series and remaining unclaimed for two
years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company
for payment thereof, and all liability of the Trustee or such Paying Agent
with respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published
in the English language, customarily published on each Business Day and of
general circulation in New York, New York, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication, any unclaimed balance of such
money then remaining will be repaid to the Company.
SECTION 1004. STATEMENT BY OFFICERS AS TO DEFAULT. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of
the Company ending after the date hereof, an Officers' Certificate, stating
whether or not to the best knowledge of the signers thereof the Company is in
default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge.
SECTION 1005. 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 existence, rights (partnership and statutory) and 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 and that the loss thereof is not disadvantageous in any material
respect to the Holders.
SECTION 1006. MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be necessary
so that the business carried on in connection therewith may be properly and
advantageously conducted at all times; PROVIDED, HOWEVER, that nothing in
this Section shall prevent the Company from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the
judgment of
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the Company, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Holders.
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 the Company 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 so long as appropriate reserves are established therefor in
accordance with generally accepted accounting principles.
SECTION 1008. INSURANCE. The Company will cause each of its properties
and each of the properties of its Subsidiaries which are of an insurable
nature to be insured against loss of damage with financially sound insurers
of recognized responsibility, in commercially reasonable amounts and types.
SECTION 1009. RESTRICTIONS ON INDEBTEDNESS.
(1) The Company will not, and will not permit any Subsidiary to, incur any
Indebtedness other than intercompany debt representing Indebtedness to
which the only parties are the Company and any of its Subsidiaries
(but only so long as such Indebtedness is held solely by any of the
Company and any Subsidiary) that is subordinate in right of payment to
any Outstanding Securities, if, immediately after giving effect to the
incurrence of such additional Indebtedness, the aggregate principal
amount of all outstanding Indebtedness of the Company and its
Subsidiaries on a consolidated basis is greater than 60% of the sum of
(i) Total Assets as of the end of the calendar quarter covered in the
Company's Annual Report on Form 10-K or Quarterly Report on Form 10-Q,
as the case may be, most recently filed with the Trustee prior to the
incurrence of such additional Indebtedness and (ii) the increase or
decrease in Total Assets from the end of such quarter including,
without limitation, any increase in Total Assets resulting from the
incurrence of such additional Indebtedness (such increase or decrease,
together with the Total Assets, being referred to herein as "Adjusted
Total Assets").
(2) The Company will not, and will not permit any Subsidiary to, incur any
Indebtedness if the ratio of Consolidated Income Available for Debt
Service to the Annual Service Charge for the period consisting of four
consecutive fiscal quarters most recently ended prior to the date on
which such additional Indebtedness is to be incurred shall have been
less than 1.5 to 1, on a pro forma basis, after giving effect to the
incurrence of such Indebtedness and to the application of the proceeds
therefrom and calculated on the assumption that (i) such Indebtedness
and any other Indebtedness incurred by the Company or its Subsidiaries
since the first day of such four-quarter period and the application of
the proceeds therefrom, including to refinance other Indebtedness, had
occurred at the beginning of such period, (ii) the repayment or
retirement of any other Indebtedness by the Company or its
Subsidiaries since the first day of such four-quarter period had
occurred at the beginning of such period (except that, in making such
computation, the amount of Indebtedness under any revolving credit
facility shall be computed based upon the average daily balance of
such Indebtedness during such
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period), (iii) the income earned on any increase in Adjusted Total
Assets since the end of such four-quarter period had been earned, on
an annualized basis, during such period, and (iv) in the case of any
acquisition or disposition by the Company or any Subsidiary of any
asset or group of assets since the first day of such four-quarter
period, including, without limitation, by merger, stock purchase or
sale, or asset purchase or sale, such acquisition or disposition or
any related repayment of Indebtedness had occurred as of the first
day of such period with the appropriate adjustments with respect to
such acquisition or disposition being included in such pro forma
calculation.
(3) The Company will not, and will not permit any Subsidiary to, incur any
Secured Indebtedness of the Company or any Subsidiary, whether owned
at the date of the Indenture or thereafter acquired, if, immediately
after giving effect to the incurrence of such additional Secured
Indebtedness, the aggregate principal amount of all outstanding
Secured Indebtedness is greater than 40% of Adjusted Total Assets.
For purposes of the foregoing provisions regarding the limitation on
the incurrence of Indebtedness, Indebtedness shall be deemed to be
"incurred" by the Company or a Subsidiary whenever the Company or its
Subsidiary shall create, assume, guarantee or otherwise become liable
in respect thereof.
(4) The Company will at all times maintain Total Unencumbered Assets of
not less than 150% of the aggregate outstanding principal amount of
all outstanding Unsecured Indebtedness.
SECTION 1010. PROVISION OF FINANCIAL INFORMATION. Whether or not the
Company is subject to Section 13 or Section 15(d) of the Exchange Act, the
Company will, to the extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and other documents that the
Company would have been required to file with the Commission pursuant to
Section 13 or Section 15(d) of the Exchange Act (the "Financial Statements")
if the Company were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates")
by which the Company would have been required so to file such documents if
the Company were so subject. The Company will also in any event (x) not
later than the 15th day following each Required Filing Date (i) transmit by
mail to all Holders, as their names and addresses appear in the Security
Register, without cost to such Holders, copies of the annual reports and
quarterly reports that the Company would have been required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act if the
Company were subject to such Sections, and (ii) file with the Trustee copies
of the annual reports, quarterly reports and other documents that the Company
would have been required to file with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act if the Company were subject to such
Sections and (y) if filing such documents by the Company with the Commission
is not permitted under the Exchange Act, promptly upon written request and
payment of the reasonable cost of duplication and delivery, supply copies of
such documents to any prospective Holder.
SECTION 1011. WAIVER OF CERTAIN COVENANTS. Except as otherwise
specified as contemplated by Section 301 for Securities of such series, the
Company may, with
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respect to the Securities of any series, omit in any particular instance to
comply with any term, provision or condition set forth in any covenant
provided pursuant to Section 301(16), 901(2) or 901(7) for the benefit of the
Holders of such series or in any of Sections 1006 to 1010, inclusive, if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision or condition, but no such waiver
shall extend to or affect such term, provision 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 such Securities) 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 a Board Resolution
or in another manner specified as contemplated by Section 301 for such
Securities. In case of any redemption at the election of the Company of less
than all the Securities of any series (including any such redemption
affecting only a single Security), the Company shall, at least 60 days prior
to the Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such Redemption Date, of
the principal amount of Securities of such series to be redeemed and, if
applicable, of the tenor of the Securities 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 are to be redeemed (unless all the
Securities of such series and of a specified tenor are to be redeemed or
unless such redemption affects only a single Security), 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 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 a portion of the principal amount of any Security of such
series, PROVIDED that the unredeemed portion of the principal amount of any
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security. If less than all the
Securities of such series and of a specified tenor are to be redeemed (unless
such redemption affects only a single Security), the particular Securities to
be redeemed shall be selected not more than 60 days prior to the Redemption
Date by the Trustee, from the Outstanding Securities of such series and
specified tenor not previously called for redemption in accordance with the
preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of
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the Security shall be in an authorized denomination (which shall not be less
than the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 1104. NOTICE OF REDEMPTION. Notice of redemption shall be
given by first-class mail, postage prepaid, mailed not less than 30 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 at the address for such Holder
appearing in the Security Register, 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.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price and accrued interest to the Redemption Date
payable as provided in Section 1106, if any,
(3) if less than all the Outstanding Securities of any series
consisting of more than a single Security are to be redeemed, the
identification (and, in the case of partial redemption of any
such Securities, the respective principal amounts) of the
particular Securities to be redeemed and, if less than all the
Outstanding Securities of any series consisting of a single
Security are to be redeemed, the principal amount of the
particular Security to be redeemed,
(4) 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 portion thereof, to be redeemed and, if applicable,
that interest thereon will cease to accrue on and after said
date,
(5) the place or places where each such Security is to be surrendered
for payment of the Redemption Price,
(6) that the redemption is for a sinking fund, if such is the case,
and
(7) the CUSIP number of such Security, if any.
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 and shall be
irrevocable.
SECTION 1105. DEPOSIT OF REDEMPTION PRICE. 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 sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
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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, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest to the
Redemption Date; PROVIDED, HOWEVER, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose Stated Maturity
is on or prior to the Redemption Date will 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 Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor
in the Security.
SECTION 1107. SECURITIES REDEEMED IN PART. Any Security which is to be
redeemed only in part 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 cause to be executed on its behalf, 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 and
of like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed
portion of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of
any series except as otherwise specified as contemplated by Section 301 for
such Securities.
The minimum amount of any sinking fund payment provided for by the terms
of any Securities 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 is herein referred to as an "optional sinking
fund payment". If provided for by the terms of any Securities, the cash
amount of any 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 as provided for by the terms of such Securities.
SECTION 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application
of permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking
fund payment with respect to any Securities of such series required to be
made pursuant to the terms of such Securities as and to the extent provided
for by the terms of such Securities; PROVIDED that the Securities to be so
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credited have not been previously so credited. The Securities to be so
credited shall be received and credited for such purpose by the Trustee at
the Redemption Price, as specified in the Securities so to be redeemed, for
redemption through operation of the sinking fund and the amount of such
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 any Securities, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for such Securities pursuant
to the terms of such Securities, the portion thereof, if any, which is to be
satisfied by payment of cash and the portion thereof, if any, which is to be
satisfied by delivering and crediting Securities pursuant to Section 1202 and
will also deliver to the Trustee any Securities to be so delivered. 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
prior to 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
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1301. COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT
DEFEASANCE. The Company may elect, at its option at any time, to have
Section 1302 or Section 1303 applied to any Securities or any series of
Securities, as the case may be, designated pursuant to Section 301 as being
defeasible pursuant to such Section 1302 or 1303, in accordance with any
applicable requirements provided pursuant to Section 301 and upon compliance
with the conditions set forth below in this Article. Any such election shall
be evidenced by a Board Resolution or in another manner specified as
contemplated by Section 301 for such Securities.
SECTION 1302. DEFEASANCE AND DISCHARGE. Upon the Company's exercise of
its option (if any) to have this Section applied to any Securities or any
series of Securities, as the case may be, the Company shall be deemed to have
been discharged from its obligations with respect to such Securities as
provided in this Section on and after the date the conditions set forth in
Section 1304 are satisfied (hereinafter called "Defeasance"). For this
purpose, such Defeasance means that the Company shall be deemed to have paid
and discharged the entire indebtedness represented by such Securities and to
have satisfied all its other obligations under such Securities and this
Indenture insofar as such Securities are concerned (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), subject to the following which shall survive until otherwise
terminated or discharged hereunder: (1) the rights of Holders of such
Securities to receive, solely from the trust fund described in Section 1304
and as more fully set forth in such Section, payments in respect of the
principal of and any premium and interest on such Securities when payments
are due, (2) the Company's obligations with respect to such Securities under
Sections 304, 305, 306, 1002 and 1003, (3) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and (4) this Article. Subject to
compliance with this Article, the Company may exercise its option (if any) to
have this Section applied to any Securities notwithstanding the prior
exercise of its option (if any) to have Section 1303 applied to such
Securities.
SECTION 1303. COVENANT DEFEASANCE. Upon the Company's exercise of its
option (if any) to have this Section applied to any Securities or any series
of Securities, as the case may be, (1) the Company shall be released from its
obligations under Section 801(3), Sections 1006
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through 1010, inclusive, and any covenants provided pursuant to Section
301(16), 901(2) or 901(7) for the benefit of the Holders of such Securities
and (2) the occurrence of any event specified in Sections 501(4) (with
respect to any of Section 801(3), Sections 1006 through 1010, inclusive, and
any such covenants provided pursuant to Section 301(16), 901(2) or 901(7)),
501(5) and 501(8) shall be deemed not to be or result in an Event of Default,
in each case with respect to such Securities as provided in this Section on
and after the date the conditions set forth in Section 1304 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that, with respect to such Securities, the Company may omit
to comply with and shall have no liability in respect of any term, condition
or limitation set forth in any such specified Section (to the extent so
specified in the case of Section 501(4)), whether directly or indirectly by
reason of any reference elsewhere herein to any such Section or by reason of
any reference in any such Section to any other provision herein or in any
other document, but the remainder of this Indenture and such Securities shall
be unaffected thereby.
SECTION 1304. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The
following shall be the conditions to the application of Section 1302 or
Section 1303 to any Securities or any series of Securities, as the case may
be:
(1) The Company shall irrevocably have deposited or caused to be deposited
with the Trustee (or another trustee which satisfies the requirements
contemplated by Section 609 and agrees to comply with the provisions
of this Article 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 benefits of the Holders of
such Securities, (A) money in an amount, or (B) U.S. Government
Obligations which through the scheduled payment of principal and
interest in respect thereof in accordance with their terms will
provide, not later than one day before the due date of any payment,
money in an amount, or (C) a combination thereof, in each case
sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge, and which
shall be applied by the Trustee (or any such other qualifying trustee)
to pay and discharge, the principal of and any premium and interest on
such Securities on the respective Stated Maturities, in accordance
with the terms of this Indenture and such Securities. As used herein,
"U.S. Government Obligation" means (x) any security which is (i) a
direct obligation of the United States of America for the payment of
which the full faith and credit of the United States of America is
pledged or (ii) an obligation of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America, which, in
either case (i) or (ii), is not callable or redeemable at the option
of the issuer thereof, and (y) any depositary receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act) as custodian
with respect to any U.S. Government Obligation which is specified in
Clause (x) above and held by such bank for the account of the holder
of such depositary receipt, or with respect to any specific payment of
principal of or interest on any U.S. Government Obligation which is so
specified and held, 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 depositary receipt from any amount
received by the custodian in respect of the U.S. Government Obligation
or the specific payment of principal or interest evidenced by such
depositary receipt.
(2) In the event of an election to have Section 1302 apply to any
Securities or any
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series of Securities, as the case may be, the Company shall have
delivered to the Trustee an Opinion of Counsel stating that (A) the
Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
instrument, there has been a change in the applicable Federal income
tax law, in either case (A) or (B) to the effect that, and based
thereon such opinion shall confirm that, the Holders of such
Securities will not recognize gain or loss for Federal income tax
purposes as a result of the deposit, Defeasance and discharge to be
effected with respect to such Securities and will be subject to
Federal income tax on the same amount, in the same manner and at the
same times as would be the case if such deposit, Defeasance and
discharge were not to occur.
(3) In the event of an election to have Section 1303 apply to any
Securities or any series of Securities, as the case may be, the
Company shall have delivered to the Trustee an Opinion of Counsel to
the effect that the Holders of such Securities will not recognize gain
or loss for Federal income tax purposes as a result of the deposit and
Covenant Defeasance to be effected with respect to such Securities and
will be subject to Federal income tax on the same amount, in the same
manner and at the same times as would be the case if such deposit and
Covenant Defeasance were not to occur.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that neither such Securities nor any other
Securities of the same series, if then listed on any securities
exchange, will be delisted as a result of such deposit.
(5) No event which is, or after notice or lapse of time or both would
become, an Event of Default with respect to such Securities or any
other Securities shall have occurred and be continuing at the time of
such deposit or, with regard to any such event specified in Sections
501(6) and (7), at any time on or prior to the 90th day after the date
of such deposit (it being understood that this condition shall not be
deemed satisfied until after such 90th day).
(6) Such Defeasance or Covenant Defeasance shall not cause the Trustee to
have a conflicting interest within the meaning of the Trust Indenture
Act (assuming all Securities are in default within the meaning of such
Act).
(7) Such Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any other agreement or
instrument to which the Company is a party or by which it is bound.
(8) Such Defeasance or Covenant Defeasance shall not result in the trust
arising from such deposit constituting an investment company within
the meaning of the Investment Company Act unless such trust shall be
registered under such Act or exempt from registration thereunder.
(9) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Defeasance or Covenant
Defeasance have been complied with.
SECTION 1305. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE
HELD IN TRUST; MISCELLANEOUS PROVISIONS. Subject to the provisions of the
last paragraph of Section 1003, all money and U.S. Government Obligations
(including the proceeds thereof) deposited with the Trustee or other
qualifying trustee (solely for
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purposes of this Section and Section 1306, the Trustee and any such other
trustee are referred to collectively as the "Trustee") pursuant to Section
1304 in respect of any Securities shall be held in trust and applied by the
Trustee, in accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of such Securities, of all sums due and to become
due thereon in respect of principal and any premium and interest, but money
so held in trust need not be segregated from other funds except to the extent
required by law. The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1304 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 Outstanding Securities.
Anything in this Article to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request
any money or U.S. Government Obligations held by it as provided in Section
1304 with respect to any Securities 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 the Defeasance
or Covenant Defeasance, as the case may be, with respect to such Securities.
SECTION 1306. REINSTATEMENT. If the Trustee or the Paying Agent is
unable to apply any money in accordance with this Article with respect to any
Securities by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application,
then the obligations under this Indenture and such Securities from which the
Company has been discharged or released pursuant to Section 1302 or 1303
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article with respect to such Securities, until such time as the Trustee
or Paying Agent is permitted to apply all money held in trust pursuant to
Section 1305 with respect to such Securities in accordance with this Article;
PROVIDED, HOWEVER, that if the Company makes any payment of principal of or
any premium or interest on any such Security following such reinstatement of
its obligations, the Company shall be subrogated to the rights (if any) of
the Holders of such Securities to receive such payment from the money so held
in trust.
ARTICLE FOURTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1401. 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 1402. REPAYMENT OF SECURITIES. Securities of any series
subject to repayment in whole or in part at the option of the Holders thereof
will, unless otherwise provided in the terms of such Securities, be repaid at
a price equal to the principal amount thereof, together with interest, if
any, thereon accrued to the Repayment Date specified in or pursuant to the
terms of such Securities. The Company covenants that on or before the day
prior to the Repayment Date (but no later than 10:00 a.m. Boston time on 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 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.
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SECTION 1403. 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 any 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, 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, shall be stated in a writing accompanying such
Security. 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 1404. WHEN SECURITIES PRESENTED FOR RECIPIENT 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.
Upon surrender of any such Security for repayment in accordance with such
provisions, 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 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 as
the close of business on the relevant Record Dates according to their terms and
the provisions of Section 307.
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 1405. 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
charge and at the expense of the Company, a new 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.
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This instrument 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 instrument.
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. PURPOSES FOR WHICH MEETINGS MAY BE CALLED. A meeting of
Holders of Securities of any series may be called at any time and from time to
time pursuant to this Article to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Securities of such
series.
SECTION 1502. CALL, NOTICE AND PLACE OF MEETINGS.
(a) The Trustee may at any time call a meeting of Holders of Securities of
any series for any purpose specified in Section 1501, to be held at such time
and at such place in the Borough of Manhattan, New York City, or in London as
the Trustee shall determine. Notice of every meeting of Holders of Securities
of any series, setting forth the time and the place of such meeting and in
general terms the action proposed to be taken at such meeting, shall be given,
in the manner provided in Section 106, not less than 21 nor more than 180 days
prior to the date fixed for the meeting.
(b) In case at any time the Company, pursuant to a Board Resolution, or any
Holders of at least 10% in principal amount of the Outstanding Securities of any
series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 1501, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have made the first publication of the
notice of such meeting within 21 days after receipt of such request or shall not
thereafter proceed to cause the meeting to be held as provided herein, then the
Company or the Holders of Securities of such series in the amount above
specified, as the case may be, may determine the time and the place in the
Borough of Manhattan, New York City, or in London for such meeting and may call
such meeting for such purposes by giving notice thereof as provided in
subsection (a) of this Section.
SECTION 1503. PERSONS ENTITLED TO VOTE AT MEETINGS. To be entitled to
vote at any meeting of Holders of Securities of any series, a Person shall be
(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
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adjourned for a period of not less than 10 days as determined by the chairman
of the meeting prior to the adjournment of such meeting. In the absence of a
quorum at the reconvening of any such adjourned meeting, such adjourned
meeting may be further adjourned for a period of not less than 10 days as
determined by the chairman of the meeting prior to the adjournment of such
adjourned meeting. Notice of the reconvening of any adjourned meeting shall
be given as provided in Section 1502(a), except that such notice need to be
given only once not less than five days prior to the date on which the
meeting is scheduled to be reconvened. Notice of the reconvening of any
adjournment meeting shall state expressly the percentage, as provided above,
of the principal amount of the Outstanding Securities of such series which
shall constitute a quorum.
Except as limited by the proviso to Section 902, any resolution presented
to a meeting or adjourned meeting duly reconvened at which a quorum is present
as aforesaid may be adopted by the affirmative vote of the persons entitled to
vote a majority in aggregate principal amount of the Outstanding Securities
represented at such meeting; provided, however, that, except as limited by the
proviso to Section 902, any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other action which this
Indenture expressly provides may be made, given or taken by the Holders of a
specified percentage, which is less than a majority, in principal amount of the
Outstanding Securities of a series may be adopted at a meeting or an adjourned
meeting duly reconvened and at which a quorum is present as aforesaid by the
affirmative vote of the Holders of such specified percentage in principal amount
of the Outstanding Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Securities of any series duly held in accordance with this Section shall be
binding on all the Holders of Securities of such series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section 1504, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action that this Indenture expressly provides may be made, given
or taken by the Holders of a specified percentage in principal amount of all
Outstanding Securities affected thereby, or of the Holders of such series and
one or more additional series:
(a) there shall be no minimum quorum requirement for such meeting; and
(b) the principal amount of the Outstanding Securities of such series that
vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction,
notice, consent, waiver or other action has been made, given or taken
under this Indenture.
SECTION 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.
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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 canceled 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 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.
SECTION 1507. EVIDENCE OF ACTION TAKEN BY HOLDERS. Any request, demand,
authorization, direction, notice consent, waiver or other action provided by
this Indenture to be given or taken by a specified percentage in principal
amount of the Holders of any or all series may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such specified
percentage of Holders in person or by agent duly appointed in writing, and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee.
Proof and execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Article
Six) conclusive in favor of the Trustee and the Company, if made in the manner
provided in this Article.
SECTION 1508. PROOF OF EXECUTION OF INSTRUMENTS. Subject to Article Six,
the execution of any instrument by a Holder or his agent or proxy may be proved
in
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accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
MERIDIAN INDUSTRIAL TRUST, INC.
By:
--------------------------------------
Name:
Title:
Attest:
---------------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Trustee
By:
--------------------------------------
Name:
Title:
Attest:
---------------------------
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STATE OF CALIFORNIA ) ss.:
)
COUNTY OF )
On the _______ day of June __, 1998, before me personally came
______________ ____________, to me known, who, being by me duly sworn, did
depose and say that he is _____________ of Meridian Industrial Trust, Inc., the
corporation described in and which executed the foregoing instrument; that he
knows the seal of said partnership; that the seal affixed to said instrument is
such seal; that it was so affixed by authority of the Board of Directors of the
company; and that he signed his name thereto by like authority.
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STATE OF TEXAS ) ss.:
COUNTY OF _________________ )
On the _____ day of June, 1998, before me personally came ________________
____________, to me known, who, being by me duly sworn, did depose and say that
he is_________________ of Chase Bank of Texas, National Association, a national
banking association, the Trustee described in and which executed the foregoing
instrument; that he knows the seal of said banking association; that the seal
affixed to said instrument is such seal; that it was so affixed by authority of
the Board of Directors of said banking association; and that he signed his name
thereto by like authority.
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Exhibit 5.1
June 17, 1998
Meridian Industrial Trust, Inc.
455 Market Street, 17th Floor
San Francisco, California 94105
Re: Registration Statement on Form S-3:
$600,000,000 Aggregate Offering Price of
Securities
Ladies and Gentlemen:
We have served as Maryland counsel to Meridian Industrial Trust, Inc., a
Maryland corporation (the "Company"), in connection with certain matters of
Maryland law arising out of the registration of the following securities of
the Company having an aggregate initial offering price of up to $600,000,000
(collectively, the "Securities"): (a) debt securities ("Debt Securities"),
(b) warrants to purchase Debt Securities ("Debt Warrants"), (c) shares of
Preferred Stock, $.001 par value per share, of the Company ("Preferred
Stock"), (d) warrants to purchase shares of Preferred Stock ("Preferred Stock
Warrants"), (e) shares of Common Stock, $.001 par value per share, of the
Company ("Common Stock"), and (f) warrants to purchase shares of Common Stock
("Common Stock Warrants"), covered by the above-referenced Registration
Statement", and all amendments thereto (the "Registration Statement"), filed
by the Company with the Securities and Exchange Commission (the "Commission")
under the Securities Act of 1933, as amended (the "1933 Act"). Unless
otherwise defined herein, capitalized terms used herein shall have the
meanings assigned to them in the Registration Statement.
In connection with our representation of the Company, and as a basis for
the opinion hereinafter set forth, we have examined originals, or copies
certified or otherwise identified
<PAGE>
Meridian Industrial Trust, Inc.
June 17, 1998
Page 2
to our satisfaction, of the following documents (collectively, the
"Documents"):
1. The Registration Statement and the related form of prospectus
included therein in the form in which it was transmitted to the Commission
under the 1933 Act;
2. The charter of the Company (the "Charter"), certified as of a recent
date by the State Department of Assessments and Taxation of Maryland (the
"SDAT");
3. The Second Amended and Restated Bylaws of the Company, certified as
of a recent date by its Secretary;
4. Resolutions adopted by the Board of Directors of the Company (the
"Board") relating to the sale, issuance and registration of the Securities,
certified as of a recent date by the Secretary of the Company (the
"Resolutions");
5. The form of certificate representing a share of Common Stock,
certified as of a recent date by the Secretary of the Company;
6. The form of certificate representing a share of Preferred Stock,
certified as of a recent date by the Secretary of the Company;
7. A certificate of the SDAT as to the good standing of the Company,
dated June 17, 1998;
8. A certificate executed by Robert A. Dobbin, Secretary of the
Company, dated June 17, 1998; and
9. Such other documents and matters as we have deemed necessary or
appropriate to express the opinion set forth in this letter, subject to the
assumptions, limitations and qualifications stated herein.
In expressing the opinion set forth below, we have assumed, and so far as
is known to us there are no facts inconsistent with, the following:
1. Each individual executing any of the Documents, whether on behalf of
such individual or another person, is legally competent to do so.
2. Each individual executing any of the Documents on behalf of a party
(other than the Company) is duly authorized to do so.
<PAGE>
Meridian Industrial Trust, Inc.
June 17, 1998
Page 3
3. Each of the parties (other than the Company) executing any of the
Documents has duly and validly executed and delivered each of the Documents
to which such party is a signatory, and such party's obligations set forth
therein are legal, valid and binding.
4. All Documents submitted to us as originals are authentic. All
Documents submitted to us as certified or photostatic copies conform to the
original documents. All signatures on all such Documents are genuine. All
public records reviewed or relied upon by us or on our behalf are true and
complete. All statements and information contained in the Documents are true
and complete. There has been no oral or written modification of or amendment
to any of the Documents, and there has been no waiver of any provision of any
of the Documents, by action or omission of the parties or otherwise.
5. The outstanding shares of stock of the Company have not been and will
not be transferred in violation of any restriction or limitation contained
in the Charter. The Shares will not be transferred in violation of any
restriction or limitation contained in the Charter.
6. The issuance and certain terms of the Securities to be issued by the
Company from time to time will be approved by the Board of Directors of the
Company, or a duly authorized committee thereof, in accordance with the
Maryland General Corporation Law (with such approval referred to herein as
the "Corporate Proceedings").
The phrase "known to us" is limited to the actual knowledge, without
independent inquiry, of the lawyers at our firm who have performed legal
services in connection with the issuance of this opinion.
Based upon the foregoing, and subject to the assumptions, limitations
and qualifications stated herein, it is our opinion that:
1. The Company is a corporation duly incorporated and existing under
and by virtue of the laws of the State of Maryland and is in good standing
with the SDAT.
2. Upon completion of all Corporate Proceedings relating to the
Securities that are shares of Common Stock (the "Common Securities") and the
due execution, countersignature and delivery of certificates representing
Common Securities, the Common Securities will be (assuming that, upon issuance,
the total number of shares of Common Stock issued and outstanding will not
<PAGE>
Meridian Industrial Trust, Inc.
June 17, 1998
Page 4
exceed the total number of shares of Common Stock that the Company is then
authorized to issue under the Charter) duly authorized and, when and if
delivered against payment therefor in accordance with the Resolutions, will
be validly issued, fully paid and nonassessable.
3. Upon the completion of all Corporate Proceedings relating to the
Securities that are shares of Preferred Stock (the "Preferred Securities")
and the due execution, countersignature and delivery of certificates
representing Preferred Securities, the Preferred Securities will be (assuming
that, upon issuance, the total number of shares of Preferred Stock of the
class or series of such Preferred Securities issued and outstanding will not
exceed the total number of shares of Preferred Stock of the class or series
of such Preferred Securities that the Company is then authorized to issue
under the Charter) duly authorized and, when and if delivered against payment
therefor in accordance with the Resolutions, will be validly issued, fully
paid and nonassessable.
The foregoing opinion is limited to the laws of the State of Maryland and
we do not express any opinion herein concerning any other law. The opinion
expressed herein is subject to the effect of judicial decisions which may
permit the introduction of parol evidence to modify the terms or the
interpretation of agreements. We express no opinion as to compliance with the
securities (or "blue sky") laws of the State of Maryland.
We assume no obligation to supplement this opinion if any applicable law
changes after the date hereof or if we become aware of any fact that might
change the opinion expressed herein after the date hereof.
This opinion is being furnished to you for submission to the Commission
as an exhibit to the Registration Statement and, accordingly, may not be
relied upon by, quoted in any manner to, or delivered to any other person or
entity without, in each instance, our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of the name of our firm therein. In
giving this consent, we do not admit that we are within the category of
persons whose consent is required by Section 7 of the 1933 Act.
Very truly yours,
Ballard Spahr Andrews & Ingersoll, LLP
<PAGE>
[LETTERHEAD]
June 17, 1998
Meridian Industrial Trust, Inc.
455 Market Street, 17th Floor
San Francisco, CA 94105
Gentlemen:
You have requested our opinion concerning: (a) the ability of Meridian
Industrial Trust, Inc. (the "Company") to qualify as a real estate investment
trust ("REIT") under Sections 856 through 860 of the Internal Revenue Code of
1986, as amended (the "Code") and (b) the accuracy of the tax discussion in
the Prospectus contained in the Registration Statement on Form S-3 filed by
the Company with the Securities and Exchange Commission on or about June 17,
1998 (the "Registration Statement") relating to the offering of up to
$600,000,000 in debt and equity securities of the Company, including common
stock and preferred stock, each par value $.001 per share. Capitalized terms
used but not defined herein have the meanings specified in the Registration
Statement.
We have examined the Registration Statement and the Company's Charter,
and such other documents as we considered necessary or appropriate for
purposes of issuing our opinions. We also received certain representations
from officers of the Company. In rendering the opinions set forth below, we
have relied upon these representations, and the information presented in the
Registration Statement and other documents, without undertaking any
independent verification of the accuracy or completeness of those matters.
In our review, we have assumed that each representation and all other
information that we reviewed is true and correct in all material respects and
will remain true and correct, that all obligations imposed by any documents
on the parties have been or will be performed, that the Registration
Statement and the other information fairly describes the past and expected
future actions of the parties, and that the Company has been and will be
operated in a fashion consistent with the expectations described in the
Registration Statement and the representations. We have not made an
independent investigation of the accuracy or completeness of those matters
and have assumed that the information made available to us accurately and
completely describes all material facts relevant to our opinion.
<PAGE>
Meridian Industrial Trust, Inc.
June 17, 1998
Page 2
Based on the facts and representations referred to above, and subject to
the analysis, qualifications and assumptions presented under the heading
"Federal Income Tax Considerations" in the Registration Statement, it is our
opinion that:
(1) The Company has qualified as a REIT for its taxable years ending
December 31, 1995, December 31, 1996 and December 31, 1997.
(2) The Company is organized in conformity with the requirements for
qualification as a REIT and its method of operation has and will enable it
to continue to meet the requirements for qualification and taxation as a
REIT under the Code, provided the Company continues to meet the asset
composition, source of income, shareholder diversification, distribution,
record keeping, and other requirements of the Code necessary for the
Company to qualify as a REIT. No assurance can be given that the Company
will qualify as a REIT for any particular period, however, because that
determination involves factual determinations as to whether the Company
actually complies with the various requirements of the Code necessary for
the Company to qualify as a REIT, and in part may turn upon whether each
of the Merged Trusts previously complied with those requirements.
(3) The discussion in the Registration Statement under the heading
"Federal Income Tax Considerations" fairly summarizes the material federal
income tax considerations to a purchaser of the Common Stock or Preferred
Stock.
Our opinions are based upon existing provisions of the Code, regulations
promulgated or proposed thereunder and interpretations thereof by the
Internal Revenue Service and the courts, all of which are subject to change
with prospective or retroactive effect, and our opinion could be adversely
affected or rendered obsolete by any such change.
We hereby consent to the filing of this opinion letter as an exhibit to
the Registration Statement and to the references to Vinson & Elkins L.L.P.
under the headings "Certain Federal Income Tax Consequences" and "Legal
Matters" in the Registration Statement. In giving this consent, we do not
thereby admit that we are within the category of the persons whose consent is
required under Section 7 of the Securities Act of 1933 and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Very truly yours,
Vinson & Elkins L.L.P.
<PAGE>
MERIDIAN INDUSTRIAL TRUST, INC.
COMPUTATION OF RATIO OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
FOR THE THREE MONTHS ENDED MARCH 31, 1998,
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996 AND
FOR THE PERIOD FROM MAY 18, 1995 (INCEPTION) TO DECEMBER 31, 1995
(IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
FROM
THREE MONTHS MAY 18, 1995
ENDED YEAR ENDED YEAR ENDED TO
MARCH 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1998 1997 1996 1995
----------- ------------ ------------ ----------
<S> <C> <C> <C> <C>
EARNINGS:
Income (loss) from operations before minority
interest, gain or loss on divestiture of properties,
and extraordinary item $ 10,251 $ 23,988 $ 11,161 $ (1,293)
Interest expense(1) 4,592 11,022 6,065 5
---------- ---------- ---------- ----------
TOTAL EARNINGS $ 14,843 $ 35,010 $ 17,226 $ (1,288)
---------- ---------- ---------- ----------
FIXED CHARGES:
Interest expense(1) $ 4,592 $ 11,022 $ 6,065 $ 5
Capitalized interest 796 1,820 561 -
Preferred Dividends 750 2,818 2,412 29
---------- ---------- ---------- ----------
TOTAL FIXED CHARGES AND PREFERRED DIVIDENDS $ 6,138 $ 15,660 $ 9,038 $ 34
---------- ---------- ---------- ----------
RATIO OF EARNINGS TO FIXED CHARGES (EXCLUDING
PREFERRED DIVIDENDS 2.75 2.73 2.60 - (2)
---------- ---------- ---------- ----------
RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED DIVIDENDS 2.42 2.24 1.91 - (2)
---------- ---------- ---------- ----------
</TABLE>
Note:
(1) Includes amortization of deferred financing fees.
(2) Indicates a ratio of less than zero. The Company was incorporated on
May 18, 1995. Except for interest earned on its investments and general
and administrative expenses incurred and accrued, the Company had no other
activities prior to February 23, 1996, the date of the Merger.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 23, 1998
included in Meridian Industrial Trust, Inc.'s Form 10-K for the year ended
December 31, 1997 and to all references to our Firm included in this
registration statement.
We also consent to the incorporation by reference in this registration
statement of our report dated February 17, 1998 on the statement of revenues and
certain expenses for the year ended December 31, 1997 on the Estate of James
Campbell Transaction included in Meridian Industrial Trust, Inc.'s Current
Report on Form 8-K filed with the Commission on May 29, 1998.
/s/ Arthur Andersen LLP
San Francisco, California
June 16, 1998
<PAGE>
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)_____
-------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
74-0800980
(I.R.S. Employer Identification Number)
712 MAIN STREET, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip code)
LEE BOOCKER, 712 MAIN STREET, 26TH FLOOR
HOUSTON, TEXAS 77002 (713) 216-2448
(Name, address and telephone number of agent for service)
MERIDIAN INDUSTRIAL TRUST, INC.
(Exact name of obligor as specified in its charter)
MARYLAND 94-3224765
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
455 MARKET STREET, 17TH FLOOR
SAN FRANCISCO, CALIFORNIA 94105
(Address of principal executive offices) (Zip code)
DEBT SECURITIES
(Title of indenture securities)
===============================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee. (See Note on Page 7.)
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING
SECURITIES OF THE TRUSTEE.
COL. A COL. B
TITLE OF CLASS AMOUNT OUTSTANDING
-------------- ------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING INFORMATION:
(a) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH OTHER
INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
1
<PAGE>
ITEM 4. (CONTINUED)
(b) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR THE
CLAIM THAT NO CONFLICTING INTEREST WITHIN THE MEANING OF SECTION
310(b)(1) OF THE ACT ARISES AS A RESULT OF THE TRUSTEESHIP UNDER ANY
SUCH OTHER INDENTURE, INCLUDING A STATEMENT AS TO HOW THE INDENTURE
SECURITIES WILL RANK AS COMPARED WITH THE SECURITIES ISSUED UNDER
SUCH OTHER INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH OBLIGOR OR
UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICERS OF THE
TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR REPRESENTATIVE
OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY EACH SUCH
PERSON HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH
CONNECTION.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF
THE TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR.
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
- ------------- -------------- ------------ -----------------
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
2
<PAGE>
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF THE
TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
- ------------- -------------- ------------ -----------------
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO THE SECURITIES OF THE OBLIGOR
OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN DEFAULT
BY THE TRUSTEE.
COL. A COL. B COL. C COL. D
AMOUNT OWNED
WHETHER THE BENEFICIALLY OR PERCENT OF
SECURITIES HELD AS COLLATERAL CLASS
ARE VOTING SECURITY FOR REPRESENTED BY
OR NONVOTING OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS SECURITIES DEFAULT IN COL. C
- -------------- ------------ ------------------- --------------
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
3
<PAGE>
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF SUCH
UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
- -------------- ----------- ------------------- --------------
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE (1) OWNS 10% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR OR
(2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH THE
FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
- -------------- ----------- ------------------- --------------
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
4
<PAGE>
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL SECURITY FOR
OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE KNOWLEDGE OF
THE TRUSTEE, OWNS 50% OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR,
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OR SUCH
PERSON ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE IN COL. C
- -------------- ----------- ------------------- --------------
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS INDEBTED TO THE
TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
COL. A COL. B COL. C
NATURE OF AMOUNT
INDEBTEDNESS OUTSTANDING DATE DUE
- ------------ ----------- --------
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(a) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not, nor has there been, a default with respect to the
securities under this indenture. (See Note on Page 7.)
5
<PAGE>
ITEM 13. (CONTINUED)
(b) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There has not been a default under any such indenture or series. (See
Note on Page 7.)
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBED EACH SUCH
AFFILIATION.
Not applicable by virtue of Form T-1 General Instruction B and response
to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN TRUSTEE IS
AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE
QUALIFIED UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY.
- 1. A copy of the articles of association of the trustee now in
effect.
# 2. A copy of the certificate of authority of the trustee to commence
business.
* 3. A copy of the certificate of authorization of the trustee to
exercise corporate trust powers issued by the Board of Governors of the
Federal Reserve System under date of January 21, 1948.
+ 4. A copy of the existing bylaws of the trustee.
5. Not applicable.
6
<PAGE>
6. The consent of the United States institutional trustees required
by Section 321(b) of the Act.
= 7. A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or examining
authority.
8. Not applicable.
9. Not applicable.
NOTE REGARDING INCORPORATED EXHIBITS
Effective January 20, 1998, the name of the Trustee was changed from
Texas Commerce Bank National Association to Chase Bank of Texas, National
Association. The exhibits incorporated herein by reference, except for
Exhibit 6, were filed under the former name of the Trustee.
- Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits
to the Form S-3 File No. 33-56195.
# Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits
to the Form S-3 File No. 33-42814.
* Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits
to the Form S-11 File No. 33-25132.
+ Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits
to the Form S-3 File No. 33-65055.
= Incorporated by reference to exhibit bearing the same designation
and previously filed with the Securities and Exchange Commission as exhibits
to the Form S-3 File No. 333-52197.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Items 2 and 13,
the answers to said Items are based on incomplete information. Such Items
may, however, be considered as correct unless amended by an amendment to this
Form T-1.
7
<PAGE>
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939 THE
TRUSTEE, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, FORMERLY KNOWN AS TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION ORGANIZED
AND EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED
THIS STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO AUTHORIZED, ALL IN THE CITY OF HOUSTON, AND STATE OF TEXAS, ON THE
17TH DAY OF JUNE, 1998.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, AS TRUSTEE
By: /s/ Mauri J. Cowen
---------------------------------
Mauri J. Cowen
Vice President and Trust Officer
8
<PAGE>
EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is a trustee under an Indenture between Meridian
Industrial Trust, Inc. (the "Company"), and Chase Bank of Texas, National
Association, as Trustee, entered into in connection with the issuance of the
Company's Debt Securities.
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned hereby consents that reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, AS TRUSTEE
By: /s/ Mauri J. Cowen
---------------------------------
Mauri J. Cowen
Vice President and Trust Officer
