AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 17, 1998
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FEDERAL REALTY INVESTMENT TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DISTRICT OF COLUMBIA 52-0782497
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION OR ORGANIZATION)
1626 EAST JEFFERSON STREET
ROCKVILLE, MARYLAND 20852-4041
(301) 998-8100
(800) 658-8980
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
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STEVEN J. GUTTMAN
PRESIDENT AND TRUSTEE
FEDERAL REALTY INVESTMENT TRUST
1626 EAST JEFFERSON STREET
ROCKVILLE, MARYLAND 20852-4041
(301) 998-8100
(800) 658-8980
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
THOMAS F. COONEY, III, ESQ. HOWARD G. GODWIN, JR., ESQ.
KIRKPATRICK & LOCKHART LLP BROWN & WOOD LLP
1800 MASSACHUSETTS AVENUE, N.W. ONE WORLD TRADE CENTER
SECOND FLOOR NEW YORK, N.Y. 10048-0557
WASHINGTON, D.C. 20036-1800
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after the effective date of the Registration Statement as determined
by market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
AGGREGATE MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED(1) REGISTERED(2) PER UNIT(3) PRICE(2)(3) FEE(5)(6)
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Debt Securities
Preferred Shares $498,600,004 (4) $498,600,004 $147,500
Common Shares
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(1) This registration statement also covers delayed delivery contracts that
may be issued by the registrant under which the party purchasing such
contracts may be required to purchase Debt Securities, Preferred Shares or
Common Shares. Such contracts may be issued together with the specific
Securities to which they relate. In addition, Securities registered
hereunder either may be sold separately or as units comprised of more than
one type of security registered hereunder.
(2) In U.S. dollars or the equivalent thereof in one or more foreign
currencies or units of two or more foreign currencies or composite
currencies (such as European Currency Units).
(3) Estimated solely for purposes of calculating the registration fee. No
separate consideration will be received for Common Shares or Preferred
Shares as may from time to time be issued upon conversion of Debt
Securities or Preferred Shares.
(4) Omitted pursuant to General Instruction II-D of Form S-3 under the
Securities Act of 1933.
(5) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933.
(6) Pursuant to Rule 429 under the Securities Act of 1933, $1,399,996 of
Securities are being carried forward from registration statement No. 33-
63687. The amount of the registration fee associated with such Securities
that was previously paid with registration statement No. 33-63687 is $483.
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Pursuant to Rule 429 under the Securities Act of 1933, the prospectus
included in this registration statement is a combined prospectus relating also
to registration statement No. 33-63687. This registration statement also
constitutes Post-Effective Amendment No. 1 to registration statement No. 33-
63687, and such Post-Effective Amendment shall hereafter become effective
concurrently with the effectiveness of this registration statement and in
accordance with Section 8(c) of the Securities Act of 1933. This registration
statement and the registration statement amended hereby are collectively
referred to hereunder as the "registration statement."
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED SEPTEMBER 17, 1998
[LOGO OF FEDERAL REALTY INVESTMENT TRUST APPEARS HERE]
$500,000,000
DEBT SECURITIES, PREFERRED SHARES AND COMMON SHARES
Federal Realty Investment Trust (the "Trust") may from time to time offer in
one or more series (i) its unsecured debt securities (the "Debt Securities"),
(ii) its preferred shares (the "Preferred Shares"), and (iii) its common shares
of beneficial interest, no par or stated value (the "Common Shares"), with an
aggregate public offering price of up to $500,000,000 (or its equivalent based
on the exchange rate at the time of sale) in amounts, at prices and on terms to
be determined at the time of offering. The Debt Securities, Preferred Shares,
and Common Shares (collectively, the "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").
The Debt Securities will be direct unsecured obligations of the Trust and may
be either senior Debt Securities (the "Senior Securities") or subordinated Debt
Securities (the "Subordinated Securities"). The Senior Securities will rank
equally with all other unsecured and unsubordinated indebtedness of the Trust.
The Subordinated Securities will be subordinated to all existing and future
Senior Debt of the Trust, as defined. See "Description of Debt Securities."
The specific terms of the Securities in respect of which this Prospectus is
being delivered will be set forth in the applicable Prospectus Supplement and
will include, where applicable: (i) in the case of 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 Trust or repayment at the
option of the Holder, terms for sinking fund payments, terms for conversion
into Preferred Shares or Common Shares, covenants and the initial public
offering price; (ii) in the case of Preferred Shares, the specific title and
stated value, any dividend, liquidation, redemption, conversion, voting and
other rights, and the initial public offering price; and (iii) in the case of
Common Shares, the initial public offering price. In addition, such specific
terms may include limitations on direct or beneficial ownership and
restrictions on transfer of the Securities, in each case as may be appropriate
to preserve the status of the Trust 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 Securities
covered by such Prospectus Supplement.
The Securities may be offered directly, through agents designated from time
to time by the Trust, or to or through underwriters or dealers. If any agents
or underwriters are involved in the sale of any of the Securities, their names,
and any applicable purchase price, fee, commission or discount arrangement
between or among them, will be set forth, or will be calculable from the
information set forth, in the applicable Prospectus Supplement. See "Plan of
Distribution." No Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms of the offering of such
Securities.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is , 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.
AVAILABLE INFORMATION
The Trust is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and 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 Section
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549; Midwest Regional Office, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and Northeast Regional Office, 7 World Trade Center,
New York, New York 10048. The Commission also maintains a web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants, including the Trust, that file
electronically with the Commission. Such reports, proxy statements and other
information concerning the Trust can also be inspected at the office of the
New York Stock Exchange, 20 Broad Street, New York, New York 10005.
The Trust will provide without charge to each person to whom a copy of this
Prospectus is delivered, upon their written or oral request, a copy of any or
all of the documents incorporated herein by reference (other than exhibits to
such documents). Written requests for such copies should be addressed to Kathy
Klein, Vice President, Corporate Communications, Federal Realty Investment
Trust, 1626 East Jefferson Street, Rockville, Maryland 20852-4041 (telephone
301/998-8100).
The Trust has filed with the Commission a registration statement on Form S-3
(the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), of which this Prospectus forms a part, with respect to
the Securities offered hereby. For further information with respect to the
Trust and the Securities offered hereby, reference is made to the Registration
Statement and exhibits thereto. Statements contained in this Prospectus as to
the contents of any contract or other documents are not necessarily complete,
and, in each instance, reference is made to the copy of such contract or
documents filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Trust with the Commission are
incorporated in this Prospectus by reference and are made a part hereof:
1. The Trust's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
2. The Trust's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998 and June 30, 1998.
3. The Trust's Current Reports on Form 8-K filed with the Commission on
February 24, 1998, March 10, 1998, March 11, 1998, May 11, 1998 and August
7, 1998.
Each document filed subsequent to the date of this Prospectus pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act and prior to termination
of the offering of all Securities to which this Prospectus relates shall be
deemed to be incorporated by reference in this Prospectus and shall be a part
hereof from the date of filing of such document.
Any statement contained 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 herein, in any
accompanying Prospectus Supplement relating to a specific offering of
Securities or in any other subsequently filed document that is also
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 or any accompanying Prospectus Supplement. Subject to the
foregoing, all information appearing in this Prospectus and each accompanying
Prospectus Supplement is qualified in its entirety by the information
appearing in the documents incorporated by reference.
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THE TRUST
Federal Realty Investment Trust (the "Trust") is an owner, operator and
redeveloper of retail properties. Founded in 1962 as a District of Columbia
business trust of unlimited duration, the Trust is a self-administered equity
real estate investment trust ("REIT"). The Trust consolidates the financial
statements of various entities which it controls. At June 30, 1998 the Trust
owned 114 retail properties and one apartment complex.
An important part of the Trust's strategy is to acquire older, well-located
properties in prime, densely populated and affluent areas and to enhance their
operating performance through a program of renovation, expansion,
reconfiguration and retenanting. The Trust's traditional focus has been on
community and neighborhood shopping centers that are anchored by supermarkets,
drug stores or high volume, value oriented retailers that provide consumer
necessities. Late in 1994 the Trust expanded this strategy to include retail
buildings and shopping centers in prime established main street shopping
areas. In addition, the Trust amended its by-laws in 1996 to permit
investments west of the Mississippi River. The Trust continually evaluates its
properties for renovation, retenanting and expansion opportunities. Similarly,
the Trust regularly reviews its portfolio and from time to time considers
selling certain of its properties. For several years the Trust has been
seeking sites in its core markets suitable for the construction of new retail
properties. Several sites have been identified and beginning in 1998 the Trust
is focusing considerable time and resources on ground up development.
The Trust's portfolio of properties has grown from 42 as of January 1, 1993
to 115 at June 30, 1998. During this period the Trust acquired 78 retail
properties for approximately $675 million. During this same period five
shopping centers were sold. Also during this period the Trust spent over
$250 million to renovate, expand, improve and retenant its properties. The
majority of the acquisitions were funded with cash. Of the properties not
fully acquired by cash, one was acquired by means of capital and ground
leases, one was acquired for Common Shares and the assumption of a mortgage,
one was acquired for cash and the assumption of a municipal bond issue and the
others were acquired for cash with minority investments by third parties. This
growth was financed through borrowing and equity offerings, since each year
the Trust has distributed all or the majority of its cash provided by
operating activities to its shareholders.
The Trust's 114 retail properties, consisting of 55 shopping centers and 59
main street retail properties, are located in 16 states and the District of
Columbia. Twenty-one of the properties are located in the Washington, D.C.
metropolitan area; twenty are in California; fourteen are in Connecticut;
eleven are in Pennsylvania, primarily in the Philadelphia area; ten are in New
Jersey; ten are in Texas; seven are in Illinois; three are in Virginia; four
are in Massachusetts; six are in New York; two are in Florida; two are in
Arizona; and there is one in each of the following states: Georgia, Michigan,
North Carolina and Oregon.
The Trust continues to seek older, well-located shopping centers and retail
buildings to acquire and then to enhance their revenue potential through a
program of renovation, retenanting and remerchandising. The Trust has also
located sites where it intends to develop new retail properties.
The Trust has made 144 consecutive quarterly distributions and has increased
its distribution rate for each of the last 31 years. This is the longest
record of annual distribution increases in the REIT industry. The current
annual indicated distribution rate is $1.76 per share.
The Trust maintains its offices at 1626 East Jefferson Street, Rockville,
Maryland 20852-4041 (telephone 301/998-8100).
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USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement for any
offering of Securities, the Trust intends to use the majority of the net
proceeds from the sale of Securities offered by the Trust to repay debt
(including repayments of amounts drawn on lines of credit for property
acquisitions), make improvements to properties, acquire additional properties
and for working capital.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the Trust's consolidated ratios of earnings
to fixed charges for the periods shown:
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
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1993 1994 1995 1996 1997 1997 1998
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1.50x 1.61x 1.55x 1.59x 1.70x 1.70x 1.74x
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings consist of income before gain on
sale of real estate and extraordinary items and fixed charges. Fixed charges
consist of interest expense (including interest costs capitalized) and the
portion of rent expense representing an interest factor. In October 1997, the
Trust issued $100 million of 7.95% Series A Cumulative Redeemable Preferred
Shares ("Series A Preferred Shares"). The ratio of earnings to combined fixed
charges and preferred dividends was 1.64x for the year ended December 31,
1997, and 1.54x for the six month period ended June 30, 1998. There were no
preferred dividends paid by the Trust prior to 1997; as a result, the ratio of
earnings to combined fixed charges and preferred dividends for the years ended
December 31, 1993 through December 31, 1996, and the six months ended June 30,
1997, are unchanged from the ratios presented in this section.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Senior Securities are to be issued under an indenture dated as of
September 1, 1998, as supplemented from time to time (the "Senior Indenture"),
between the Trust and First Union National Bank, Trustee, and the Subordinated
Securities are to be issued under an indenture dated as of December 1, 1993,
as supplemented from time to time (the "Subordinated Indenture"), between the
Trust and First Union National Bank, Trustee. The term "Trustee" as used
herein shall refer to First Union National Bank as appropriate for Senior
Securities or Subordinated Securities. The forms of the Senior Indenture and
the Subordinated Indenture (being sometimes referred to herein collectively as
the "Indentures" and individually as an "Indenture") are filed as exhibits to
the registration statement. The Indentures are subject to and governed by the
Trust Indenture Act of 1939, as amended (the "TIA"). The statements made under
this heading relating to the Debt Securities and the Indentures are summaries
of the provisions thereof and do not purport to be complete and are qualified
in their entirety by reference to the Indentures and such Debt Securities.
Parenthetical references below are to the Indentures and capitalized terms
used but not defined herein shall have the respective meanings set forth in
the Indentures.
TERMS
The Debt Securities will be direct, unsecured obligations of the Trust. The
indebtedness represented by the Senior Securities will rank equally with all
other unsecured and unsubordinated indebtedness of the Trust. The indebtedness
represented by the Subordinated Securities will be subordinated in right of
payment to the prior payment in full of the Senior Debt of the Trust as
described under "Subordination."
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Each Indenture provides that 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 of Trustees of the Trust or as established in one or
more indentures supplemental to such Indenture. All Debt Securities of one
series need not be issued at the same time and, unless otherwise provided, a
series may be reopened, without the consent of the Holders of the Debt
Securities of such series, for issuances of additional Debt Securities of such
series (Section 301 of each Indenture).
Any Trustee under either Indenture may resign or be removed with respect to
one or more series of Debt Securities, and a successor Trustee may be
appointed to act with respect to such series (Section 608 of each Indenture).
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 of each Indenture), and, except
as otherwise indicated herein, any action described herein to be taken by each
Trustee may be taken by each such Trustee with respect to, and only with
respect to, the one or more series of Debt Securities for which it is Trustee
under the applicable Indenture.
Reference is made to the Prospectus Supplement relating to the series of
Debt Securities being offered for the specific terms thereof, including:
(1) the title of such Debt Securities and whether such Debt Securities
are Senior Securities or Subordinated Securities;
(2) the aggregate principal amount of such Debt Securities and any limit
on such aggregate principal amount;
(3) the percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the portion
of the principal amount thereof payable upon declaration of acceleration of
the maturity thereof, or (if applicable) the portion of the principal
amount of such Debt Securities that is convertible into Common Shares or
Preferred Shares, or the method by which any such portion shall be
determined;
(4) if convertible, in connection with the preservation of the Trust's
status as a REIT, any applicable limitations on the ownership or
transferability of the Common Shares or Preferred Shares into which such
Debt Securities are convertible;
(5) the date or dates, or the method for determining such date or dates,
on which the principal of such Debt Securities will be payable;
(6) the rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt Securities
will bear interest, if any;
(7) the date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the Interest Payment Dates on
which any such interest will be payable, the Regular Record Dates for such
Interest Payment Dates, or the method by which such Dates shall be
determined, the Persons to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other than that of a 360-
day year of twelve 30-day months;
(8) the place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such Debt
Securities may be surrendered for conversion or registration of transfer or
exchange and where notices or demands to or upon the Trust in respect of
such Debt Securities and the applicable Indenture may be served;
(9) the period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be
redeemed, as a whole or in part, at the option of the Trust, if the Trust
is to have such an option;
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(10) the obligation, if any, of the Trust to redeem, repay or purchase
such Debt Securities pursuant to any sinking fund or analogous provision or
at the option of a Holder thereof, and the period or periods within which,
the price or prices at which and the other terms and conditions upon which
such Debt Securities will be redeemed, repaid or purchased, as a whole or
in part, pursuant to such obligation;
(11) if other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite currency
or currencies, and the terms and conditions relating thereto;
(12) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula or
method may, but need not be, based on a currency, currencies, currency unit
or units or composite currency or currencies) and the manner in which such
amounts shall be determined;
(13) any additions to, modifications of or deletions from the terms of
such Debt Securities with respect to the Events of Default or covenants set
forth in the applicable Indenture;
(14) whether such Debt Securities will be issued in certificated or book-
entry form;
(15) whether such Debt Securities will be in registered or bearer form
and, if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the denominations
thereof and terms and conditions relating thereto;
(16) the applicability, if any, of the defeasance and covenant defeasance
provisions of Article XIV of the applicable Indenture;
(17) the terms, if any, upon which such Debt Securities may be
convertible into Common Shares or Preferred Shares of the Trust and the
terms and conditions upon which such conversion will be effected,
including, without limitation, the initial conversion price or rate and the
conversion period;
(18) whether and under what circumstances the Trust will pay Additional
Amounts as contemplated in the applicable Indenture on such Debt Securities
in respect of any tax, assessment or governmental charge and, if so,
whether the Trust will have the option to redeem such Debt Securities in
lieu of making such payment; and
(19) any other terms of such Debt Securities not inconsistent with the
provisions of the applicable Indenture (Section 301 of each Indenture).
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities") (Section 502 of each Indenture).
Special U.S. federal income tax, accounting and other considerations
applicable to Original Issue Discount Securities will be described in the
applicable Prospectus Supplement.
Except as may be set forth in any Prospectus Supplement, the Debt Securities
will not contain any provisions that would limit the ability of the Trust to
incur indebtedness or that would afford Holders of Debt Securities protection
in the event of a highly leveraged or similar transaction involving the Trust
or in the event of a change of control. Restrictions on ownership and
transfers of the Trust's Common Shares and Preferred Shares are designed to
preserve its status as a REIT and, therefore, may act to prevent or hinder a
change of control. See "Description of Common Shares" and "Description of
Preferred Shares." Reference is made to the applicable Prospectus Supplement
for information with respect to any deletions from, modifications of, or
additions to, the Events of Default or covenants of the Trust that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
6
DENOMINATIONS, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the Debt
Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof (Section 302 of each Indenture).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of
Debt Securities will be payable at the corporate trust office of the Trustee,
initially located at First Union National Bank, 230 S. Tryon Street, 9th
Floor, Charlotte, North Carolina 28288-1179 in the case of the Senior
Securities and the Subordinated Securities, provided that, at the option of
the Trust, payment of interest may be made by check mailed to the address of
the Person entitled thereto as it appears in the Security Register or by wire
transfer of funds to such Person at an account maintained within the United
States (Sections 301, 305, 306, 307, and 1002 of each Indenture).
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
applicable Trustee, notice whereof shall be given to each Holder of such Debt
Security not less than 10 days prior to such Special Record Date, or may be
paid at any time in any other lawful manner, all as more completely described
in the applicable Indenture (Section 307 of each Indenture).
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount
and tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the applicable Trustee referred to
above. In addition, subject to certain limitations imposed upon Debt
Securities issued in book-entry form, the Debt Securities of any series may be
surrendered for conversion or registration of transfer thereof at the
corporate trust office of the applicable Trustee referred to above. Every Debt
Security surrendered for conversion, registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of transfer. No
service charge will be made for any registration of transfer or exchange of
any Debt Securities, but the Trust may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith
(Section 305 of each Indenture). If the applicable Prospectus Supplement
refers to any transfer agent (in addition to the applicable Trustee) initially
designated by the Trust with respect to any series of Debt Securities, the
Trust may at any time rescind the designation of any such transfer agent or
approve a change in the location through which any such transfer agent acts,
except that the Trust will be required to maintain a transfer agent in each
Place of Payment for such series. The Trust may at any time designate
additional transfer agents with respect to any series of Debt Securities
(Section 1002 of each Indenture).
Neither the Trust nor either Trustee shall be required to (i) issue,
register the transfer of or exchange Debt Securities of any series during a
period beginning at the opening of business 15 days before any selection of
Debt Securities of that series to be redeemed and ending at the close of
business on the day of mailing of the relevant notice of redemption; (ii)
register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security
being redeemed in part; or (iii) issue, register the transfer of or exchange
any Debt Security that has been surrendered for repayment at the option of the
Holder, except the portion, if any, of such Debt Security not to be so repaid
(Section 305 of each Indenture).
7
MERGER, CONSOLIDATION OR SALE
The Trust may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into, any other
corporation or trust or entity provided that (a) either the Trust shall be the
continuing corporation, or the successor corporation (if other than the Trust)
formed by or resulting from any such consolidation or merger or which shall
have received the transfer of such assets shall expressly assume payment of
the principal of (and premium, if any) and interest on all of the Debt
Securities and the due and punctual performance and observance of all of the
covenants and conditions contained in each Indenture; (b) immediately after
giving effect to such transaction and treating any indebtedness that becomes
an obligation of the Trust or any Subsidiary as a result thereof as having
been incurred by the Trust or such Subsidiary at the time of such transaction,
no Event of Default under the Indenture, and no event which, after notice or
the lapse of time, or both, would become such an Event of Default, shall have
occurred and be continuing; and (c) an officers' certificate and legal opinion
covering such conditions shall be delivered to each Trustee (Sections 801 and
803 of each Indenture).
CERTAIN COVENANTS
Existence. Except as permitted under "Merger, Consolidation or Sale," the
Trust will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Trust 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 (Section 1004 of each
Indenture).
Maintenance of Properties. The Trust will cause all of its material
properties used or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Trust may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times (Section 1005 of each Indenture).
Insurance. The Trust will, and will cause each of its Subsidiaries to, keep
all of its insurable properties insured against loss or damage at least equal
to their then full insurable value with insurers of recognized responsibility
and having a rating of at least A-:XII in Best's Key Rating Guide (Section
1006 of each Indenture).
Payment of Taxes and Other Claims. The Trust will pay or discharge or cause
to be paid or discharged, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges levied or imposed upon it or any
Subsidiary or upon the income, profits or property of the Trust or any
Subsidiary, and (ii) all lawful claims for labor, materials and supplies
which, if unpaid, might by law become a lien upon the property of the Trust or
any Subsidiary; provided, however, that the Trust 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 (Section 1007 of each Indenture).
Provision of Financial Information. Whether or not the Trust is subject to
Section 13 or 15(d) of the Exchange Act, the Trust will within 15 days of each
of the respective dates by which the Trust would have been required to file
annual reports, quarterly reports and other documents with the Commission if
the Trust were so subject (i) transmit by mail to all Holders of Debt
Securities, as their names and addresses appear in the Security Register,
without cost to such Holders copies of the annual reports, quarterly reports
and other documents that the Trust would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Trust
were subject to such Sections, (ii) file with the applicable Trustee copies of
the annual reports, quarterly reports and
8
other documents that the Trust would have been required to file with the
Commission pursuant to Section 13 or 15(d) of the Exchange Act if the Trust
were subject to such Sections and (iii) promptly upon written request and
payment of the reasonable cost of duplication and delivery, supply copies of
such documents to any prospective Holder (Section 1008 of each Indenture).
Additional Covenants. Any additional covenants of the Trust with respect to
any series of Debt Securities will be set forth in the Prospectus Supplement
relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Each Indenture provides that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (a) default
for 30 days in the payment of any installment of interest on any Debt Security
of such series; (b) default in the payment of the principal of (or premium, if
any, on) any Debt Security of such series at its Maturity; (c) default in
making any sinking fund payment as required for any Debt Security of such
series; (d) default in the performance or breach of any other covenant or
warranty of the Trust contained in the Indenture (other than a covenant added
to the Indenture solely for the benefit of a series of Debt Securities issued
thereunder other than such series), continued for 60 days after written notice
as provided in the applicable Indenture; (e) a default under any bond,
debenture, note or other evidence of indebtedness for money borrowed by the
Trust (including obligations under leases required to be capitalized on the
balance sheet of the lessee under generally accepted accounting principles but
not including any indebtedness or obligations for which recourse is limited to
property purchased) in an aggregate principal amount in excess of $5,000,000
or under any mortgage, indenture or instrument under which there may be issued
or by which there may be secured or evidenced any indebtedness for money
borrowed by the Trust (including such leases but not including such
indebtedness or obligations for which recourse is limited to property
purchased) in an aggregate principal amount in excess of $5,000,000 by the
Trust, whether such indebtedness now exists or shall hereafter be created
which default shall have resulted in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable or such obligations being accelerated, without such
acceleration having been rescinded or annulled; (f) certain events of
bankruptcy, insolvency or reorganization, or court appointment of a receiver,
liquidator or trustee of the Trust or any Significant Subsidiary or either of
its properties; and (g) any other Event of Default provided with respect to a
particular series of Debt Securities (Section 501 of each Indenture). The term
"Significant Subsidiary" means each significant subsidiary (as defined in
Regulation S-X promulgated under the Securities Act) of the Trust.
If an Event of Default under either Indenture with respect to Debt
Securities of any series at the time Outstanding occurs and is continuing,
then in every such case the applicable Trustee or the Holders of not less than
25% in principal amount of the Outstanding Debt Securities of that series may
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Trust (and to the applicable Trustee if given by the Holders).
However, at any time after such a declaration of acceleration with respect to
Debt Securities of such series (or of all Debt Securities then Outstanding
under either Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained by the
applicable Trustee, the Holders of not less than a majority in principal
amount of Outstanding Debt Securities of such series (or of all Debt
Securities then Outstanding under the applicable Indenture, as the case may
be) may rescind and annul such declaration and its consequences if (a) the
Trust shall have deposited with the applicable Trustee all required payments
of the principal of (and premium, if any) and interest on the Debt Securities
of such series (or of all Debt Securities then Outstanding under the
applicable Indenture, as the case may be), plus certain fees, expenses,
disbursements and advances of the
9
applicable Trustee and (b) all Events of Default, other than the non-payment
of accelerated principal (or specified portion thereof), with respect to Debt
Securities of such series (or of all Debt Securities then Outstanding under
the applicable Indenture, as the case may be) have been cured or waived as
provided in each Indenture (Section 502 of each Indenture). Each Indenture
also provides that the Holders of not less than a majority in principal amount
of the Outstanding Debt Securities of any series (or of all Debt Securities
then Outstanding under the applicable Indenture, as the case may be) may waive
any past default with respect to such series and its consequences, except a
default (x) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series or (y) in respect of a covenant
or provision contained in the applicable Indenture that cannot be modified or
amended without the consent of the Holder of each Outstanding Debt Security
affected thereby (Section 513 of each Indenture).
Each Trustee is required to give notice to the Holders of Debt Securities
within 90 days of a default under the applicable Indenture unless such default
shall have been cured or waived; provided, however, that such Trustee may
withhold notice to the Holders of any series of Debt Securities of any default
with respect to such series (except a default in the payment of the principal
of (or premium, if any) or interest on any Debt Security of such series or in
the payment of any sinking fund installment in respect of any Debt Security of
such series) if the Responsible Officers of such Trustee consider such
withholding to be in the interest of such Holders (Section 601 of each
Indenture).
Each Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to such
Indenture or for any remedy thereunder, except in the case of failure of the
applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the
Holders of not less than 25% in principal amount of the Outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it (Section 507 of each Indenture). This provision will not
prevent, however, any Holder of Debt Securities from instituting suit for the
enforcement of payment of the principal of (and premium, if any) and interest
on such Debt Securities at the respective due dates thereof (Section 508 of
each Indenture).
Subject to provisions in each Indenture relating to its duties in case of
default, neither Trustee is under an obligation to exercise any of its rights
or powers under such Indenture at the request or direction of any Holders of
any series of Debt Securities then Outstanding under such Indenture, unless
such Holders shall have offered to the Trustee thereunder reasonable security
or indemnity (Section 602 of each Indenture). The Holders of not less than a
majority in principal amount of the Outstanding Debt Securities of any series
(or of all Debt Securities then Outstanding under each Indenture, as the case
may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee,
or of exercising any trust or power conferred upon such Trustee. However, each
Trustee may refuse to follow any direction which is in conflict with any law
or the applicable Indenture, which may involve such Trustee in personal
liability or which may be unduly prejudicial to the Holders of Debt Securities
of such series not joining therein (Section 512 of each Indenture).
Within 120 days after the close of each fiscal year, the Trust must deliver
to each Trustee a certificate, signed by one of several specified officers,
stating whether or not such officer has knowledge of any default under the
applicable Indenture and, if so, specifying each such default and the nature
and status thereof (Section 1009 of each Indenture).
MODIFICATION OF THE INDENTURES
Modifications and amendments of either Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities issued under such Indenture which are affected by
such modification or amendment; provided, however, that no
10
such modification or amendment may, without the consent of the Holder of each
such Debt Security affected thereby, (a) change the Stated Maturity of the
principal of, or any installment of interest (or premium, if any) on, any such
Debt Security; (b) reduce the principal amount of, or the rate or amount of
interest on, or any premium payable on redemption of, any such Debt Security,
or reduce the amount of principal of an Original Issue Discount Security that
would be due and payable upon declaration of acceleration of the maturity
thereof or would be provable in bankruptcy, or adversely affect any right of
repayment of the Holder of any such Debt Security; (c) change the Place of
Payment, or the coin or currency, for payment of principal of, premium, if
any, or interest on any such Debt Security; (d) impair the right to institute
suit for the enforcement of any payment on or with respect to any such Debt
Security; (e) reduce the above-stated percentage of Outstanding Debt
Securities of any series necessary to modify or amend the applicable
Indenture, to waive compliance with certain provisions thereof or certain
defaults and consequences thereunder or to reduce the quorum or voting
requirements set forth in the applicable Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of
certain past defaults or certain covenants, except to increase the required
percentage to effect such action or to provide that certain other provisions
may not be modified or waived without the consent of the Holder of such Debt
Security (Section 902 of each Indenture).
The Holders of not less than a majority in principal amount of Outstanding
Debt Securities issued under either Indenture have the right to waive
compliance by the Trust with certain covenants in such Indenture (Section 1011
of each Indenture).
Modifications and amendments of either Indenture may be made by the Trust
and the respective Trustee thereunder without the consent of any Holder of
Debt Securities for any of the following purposes: (i) to evidence the
succession of another Person to the Trust as obligor under such Indenture;
(ii) to add to the covenants of the Trust for the benefit of the Holders of
all or any series of Debt Securities or to surrender any right or power
conferred upon the Trust in such Indenture; (iii) to add Events of Default for
the benefit of the Holders of all or any series of Debt Securities; (iv) to
add or change any provisions of either Indenture to facilitate the issuance
of, or to liberalize certain terms of, Debt Securities in bearer form, or to
permit or facilitate the issuance of Debt Securities in uncertificated form,
provided that such action shall not adversely affect the interests of the
Holders of the Debt Securities of any series in any material respect; (v) to
change or eliminate any provisions of either Indenture, provided that any such
change or elimination shall become effective only when there are no Debt
Securities Outstanding of any series created prior thereto which are entitled
to the benefit of such provision; (vi) to secure the Debt Securities; (vii) to
establish the form or terms of Debt Securities of any series, including the
provisions and procedures, if applicable, for the conversion of such Debt
Securities into Common Shares or Preferred Shares of the Trust; (viii) to
provide for the acceptance of appointment by a successor Trustee or facilitate
the administration of the trusts under either Indenture by more than one
Trustee; (ix) to cure any ambiguity, defect or inconsistency in either
Indenture, provided that such action shall not adversely affect the interests
of Holders of Debt Securities of any series issued under such Indenture; or
(x) to supplement any of the provisions of either Indenture to the extent
necessary to permit or facilitate defeasance and discharge of any series of
such Debt Securities, provided that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series (Section 901 of
each Indenture).
Each Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security
that shall be deemed to be outstanding shall be the amount of the principal
thereof that would be due and payable as of the date of such determination
upon declaration of acceleration of the maturity thereof, (ii) the principal
amount of a Debt Security denominated in a Foreign Currency that shall be
deemed outstanding shall be the
11
U.S. dollar equivalent, determined on the issue date for such Debt Security,
of the principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the issue date of such Debt Security
of the amount determined as provided in (i) above), (iii) the principal amount
of an Indexed Security that shall be deemed outstanding shall be the principal
face amount of such Indexed Security at original issuance, unless otherwise
provided with respect to such Indexed Security pursuant to Section 301 of each
Indenture, and (iv) Debt Securities owned by the Trust or any other obligor
upon the Debt Securities or any Affiliate of the Trust or of such other
obligor shall be disregarded (Section 101 of each Indenture).
Each Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 1501 of each Indenture). A meeting may be
called at any time by the applicable Trustee, and also, upon request, by the
Trust or the Holders of at least 10% in principal amount of the Outstanding
Debt Securities of such series, in any such case upon notice given as provided
in the Indenture (Section 1502 of each Indenture). Except for any consent that
must be given by the Holder of each Debt Security affected by certain
modifications and amendments of either Indenture, any resolution presented at
a meeting or adjourned meeting duly reconvened at which a quorum is present
may be adopted by the affirmative vote of the Holders of a majority in
principal amount of the Outstanding Debt Securities of that series; provided,
however, that, except as referred to above, any resolution with respect to any
request, demand, authorization, direction, notice, consent, waiver or other
action that may be made, given or taken by the Holders of a specified
percentage, which is less than a majority, in principal amount of the
Outstanding Debt Securities of a series may be adopted at a meeting or
adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal
amount of the Outstanding Debt Securities of that series. Any resolution
passed or decision taken at any meeting of Holders of Debt Securities of any
series duly held in accordance with either Indenture will be binding on all
Holders of Debt Securities of that series. The quorum at any meeting called to
adopt a resolution, and at any reconvened meeting, will be Persons holding or
representing a majority in principal amount of the Outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the Holders
of not less than a specified percentage in principal amount of the Outstanding
Debt Securities of a series, the Persons holding or representing such
specified percentage in principal amount of the Outstanding Debt Securities of
such series will constitute a quorum (Section 1504 of each Indenture).
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 either Indenture expressly provides may be made, given or taken by
the Holders of a specified percentage in principal amount of all Outstanding
Debt Securities affected thereby, or of the Holders of such series and one or
more additional series: (i) there shall be no minimum quorum requirement for
such meeting and (ii) the principal amount of the Outstanding Debt Securities
of such series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken into account
in determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under such
Indenture (Section 1504 of each Indenture).
SUBORDINATION
Upon any distribution to creditors of the Trust in a liquidation,
dissolution or reorganization, the payment of the principal of and interest on
the Subordinated Securities will be subordinated to the extent provided in the
Subordinated Indenture in right of payment to the prior payment in full of all
Senior Debt (Sections 1601 and 1602 of the Subordinated Indenture), but the
obligation of the Trust to make payment of the principal and interest on the
Subordinated Securities will not otherwise be affected (Section 1608 of the
Subordinated Indenture). No payment of principal or interest may be made on
the Subordinated
12
Securities at any time if a default on Senior Debt exists that permits the
holders of such Senior Debt to accelerate its maturity and the default is the
subject of judicial proceedings or the Trust receives notice of the default
(Section 1603 of the Subordinated Indenture). After all Senior Debt is paid in
full and until the Subordinated Securities are paid in full, holders will be
subrogated to the rights of holders of Senior Debt to the extent that
distributions otherwise payable to holders have been applied to the payment of
Senior Debt (Section 1607 of the Subordinated Indenture). By reason of such
subordination, in the event of a distribution of assets upon insolvency,
certain general creditors of the Trust may recover more, ratably, than holders
of the Subordinated Securities.
Senior Debt is defined in the Subordinated Indenture as the principal of and
interest on, or substantially similar payments to be made by the Trust in
respect of, the following, whether outstanding at the date of execution of the
Subordinated Indenture or thereafter incurred, created or assumed:
(a) indebtedness of the Trust for money borrowed or represented by purchase-
money obligations, (b) indebtedness of the Trust evidenced by notes,
debentures, or bonds, or other securities issued under the provisions of an
indenture, fiscal agency agreement or other instrument, (c) obligations of the
Trust as lessee under leases of property either made as part of any sale and
leaseback transaction to which the Trust is a party or otherwise,
(d) indebtedness of partnerships and joint ventures which is included in the
consolidated financial statements of the Trust, (e) indebtedness, obligations
and liabilities of others in respect of which the Trust is liable contingently
or otherwise to pay or advance money or property or as guarantor, endorser or
otherwise or which the Trust has agreed to purchase or otherwise acquire, and
(f) any binding commitment of the Trust to fund any real estate investment or
to fund any investment in any entity making such real estate investment, in
each case other than (1) any such indebtedness, obligation or liability
referred to in clauses (a) through (f) above as to which, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding,
it is provided that such indebtedness, obligation or liability is not superior
in right of payment to the Subordinated Securities or ranks pari passu with
the Subordinated Securities, (2) any such indebtedness, obligation or
liability which is subordinated to indebtedness of the Trust to substantially
the same extent as or to a greater extent than the Subordinated Securities are
subordinated, and (3) the Subordinated Securities (Section 101 of the
Subordinated Indenture). At June 30, 1998, Senior Debt aggregated
approximately $648 million. There are no restrictions in the Subordinated
Indenture upon the creation of additional Senior Debt.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
Under each Indenture, the Trust may discharge certain obligations to Holders
of any series of Debt Securities issued thereunder that have not already been
delivered to the applicable Trustee for cancellation and that either have
become due and payable or will become due and payable within one year (or
scheduled for redemption within one year) by irrevocably depositing with the
applicable Trustee, in trust, funds in such currency or currencies, currency
unit or units or composite currency or currencies in which such Debt
Securities are payable in an amount sufficient to pay the entire indebtedness
on such Debt Securities in respect of principal (and premium, if any) and
interest to the date of such deposit (if such Debt Securities have become due
and payable) or to the Stated Maturity or Redemption Date, as the case may be
(Section 401 of each Indenture).
Each Indenture provides that, if the provisions of Article Fourteen thereof
are made applicable to the Debt Securities of or within any series pursuant to
Section 301 of such Indenture, the Trust may elect either (a) to defease and
be discharged from any and all obligations with respect to such Debt
Securities (except for the obligation to pay Additional Amounts, if any, upon
the occurrence of certain events of tax, assessment or governmental charge
with respect to payments on such Debt Securities and the obligations to
register the transfer or exchange of such Debt Securities, to replace
temporary or mutilated, destroyed, lost or stolen Debt Securities, to maintain
an office or agency in respect of such Debt Securities and to hold moneys for
payment in trust) ("defeasance") (Section 1402 of each
13
Indenture) or (b) to be released from its obligations with respect to such
Debt Securities under Sections 1004 to 1008, inclusive, of each Indenture
(being the restrictions described under "Certain Covenants") or, if provided
pursuant to Section 301 of each Indenture, its obligations with respect to any
other covenant, and any omission to comply with such obligations shall not
constitute a default or an Event of Default with respect to such Debt
Securities ("covenant defeasance") (Section 1403 of each Indenture), in either
case upon the irrevocable deposit by the Trust with the applicable Trustee, in
trust, of an amount, in such currency or currencies, currency unit or units or
composite currency or currencies in which such Debt Securities are payable at
Stated Maturity, or Government Obligations (as defined below), or both,
applicable to such Debt Securities which through the scheduled payment of
principal and interest in accordance with their terms will provide money in an
amount sufficient to pay the principal of (and premium, if any) and interest
on such Debt Securities, and any mandatory sinking fund or analogous payments
thereon, on the scheduled due dates therefor (Section 1404 of each Indenture).
Such a trust may only be established if, among other things, the Trust has
delivered to the applicable Trustee an Opinion of Counsel (as specified in
each Indenture) to the effect that the Holders of such Debt Securities will
not recognize income, gain or loss for U.S. federal income tax purposes as a
result of such defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such defeasance or covenant defeasance
had not occurred, and such Opinion of Counsel, in the case of defeasance, must
refer to and be based upon a ruling of the Internal Revenue Service or a
change in applicable U. S. federal income tax law occurring after the date of
the Indenture (Section 1404 of each Indenture).
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the Foreign
Currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which
issued the Foreign Currency in which the Debt Securities of such series are
payable, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America or such other
government, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to any such
Government Obligation or a specific payment of interest on or principal of any
such Government Obligation held by such custodian for the account of the
holder of a depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to
the holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the specific payment of
interest on or principal of the Government Obligation evidenced by such
depository receipt (Section 101 of each Indenture).
Unless otherwise provided in the applicable Prospectus Supplement, if after
the Trust has deposited funds and/or Government Obligations to effect
defeasance or covenant defeasance with respect to Debt Securities of any
series, (a) the Holder of a Debt Security of such series is entitled to, and
does, elect pursuant to Section 301 of either Indenture or the terms of such
Debt Security to receive payment in a currency, currency unit or composite
currency other than that in which such deposit has been made in respect of
such Debt Security, or (b) a Conversion Event (as defined below) occurs in
respect of the currency, currency unit or composite currency in which such
deposit has been made, the indebtedness represented by such Debt Security
shall be deemed to have been, and will be, fully discharged and satisfied
through the payment of the principal of (and premium, if any) and interest on
such Debt Security as they become due out of the proceeds yielded by
converting the amount so deposited in respect of such Debt Security into the
currency, currency unit or composite currency in which such Debt Security
becomes payable as a result of such election or such cessation
14
of usage based on the applicable market exchange rate (Section 1405 of each
Indenture). "Conversion Event" means the cessation of use of (i) a currency,
currency unit or composite currency both by the government of the country
which issued such currency and for the settlement of transactions by a central
bank or other public institutions of or within the international banking
community, (ii) the ECU both within the European Monetary System and for the
settlement of transactions by public institutions of or within the European
Communities or (iii) any currency unit or composite currency other than the
ECU for the purposes for which it was established. Unless otherwise provided
in the applicable Prospectus Supplement, all payments of principal of (and
premium, if any) and interest on any Debt Security that are payable in a
Foreign Currency that ceases to be used by its government of issuance shall be
made in U.S. dollars (Section 101 of each Indenture).
In the event the Trust effects covenant defeasance with respect to any Debt
Securities and such Debt Securities are declared due and payable because of
the occurrence of any Event of Default other than the Event of Default
described in clause (d) under "Events of Default, Notice and Waiver" with
respect to Sections 1004 to 1008, inclusive, of each Indenture (which Sections
would no longer be applicable to such Debt Securities) or described in clause
(g) under "Events of Default, Notice and Waiver" with respect to any other
covenant as to which there has been covenant defeasance, the amount in such
currency, currency unit or composite currency in which such Debt Securities
are payable, and Government Obligations on deposit with the applicable
Trustee, will be sufficient to pay amounts due on such Debt Securities at the
time of their Stated Maturity but may not be sufficient to pay amounts due on
such Debt Securities at the time of the acceleration resulting from such Event
of Default. However, the Trust would remain liable to make payment of such
amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the provisions, if
any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
CONVERSION RIGHTS
The terms and conditions, if any, upon which the Debt Securities are
convertible into Common Shares or Preferred Shares will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms will include
whether such Debt Securities are convertible into Common Shares or Preferred
Shares, the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at the option
of the Holders or the Trust, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event of the
redemption of such Debt Securities.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depositary (the "Depositary") identified in
the applicable Prospectus Supplement relating to such series. Global
Securities may be issued in either registered or bearer form and in either
temporary or permanent form. The specific terms of the depositary arrangement
with respect to a series of Debt Securities will be described in the
applicable Prospectus Supplement relating to such series.
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DESCRIPTION OF PREFERRED SHARES
GENERAL
The Trust is authorized to issue an unlimited number of preferred shares
(the "Preferred Shares"). On October 6, 1997, the Trust issued 4,000,000
shares of 7.95% Series A Cumulative Redeemable Preferred Shares (liquidation
preference $25.00 per share); no other Preferred Shares are outstanding.
The following description of the Preferred Shares sets forth certain general
terms and provisions of the Preferred Shares to which any Prospectus
Supplement may relate. The statements below describing the Preferred Shares
are in all respects subject to and qualified in their entirety by reference to
the applicable provisions of the Trust's Third Amended and Restated
Declaration of Trust (the "Declaration of Trust") and Bylaws and applicable
statement of designations (the "Statement of Designations").
TERMS
Subject to the limitations prescribed by the Declaration of Trust, the Board
of Trustees is authorized to fix the number of shares constituting each series
of Preferred Shares and the designations and powers, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions thereof, including such provisions as may be
desired concerning voting, redemption, dividends, dissolution or the
distribution of assets, conversion or exchange, and such other subjects or
matters as may be fixed by resolution of the Board of Trustees. The Preferred
Shares will, when issued, be fully paid and nonassessable by the Trust (except
as described under "Shareholder Liability" below) and will have no preemptive
rights.
Reference is made to the Prospectus Supplement relating to the Preferred
Shares offered thereby for specific terms, including:
(1) The title and stated value of such Preferred Shares;
(2) The number of such Preferred Shares offered, the liquidation
preference per share and the offering price of such Preferred Shares;
(3) The dividend rate(s), period(s) and/or payment date(s) or method(s)
of calculation thereof applicable to such Preferred Shares;
(4) The date from which dividends on such Preferred Shares shall
accumulate, if applicable;
(5) The procedures for any auction and remarketing, if any, for such
Preferred Shares;
(6) The provision for a sinking fund, if any, for such Preferred Shares;
(7) The provision for redemption, if applicable, of such Preferred
Shares;
(8) Any listing of such Preferred Shares on any securities exchange;
(9) The terms and conditions, if applicable, upon which such Preferred
Shares will be convertible into Common Shares of the Trust, including the
conversion price (or manner of calculation thereof);
(10) Any other specific terms, preferences, rights, limitations or
restrictions of such Preferred Shares;
(11) A discussion of federal income tax considerations applicable to such
Preferred Shares;
(12) The relative ranking and preferences of such Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of the Trust;
(13) Any limitations on issuance of any series of Preferred Shares
ranking senior to or on a parity with such series of Preferred Shares as to
dividend rights and rights upon liquidation, dissolution or winding up of
the affairs of the Trust; and
16
(14) Any limitations on direct or beneficial ownership and restrictions
on transfer, in each case as may be appropriate to preserve the status of
the Trust as a REIT.
RANK
Unless otherwise specified in the Prospectus Supplement, the Preferred
Shares will, with respect to dividend rights and rights upon liquidation,
dissolution or winding up of the Trust, rank (i) senior to all classes or
series of Common Shares or other capital shares of the Trust, and to all
equity securities ranking junior to such Preferred Shares; (ii) on a parity
with all equity securities issued by the Trust the terms of which specifically
provide that such equity securities rank on a parity with the Preferred
Shares; and (iii) junior to all equity securities issued by the Trust the
terms of which specifically provide that such equity securities rank senior to
the Preferred Shares. The term "equity securities" does not include
convertible debt securities.
DIVIDENDS
Holders of the Preferred Shares of each series will be entitled to receive,
when, as and if declared by the Board of Trustees of the Trust, out of assets
of the Trust legally available for payment, cash dividends at such rates and
on such dates as will be set forth in the applicable Prospectus Supplement.
Each such dividend shall be payable to holders of record as they appear on the
share transfer books of the Trust on such record dates as shall be fixed by
the Board of Trustees of the Trust.
Dividends on any series of the Preferred Shares may be cumulative or non-
cumulative, as provided in the applicable Prospectus Supplement. Dividends, if
cumulative, will be cumulative from and after the date set forth in the
applicable Prospectus Supplement. If the Board of Trustees of the Trust fails
to declare a dividend payable on a dividend payment date on any series of the
Preferred Shares for which dividends are noncumulative, then the holders of
such series of the Preferred Shares will have no right to receive a dividend
in respect of the dividend period ending on such dividend payment date, and
the Trust will have no obligation to pay the dividend accrued for such period,
whether or not dividends on such series are declared payable on any future
dividend payment date.
If Preferred Shares of any series are outstanding, no dividends will be
declared or paid or set apart for payment on the Preferred Shares of the Trust
of any other series ranking, as to dividends, on a parity with or junior to
the Preferred Shares of such series for any period unless (i) if such series
of Preferred Shares has a cumulative dividend, full cumulative dividends have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Preferred
Shares of such series for all past dividend periods and the then current
dividend period or (ii) if such series of Preferred Shares does not have a
cumulative dividend, full dividends for the then current dividend period have
been or contemporaneously are declared and paid or declared and a sum
sufficient for the payment thereof set apart for such payment on the Preferred
Shares of such series. When dividends are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon Preferred Shares of
any series and the shares of any other series of Preferred Shares ranking on a
parity as to dividends with the Preferred Shares of such series, all dividends
declared upon Preferred Shares of such series and any other series of
Preferred Shares ranking on a parity as to dividends with such Preferred
Shares shall be declared pro rata so that the amount of dividends declared per
Preferred Share of such series and such other series of Preferred Shares shall
in all cases bear to each other the same ratio that accrued dividends per
share on the Preferred Shares of such series (which shall not include any
accumulation in respect of unpaid dividends for prior dividend periods if such
Preferred Shares do not have a cumulative dividend) and such other series of
Preferred Shares bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any dividend payment or payments on
Preferred Shares of such series which may be in arrears.
17
Except as provided in the immediately preceding paragraph, unless (i) if
such series of Preferred Shares has a cumulative dividend, full cumulative
dividends on the Preferred Shares of such series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series of Preferred Shares
does not have a cumulative dividend, full dividends on the Preferred Shares of
such series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for the
then current dividend period, no dividends (other than in Common Shares or
other capital shares ranking junior to the Preferred Shares of such series as
to dividends and upon liquidation) shall be declared or paid or set aside for
payment or other distribution shall be declared or made upon the Common
Shares, or any other capital shares of the Trust ranking junior to or on a
parity with the Preferred Shares of such series as to dividends or upon
liquidation, nor shall any Common Shares, or any other capital shares of the
Trust ranking junior to or on a parity with the Preferred Shares of such
series as to dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any such shares) by the Trust (except by
conversion into or exchange for other capital shares of the Trust ranking
junior to the Preferred Shares of such series as to dividends and upon
liquidation).
Any dividend payment made on shares of a series of Preferred Shares shall
first be credited against the earliest accrued but unpaid dividend due with
respect to shares of such series which remains payable.
REDEMPTION
If so provided in the applicable Prospectus Supplement, the Preferred Shares
will be subject to mandatory redemption or redemption at the option of the
Trust, as a whole or in part, in each case upon the terms, at the times and at
the redemption prices set forth in such Prospectus Supplement.
The Prospectus Supplement relating to a series of Preferred Shares that is
subject to mandatory redemption will specify the number of such Preferred
Shares that shall be redeemed by the Trust in each year commencing after a
date to be specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends thereon
(which shall not, if such Preferred Shares do not have a cumulative dividend,
include any accumulation in respect of unpaid dividends for prior dividend
periods) to the date of redemption. The redemption price may be payable in
cash or other property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Shares of any series is payable only
from the net proceeds of the issuance of capital shares of the Trust, the
terms of such Preferred Shares may provide that, if no such capital shares
shall have been issued or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then due, such
Preferred Shares shall automatically and mandatorily be converted into the
applicable capital shares of the Trust pursuant to conversion provisions
specified in the applicable Prospectus Supplement.
Notwithstanding the foregoing, unless (i) if such series of Preferred Shares
has a cumulative dividend, full cumulative dividends on all shares of any
series of Preferred Shares shall have been or contemporaneously are declared
and paid or declared and a sum sufficient for the payment thereof set apart
for payment for all past dividend periods and the then current dividend period
and (ii) if such series of Preferred Shares does not have a cumulative
dividend, full dividends on the Preferred Shares of any series have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for the then current dividend
period, no shares of any series of Preferred Shares shall be redeemed unless
all outstanding Preferred Shares of such series are simultaneously redeemed;
provided, however, that the foregoing shall not prevent the purchase or
acquisition of Preferred Shares of such series to preserve the REIT status of
the Trust or pursuant to
18
a purchase or exchange offer made on the same terms to holders of all
outstanding Preferred Shares of such series, and, unless (i) if such series of
Preferred Shares has a cumulative dividend, full cumulative dividends on all
outstanding shares of any series of Preferred Shares have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof set apart for payment for all past dividend periods and
the then current dividend period and (ii) if such series of Preferred Shares
does not have a cumulative dividend, full dividends on the Preferred Shares of
any series have been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for payment for the
then current dividend period, the Trust shall not purchase or otherwise
acquire directly or indirectly any Preferred Shares of such series (except by
conversion into or exchange for capital shares of the Trust ranking junior to
the Preferred Shares of such series as to dividends and upon liquidation);
provided, however, that the foregoing shall not prevent the purchase or
acquisition of Preferred Shares of such series to preserve the REIT status of
the Trust or pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding Preferred Shares of such series.
If fewer than all of the outstanding shares of Preferred Shares of any
series are to be redeemed, the number of shares to be redeemed will be
determined by the Trust and such shares may be redeemed pro rata from the
holders of record of such shares in proportion to the number of such shares
held by such holders (with adjustments to avoid redemption of fractional
shares) or by lot in a manner determined by the Trust.
Notice of redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of record of Preferred Shares
of any series to be redeemed at the address shown on the share transfer books
of the Trust. Each notice shall state: (i) the redemption date; (ii) the
number of shares and series of the Preferred Shares to be redeemed; (iii) the
redemption price; (iv) the place or places where certificates for such
Preferred Shares are to be surrendered for payment of the redemption price;
(v) that dividends on the shares to be redeemed will cease to accrue on such
redemption date; and (vi) the date upon which the holder's conversion rights,
if any, as to such shares shall terminate. If fewer than all the Preferred
Shares of any series are to be redeemed, the notice mailed to each such holder
thereof shall also specify the number of Preferred Shares to be redeemed from
each such holder. If notice of redemption of any Preferred Shares has been
given and if the funds necessary for such redemption have been set aside by
the Trust in trust for the benefit of the holders of any Preferred Shares so
called for redemption, then from and after the redemption date dividends will
cease to accrue on such Preferred Shares, and all rights of the holders of
such shares will terminate, except the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Trust, then, before any distribution or payment shall be
made to the holders of any Common Shares, excess shares or any other class or
series of capital shares of the Trust ranking junior to the Preferred Shares
in the distribution of assets upon any liquidation, dissolution or winding up
of the Trust, the holders of each series of Preferred Shares shall be entitled
to receive out of assets of the Trust legally available for distribution to
shareholders liquidating distributions in the amount of the liquidation
preference per share (set forth in the applicable Prospectus Supplement), plus
an amount equal to all dividends accrued and unpaid thereon (which shall not
include any accumulation in respect of unpaid dividends for prior dividend
periods if such Preferred Shares do not have a cumulative dividend). After
payment of the full amount of the liquidating distributions to which they are
entitled, the holders of Preferred Shares will have no right or claim to any
of the remaining assets of the Trust. In the event that, upon any such
voluntary or involuntary liquidation, dissolution or winding up, the available
assets of the Trust are insufficient to pay the amount of the liquidating
distributions on all outstanding Preferred Shares and the corresponding
amounts payable on all shares of other classes or series of capital shares of
19
the Trust ranking on a parity with the Preferred Shares in the distribution of
assets, then the holders of the Preferred Shares and all other such classes or
series of capital shares shall share ratably in any such distribution of
assets in proportion to the full liquidating distributions to which they would
otherwise be respectively entitled.
If liquidating distributions shall have been made in full to all holders of
Preferred Shares, the remaining assets of the Trust shall be distributed among
the holders of any other classes or series of capital shares ranking junior to
the Preferred Shares upon liquidation, dissolution or winding up, according to
their respective rights and preferences and in each case according to their
respective number of shares. For such purposes, the consolidation or merger of
the Trust with or into any other corporation, trust or entity, or the sale,
lease or conveyance of all or substantially all of the property or business of
the Trust, shall not be deemed to constitute a liquidation, dissolution or
winding up of the Trust.
VOTING RIGHTS
Holders of the Preferred Shares will not have any voting rights, except as
set forth below or as otherwise from time to time required by law or as
indicated in the applicable Prospectus Supplement.
Whenever dividends on any Preferred Shares shall be in arrears for six
consecutive quarterly periods, the holders of such Preferred Shares (voting
separately as a class with all other series of Preferred Shares upon which
like voting rights have been conferred and are exercisable) will be entitled
to vote for the election of two additional Trustees of the Trust at the next
annual meeting of shareholders and at each subsequent meeting until (i) if
such series of Preferred Shares has a cumulative dividend, all dividends
accumulated on such shares of Preferred Shares for the past dividend periods
and the then current dividend period shall have been fully paid or declared
and a sum sufficient for the payment thereof set aside for payment or (ii) if
such series of Preferred Shares does not have a cumulative dividend, four
consecutive quarterly dividends shall have been fully paid or declared and a
sum sufficient for the payment thereof set aside for payment. In such case,
the entire Board of Trustees of the Trust will be increased by two Trustees.
Unless provided otherwise for any series of Preferred Shares, so long as any
Preferred Shares remain outstanding, the Trust will not, without the
affirmative vote or consent of the holders of at least two-thirds of the
shares of each series of Preferred Shares outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such series voting
separately as a class), (i) authorize or create, or increase the authorized or
issued amount of, any class or series of capital shares ranking prior to such
series of Preferred Shares with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up or
reclassify any authorized capital shares of the Trust into any such shares, or
create, authorize or issue any obligation or security convertible into or
evidencing the right to purchase any such shares; or (ii) amend, alter or
repeal the provisions of the Trust's Declaration of Trust or the Statement of
Designations for such series of Preferred Shares, whether by merger,
consolidation or otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of such series of
Preferred Shares or the holders thereof; provided, however, with respect to
the occurrence of any of the Events set forth in (ii) above, so long as the
Preferred Shares remain outstanding with the terms thereof materially
unchanged, taking into account that upon the occurrence of an Event, the Trust
may not be the surviving entity, the occurrence of any such Event shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting power of holders of Preferred Shares and provided further that
(x) any increase in the amount of the authorized Preferred Shares or the
creation or issuance of any other series of Preferred Shares, or (y) any
increase in the amount of authorized shares of such series or any other series
of Preferred Shares, in each case ranking on a parity with or junior to the
Preferred Shares of such series with respect to payment of dividends or the
distribution of assets upon liquidation, dissolution or winding up, shall not
be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers.
20
The foregoing voting provisions will not apply if, at or prior to the time
when the act with respect to which such vote would otherwise be required shall
be effected, all outstanding shares of such series of Preferred Shares shall
have been redeemed or called for redemption and sufficient funds shall have
been deposited in trust to effect such redemption.
CONVERSION RIGHTS
The terms and conditions, if any, upon which any series of Preferred Shares
are convertible into Common Shares will be set forth in the applicable
Prospectus Supplement relating thereto. Such terms will include the number of
Common Shares into which the Preferred Shares are convertible, the conversion
price (or manner of calculation thereof), the conversion period, provisions as
to whether conversion will be at the option of the holders of the Preferred
Shares or the Trust, the events requiring an adjustment of the conversion
price and provisions affecting conversion in the event of the redemption of
such series of Preferred Shares.
SHAREHOLDER LIABILITY
As discussed below under "Description of Common Shares--Shareholder
Liability," the Declaration of Trust provides that no shareholder, including
holders of Preferred Shares, shall be personally liable for the acts and
obligations of the Trust and that the funds and property of the Trust shall be
solely liable for such acts or obligations. The Declaration of Trust provides
that, to the extent practicable, each written instrument creating an
obligation of the Trust shall contain a provision to that effect. The
Declaration of Trust also provides that the Trust shall indemnify and hold
harmless shareholders against all claims and liabilities and related
reasonable expenses to which they may become subject by reason of their being
or having been shareholders. In some jurisdictions, however, with respect to
tort and contract claims where shareholder liability is not so negated, claims
for taxes and certain statutory liability, shareholders may be personally
liable to the extent that such claims are not satisfied by the Trust. The
Trust carries public liability insurance that the Trustees consider adequate.
Thus, any risk of personal liability to shareholders is limited to situations
in which the Trust's assets plus its insurance coverage would be insufficient
to satisfy the claims against the Trust and its shareholders.
RESTRICTIONS ON OWNERSHIP
As discussed below under "Description of Common Shares--Restrictions on
Ownership," for the Trust to qualify as a REIT under the Internal Revenue Code
of 1986, as amended (the "Code"), not more than 50% in value of its
outstanding capital shares may be owned, directly or constructively, by five
or fewer individuals (as defined in the Code to include certain entities)
during the last half of a taxable year. To assist the Trust in meeting this
requirement, the Trust may take certain other actions to limit the beneficial
ownership, directly or indirectly, by a single person of more than 9.8% of the
Trust's outstanding equity securities, including any Preferred Shares of the
Trust. Therefore, the Statement of Designations for each series of Preferred
Shares will contain certain provisions restricting the ownership and transfer
of the Preferred Shares. The applicable Prospectus Supplement will specify any
additional ownership limitation relating to a series of Preferred Shares.
21
DESCRIPTION OF COMMON SHARES
GENERAL
The Common Shares are issued pursuant to the Declaration of Trust. The
Common Shares (no par or stated value) are equal with respect to distribution
and liquidation rights, are not convertible, have no preemptive rights to
subscribe for additional Common Shares, are nonassessable (except as described
under "Shareholder Liability" below) and are transferable in the same manner
as shares of a corporation. Each shareholder is entitled to one vote in person
or by proxy for each Common Share registered in his name and has the right to
vote on the election or removal of Trustees, amendments to the Declaration of
Trust, proposals to terminate, reorganize, merge or consolidate the Trust or
to sell or dispose of substantially all of the Trust's property and with
respect to certain business combinations. The Trust will have perpetual
existence unless and until dissolved and terminated. Except with respect to
the foregoing matters, no action taken by the shareholders at any meeting
shall in any way bind the Trustees. The Common Shares offered by the Trust
will be, when issued, fully paid and nonassessable (except as described under
"Shareholder Liability" below).
Without shareholder approval, the Trust may issue an unlimited number of
securities, warrants, rights, or other options to purchase Common Shares and
other securities convertible into Common Shares.
Several provisions in the Declaration of Trust may have the effect of
deterring a takeover of the Trust. These provisions (i) establish the
percentage of outstanding Common Shares required to approve certain matters,
including removal of a Trustee, amendment of any section of the Declaration of
Trust that provides for a shareholder vote, the reorganization, merger,
consolidation, sale or termination of the Trust and a sale of substantially
all of the assets of the Trust, at 80% unless the matter to be acted upon is
approved or recommended by the Board of Trustees in which event the percentage
is 66 2/3%; (ii) restrict ownership of the Trust's outstanding capital shares
by a single person to 9.8% of such capital shares unless otherwise approved by
the Board of Trustees to assist in protecting and preserving the qualification
of the Trust as a real estate investment trust under the Code; and (iii)
include a "fair price" provision that would deter a "two-stage" takeover
transaction by requiring an 80% vote of outstanding Common Shares for certain
defined "business combinations" with shareholders owning more than 9.8% of
Common Shares or their affiliates if the transaction is neither approved by
the Board of Trustees nor meets certain price and procedural conditions.
In addition, the Declaration of Trust includes provisions for (i) the
classification of Trustees into three classes serving three year staggered
terms and (ii) the authorization of Trustees to issue an unlimited number of
Common Shares and to issue additional classes of equity securities in
unlimited numbers with such rights, qualifications, limitations or
restrictions as are stated in the Board of Trustees' resolution establishing
such class of securities.
In 1989, the Trustees adopted a Shareholder Rights Plan (the "Plan"). Under
the Plan, one right was issued for each outstanding Common Share and a right
will be attached to each Share issued in the future. The rights authorize the
holders to purchase Common Shares at a price below market upon the occurrence
of certain events, including, unless approved by the Board of Trustees,
acquisition by a person or group of certain levels of beneficial ownership of
the Trust or a tender offer. The rights are redeemable by the Trust for $.01
and expire in 1999.
RESTRICTIONS ON OWNERSHIP
For the Trust to qualify as a REIT under the Code, not more than 50% in
value of the outstanding capital shares, including in some circumstances
capital shares into which outstanding securities (including the Securities)
might be converted, may be owned actually or constructively by five or fewer
individuals or certain other entities at any time during the last half of the
Trust's taxable year. To assist
22
the Trust in meeting this requirement, the Trust (a) by lot or other equitable
means, may prevent the transfer of and/or may call for redemption a number of
capital shares sufficient for the continued qualification of the Trust as a
REIT and (b) may refuse to register the transfer of capital shares and may
take certain other actions to limit the beneficial ownership, directly or
indirectly, by a single person of more than 9.8% of the Trust's outstanding
equity securities. Capital shares reserved for issuance upon conversion of any
class of then outstanding convertible securities of the Trust may be
considered outstanding capital shares for purposes of this provision if the
effect thereof would be to cause a single person to own or to be deemed to own
more than 9.8% of the Trust's outstanding capital shares. Without shareholder
approval, the Trust may issue an unlimited number of securities, warrants,
rights or other options to purchase Common Shares and other securities
convertible into Common Shares.
SHAREHOLDER LIABILITY
The Declaration of Trust provides that no shareholder shall be personally
liable in connection with the Trust's property or the affairs of the Trust.
The Declaration of Trust further provides that the Trust shall indemnify and
hold harmless shareholders against all claims and liabilities and related
reasonable expenses to which they may become subject by reason of their being
or having been shareholders. In addition, the Trust is required to, and as a
matter of practice does, insert a clause in its contracts that provides that
shareholders shall not be personally liable thereunder. However, in respect to
tort claims and contract claims where shareholder liability is not so negated,
claims for taxes and certain statutory liability, the shareholders may, in
some jurisdictions, be personally liable to the extent that such claims are
not satisfied by the Trust. The Trust carries public liability insurance that
the Trustees consider adequate. Thus, any risk of personal liability to
shareholders is limited to situations in which the Trust's assets plus its
insurance coverage would be insufficient to satisfy the claims against the
Trust and its shareholders.
REGISTRAR AND TRANSFER AGENT
The Registrar and Transfer Agent for the Common Shares is American Stock
Transfer & Trust Company, New York, New York.
FEDERAL INCOME TAX CONSIDERATIONS
The Trust believes it has operated, and the Trust intends to continue to
operate, in such manner as to qualify as a REIT under the Code, but no
assurance can be given that it will at all times so qualify. The provisions of
the Code pertaining to REITs are highly technical and complex. The following
is a brief and general summary of certain provisions that currently govern the
federal income tax treatment of the Trust and its shareholders. For the
particular provisions that govern the federal income tax treatment of the
Trust and its shareholders, reference is made to Sections 856 through 860 of
the Code and the treasury regulations promulgated thereunder. The following
summary is qualified in its entirety by such reference.
Under the Code, if certain requirements are met in a taxable year, a REIT
generally will not be subject to federal income tax with respect to income
that it distributes to its shareholders. If the Trust fails to qualify during
any taxable year as a REIT, unless certain relief provisions are available, it
will be subject to tax (including any applicable alternative minimum tax) on
its taxable income at regular corporate rates, which could have a material
adverse effect upon its shareholders.
To qualify as a REIT, the Trust must comply with a number of annual
requirements regarding its income, assets and distributions. These
requirements impose a number of restrictions on the Trust's operations. For
example, the Trust may not lease property if the lease has the effect of
giving the Trust a share of the net income of the lessee. The amount of
personal property that may be included under
23
a lease may not exceed a defined, low level, and the Trust may not provide
services to its tenants, other than customary services and de minimis non-
customary services. The Trust's ability to acquire non-real estate assets is
restricted, and a 100% tax is imposed on any gain that the Trust realizes from
sales of property to customers in the ordinary course of business (other than
property acquired by reason of certain foreclosures), effectively preventing
the Trust from participating directly in condominium projects and other
projects involving the development of property for resale. Minimum
distribution requirements also generally require the Trust to distribute at
least 95% of its taxable income each year (excluding any net capital gain).
In any year in which the Trust qualifies to be taxed as a REIT,
distributions made to its shareholders out of current or accumulated earnings
and profits will be taxed to shareholders as ordinary income except that
distributions of net capital gains designated by the Trust as capital gain
dividends will be taxed as long-term capital gain income to the shareholders.
A portion of such gains may be taxed at the 25% rate applicable to "Section
1250" gains. To the extent that distributions exceed current or accumulated
earnings and profits, they will constitute a return of capital, rather than
dividend or capital gain income, and will reduce the basis for the
shareholder's Securities with respect to which the distribution is paid or, to
the extent that they exceed such basis, will be taxed in the same manner as
gain from the sale of those Securities.
Investors are urged to consult their own tax advisors with respect to the
appropriateness of an investment in the Securities offered hereby and with
respect to the tax consequences arising under federal law and the laws of any
state, municipality or other taxing jurisdiction, including tax consequences
resulting from such investor's own tax characteristics. In particular, foreign
investors should consult their own tax advisors concerning the tax
consequences of an investment in the Trust, including the possibility of
United States income tax withholding on Trust distributions.
PLAN OF DISTRIBUTION
The Trust may sell Securities to or through underwriters, and also may sell
Securities directly to other purchasers or through agents.
The distribution of the Securities may be effected from time to time in one
or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Securities, underwriters may receive
compensation from the Trust or from purchasers of Securities, for whom they
may act as agents, in the form of discounts, concessions, or commissions.
Underwriters may sell Securities to or through dealers, and such dealers may
receive compensation in the form of discounts, concessions, or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers, and agents that participate in the
distribution of Securities may be deemed to be underwriters, and any discounts
or commissions they receive from the Trust, and any profit on the resale of
Securities they realize may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Trust will be
described, in the Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, each series
of Securities will be a new issue with no established trading market, other
than the Common Shares which are listed on the New York Stock Exchange. Any
Common Shares sold pursuant to a Prospectus Supplement will be listed on such
exchange, subject to official notice of issuance. The Trust may elect to list
any series of Debt Securities or Preferred Shares on an exchange, but is not
obligated to do so. It is possible
24
that one or more underwriters may make a market in a series of Securities, but
will not be obligated to do so and may discontinue any market making at any
time without notice. Therefore, no assurance can be given as to the liquidity
of the trading market for the Securities.
Under agreements the Trust may enter into, underwriters, dealers, and agents
who participate in the distribution of Securities may be entitled to
indemnification by the Trust against certain liabilities, including
liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, or be customers of, the Trust in the ordinary course of
business.
If so indicated in the Prospectus Supplement, the Trust will authorize
underwriters or other persons acting as the Trust's agents to solicit offers
by certain institutions to purchase Securities from the Trust pursuant to
contracts providing for payment and delivery on a future date. Institutions
with which such contracts may be made include commercial and savings banks,
insurance companies, pension funds, investment companies, educational and
charitable institutions and others, but in all cases such institutions must be
approved by the Trust. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Securities
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such
other agents will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL OPINIONS
The legality of the Securities offered hereby is being passed upon for the
Trust by Kirkpatrick & Lockhart LLP, 1800 Massachusetts Avenue, N.W.,
Washington, D.C. 20036-1800. Certain REIT tax matters relating to the Trust
are being passed upon by Goodwin, Procter & Hoar LLP, Exchange Place, Boston,
Massachusetts 02109. Brown & Wood LLP, One World Trade Center, New York, New
York 10048-0557 will act as counsel to any underwriters, dealers or agents.
EXPERTS
The Consolidated FInancial Statements and Schedules of the Trust as of
December 31, 1997 and 1996 and for each of the years in the three year period
ended December 31, 1997 incorporated herein by reference have been
incorporated herein in reliance on the reports dated February 5, 1998 of Grant
Thornton LLP, independent certified public accountants, also incorporated by
reference herein, and upon the authority of said firm as experts in accounting
and auditing.
With respect to the unaudited interim financial information included in the
Trust's Quarterly Reports on Form 10-Q for the quarters ended March 31, 1998
and June 30, 1998 which are incorporated herein by reference, Grant Thornton
LLP has applied limited procedures in accordance with professional standards
for a review of such information. However, as stated in their reports dated
May 5, 1998 and August 5, 1998 included in the Trust's Quarterly Reports on
Form 10-Q for the quarters ended March 31, 1998 and June 30, 1998 and
incorporated by reference herein, they did not audit and they do not express
an opinion on that interim financial information. Accordingly, the degree of
reliance on their reports on such information should be restricted in light of
the limited nature of the review procedures applied. Grant Thornton LLP is not
subject to the liability provisions of Section 11 of the Securities Act of
1933 for their reports on the unaudited interim financial information because
those reports are not "reports" or a "part" of the registration statement
prepared or certified by an accountant within the meaning of Sections 7 and 11
of the Securities Act.
25
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
offering contemplated by this Registration Statement:
SEC Registration Fee .......................................... $ 147,500
Blue Sky Fees and Expenses .................................... 25,000
Printing and Engraving Costs .................................. 300,000
Accounting Fees and Expenses .................................. 60,000
Legal Fees and Expenses ....................................... 200,000
Transfer Agent and Registrar's Fees ........................... 10,000
Trustees' Fees ................................................ 60,000
Rating Agencies Fees .......................................... 375,000
Miscellaneous ................................................. 7,500
----------
Total ..................................................... $1,185,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Trust's Third Amended and Restated Declaration of Trust provides in
substance that Trustees and officers of the Trust shall not be personally
liable to the Trust or to any other person involving the Trust's affairs,
except for their own bad faith, willful misconduct, gross negligence or
reckless disregard of duties, or failure to act in good faith in the
reasonable belief that their action was in the best interest of the Trust. The
Trust indemnifies and holds harmless each Trustee and officer against all
claims, liabilities and expenses in connection with the defense or disposition
of any lawsuit threatened or brought by reason of his office, except as to any
matter for which a Trustee or officer is personally liable as stated above.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted pursuant to the Third Amended and Restated
Declaration of Trust or otherwise, the Trust has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act, and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Trust of expenses incurred or paid
in the successful defense of any action, suit or proceeding) is asserted in
connection with the securities being registered, the Trust will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS.
(1)(a) Form of Underwriting Agreement for Debt Securities
(1)(b) Form of Underwriting Agreement for Equity Securities
(4)(a) Indenture for Senior Debt Securities
(4)(b) Indenture for Subordinated Debt Securities*
(4)(c) Form of Senior Debt Security
(4)(d) Form of Subordinated Debt Security*
(4)(e) Form of Statement of Designation of Preferred Shares*
II-1
(4)(f) Form of Preferred Share Certificate*
(5) Opinion regarding legality
(8) Opinion regarding tax matters
(12) Statement regarding computation of ratios
(15) Acknowledgement of Independent Accountants (included on page II-4)
(23)(a) Consents of Independent Accountants (included on page II-4)
(23)(b) Consents of Counsel (included in opinions)
(24) Power of Attorney (included on signature page)
(25)(a) Statement of Eligibility of Trustee (First Union National Bank of North Carolina) on Form T-1
- --------
* Previously filed with the Commission as part of a Registration Statement on
Form S-3 (No. 33-51029) declared effective on December 13, 1993.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) under the Securities Act
if, in the aggregate, the changes in volume and price represent no more
than a 20% change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in this Registration
Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
II-2
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described 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 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than in payment by the registrant of expenses incurred or
paid by a director, officer or controlling person in the successful defense of
any action, suit or proceeding) is asserted against the registrant by such
director, officer or controlling person in connection with the securities
being registered hereby, 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 Act and will be governed by
the final adjudication of such issue.
II-3
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated February 5, 1998, accompanying the
consolidated financial statements of Federal Realty Investment Trust appearing
in the 1998 Annual Report of the Trust to its shareholders and accompanying
the schedules included in the Annual Report on Form 10-K for the year ended
December 31, 1997 which are incorporated by reference in this Registration
Statement. We consent to the incorporation by reference in this Registration
Statement and the related Prospectus of the aforementioned reports and to the
use of our name as it appears under the caption "Experts."
Grant Thornton LLP
Washington, D.C.
September 17, 1998
ACKNOWLEDGEMENT OF INDEPENDENT ACCOUNTANTS
We hereby acknowledge our awareness of the use of our reports dated May 5,
1998 and August 5, 1998 included in the Trust's Quarterly Reports on Form 10-Q
for the quarters ended March 31, 1998 and June 30, 1998 incorporated by
reference in the Prospectus constituting part of this Registration Statement.
Such reports, pursuant to Rule 436(c) under the Securities Act of 1933, are
not considered a part of a registration statement prepared or certified by an
accountant or reports prepared or certified by an accountant within the
meaning of Section 7 and 11 of the Securities Act.
Grant Thornton LLP
Washington, D.C.
September 17, 1998
CONSENTS OF COUNSEL
The consent of Kirkpatrick & Lockhart LLP is contained in its opinion filed
as Exhibit 5 to this Registration Statement.
The consent of Goodwin, Procter & Hoar LLP is contained in its opinion filed
as Exhibit 8 to this Registration Statement.
II-4
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 STATE OF MARYLAND ON THIS 17TH DAY OF SEPTEMBER, 1998.
Federal Realty Investment Trust
/s/ Steven J. Guttman
By: _________________________________
STEVEN J. GUTTMAN, PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Steven J. Guttman his true and lawful attorney-
in-fact and agent, for him, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all interests and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS FORM S-3
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATE INDICATED.
SIGNATURES TITLE DATE
/s/ Steven J. Guttman President and Trustee (Chief September 17, 1998
- ------------------------------------- Executive Officer)
STEVEN J. GUTTMAN
/s/ Donald C. Wood Senior Vice President and Chief September 17, 1998
- ------------------------------------- Financial Officer
DONALD C. WOOD
/s/ Cecily A. Ward Vice President and Controller September 17, 1998
- ------------------------------------- (Principal Accounting Officer)
CECILY A. WARD
II-5
SIGNATURES TITLE DATE
/s/ Dennis L. Berman Trustee September 17, 1998
- ------------------------------------
DENNIS L. BERMAN
Trustee September 17, 1998
- ------------------------------------
KENNETH D. BRODY
/s/ A. Cornet De Ways Ruart Trustee September 17, 1998
- ------------------------------------
A. CORNET DE WAYS RUART
Trustee September 17, 1998
- ------------------------------------
KRISTIN GAMBLE
/s/ Samuel J. Gorlitz Trustee September 17, 1998
- ------------------------------------
SAMUEL J. GORLITZ
/s/ Walter F. Loeb Trustee September 17, 1998
- ------------------------------------
WALTER F. LOEB
/s/ Mark S. Ordan Trustee September 17, 1998
- ------------------------------------
MARK S. ORDAN
/s/ George L. Perry Trustee September 17, 1998
- ------------------------------------
GEORGE L. PERRY
II-6
EXHIBIT INDEX
EXHIBIT NO PAGE NO.
---------- --------
(1)(a) Form of Underwriting Agreement for Debt Securities.......
(1)(b) Form of Underwriting Agreement for Equity Securities.....
(4)(a) Indenture for Senior Debt Securities.....................
(4)(b) Indenture for Subordinated Debt Securities*..............
(4)(c) Form of Senior Debt Security.............................
(4)(d) Form of Subordinated Debt Security*......................
(4)(e) Form of Statement of Designation of Preferred Shares*....
(4)(f) Form of Preferred Share Certificate*.....................
(5) Opinion regarding legality...............................
(8) Opinion regarding tax matters............................
(12) Statement regarding computation of ratios................
(15) Acknowledgement of Independent Accountants (included on
page II-4)..............................................
(23)(a) Consents of Independent Accounts (included on page II-4).
(23)(b) Consents of Counsel (included in opinions)...............
(24) Power of Attorney (included on signature page)...........
(25)(a) Statement of Eligibility of Trustee (First Union National
Bank of North Carolina) on Form T-1.....................
- --------
* Previously filed with the Commission as part of a Registration Statement on
Form S-3 (No. 33-51029) declared effective on December 13, 1993.
II-7
Exhibit 1(a)
FEDERAL REALTY INVESTMENT TRUST
Debt Securities
---------------
Underwriting Agreement
----------------------
_____________________
[Name of Underwriter]
Ladies and Gentlemen:
From time to time Federal Realty Investment Trust, a business trust
organized under the laws of the District of Columbia (the "Company"), proposes
to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the
form of Annex I hereto, with such additions and deletions as the parties thereto
may determine, and, subject to the terms and conditions stated herein and
therein, to issue and sell to the firms named in Schedule I to the applicable
Pricing Agreement (such firms constituting the "Underwriters" with respect to
such Pricing Agreement and the securities specified therein) certain of its debt
securities (the "Securities") specified in Schedule II to such Pricing Agreement
(with respect to such Pricing Agreement, the "Designated Securities").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the indenture (the "Indenture") identified in such Pricing
Agreement.
1. Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Securities or as an obligation
of any of the Underwriters to purchase the Securities. The obligation of the
Company to issue and sell any of the Securities and the obligation of any of the
Underwriters to purchase any of the Securities shall be evidenced by the Pricing
Agreement with respect to the Designated Securities specified therein. Each
Pricing Agreement shall specify the aggregate principal amount of such
Designated Securities,
the initial public offering price of such Designated Securities, the purchase
price to the Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the names of the Representatives of
such Underwriters and the principal amount of such Designated Securities to be
purchased by each Underwriter and shall set forth the date, time and manner of
delivery of such Designated Securities and payment therefor. The Pricing
Agreement shall also specify (to the extent not set forth in the Indenture and
the registration statement and prospectus with respect thereto) the terms of
such Designated Securities. A Pricing Agreement shall be in the form of an
executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) Registration statements on Form S-3 (File No. 33-63687 and File
No. 333-_______) (the "Initial Registration Statements") in respect of
the Securities have been filed with the Securities and Exchange
Commission (the "Commission"); the Initial Registration Statements and
any post-effective amendments thereto, each in the form heretofore
delivered or to be delivered to the Representatives and, excluding
exhibits to such registration statements, but including all documents
incorporated by reference in the prospectuses contained therein, to
the Representatives for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other documents with respect to the Initial
Registration Statements or documents incorporated by reference therein
have heretofore been filed or transmitted for filing with the
Commission (other than prospectuses filed pursuant to Rule 424(b)
under the Act, each in the form heretofore delivered to the
Representatives); and no stop orders suspending the effectiveness of
the Initial Registration Statements, any post-effective amendments
thereto or the Rule 462(b) Registration Statement, if any, have been
issued and no proceedings for that purpose have been initiated or
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statements or filed with the Commission
pursuant to Rule 424(a) under the Act is hereinafter called a
"Preliminary Prospectus"; the various parts of the Initial
Registration Statements and the Rule 462(b) Registration Statement, if
any, including all exhibits thereto and the documents incorporated by
reference in the prospectuses contained in the Initial Registration
Statements at the time such part of the registration statements became
effective but excluding Form T-1, each as amended at the time such
part of the Initial Registration Statements became effective or such
part of the Rule 462(b) Registration Statement, if
2
any, became or hereafter becomes effective, are hereinafter
collectively called the "Registration Statement"; the prospectus
relating to the Securities, in the form in which it has most recently
been filed, or transmitted for filing, with the Commission on or prior
to the date of this Agreement, is hereinafter called the "Prospectus";
any reference herein to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of
the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
any documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and incorporated by reference in
such Preliminary Prospectus or Prospectus, as the case may be; any
reference to any amendment to the Registration Statement shall be
deemed to refer to and include any annual report of the Company filed
pursuant to Section 13(a) or 15(d) of the Exchange Act after the
effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; any reference to the
Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable
Designated Securities in the form in which it is filed with the
Commission pursuant to Rule 424(b) under the Act in accordance with
Section 5(a) hereof, including any documents incorporated by reference
therein as of the date of such filing; and if the Company elects to
rely on Rule 434 under the Act, any reference to the Prospectus shall
be deemed to include, without limitation, the form of prospectus and
the abbreviated term sheet, taken together, provided to the
Underwriters by the Company in reliance on Rule 434 under the Act (the
"Rule 434 Prospectus");
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case
may be, conformed in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations
of the Commission thereunder, and none of such documents contained an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they
were made; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement
thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any
3
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Securities through the Representatives expressly for use in
the Prospectus as amended or supplemented relating to such Securities;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements
of the Act and the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act") and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective
date as to the Registration Statement and any amendment thereto and as
of the applicable filing date as to the Prospectus and any amendment
or supplement thereto, contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of
the circumstances under which they were made; provided, however, that
this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities;
(d) The Company has been duly organized and is validly existing as a
business trust of unlimited duration with transferable shares of
beneficial interest in good standing under the laws of the District of
Columbia, with full power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus;
the Company has interests in a number of entities (collectively, the
"Entities"), identified on Annex III, which have been duly organized
and are validly existing as corporations, limited partnerships,
general partnerships, limited liability corporations, or joint
ventures as the case may be, in good standing under the laws of the
jurisdictions of their organization (except for joint ventures, which
have no good standing certificate requirements), with full power and
authority to own, lease and operate their properties and conduct their
businesses as described in the Prospectus; except as otherwise denoted
in Annex III hereto, all of the equity interests in the Entities are
owned by the Company free and clear of all pledges, liens,
encumbrances, claims, security interests and defects; all of the
issued and outstanding stock of each Entity that is a corporation has
been duly authorized and validly issued, is fully paid and non-
assessable and is owned by the Company, except as otherwise denoted in
Annex III hereto, free and clear of all pledges, liens, encumbrances,
claims, security interests and defects; no options, warrants or other
rights to convert any obligations into partnership or other ownership
interests in the Entities are outstanding; and the Company and the
Entities are duly qualified to transact business in all jurisdictions
in which the Company and the Entities are transacting business and in
which the conduct of their respective businesses requires
4
such qualification, except where the failure to so qualify would not
have a material adverse effect on the condition, financial or
otherwise, or on the earnings, business affairs or business prospects
of the Company and the Entities considered as one enterprise; one of
the Company's subsidiaries, FRIT-WM, Inc., has been organized as a
Maryland corporation, and has conducted no business since the date of
its organization and has no assets as of the date hereof;
(e) Neither the Company nor any of the Entities has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and, since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the
consolidated capital stock (except for issuances of Common Shares
pursuant to the Company's employee benefit plans and the Company's
Dividend Reinvestment and Share Purchase Plan) or any increase in the
consolidated long-term debt of the Company or any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the general affairs, management, financial
position, shareholders' equity or results of operations of the Company
and the Entities taken as a whole, otherwise than as set forth or
contemplated in the Prospectus;
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and, except as set forth in the Prospectus under the captions
"Description of Common Shares--Shareholder Liability" and "Description
of Preferred Shares--Shareholder Liability", non-assessable;
(g) The Securities have been duly and validly authorized, and, when
Designated Securities are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Securities, such Designated Securities will have been duly executed,
authenticated, issued and delivered and will constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture, which will be substantially in the form
filed as an exhibit to the Registration Statement; the Indenture has
been duly authorized and duly qualified under the Trust Indenture Act
and, at the Time of Delivery for such Designated Securities (as
defined in Section 4 hereof), the Indenture will constitute a valid
and legally binding instrument, enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles; and the
5
Indenture conforms, and the designated Securities will conform, to the
descriptions thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Securities;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture,
this Agreement and any Pricing Agreement, and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company
or any of the Entities is a party or by which the Company or any of
the Entities is bound or to which any of the property or assets of the
Company or any of the Entities is subject, nor will such action result
in any violation of the provisions of the Declaration of Trust or By-
laws of the Company or any statute or any order, rule or regulation of
any court or governmental agency or body having jurisdiction over the
Company or any of the Entities or any of their properties; and no
consent, approval, authorization, order, registration or qualification
of or with any such court or governmental agency or body is required
for the issue and sale of the Securities or the consummation by the
Company of the transactions contemplated by this Agreement or any
Pricing Agreement or the Indenture, except such as have been, or will
have been prior to the Time of Delivery, obtained under the Act and
the Trust Indenture Act and except for the listing of the Designated
Securities on the New York Stock Exchange, Inc. ("NYSE") or other
stock exchanges and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Underwriters;
(i) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of the
Entities is a party or of which any property of the Company or any of
the Entities is the subject which, if determined adversely to the
Company or any of the Entities, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and the
Entities; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities
or threatened by others;
(j) The consolidated financial statements of the Company and the
Entities, together with related Designated Securities and schedules as
set forth or incorporated by reference in the Registration Statement,
present fairly the financial position and the results of operations of
the Company and the Entities at the indicated dates and for the
indicated periods. Such consolidated financial statements have been
prepared in accordance with generally accepted accounting principles,
consistently applied throughout
6
the periods involved, and all adjustments necessary for a fair
presentation of results for such periods have been made. The summary
financial and statistical data included in the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with the consolidated financial statements incorporated by
reference therein;
(k) The Company and the Entities have good and marketable title to,
or valid and enforceable leasehold estates in, all items of real and
personal property referred to in the Prospectus as owned or leased by
the Company or any of the Entities, in each case free and clear of all
pledges, liens, encumbrances, claims, security interests and defects,
other than those referred to in the Prospectus or which are not
material in amount;
(l) The Company and the Entities have filed all Federal, State, local
and foreign income tax returns which have been required to be filed,
or appropriate extensions for such filings have been obtained as
required by law, and all Federal, State, local and foreign taxes of
the Company and the Entities have been paid except such taxes as are
not yet due or are being contested in good faith;
(m) The Company and each of the Entities hold all material licenses,
certificates and permits from governmental authorities which are
necessary to the conduct of their respective businesses; and neither
the Company nor any of the Entities has infringed any patents, patent
rights, trade names, trademarks or copyrights, which infringement is
material to the business of the Company;
(n) Grant Thornton LLP, who have certified the consolidated financial
statements filed with the Commission as part of, or incorporated by
reference in, the Registration Statement and Prospectus, are
independent public accountants as required by the Act and the rules
and regulations of the Commission promulgated thereunder;
(o) The conditions for use of registration statements on Form S-3 set
forth in the General Instructions on Form S-3 have been satisfied and
the Company is entitled to use such form for the transaction
contemplated herein;
(p) Although the Company is aware of the presence of hazardous
substances, hazardous materials, toxic substances or waste materials
("Hazardous Materials") on certain of its properties, nothing has come
to the attention of the Company which, at this time, would lead the
Company to believe that the presence of such Hazardous Materials, when
considered in the aggregate, would materially adversely affect the
financial condition of the Company. In connection with the
construction on or operation and use of the properties owned or leased
by the Company or the Entities, the Company represents that, as of the
date of this Agreement, it has no
7
knowledge of any material failure by the Company or the Entities to
comply with all applicable local, state and federal environmental laws,
regulations, ordinances and administrative and judicial orders relating
to the generation, recycling, reuse, sale, storage, handling, transport
and disposal of any Hazardous Materials;
(q) With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim, the
Company has met the requirements for qualification as a real estate
investment trust under Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the "Code"), and the Company's
present and contemplated operations, assets and income continue to
meet such requirements; and the Company is neither an "investment
company" nor a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer such
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in the form specified in such Pricing
Agreement, and in such authorized denominations and registered in such names as
the Representatives may request upon at least twenty-four hours' prior notice to
the Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in the funds
specified in such Pricing Agreement, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time and
date as the Representatives and the Company may agree upon in writing, such time
and date being herein called the "Time of Delivery" for such Securities.
5. The Company agrees with each of the Underwriters of any Designated
Securities:
(a) If the Company does not elect to rely on Rule 434 under the Act,
immediately following execution and delivery of the applicable Pricing
Agreement, to prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Securities in a form approved by
the Representatives and to file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business
on the business day following the execution and delivery of the
Pricing Agreement relating to the applicable Designated Securities or,
if applicable, such earlier time as may be required by Rule 424(b), or
if the Company elects to rely on Rule 434 under the Act, immediately
following execution and delivery of the applicable Pricing Agreement,
to prepare an abbreviated
8
term sheet relating to the Designated Securities in a form approved by
the Representatives that complies with the requirements of Rule 434
under the Act and to file such form of Rule 434 Prospectus complying
with Rule 434(c)(2) of the Act pursuant to Rule 424(b) under the Act
not later than the Commission's close of business on the business day
following the execution and delivery of the Pricing Agreement relating
to the applicable Designated Securities or, if applicable, such earlier
time as may be required by Rule 424(b); to make no further amendment or
any supplement to the Registration Statement or Prospectus as amended
or supplemented after the date of the Pricing Agreement relating to
such Securities and prior to the Time of Delivery for such Securities
which shall be reasonably disapproved by the Representatives for such
Securities promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after such
Time of Delivery and furnish the Representatives with copies thereof;
to file promptly all reports and any definitive proxy or information
statements required to be filed by the Company with the Commission
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act for
so long as the delivery of a prospectus is required in connection with
the offering or sale of such Securities, and during such same period to
advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been
filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, of the issuance
by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Securities, of the
suspension of the qualification of such Securities for offering or sale
in any jurisdiction, of the initiation or threatening of any proceeding
for any such purpose, or of any request by the Commission for the
amending or supplementing of the Registration Statement or Prospectus
or for additional information; and, in the event of the issuance of any
such stop order or of any such order preventing or suspending the use
of any prospectus relating to the Securities or suspending any such
qualification, to use promptly its best efforts to obtain its
withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Securities, provided that in connection therewith
the Company shall not be required to qualify as a foreign corporation
or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 a.m. New York City time, on the New York business
day next succeeding the date of the applicable Pricing Agreement and
9
from time to time, to furnish the Underwriters with copies of the
Prospectus in New York City as amended or supplemented in such
quantities as the Representatives may reasonably request, and, if the
delivery of a prospectus is required at any time in connection with
the offering or sale of the Securities and if at such time any event
shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not
misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the
Trust Indenture Act, to notify the Representatives and upon their
request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many
copies as the Representatives may from time to time reasonably request
of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule
158(c)), an earnings statement of the Company (which need not be
audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including at the option of
the Company Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and
including the earlier of (i) the termination of trading restrictions
for such Designated Securities, as notified to the Company by the
Representatives and (ii) the Time of Delivery for such Designated
Securities, not to offer, sell, contract to sell or otherwise issue
any debt securities of the Company which mature more than one year
after such Time of Delivery and which are substantially similar to
such Designated Securities, without the prior written consent of the
Representatives;
(f) To use the net proceeds received by it from the sale of the
Securities in the manner specified in the Prospectus under the caption
"Use of Proceeds"; and
(g) To elect to qualify as a "real estate investment trust" under the
Code, and to use its best efforts to continue to meet the requirements
to qualify as a "real estate investment trust".
10
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Securities under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto (including each abbreviated term sheet delivered by the
Company pursuant to Rule 434 under the Act) and the mailing and delivering of
copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any Indenture, any blue sky and legal investment surveys and any
other documents in connection with the offering, purchase, sale and delivery of
the Securities; (iii) all expenses in connection with the qualification of the
Securities for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
blue sky and legal investment surveys; (iv) any fees charged by securities
rating services for rating the Securities; (v) any filing fees incident to any
required review by the National Association of Securities Dealers, Inc. of the
terms of the sale of the Securities; (vi) the cost of preparing the Securities;
(vii) the fees and expenses of any Trustee and any agent of any Trustee and the
fees and disbursements of counsel for any Trustee in connection with any
Indenture and the Securities; and (viii) all other costs and expenses incident
to the performance of its obligations hereunder which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section, Section 8 and Section 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees of
their counsel, transfer taxes on resale of any of the Securities by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Securities under
the Pricing Agreement relating to such Designated Securities shall be subject,
in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Company in or
incorporated by reference in the Pricing Agreement relating to such Designated
Securities are, at and as of the Time of Delivery for such Designated
Securities, true and correct, to the condition that the Company shall have
performed all of its obligations hereunder theretofore to be performed, and to
the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act
and in accordance with Section 5(a) hereof; no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
11
(b) Brown & Wood LLP, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions, dated the
Time of Delivery for such Designated Securities, with respect to the
organization of the Company, the validity of the Indenture, the
Registration Statement, the Prospectus as amended or supplemented and
other related matters as the Underwriters may reasonably request, and
such counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Kirkpatrick & Lockhart LLP, counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Time
of Delivery for such Designated Securities, in form and substance
satisfactory to the Representatives, to the effect that:
(i) The Company has been duly organized and is validly existing
as a business trust in good standing under the laws of the District of
Columbia, with full power and authority to own its properties and
conduct its business as described in the Prospectus; the Entities have
been duly organized and are validly existing as corporations, limited
partnerships, general partnerships, limited liability corporations, or
joint ventures as the case may be, in good standing under the laws of
the jurisdictions of their organization (except for joint ventures,
which have no good standing certificate requirements); the Entities
have power and authority to own their properties and conduct their
businesses as described in the Prospectus; to the best of such
counsel's knowledge, except as otherwise denoted in Annex III hereto,
all of the equity interests in the Entities are owned by the Company
and, to the best of such counsel's knowledge, are owned free and clear
of all pledges, liens, encumbrances, claims and security interests,
and to the best of such counsel's knowledge, no options, warrants or
other rights to convert any obligations into partnership or other
ownership interests in the Entities are outstanding; all of the issued
and outstanding stock of each Entity that is a corporation has been
duly authorized and validly issued, is fully paid and non-assessable
and is owned by the Company, except as otherwise denoted in Annex III
hereto, free and clear of all pledges, liens, encumbrances, claims and
security interests; the Company and the Entities are duly qualified to
transact business in all jurisdictions in which the Company and the
Entities are, to such counsel's knowledge, transacting business and in
which the conduct of their respective businesses requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or
on the earnings, business affairs or business prospects of the Company
and the Entities considered as one enterprise; and the conditions for
use of a registration statement on Form S-3 have been satisfied; one
of the Company's subsidiaries, FRIT-WM, Inc., has been organized as a
Maryland corporation, and has conducted no business since the date of
its organization and has no assets as of the date hereof;
12
(ii) The Company has an authorized capitalization as set forth in
the Prospectus as amended or supplemented and all of the issued shares
of capital stock of the Company have been duly and validly authorized
and issued and are fully paid and, except as set forth in the
Prospectus under the captions "Description of Common Shares--
Shareholder Liability" and "Description of Preferred Shares--
Shareholder Liability", non-assessable;
(iii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of the Entities is a
party or of which any property of the Company or any of the Entities is
the subject which, if determined adversely to the Company or any of the
Entities, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, shareholders'
equity or results of operations of the Company and the Entities; and,
to the best of such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(iv) This Agreement has been duly authorized, executed and
delivered by the Company;
(v) The Designated Securities have been duly authorized,
executed, authenticated, issued and delivered and constitute valid and
legally binding obligations of the Company entitled to the benefits
provided by the Indenture; and the Designated Securities and the
Indenture conform to the descriptions thereof in the Prospectus as
amended or supplemented;
(vi) The Indenture has been duly authorized, executed and
delivered by the parties thereto and constitutes a valid and legally
binding instrument, enforceable in accordance with its terms, subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other
laws of general applicability relating to or affecting creditors'
rights and to general equity principles; and the Indenture has been
duly qualified under the Trust Indenture Act;
(vii) The issue and sale of the Designated Securities being
delivered at such Time of Delivery and the compliance by the Company
with all of the provisions of the Designated Securities, the
Indenture, this Agreement and the Pricing Agreement with respect to
the Designated Securities and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a
breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel
to which the Company or any of the Entities is a party or by which the
Company or any of the Entities is bound or to which any of the
property or assets of the Company or any of the Entities is subject,
nor will such actions result in any violation of the provisions of the
13
Declaration of Trust or By-laws of the Company or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over the Company or
any of the Entities or any of their respective properties;
(viii) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is
required for the issue and sale of the Designated Securities being
delivered at such Time of Delivery or the consummation by the Company
of the transactions contemplated by this Agreement or the Pricing
Agreement or the Indenture, except such as have been obtained under the
Act and the Trust Indenture Act and except for the listing of the
Designated Securities on the NYSE, or other stock exchanges and such
consents, approvals, authorizations, registrations or qualifications as
may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Designated Securities by the
Underwriters;
(ix) The statements under caption "Item 3. Legal Proceedings" in
the Company's most recent Form 10-K filed with the Commission, and
under the captions "Remuneration of Executive Officers and Trustees"
and "Certain Transactions" in the Company's most recent Proxy
Statement filed with the Commission, insofar as such statements
constitute a summary of documents referred to therein or matters of
law, are accurate summaries and fairly and correctly present the
information called for with respect to such documents and matters;
(x) The investments of the Company described in the Prospectus
are permitted investments under the Declaration of Trust;
(xi) The documents incorporated by reference in the Prospectus as
amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission
thereunder; and they have no reason to believe that any of such
documents, when they became effective or were so filed, as the case
may be, contained, in the case of a registration statement which
became effective under the Act, an untrue statement of a material act
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, or, in the
case of other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; and
14
(xii) The Registration Statement and the Prospectus as amended or
supplemented and any further amendments and supplements thereto made
by the Company prior to the Time of Delivery for the Designated
Securities (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the requirements of the Act and
the Trust Indenture Act and the rules and regulations thereunder; if
applicable, the Rule 434 Prospectus complies as to form in all
material respects with the requirements of Rule 434 under the Act;
they have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the
Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel
need express no opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that, as
of its date, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to the Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained
an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading or that, as of
the Time of Delivery, either the Registration Statement or the
Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Company prior to the Time of Delivery
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) contains an untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required to be
filed or any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement
or the Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required.
In delivering such opinion, counsel shall be entitled to rely in
respect of the opinion in this clause upon opinions of local counsel
and in respect of certain matters of fact upon certificates of
officers of the Company, provided that such counsel shall state that
they believe that both you and they are justified in relying upon such
opinions and certificates.
(d) In addition to the above opinion, the Underwriters shall have
received the opinion or opinions of Goodwin, Procter & Hoar LLP,
Special Tax Counsel to the Company, or other counsel to the Company,
dated the Time of Delivery for such Designated Securities, in form and
substance
15
satisfactory to the Underwriters, to the effect that (1) the Company
has qualified to be taxed as a real estate investment trust pursuant to
Sections 856-860 of the Code, for the fiscal years ended December 31,
1987 through the date of its most recent fiscal year ended and that the
form of organization of the Company and its current operations, assets
and contemplated income are such that the Company is in a position
under present law to so qualify for the current taxable year and should
so qualify for such taxable year provided that the Company continues to
meet the asset composition, source of income, shareholder
diversification, distribution and other requirements of the Code
necessary for the Company to qualify as a real estate investment trust
and (2) such Special Tax Counsel concurs with the accuracy of the legal
statements set forth in "Description of Common Shares--Restriction on
Ownership" and "Federal Income Tax Considerations" in the Prospectus.
(e) On the date of the Pricing Agreement for such Designated
Securities and at the Time of Delivery for such Designated Securities,
the independent accountants of the Company who have certified the
financial statements of the Company included or incorporated by
reference in the Registration Statement shall have furnished to the
Representatives a letter, dated the effective date of the Registration
Statement or the date of the most recent report filed with the
Commission containing financial statements and incorporated by
reference in the Registration Statement, if the date of such report is
later than such effective date, and a letter dated such Time of
Delivery, respectively, to the effect set forth in Annex II hereto,
and with respect to such letter dated such Time of Delivery, as to
such other matters as the Representatives may reasonably request and
in form and substance satisfactory to the Representatives;
(f) (i) Neither the Company nor any of the Entities shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus as amended or supplemented, and (ii) since the respective
dates as of which information is given in the Prospectus as amended or
supplemented there shall not have been any change in the capital stock
or long-term debt of the Company or any of the Entities or any change,
or any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity
or results of operations of the Company and the Entities, otherwise
than as set forth or contemplated in the Prospectus as amended or
supplemented, the effect of which, in any such case described in
Clause (i) or (ii), is in the judgment of the Representatives so
material and adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Designated
Securities on the terms
16
and in the manner contemplated in the Prospectus as amended or
supplemented;
(g) On or after the date of the Pricing Agreement relating to the
Designated Securities (i) no downgrading shall have occurred in the
rating accorded the Company's debt securities or preferred shares by
any "nationally recognized statistical rating organization", as that
term is defined by the Commission for purposes of Rule 436(g)(2) under
the Act and (ii) no such organization shall have publicly announced
that it has under surveillance or review, with possible negative
implications, its rating of any of the Company's debt securities or
preferred shares;
(h) On or after the date of the Pricing Agreement relating to the
Designated Securities there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in
securities generally on the NYSE; (ii) a suspension or material
limitation in trading in the Company's securities on the NYSE; (iii) a
general moratorium on commercial banking activities in New York
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or
the declaration by the United States of a national emergency or war if
the effect of any such event specified in this Clause (iv) in the
judgment of the Representatives makes it impracticable or inadvisable
to proceed with the public offering or the delivery of the Designated
Securities on the terms and in the manner contemplated in the
Prospectus as amended or supplemented;
(i) The Company shall have complied with the provisions of Section
5(c) hereof with respect to the furnishing of prospectuses on the New
York business day next succeeding the date of the applicable Pricing
Agreement; and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Securities
a certificate or certificates of officers of the Company satisfactory
to the Representatives as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery,
as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, as to
the matters set forth in subsections (a) and (f) of this Section and
as to such other matters as the Representatives may reasonably
request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several,
to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in
any Preliminary Prospectus, any
17
preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating
to the Securities, or any amendment or supplement thereto (including
the information deemed to be a part of the Registration Statement
pursuant to Rule 434 under the Act, if applicable), or arise out of or
are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter
for any legal or other expenses reasonably incurred by such Underwriter
in connection with investigating or defending any such action or claim
as such expenses are incurred; provided, however, that the Company
shall not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or
any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
expressly for use in the Prospectus as amended or supplemented relating
to such Securities.
(b) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the
Company may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Securities, or any amendment or supplement
thereto (including the information deemed to be a part of the
Registration Statement pursuant to Rule 434 under the Act, if
applicable), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission
was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or
any such amendment or supplement in reliance upon and in conformity
with written information furnished to the Company by such Underwriter
expressly for use therein; and will reimburse the Company for any
legal or other expenses reasonably incurred by the Company in
connection with investigating or defending any such action or claim as
such expenses are incurred.
18
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof; but the
omission so to notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise
than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish,
jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under such subsection
for any legal expenses of other counsel (unless separate counsel is
required due to conflict of interest) or any other expenses, in each
case subsequently incurred by such indemnified party, in connection
with the defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and each Underwriter on the other from
the offering of the Designated Securities to which such loss, claim,
damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence
is not permitted by applicable law or if the indemnified party failed
to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect
not only such relative benefits but also the relative fault of the
Company on the one hand and each Underwriter on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and each
Underwriter shall be deemed to be in the same proportion as the total
net proceeds from such offering (before deducting expenses) received
by the Company and the total discounts and commissions received by
each Underwriter in respect thereof bear to the aggregate offering
price of such Designated Securities. The relative fault shall be
19
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company on the one hand or such Underwriter on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable
by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding
the provisions of this subsection (d), no Underwriter shall be
required to contribute any amount in excess of the amount by which the
total price at which the applicable Designated Securities underwritten
by it and distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement
or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty
of such fraudulent misrepresentation. The obligations of the
Underwriters of Designated Securities in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such Securities and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 8 shall be in
addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions,
to each officer and trustee of the Company and to each person, if any,
who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Designated Securities which it has agreed to purchase
under the Pricing Agreement relating to such Designated Securities,
the Representatives may in their discretion arrange for themselves or
another party or other parties to purchase such Designated Securities
on the terms contained herein. If within thirty-six hours after such
default by any Underwriter the Representatives do not arrange for the
purchase of such Designated
20
Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such
Designated Securities on such terms. In the event that, within the
respective prescribed period, the Representatives notify the Company
that they have so arranged for the purchase of such Designated
Securities, or the Company notifies the Representatives that it has so
arranged for the purchase of such Designated Securities, the
Representatives or the Company shall have the right to postpone the
time of Delivery for such Designated Securities for a period of not
more than seven days, in order to effect whatever changes may thereby
be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements,
and the Company agrees to file promptly any amendments or supplements
to the Registration Statement or the Prospectus which in the opinion
of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person
substituted under this Section with like effect as if such person had
originally been a party to the Pricing Agreement with respect to such
Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters
by the Representatives and the Company as provided in subsection (a)
above, the aggregate principal amount of such Designated Securities
which remains unpurchased does not exceed one-tenth of the aggregate
principal amount of the Designated Securities, then the Company shall
have the right to require each non-defaulting Underwriter to purchase
the principal amount of Designated Securities which such Underwriter
agreed to purchase under the Pricing Agreement relating to such
Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the principal
amount of Designated Securities which such Underwriter agreed to
purchase under such Pricing Agreement) of the Designated Securities of
such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Designated Securities of a defaulting Underwriter or Underwriters
by the Representatives and the Company as provided in subsection (a)
above, the aggregate principal amount of Designated Securities which
remains unpurchased exceeds one-tenth of the aggregate principal
amount of the Designated Securities, as referred to in subsection (b)
above, or if the Company shall not exercise the right described in
subsection (b) above to require non-defaulting Underwriters to
purchase Designated Securities of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Designated
Securities shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company, except for the expenses
to be borne by the Company and the Underwriters
21
as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or trustee or controlling person of the Company, and shall
survive delivery of and payment for the Securities.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Securities covered by such Pricing Agreement
except as provided in Section 6 and Section 8 hereof. If this Agreement shall
be terminated as a result of any of the conditions set forth in Section 7 hereof
(other than Section 7(h)(i), (iii) or (iv)) not being satisfied, the Company
will reimburse the Underwriters through the Representatives for all out-of-
pocket expenses approved in writing by the Representatives, including fees and
disbursements to counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Securities,
but the Company shall then be under no further liability to any Underwriter with
respect to such Designated Securities except as provided in Section 6 and
Section 8 hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Securities shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and trustees of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs,
22
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing, Agreement. No purchaser of any of the Securities from any Underwriter
shall be deemed a successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Federal Realty Investment Trust is a business trust organized under
District of Columbia law. Under the terms of Article VIII of the Company's
Third Amended and Restated Declaration of Trust, all persons shall look solely
to the Company's property, real, personal or otherwise, tangible or intangible,
for the payment of any claim under or for the performance of this Agreement, and
no trustee, officer, employee or Underwriter of the Company shall be subject to
any personal liability whatsoever, in tort, contract or otherwise in connection
with the obligations of the Company hereunder.
If the foregoing is in accordance with your understanding, please sign and
return to us one for the Trust and each of the Representatives plus one for each
counsel counterparts hereof.
Very truly yours,
FEDERAL REALTY INVESTMENT TRUST
By:______________________________
Name:
Title:
Accepted as of the date hereof:
- -------------------------------
[Name of Underwriter]
23
ANNEX I
Pricing Agreement
-----------------
As Representatives of the several
Underwriters named in Schedule I hereto,
[Name and address of Representative]
_________________, 199__
Dear Sirs:
Federal Realty Investment Trust, a business trust organized under the laws
of the District of Columbia (the "Company"), proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated
_______________ __, 199__ (the "Underwriting Agreement"), between the Company on
the one hand and [names of Representatives] on the other hand, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") the
Securities specified in Schedules I and II hereto (the "Designated Securities").
Each of the provisions of the Underwriting Agreement is incorporated herein by
reference in its entirety, and shall be deemed to be a part of this Agreement to
the same extent as if such provisions had been set forth in full herein; and
each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated to
act on behalf of the Representatives and on behalf of each of the Underwriters
of the Designated Securities pursuant to Section 12 of the Underwriting
Agreement and the address of the Representatives referred to in such Section 12
are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to
each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Company, at the time and place
and at the purchase price to the Underwriters set forth in Schedule II hereto,
the principal amount of Designated Securities set forth opposite the name of
such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us [one for the Company and each of the Representatives plus one for
each counsel] counterparts hereof, and upon acceptance hereof by you, on behalf
of each of the Underwriters, this letter and such acceptance hereof, including
the provisions of the Underwriting Agreement incorporated herein by reference,
shall constitute a binding agreement between each of the Underwriters and the
Company. It is understood that your acceptance of this letter on behalf of each
of the Underwriters is or will be pursuant to the authority set forth in a form
of Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
FEDERAL REALTY INVESTMENT TRUST
By: __________________________________________
Title:
Accepted as of the date hereof:
[NAME OF UNDERWRITER]
By: _______________________________
Name:
Title:
2
SCHEDULE I
Number of
Designated Securities
Underwriter to be Purchased
--------------------------------- ---------------------
-------------
Total $
=============
SCHEDULE II
Title of Designated Securities:
[ %] [Senior] [Subordinated] [Floating Rate] [Zero Coupon] [Designated
Securities]
[Debentures] due
Aggregate principal amount
[$]
Price to Public:
% of the principal amount of the Designated Securities, plus accrued
interest from to
[and accrued amortization, if any, from to ]
Purchase Price by Underwriters:
% of the principal amount of the Designated Securities, plus accrued
interest from to
[and accrued amortization, if any, from to ]
Specified funds for payment of purchase price:
[New York] Clearing House funds
Indenture:
Indenture dated , 19 , between the Company and , as Trustee
Maturity:
Interest Rate:
[ %] [Zero Coupon] [See Floating Rate Provisions]
Interest Payment Dates:
[months and dates]
Redemption Provisions:
[No provisions for redemption]
[The Designated Securities may be redeemed, otherwise than through the
sinking fund, in whole or in part at the option of the Company, in the
amount of [$] or an integral multiple thereof,
[on or after , at the following redemption prices (expressed in
percentages of principal amount). If [redeemed on or before ,
%, and if] redeemed during the 12-month period beginning ,
Redemption
Year Price
---- ----------
and thereafter at 100% of their principal amount, together in each case
with accrued interest to the redemption date.]
[on any interest payment date falling on or after , , at the
election of the Company, at a redemption price equal to the principal
amount thereof, plus accrued interest to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption upon
occurrence of certain events or redemption for changes in tax law]
[Restriction on refunding]
Sinking Fund Provisions:
[No sinking fund provisions]
[The Designated Securities are entitled to the benefit of a sinking fund to
retire [$] principal amount of Designated Securities on in each of
the years through at 100% of their principal amount plus
accrued interest] [,together with [cumulative] [noncumulative] redemptions
at the option of the Company to retire an additional [$] principal
amount of Designated Securities in the years through at 100% of
their principal amount plus accrued interest].
[If Securities are extendable debt Securities, insert --
Extendable provisions:
Securities are repayable on , [insert date and years], at
the option of the holder, at their principal amount with accrued
interest. Initial annual interest rate will be %, and thereafter
annual interest rate will be adjusted on , and to a
rate not less than % of the effective annual interest rate on U.S.
Treasury obligations with -year maturities as of the [insert
date 15 days prior to maturity date] prior to such [insert maturity
date].]
[If Securities are Floating Rate debt Securities, insert --
2
Floating rate provisions:
Initial annual interest rate will be % through [and
thereafter will be adjusted [monthly] [on each , ,
and ] [to an annual rate of % above the average rate for
-year [month] [securities] [certificates of deposit] issued by
and [insert names of banks],] [and the annual interest rate
[thereafter] [from through ] will be the interest
yield equivalent of the weekly average per annum market discount rate
for -month Treasury bills plus % of Interest Differential
(the excess, if any, of (i) then current weekly average per annum
secondary market yield for -month certificates of deposit over (ii)
then current interest yield equivalent of the weekly average per annum
market discount rate for -month Treasury bills); from
and thereafter the rate will be the then current interest yield
equivalent plus % of interest Differential].]
Defeasance provisions:
Time of Delivery:
Closing Location:
Names and addresses of Representatives:
Designated Representatives:
Address for Notices, etc.:
[Other Terms]*:
___________
*A description of particular tax, accounting or other unusual features
(such as the addition of event risk provisions) of the Securities should be set
forth, or referenced to an attached and accompanying description, if necessary
to ensure agreement as to the terms of the Securities to be purchased and sold.
Such a description might appropriately be in the form in which such features
will be described in the Prospectus Supplement for the offering.
3
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly report on Form 10-Q
incorporated by reference into the Prospectus as indicated in their reports
thereon copies of which are attached hereto; and on the basis of specified
procedures including inquiries of officials of the Company who have
responsibility for financial and accounting matters regarding whether the
unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations, nothing came to their
attention that caused them to believe that the unaudited condensed
consolidated financial statements do not comply as to form in all material
respects with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after
restatement where applicable) in the audited consolidated financial
statements for five such fiscal years which were included or incorporated
by reference in the Company's Annual Reports on Form 10-K for such fiscal
years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result to the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations or
(ii) any material modifications should be made to the unaudited
condensed consolidated statements of income, consolidated balance
sheets and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus for them to be in
conformity with generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
2
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than three days prior to
the date of such letter, there have been any changes in the
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights, upon earn-outs of
performance shares and upon conversions of convertible securities, in
each case which were outstanding on the date of the latest balance
sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company, or any
decreases in consolidated net current assets or net assets or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in revenue, or in income before gain on sale of real estate and
extraordinary items or the total or per share amounts of consolidated
net income or other items specified by the Representatives, or any
increases in any items specified by the Representatives, in each case
as compared with the comparable period of the preceding year and with
any other period of corresponding length specified by the
Representatives, except in each case for increases or decreases which
the Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the audit referred to in their reports
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance with
generally accepted auditing standards, with respect to certain amounts,
percentages and financial information specified by the Representatives
3
which are derived from the general accounting records of the Company and
its subsidiaries, which appear in the Prospectus (excluding documents
incorporated by reference), or in Part II of, or in exhibits and schedules
to, the Registration Statement specified by the Representatives or in
documents incorporated by reference in the Prospectus specified by the
Representatives, and have compared certain of such amounts, percentages and
financial information with the accounting records of the Company and its
subsidiaries and have found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such Designated
Securities.
4
ANNEX III
Corporations (including Subsidiaries), Partnerships, Limited Liability Companies
- --------------------------------------------------------------------------------
and Joint Venture of Federal Realty Investment Trust ("FRIT")
-------------------------------------------------------------
FRIT
----
Entity Type Ownership Interest
- ----------- ------------------
Subsidiaries:
FRIT-WM, Inc. 100%
FR Acquisitions Holding Co., Inc. 100%
Street Retail Inc. ("SRI") 100%
Subsidiary of Street Retail, Inc.
Street Retail West GP, Inc. 100%
FR Pike 7 Limited Partnership 99%
FRLP, Inc. 100%
Federal Realty Partners, Inc. 100%
Federal Realty Partners, L.P. 100%
SRI Holding Company, Inc. SRI owns 100%
of voting stock
SRI Texas, Inc. 100%
Street Retail San Antonio, L.P. 100%
TRS Development, Inc. 100%
Terranomics Retail Services, Inc. FRIT owns 100%
of voting stock
Corporations, Partnerships and Limited Liability Companies:
Andorra Associates 99% FRIT
1% FRA
Berman Enterprises II Limited Partnership 99% FRIT
1% FRA
FR Associates Limited Partnership ("FRA") 99%
FRIT Escondido Promenade, LLC 70%
FRIT San Jose Town and Country Village LLC 75%
Governor Plaza Associates 99% FRIT
1% FRA
Loehmann's Plaza Limited Partnership 1%
San Jose Residential, Inc. FRIT San Jose Town
and Country Village
LLC owns 100% of
non-voting stock
SRI Old Town, LLC 100%
SRI San Antonio, Inc. 100%
Shopping Center Associates Limited Partnership 99% FRIT
1% FRA
Street Retail Forest Hills I, LLC 90%
Street Retail Forest Hills II, LLC 90%
Street Retail Tempe I, LLC 90%
Street Retail West I, L.P. (indirect partnership) 90%
Street Retail West II, L.P. (indirect partnership) 90%
Street Retail West 3, L.P. (indirect partnership) 90%
Street Retail West 4, L.P. (indirect partnership) 90%
Virginia Real Estate Investors Limited Partnership 99%
Joint Venture:
Congressional Plaza Associates 55.7%
EXHIBIT 1(b)
FEDERAL REALTY INVESTMENT TRUST
Common Shares and Preferred Shares
---------------------------
Underwriting Agreement
----------------------
----------------
[Name of Underwriter]
Ladies and Gentlemen:
From time to time Federal Realty Investment Trust, a business trust
organized under the laws of the District of Columbia (the "Company"), proposes
to enter into one or more Pricing Agreements (each a "Pricing Agreement") in the
form of Annex I hereto, with such additions and deletions as the parties thereto
may determine, and, subject to the terms and conditions stated herein and
therein, to issue and sell to the firms named in Schedule I to the applicable
Pricing Agreement (such firms constituting the "Underwriters" with respect to
such Pricing Agreement and the securities specified therein) certain of its
shares of beneficial interest (the "Shares") specified in Schedule II to such
Pricing Agreement (with respect to such Pricing Agreement, the "Designated
Shares"). The Shares may include the Company's shares of beneficial interest,
no par or stated value (the "Common Shares"), or preferred shares (the
"Preferred Shares").
The terms and rights of any particular issuance of Designated Shares shall
be as specified in the Pricing Agreement relating thereto and in or pursuant to
the resolutions of the board of trustees of the Company identified in such
Pricing Agreement.
1. Particular sales of Designated Shares may be made from time to time to
the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The term
"Representatives" also refers to a single firm acting as sole representative of
the Underwriters and to Underwriters who act without any firm being designated
as their representative. This Underwriting Agreement shall not be construed as
an obligation of the Company to sell any of the Shares or as an obligation of
any of the Underwriters to purchase the Shares. The obligation of the Company to
issue and sell any of the Shares and the obligation of any of the Underwriters
to purchase any of the Shares shall be evidenced by the Pricing Agreement with
respect to the Designated Shares specified therein. Each Pricing Agreement shall
specify the aggregate number of such Designated Shares, the
initial public offering price of such Designated Shares, the purchase price to
the Underwriters of such Designated Shares, the names of the Underwriters of
such Designated Shares, the names of the Representatives of such Underwriters
and the number of such Designated Shares to be purchased by each Underwriter and
shall set forth the date, time and manner of delivery of such Designated Shares
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the registration statement and prospectus with respect thereto)
the terms of such Designated Shares. A Pricing Agreement shall be in the form of
an executed writing (which may be in counterparts), and may be evidenced by an
exchange of telegraphic communications or any other rapid transmission device
designed to produce a written record of communications transmitted. The
obligations of the Underwriters under this Agreement and each Pricing Agreement
shall be several and not joint.
2. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) Registration statements on Form S-3 (File No. 33-63687 and File No.
333-_______) (the "Initial Registration Statements") in respect of the
Shares have been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statements and any post-effective
amendments thereto, each in the form heretofore delivered or to be
delivered to the Representatives and, excluding exhibits to such
registration statements, but including all documents incorporated by
reference in the prospectuses contained therein, to the Representatives for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Securities Act of
1933, as amended (the "Act"), which became effective upon filing, no other
documents with respect to the Initial Registration Statements or documents
incorporated by reference therein have heretofore been filed or transmitted
for filing with the Commission (other than prospectuses filed pursuant to
Rule 424(b) under the Act, each in the form heretofore delivered to the
Representatives); and no stop orders suspending the effectiveness of the
Initial Registration Statements, any post-effective amendments thereto or
the Rule 462(b) Registration Statement, if any, have been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Registration
Statements or filed with the Commission pursuant to Rule 424(a) under the
Act is hereinafter called a "Preliminary Prospectus"; the various parts of
the Initial Registration Statements and the Rule 462(b) Registration
Statement, if any, including all exhibits thereto and the documents
incorporated by reference in the prospectuses contained in the Initial
Registration Statements at the time such part of the registration
statements became effective but excluding Form T-1, each as amended at the
time such part of the Initial Registration Statements became effective or
such part of the Rule 462(b) Registration Statement, if any, became or
hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; the prospectus relating to the Shares, in the
form in which it has most recently been filed, or transmitted for filing,
with the Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of such Preliminary
2
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the date
of such Preliminary Prospectus or Prospectus, as the case may be, under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
incorporated by reference in such Preliminary Prospectus or Prospectus, as
the case may be; any reference to any amendment to the Registration
Statement shall be deemed to refer to and include any annual report of the
Company filed pursuant to Section 13(a) or 15(d) of the Exchange Act after
the effective date of the Registration Statement that is incorporated by
reference in the Registration Statement; any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated Shares in
the form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such filing;
and if the Company elects to rely on Rule 434 under the Act, any reference
to the Prospectus shall be deemed to include, without limitation, the form
of prospectus and the abbreviated term sheet, taken together, provided to
the Underwriters by the Company in reliance on Rule 434 under the Act (the
"Rule 434 Prospectus");
(b) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the Act or
the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which they were made; and
any further documents so filed and incorporated by reference in the
Prospectus or any further amendment or supplement thereto, when such
documents become effective or are filed with the Commission, as the case
may be, will conform in all material respects to the requirements of the
Act or the Exchange Act, as applicable, and the rules and regulations of
the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and any
further amendments or supplements to the Registration Statement or the
Prospectus will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were
made; provided, however, that this
3
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter of Designated Shares through the
Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares;
(d) The Company has been duly organized and is validly existing as a
business trust of unlimited duration with transferable shares of beneficial
interest in good standing under the laws of the District of Columbia, with
full power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus; the Company has
interests in a number of entities (collectively, the "Entities"),
identified on Annex III, which have been duly organized and are validly
existing as corporations, limited partnerships, general partnerships,
limited liability corporations, or joint ventures as the case may be, in
good standing under the laws of the jurisdictions of their organization
(except for joint ventures, which have no good standing certificate
requirements), with full power and authority to own, lease and operate
their properties and conduct their businesses as described in the
Prospectus; except as otherwise denoted in Annex III hereto, all of the
equity interests in the Entities are owned by the Company free and clear of
all pledges, liens, encumbrances, claims, security interests and defects;
all of the issued and outstanding stock of each Entity that is a
corporation has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, except as otherwise denoted in
Annex III hereto, free and clear of all pledges, liens, encumbrances,
claims, security interests and defects; no options, warrants or other
rights to convert any obligations into partnership or other ownership
interests in the Entities are outstanding; and the Company and the Entities
are duly qualified to transact business in all jurisdictions in which the
Company and the Entities are transacting business and in which the conduct
of their respective businesses requires such qualification, except where
the failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs or
business prospects of the Company and the Entities considered as one
enterprise; one of the Company's subsidiaries, FRIT-WM, Inc., has been
organized as a Maryland corporation, and has conducted no business since
the date of its organization and has no assets as of the date hereof;
(e) Neither the Company nor any of the Entities has sustained since the
date of the latest audited financial statements included or incorporated by
reference in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in the
Prospectus; and, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not been
any change in the consolidated capital stock (except for issuances of
Common Shares pursuant to the Company's employee benefit plans and the
Company's Dividend Reinvestment and Share Purchase Plan) or any increase in
the consolidated long-term debt of the Company or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the general affairs, management, financial position,
shareholders' equity or results of operations of the Company and the
Entities taken as a whole, otherwise than as set forth or contemplated in
the Prospectus;
4
(f) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued and are fully paid and,
except as set forth in the Prospectus under the captions "Description of
Common Shares--Shareholder Liability" and "Description of Preferred Shares-
-Shareholder Liability", non-assessable;
(g) The Shares have been duly and validly authorized, and, when
Designated Shares are issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect to such Designated Shares, such
Designated Shares will be duly and validly issued and fully paid and,
except as set forth in the Prospectus under the captions "Description of
Common Shares--Shareholder Liability" and "Description of Preferred
Shares--Shareholder Liability", non-assessable; and the Shares conform to
the description thereof contained in the Registration Statement, and the
Designated Shares will conform to the description thereof contained in the
Prospectus as amended or supplemented with respect to such Designated
Shares;
(h) The issue and sale of the Shares and the compliance by the Company
with all of the provisions of this Agreement and any Pricing Agreement, and
the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of the Entities is a party or by which the Company or any of
the Entities is bound or to which any of the property or assets of the
Company or any of the Entities is subject, nor will such action result in
any violation of the provisions of the Declaration of Trust or By-laws of
the Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
the Entities or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement or any Pricing Agreement, except such as
have been, or will have been prior to the Time of Delivery (as defined in
Section 4 hereof), obtained under the Act and except for the listing of the
Designated Shares on the New York Stock Exchange, Inc. ("NYSE") or other
stock exchanges and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by the
Underwriters;
(i) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of the
Entities is a party or of which any property of the Company or any of the
Entities is the subject which, if determined adversely to the Company or
any of the Entities, would individually or in the aggregate have a material
adverse effect on the consolidated financial position, shareholders' equity
or results of operations of the Company and the Entities; and, to the best
of the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
5
(j) The consolidated financial statements of the Company and the
Entities, together with related notes and schedules as set forth or
incorporated by reference in the Registration Statement, present fairly the
financial position and the results of operations of the Company and the
Entities at the indicated dates and for the indicated periods. Such
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles, consistently applied throughout
the periods involved, and all adjustments necessary for a fair presentation
of results for such periods have been made. The summary financial and
statistical data included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with the
consolidated financial statements incorporated by reference therein;
(k) The Company and the Entities have good and marketable title to, or
valid and enforceable leasehold estates in, all items of real and personal
property referred to in the Prospectus as owned or leased by the Company or
any of the Entities, in each case free and clear of all pledges, liens,
encumbrances, claims, security interests and defects, other than those
referred to in the Prospectus or which are not material in amount;
(l) The Company and the Entities have filed all Federal, State, local
and foreign income tax returns which have been required to be filed, or
appropriate extensions for such filings have been obtained as required by
law, and all Federal, State, local and foreign taxes of the Company and the
Entities have been paid except such taxes as are not yet due or are being
contested in good faith;
(m) The Company and each of the Entities hold all material licenses,
certificates and permits from governmental authorities which are necessary
to the conduct of their respective businesses; and neither the Company nor
any of the Entities has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of
the Company;
(n) Grant Thornton LLP, who have certified the consolidated financial
statements filed with the Commission as part of, or incorporated by
reference in, the Registration Statement and Prospectus, are independent
public accountants as required by the Act and the rules and regulations of
the Commission promulgated thereunder;
(o) The conditions for use of registration statements on Form S-3 set
forth in the General Instructions on Form S-3 have been satisfied and the
Company is entitled to use such form for the transaction contemplated
herein;
(p) Although the Company is aware of the presence of hazardous
substances, hazardous materials, toxic substances or waste materials
("Hazardous Materials") on certain of its properties, nothing has come to
the attention of the Company which, at this time, would lead the Company to
believe that the presence of such Hazardous Materials, when considered in
the aggregate, would materially adversely affect the financial condition of
the Company. In connection with the construction on or operation and use of
the properties owned or leased by the Company or the Entities, the Company
represents that, as of the date of this Agreement, it has no knowledge of
any material failure by the Company or the Entities to comply with all
applicable local, state and
6
federal environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials; and
(q) With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim, the Company has
met the requirements for qualification as a real estate investment trust
under Sections 856 through 860 of the Internal Revenue Code of 1986, as
amended (the "Code"), and the Company's present and contemplated
operations, assets and income continue to meet such requirements; and the
Company is neither an "investment company" nor a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940, as amended.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of
such Designated Shares, the several Underwriters propose to offer such
Designated Shares for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
4. Certificates for the Designated Shares to be purchased by each
Underwriter pursuant to the Pricing Agreement relating thereto, in definitive
form and in such authorized denominations and registered in such names as the
Representatives may request upon at least twenty-four hours' prior notice to the
Company, shall be delivered by or on behalf of the Company to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by certified or
official bank check or checks, payable to the order of the Company in the funds
specified in such Pricing Agreement, all at the place and time and date
specified in such Pricing Agreement or at such other place and time and date as
the Representatives and the Company may agree upon in writing, such time and
date being herein called the "Time of Delivery" for such Shares.
5. The Company agrees with each of the Underwriters of any Designated
Shares:
(a) If the Company does not elect to rely on Rule 434 under the Act,
immediately following execution and delivery of the applicable Pricing
Agreement, to prepare the Prospectus as amended and supplemented in
relation to the applicable Designated Shares in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the business
day following the execution and delivery of the Pricing Agreement relating
to the applicable Designated Shares or, if applicable, such earlier time as
may be required by Rule 424(b), or if the Company elects to rely on Rule
434 under the Act, immediately following execution and delivery of the
applicable Pricing Agreement, to prepare an abbreviated term sheet relating
to the Designated Shares in a form approved by the Representatives that
complies with the requirements of Rule 434 under the Act and to file such
form of Rule 434 Prospectus complying with Rule 434(c)(2) of the Act
pursuant to Rule 424(b) under the Act not later than the Commission's close
of business on the business day following the execution and delivery of the
Pricing Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to make no
further amendment or any supplement to the
7
Registration Statement or Prospectus as amended or supplemented after the
date of the Pricing Agreement relating to such Shares and prior to the Time
of Delivery for such Shares which shall be reasonably disapproved by the
Representatives for such Shares promptly after reasonable notice thereof;
to advise the Representatives promptly of any such amendment or supplement
after such Time of Delivery and furnish the Representatives with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of such Shares, and during such same period to
advise the Representatives, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Shares, of the suspension of the
qualification of such Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Shares
or suspending any such qualification, to use promptly its best efforts to
obtain its withdrawal;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of such Shares,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction;
(c) Prior to 10:00 a.m. New York City time, on the New York business
day next succeeding the date of the applicable Pricing Agreement and from
time to time, to furnish the Underwriters with copies of the Prospectus in
New York City as amended or supplemented in such quantities as the
Representatives may reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or sale
of the Shares and if at such time any event shall have occurred as a result
of which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
8
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)),
an earnings statement of the Company (which need not be audited) complying
with Section 11(a) of the Act and the rules and regulations of the
Commission thereunder (including at the option of the Company Rule 158);
(e) During the period beginning from the date of the Pricing Agreement
for such Designated Shares and continuing to and including the earlier of
(i) the termination of trading restrictions for such Designated Shares, as
notified to the Company by the Representatives and (ii) the Time of
Delivery for such Designated Shares, not to offer, sell, contract to sell
or otherwise issue any shares of capital stock of the Company which are
substantially similar to such Designated Shares, without the prior written
consent of the Representatives;
(f) To use the net proceeds received by it from the sale of the Shares
in the manner specified in the Prospectus under the caption "Use of
Proceeds"; and
(g) To elect to qualify as a "real estate investment trust" under the
Code, and to use its best efforts to continue to meet the requirements to
qualify as a "real estate investment trust".
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
(including each abbreviated term sheet delivered by the Company pursuant to Rule
434 under the Act) and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any blue sky and
legal investment surveys and any other documents in connection with the
offering, purchase, sale and delivery of the Shares; (iii) all expenses in
connection with the qualification of the Shares for offering and sale under
state securities laws as provided in Section 5(b) hereof, including the fees and
disbursements of counsel for the Underwriters in connection with such
qualification and in connection with the blue sky and legal investment surveys;
(iv) any filing fees incident to any required review by the National Association
of Securities Dealers, Inc. of the terms of the sale of the Shares; (v) the cost
of preparing certificates for the Shares; (vi) the costs and charges of any
transfer agent or registrar or dividend disbursing agent; and (vii) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, Section 8 and
Section 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Shares by them, and any advertising expenses connected with any offers
they may make.
7. The obligations of the Underwriters of any Designated Shares under the
Pricing Agreement relating to such Designated Shares shall be subject, in the
discretion of the
9
Representatives, to the condition that all representations and warranties and
other statements of the Company in or incorporated by reference in the Pricing
Agreement relating to such Designated Shares are, at and as of the Time of
Delivery for such Designated Shares, true and correct, to the condition that the
Company shall have performed all of its obligations hereunder theretofore to be
performed, and to the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Shares shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for
such filing by the rules and regulations under the Act and in accordance
with Section 5(a) hereof; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceeding for that purpose shall have been initiated or threatened by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to the Representatives' reasonable
satisfaction;
(b) Brown & Wood llp, counsel for the Underwriters, shall have
furnished to the Representatives such opinion or opinions, dated the Time
of Delivery for such Designated Shares, with respect to the organization of
the Company, the validity of the Designated Shares being delivered at such
Time of Delivery, the Registration Statement, the Prospectus as amended or
supplemented and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(c) Kirkpatrick & Lockhart LLP, counsel for the Company, shall have
furnished to the Representatives their written opinion, dated the Time of
Delivery for such Designated Shares, in form and substance satisfactory to
the Representatives, to the effect that:
(i) The Company has been duly organized and is validly
existing as a business trust in good standing under the laws of the
District of Columbia, with full power and authority to own its
properties and conduct its business as described in the Prospectus; the
Entities have been duly organized and are validly existing as
corporations, limited partnerships, general partnerships, limited
liability corporations, or joint ventures as the case may be, in good
standing under the laws of the jurisdictions of their organization
(except for joint ventures, which have no good standing certificate
requirements); the Entities have power and authority to own their
properties and conduct their businesses as described in the Prospectus;
to the best of such counsel's knowledge, except as otherwise denoted in
Annex
10
III hereto, all of the equity interests in the Entities are owned by the
Company and, to the best of such counsel's knowledge, are owned free and
clear of all pledges, liens, encumbrances, claims and security
interests, and to the best of such counsel's knowledge, no options,
warrants or other rights to convert any obligations into partnership or
other ownership interests in the Entities are outstanding; all of the
issued and outstanding stock of each Entity that is a corporation has
been duly authorized and validly issued, is fully paid and non-
assessable and is owned by the Company, except as otherwise denoted in
Annex III hereto, free and clear of all pledges, liens, encumbrances,
claims and security interests; the Company and the Entities are duly
qualified to transact business in all jurisdictions in which the Company
and the Entities are, to such counsel's knowledge, transacting business
and in which the conduct of their respective businesses requires such
qualification, except where the failure to so qualify would not have a
material adverse effect on the condition, financial or otherwise, or on
the earnings, business affairs or business prospects of the Company and
the Entities considered as one enterprise; and the conditions for use of
a registration statement on Form S-3 have been satisfied; one of the
Company's subsidiaries, FRIT-WM, Inc., has been organized as a Maryland
corporation, and has conducted no business since the date of its
organization and has no assets as of the date hereof;
(ii) The Company has an authorized capitalization as set forth
in the Prospectus as amended or supplemented and all of the issued
shares of capital stock of the Company (including the Designated Shares
being delivered at such Time of Delivery) have been duly and validly
authorized and issued and are fully paid and, except as set forth in the
Prospectus under the captions "Description of Common Shares--Shareholder
Liability" and "Description of Preferred Shares--Shareholder Liability",
non-assessable;
(iii) To the best of such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or governmental
proceedings pending to which the Company or any of the Entities is a
party or of which any property of the Company or any of the Entities is
the subject which, if determined adversely to the Company or any of the
Entities, would individually or in the aggregate have a material adverse
effect on the consolidated financial position, shareholders' equity or
results of operations of the Company and the Entities; and, to the best
of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(iv) This Agreement and the Pricing Agreement with respect to
the Designated Shares have been duly authorized, executed and delivered
by the Company;
(v) The Designated Shares conform to the description thereof
in the Prospectus as amended or supplemented;
(vi) The issue and sale of the Designated Shares being
delivered at such Time of Delivery and the compliance by the Company
with all of the provisions of this Agreement and the Pricing Agreement
with respect to the Designated Shares and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which the Company or any of the Entities is a party or by which the
Company or any of the Entities is bound or to which any of the property
or assets
11
of the Company or any of the Entities is subject, nor will such actions
result in any violation of the provisions of the Declaration of Trust or
By-laws of the Company or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or body having
jurisdiction over the Company or any of the Entities or any of their
respective properties;
(vii) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is
required for the issue and sale of the Designated Shares being delivered
at such Time of Delivery or the consummation by the Company of the
transactions contemplated by this Agreement or the Pricing Agreement,
except such as have been obtained under the Act and except for the
listing of the Designated Shares on the New York Stock Exchange, Inc. or
other stock exchanges and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Shares by the Underwriters;
(viii) The statements under caption "Item 3. Legal Proceedings"
in the Company's most recent Form 10-K filed with the Commission and
under the captions "Remuneration of Executive Officers and Trustees" and
"Certain Transactions" in the Company's most recent Proxy Statement
filed with the Commission, insofar as such statements constitute a
summary of documents referred to therein or matters of law, are accurate
summaries and fairly and correctly present the information called for
with respect to such documents and matters;
(ix) The investments of the Company described in the
Prospectus are permitted investments under the Declaration of Trust;
(x) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material respects with
the requirements of the Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder; and they have no
reason to believe that any of such documents, when they became effective
or were so filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act, an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or, in the case of other documents which were
filed under the Act or the Exchange Act with the Commission, an untrue
statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such documents were so
filed, not misleading; and
12
(xi) The Registration Statement and the Prospectus as amended
or supplemented and any further amendments and supplements thereto made
by the Company prior to the Time of Delivery for the Designated Shares
(other than the financial statements and related schedules therein, as
to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the rules and
regulations thereunder; if applicable, the Rule 434 Prospectus complies
as to form in all material respects with the requirements of Rule 434
under the Act; they have no reason to believe that, as of its effective
date, the Registration Statement or any further amendment thereto made
by the Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of
its date, the Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Company prior to the Time of
Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to state a material fact
necessary to make the statements therein, in light of the circumstances
in which they were made, not misleading or that, as of the Time of
Delivery, either the Registration Statement or the Prospectus as amended
or supplemented or any further amendment or supplement thereto made by
the Company prior to the Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary to make the statements therein,
in light of the circumstances in which they were made, not misleading;
and they do not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended
or supplemented or required to be described in the Registration
Statement or the Prospectus as amended or supplemented which are not
filed or incorporated by reference or described as required.
In delivering such opinion, counsel shall be entitled to rely in respect
of the opinion in this clause upon opinions of local counsel and in respect of
certain matters of fact upon certificates of officers of the Company, provided
that such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates.
(d) In addition to the above opinion, the Representatives shall have
received the opinion or opinions of Goodwin, Procter & Hoar LLP, Special
Tax Counsel to the Company, or other counsel to the Company, dated the Time
of Delivery for such Designated Shares, in form and substance satisfactory
to the Representatives, to the effect that (1) the Company has qualified to
be taxed as a real estate investment trust pursuant to Sections 856-860 of
the Code, for the fiscal years ended December 31, 1987 through the date of
its most recent fiscal year ended and that the form of organization of the
Company and its current operations, assets and contemplated income are such
that the Company is
13
in a position under present law to so qualify for the current taxable year
and should so qualify for such taxable year provided that the Company
continues to meet the asset composition, source of income, shareholder
diversification, distribution and other requirements of the Code necessary
for the Company to qualify as a real estate investment trust and (2) such
Special Tax Counsel concurs with the accuracy of the legal statements set
forth in "Description of Common Shares--Restriction on Ownership" and
"Federal Income Tax Considerations" in the Prospectus.
(e) On the date of the Pricing Agreement for such Designated Shares and
at the Time of Delivery for such Designated Shares, the independent
accountants of the Company who have certified the financial statements of
the Company included or incorporated by reference in the Registration
Statement shall have furnished to the Representatives a letter, dated the
effective date of the Registration Statement or the date of the most recent
report filed with the Commission containing financial statements and
incorporated by reference in the Registration Statement, if the date of
such report is later than such effective date, and a letter dated such Time
of Delivery, respectively, to the effect set forth in Annex II hereto, and
with respect to such letter dated such Time of Delivery, as to such other
matters as the Representatives may reasonably request and in form and
substance satisfactory to the Representatives;
(f) (i) Neither the Company nor any of the Entities shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended or
supplemented any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or
from any labor dispute or court or governmental action, order or decree,
otherwise than as set forth or contemplated in the Prospectus as amended or
supplemented, and (ii) since the respective dates as of which information
is given in the Prospectus as amended or supplemented there shall not have
been any change in the capital stock or long-term debt of the Company or
any of the Entities or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the
Company and the Subsidiaries and the Entities, otherwise than as set forth
or contemplated in the Prospectus as amended or supplemented, the effect of
which, in any such case described in Clause (i) or (ii), is in the judgment
of the Representatives so material and adverse as to make it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the
Prospectus as amended or supplemented;
(g) On or after the date of the Pricing Agreement relating to the
Designated Shares (i) no downgrading shall have occurred in the rating
accorded the Company's debt securities or preferred shares by any
"nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act and
(ii) no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of
any of the Company's debt securities or preferred shares;
14
(h) On or after the date of the Pricing Agreement relating to the
Designated Shares there shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the
NYSE; (ii) a suspension or material limitation in trading in the Company's
securities on the NYSE; (iii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York State
authorities; or (iv) the outbreak or escalation of hostilities involving
the United States or the declaration by the United States of a national
emergency or war if the effect of any such event specified in this Clause
(iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the
Prospectus as amended or supplemented;
(i) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York
business day next succeeding the date of the applicable Pricing Agreement;
and
(j) The Company shall have furnished or caused to be furnished to the
Representatives at the Time of Delivery for the Designated Shares a
certificate or certificates of officers of the Company satisfactory to the
Representatives as to the accuracy of the representations and warranties of
the Company herein at and as of such Time of Delivery, as to the
performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (f) of this Section and as to such other matters as
the Representatives may reasonably request.
8. The Company will indemnify and hold harmless each Underwriter against
any losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto (including the information deemed to be a part of the
Registration Statement pursuant to Rule 434 under the Act, if applicable), or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that the Company shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter of Designated Shares
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Shares.
15
(a) Each Underwriter will indemnify and hold harmless the Company
against any losses, claims, damages or liabilities to which the Company may
become subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon an untrue statement or alleged untrue statement of a material
fact contained in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any
amendment or supplement thereto (including the information deemed to be a
part of the Registration Statement pursuant to Rule 434 under the Act, if
applicable), or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any such amendment or
supplement in reliance upon and in conformity with written information
furnished to the Company by such Underwriter through the Representatives
expressly for use therein; and will reimburse the Company for any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(b) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may
have to any indemnified party otherwise than under such subsection. In case
any such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified,
to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to
such indemnified party under such subsection for any legal expenses of
other counsel (unless separate counsel is required due to conflict of
interest) or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than
reasonable costs of investigation.
(c) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the
one hand and the Underwriters of the Designated Shares
16
on the other from the offering of the Designated Shares to which such loss,
claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is
not permitted by applicable law or if the indemnified party failed to give
the notice required under subsection (c) above, then each indemnifying
party shall contribute to such amount paid or payable by such indemnified
party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one
hand and the Underwriters of the Designated Shares on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Company on the one hand and such Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Company bear to the
total underwriting discounts and commissions received by such Underwriters.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or such Underwriters on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to above in
this subsection (d). The amount paid or payable by an indemnified party as
a result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this subsection (d) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of
Designated Shares in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to
such Shares and not joint.
(d) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter within the meaning of the Act; and the obligations
of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and trustee of
the Company and to each person, if any, who controls the Company within the
meaning of the Act.
17
9. If any Underwriter shall default in its obligation to purchase the
Designated Shares which it has agreed to purchase under the Pricing Agreement
relating to such Designated Shares, the Representatives may in their discretion
arrange for themselves or another party or other parties to purchase such
Designated Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter the Representatives do not arrange for the
purchase of such Designated Shares, then the Company shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Designated
Shares on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Company that they have so arranged for
the purchase of such Designated Shares, or the Company notifies the
Representatives that it has so arranged for the purchase of such Designated
Shares, the Representatives or the Company shall have the right to postpone the
time of Delivery for such Designated Shares for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in the opinion of the Representatives may thereby be made necessary. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to the Pricing Agreement with respect to such Designated Shares.
(a) If, after giving effect to any arrangements for the purchase of the
Designated Shares of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate number of such Designated Shares which remains unpurchased does
not exceed one-tenth of the aggregate number of the Designated Shares, then
the Company shall have the right to require each non-defaulting Underwriter
to purchase the number of Designated Shares which such Underwriter agreed
to purchase under the Pricing Agreement relating to such Designated Shares
and, in addition, to require each non-defaulting Underwriter to purchase
its pro rata share (based on the number of Designated Shares which such
Underwriter agreed to purchase under such Pricing Agreement) of the
Designated Shares of such defaulting Underwriter or Underwriters for which
such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(b) If, after giving effect to any arrangements for the purchase of the
Designated Shares of a defaulting Underwriter or Underwriters by the
Representatives and the Company as provided in subsection (a) above, the
aggregate number of Designated Shares which remains unpurchased exceeds
one-tenth of the aggregate number of the Designated Shares, as referred to
in subsection (b) above, or if the Company shall not exercise the right
described in subsection (b) above to require non-defaulting Underwriters to
purchase Designated Shares of a defaulting Underwriter or Underwriters,
then the Pricing Agreement relating to such Designated Shares shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter or the Company, except for the expenses to be borne by the
Company and the Underwriters as provided in Section 6 hereof and the
indemnity and contribution agreements in Section
18
8 hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Underwriters, as set forth
in this Agreement or made by or on behalf of them, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company,
or any officer or trustee or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If any Pricing Agreement shall be terminated pursuant to Section 9
hereof, the Company shall not then be under any liability to any Underwriter
with respect to the Designated Shares covered by such Pricing Agreement except
as provided in Section 6 and Section 8 hereof. If this Agreement shall be
terminated as a result of any of the conditions set forth in Section 7 (other
than Section 7(h)(i), (iii) or (iv)) not being satisfied the Company will
reimburse the Underwriters through the Representatives for all out-of-pocket
expenses approved in writing by the Representatives, including fees and
disbursements to counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Shares, but
the Company shall then be under no further liability to any Underwriter with
respect to such Designated Shares except as provided in Section 6 and Section 8
hereof.
12. In all dealings hereunder, the Representatives of the Underwriters of
Designated Shares shall act on behalf of each of such Underwriters, and the
parties hereto shall be entitled to act and rely upon any statement, request,
notice or agreement on behalf of any Underwriter made or given by such
Representatives jointly or by such of the Representatives, if any, as may be
designated for such purpose in the Pricing Agreement.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Company shall be delivered or sent by mail,
telex or facsimile transmission to the address of the Company set forth in the
Registration Statement: Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Company and, to the extent
provided in Section 8 and Section 10 hereof, the officers and trustees of the
Company and each person who controls the Company or any Underwriter, and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement or any such Pricing Agreement. No purchaser of any of the Shares from
any Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
19
14. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
Federal Realty Investment Trust is a business trust organized under
District of Columbia law. Under the terms of Article VIII of the Company's
Third Amended and Restated Declaration of Trust, all persons shall look solely
to the Company's property, real, personal or otherwise, tangible or intangible,
for the payment of any claim under or for the performance of this Agreement, and
no trustee, officer, employee or agent of the Company shall be subject to any
personal liability whatsoever, in tort, contract or otherwise in connection with
the obligations of the Company hereunder.
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof.
Very truly yours,
FEDERAL REALTY INVESTMENT TRUST
By:
----------------------------------------
Title:
Accepted as of the date hereof:
[NAME OF UNDERWRITER]
By:
--------------------------------
Title:
20
ANNEX I
Pricing Agreement
-----------------
[NAME OF UNDERWRITER]
______________, 199_
Dear Sirs:
Federal Realty Investment Trust, a business trust organized under the laws
of the District of Columbia (the "Company"), proposes, subject to the terms and
conditions stated herein and in the Underwriting Agreement, dated __________,
199_ (the "Underwriting Agreement"), between the Company on the one hand and
_________________ (the "Underwriter") on the other hand, to issue and sell to
the Underwriter the Shares specified in Schedules I and II hereto (the
"Designated Shares"). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set forth
therein shall be deemed to have been made at and as of the date of this Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Shares which are the
subject of this Pricing Agreement. Each reference to the Representatives in the
provisions of the Underwriting Agreement so incorporated by reference shall be
deemed to refer to you. Unless otherwise defined herein, terms defined in the
Underwriting Agreement are used herein as therein defined.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, the Company agrees to
issue and sell to the Underwriter, and the Underwriter agrees to purchase from
the Company, at the time and place and at the purchase price to the Underwriter
set forth in Schedule II hereto, the number of Designated Shares set forth
opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign and
return to us four counterparts hereof, and upon acceptance hereof by you this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding agreement
between the Underwriter and the Company.
Very truly yours,
FEDERAL REALTY INVESTMENT TRUST
By:
---------------------------------------
Title:
Accepted as of the date hereof:
[NAME OF UNDERWRITER]
By:
-------------------------------
Name:
Title:
2
SCHEDULE I
Number of
Designated Shares
Underwriter to be Purchased
--------------- -------------------
--------- ---------
-------
Total $
SCHEDULE II
Title of Designated Shares:
Common Shares of Beneficial Interest
Number of Designated Shares:
________ Shares
Overallotment option:
_________ Option Shares; exercisable for 30 days from the date hereof.
Initial Offering Price to Public:
$________ per Share
Purchase Price for Designated Shares:
___________________________
Purchase Price for Option Shares:
Purchase price per Option Share will be $________ per Option Share for
certain purchasers and $________ for other purchasers, as advised by the
Underwriter, in each case less an amount equal to any dividend payable on
the Designated Shares and not payable on the Option Shares
Specified Funds for Payment of Purchase Price:
Same-day funds
Time of Delivery:
10:00 a.m., New York City time, on _____________
Closing Location:
Brown & Wood llp, One World Trade Center
New York, New York 10048
Name and address of Underwriter:
__________________
Address for Notices, etc.:
[NAME AND ADDRESS OF UNDERWRITER]
Federal Realty Investment Trust, 1626 East Jefferson Street, Rockville,
Maryland 20852, Attention: Steven J. Guttman
Other Terms:
None
2
ANNEX II
Pursuant to Section 7(e) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriter to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules audited (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder; and, if applicable,
they have made a review in accordance with standards established by the
American Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro forma financial
information, financial forecasts and/or condensed financial statements
derived from audited financial statements of the Company for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representatives of the Underwriters (the
"Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which are attached hereto; and on the basis of specified procedures
including inquiries of officials of the Company who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form
10-K for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated financial
statements for five such fiscal years which were included or incorporated
by reference in the Company's Annual Reports on Form 10-K for such fiscal
years;
(v) They have compared the information in the Prospectus under selected
captions with the disclosure requirements of Regulation S-K and on the
basis of limited procedures specified in such letter nothing came to their
attention as a result to the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an examination
in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information
referred to below, a reading of the latest available interim financial
statements of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries
and procedures as may be specified in such letter, nothing came to their
attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements
of cash flows included in the Prospectus and/or included or
incorporated by reference in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus do not
comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act and the related
published rules and regulations or (ii) any material
modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included in the
Prospectus or included in the Company's Quarterly Reports on
Form 10-Q incorporated by reference in the Prospectus for them
to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial
statements from which such data and items were derived, and any
such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual
Report on Form 10-K for the most recent fiscal year;
2
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included
in the Prospectus and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis
for the audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the
most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
(E) as of a specified date not more than three days prior to
the date of such letter, there have been any changes in the
consolidated capital stock d(other than issuances of capital
stock upon exercise of options and stock appreciation rights,
upon earn-outs of performance shares and upon conversions of
convertible securities, in each case which were outstanding on
the date of the latest balance sheet included or incorporated by
reference in the Prospectus) or any increase in the consolidated
long-term debt of the Company, or any decreases in consolidated
net current assets or net assets or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference
in the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in Clause (E) there
were any decreases in revenue, or in income before gain on sale
of real estate and extraordinary items or the total or per share
amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by
the Representatives, in each case as compared with the
comparable period of the preceding year and with any other
period of corresponding length specified by the Representatives,
except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are
described in such letter; and
(vii) In addition to the audit referred to in their reports included
or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an
3
audit in accordance with generally accepted auditing standards, with
respect to certain amounts, percentages and financial information
specified by the Representatives which are derived from the general
accounting records of the Company and its subsidiaries, which appear in
the Prospectus (excluding documents incorporated by reference), or in
Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by
reference in the Prospectus specified by the Representatives, and have
compared certain of such amounts, percentages and financial information
with the accounting records of the Company and its subsidiaries and have
found them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement for purposes of such letter and to the
Prospectus as amended or supplemented (including the documents incorporated by
reference therein) in relation to the applicable Designated Shares for purposes
of the letter delivered at the Time of Delivery for such Designated Shares.
4
ANNEX III
Corporations (including Subsidiaries), Partnerships, Limited Liability Companies
- --------------------------------------------------------------------------------
and Joint Venture of Federal Realty Investment Trust ("FRIT")
-------------------------------------------------------------
FRIT
----
Entity Type Ownership Interest
- ----------- ------------------
Subsidiaries:
FRIT-WM, Inc. 100%
FR Acquisitions Holding Co., Inc. 100%
Street Retail Inc. ("SRI") 100%
Subsidiary of Street Retail, Inc.
Street Retail West GP, Inc. 100%
FR Pike 7 Limited Partnership 99%
FRLP, Inc. 100%
Federal Realty Partners, Inc. 100%
Federal Realty Partners, L.P. 100%
SRI Holding Company, Inc. SRI owns 100%
of voting stock
SRI Texas, Inc. 100%
Street Retail San Antonio, L.P. 100%
TRS Development, Inc. 100%
Terranomics Retail Services, Inc. FRIT owns 100%
of voting stock
Corporations, Partnerships and Limited Liability Companies:
Andorra Associates 99% FRIT
1% FRA
Berman Enterprises II Limited Partnership 99% FRIT
1% FRA
FR Associates Limited Partnership ("FRA") 99%
FRIT Escondido Promenade, LLC 70%
FRIT San Jose Town and Country Village LLC 75%
Governor Plaza Associates 99% FRIT
1% FRA
Loehmann's Plaza Limited Partnership 1%
San Jose Residential, Inc. FRIT San Jose Town
and Country Village LLC owns 100%
of non-voting stock
SRI Old Town, LLC 100%
SRI San Antonio, Inc. 100%
Shopping Center Associates Limited Partnership 99% FRIT
1% FRA
Street Retail Forest Hills I, LLC 90%
Street Retail Forest Hills II, LLC 90%
Street Retail Tempe I, LLC 90%
Street Retail West I, L.P. (indirect partnership) 90%
Street Retail West II, L.P. (indirect partnership) 90%
Street Retail West 3, L.P. (indirect partnership) 90%
Street Retail West 4, L.P. (indirect partnership) 90%
Virginia Real Estate Investors Limited Partnership 99%
Joint Venture:
Congressional Plaza Associates 55.7%
EXHIBIT 4(a)
_____________________________________________________________________________
FEDERAL REALTY INVESTMENT TRUST
TO
FIRST UNION NATIONAL BANK
Trustee
_____________________________
Indenture
Dated as of September 1, 1998
_____________________________
Senior Debt Securities
_____________________________________________________________________________
TABLE OF CONTENTS
Page
PARTIES................................................................... 1
RECITALS.................................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions............................................. 1
Act............................................................. 2
Additional Amounts.............................................. 2
Affiliate....................................................... 2
Authenticating Agent............................................ 2
Authorized Newspaper............................................ 2
Bankruptcy Law.................................................. 2
Bearer Security................................................. 2
Board of Trustees............................................... 3
Board Resolution................................................ 3
Business Day.................................................... 3
CEDEL........................................................... 3
Commission...................................................... 3
Common Shares................................................... 3
Company......................................................... 3
Company Request and Company Order............................... 3
Conversion Event................................................ 3
Corporate Trust Office.......................................... 4
Corporation..................................................... 4
Coupon.......................................................... 4
Custodian....................................................... 4
Defaulted Interest.............................................. 4
Dollar or $..................................................... 4
ECU............................................................. 4
Euroclear....................................................... 4
European Communities............................................ 4
European Monetary System........................................ 4
Event of Default................................................ 4
Foreign Currency................................................ 4
GAAP............................................................ 4
Government Obligations.......................................... 4
Holder.......................................................... 5
Indenture....................................................... 5
Indexed Security................................................ 5
Interest........................................................ 6
Interest Payment Date........................................... 6
Maturity........................................................ 6
Officers' Certificate........................................... 6
Opinion of Counsel.............................................. 6
Original Issue Discount Security................................ 6
Outstanding..................................................... 6
Paying Agent.................................................... 8
i
Person...................................................... 8
Place of Payment............................................ 8
Predecessor Security........................................ 8
Preferred Shares............................................ 8
Redemption Date............................................. 8
Redemption Price............................................ 8
Registered Security......................................... 8
Regular Record Date......................................... 8
Repayment Date.............................................. 9
Repayment Price............................................. 9
Responsible Officer......................................... 9
Security.................................................... 9
Security Register and Security Registrar.................... 9
Significant Subsidiary...................................... 9
Special Record Date......................................... 9
Stated Maturity............................................. 9
Subsidiary.................................................. 10
Trust Indenture Act or TIA.................................. 10
Trustee..................................................... 10
United States............................................... 10
United States person........................................ 10
Yield to Maturity........................................... 10
SECTION 102. Compliance Certificates and Opinions.............. 10
SECTION 103. Form of Documents Delivered to Trustee............ 11
SECTION 104. Acts of Holders................................... 12
SECTION 105. Notices, etc., to Trustee and Company............. 14
SECTION 106. Notice to Holders; Waiver......................... 14
SECTION 107. Effect of Headings and Table of Contents.......... 15
SECTION 108. Successors and Assigns............................ 15
SECTION 109. Separability Clause............................... 15
SECTION 110. Benefits of Indenture............................. 16
SECTION 111. Governing Law..................................... 16
SECTION 112. Legal Holidays.................................... 16
SECTION 113. Immunity of Shareholders, Trustees, Officers and
Agents of the Company............................. 16
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities............................... 17
SECTION 202. Form of Trustee's Certificate of Authentication... 17
SECTION 203. Securities Issuable in Global Form................ 17
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.............. 18
SECTION 302. Denominations..................................... 23
SECTION 303. Execution, Authentication, Delivery and Dating.... 23
SECTION 304. Temporary Securities............................... 25
ii
SECTION 305. Registration, Registration of Transfer and
Exchange........................................... 28
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities... 32
SECTION 307. Payment of Interest; Interest Rights Preserved..... 33
SECTION 308. Persons Deemed Owners.............................. 36
SECTION 309. Cancellation....................................... 37
SECTION 310. Computation of Interest............................ 37
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture............ 37
SECTION 402. Application of Trust Funds......................... 39
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.................................. 39
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.......................................... 41
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee............................. 42
SECTION 504. Trustee May File Proofs of Claim................... 43
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities or Coupons.............................. 44
SECTION 506. Application of Money Collected..................... 44
SECTION 507. Limitation on Suits................................ 45
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium, if any, Interest and Additional Amounts... 45
SECTION 509. Restoration of Rights and Remedies................. 46
SECTION 510. Rights and Remedies Cumulative..................... 46
SECTION 511. Delay or Omission Not Waiver....................... 46
SECTION 512. Control by Holders of Securities................... 46
SECTION 513. Waiver of Past Defaults............................ 47
SECTION 514. Waiver of Usury, Stay or Extension Laws............ 47
SECTION 515. Undertaking for Costs.............................. 47
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults................................. 48
SECTION 602. Certain Rights of Trustee.......................... 48
SECTION 603. Not Responsible for Recitals or Issuance of
Securities......................................... 50
SECTION 604. May Hold Securities................................ 50
SECTION 605. Money Held in Trust................................ 50
SECTION 606. Compensation and Reimbursement..................... 50
SECTION 607. Corporate Trustee Required; Eligibility;
iii
Conflicting Interests................................ 51
SECTION 608. Resignation and Removal; Appointment of Successor.... 51
SECTION 609. Acceptance of Appointment by Successor............... 53
SECTION 610. Merger, Conversion, Consolidation or Succession to
Business............................................. 54
SECTION 611. Appointment of Authenticating Agent.................. 55
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders......... 56
SECTION 702. Reports by Trustee................................... 57
SECTION 703. Reports by Company................................... 57
SECTION 704. Company to Furnish Trustee Names and Addresses of
Holders.............................................. 57
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales,
Leases and Conveyances Permitted Subject to Certain
Conditions........................................... 58
SECTION 802. Rights and Duties of Successor Corporation........... 58
SECTION 803. Officers' Certificate and Opinion of Counsel......... 59
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders... 59
SECTION 902. Supplemental Indentures with Consent of Holders...... 61
SECTION 903. Execution of Supplemental Indentures................. 62
SECTION 904. Effect of Supplemental Indentures.................... 62
SECTION 905. Conformity with Trust Indenture Act.................. 63
SECTION 906. Reference in Securities to Supplemental Indentures... 63
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, Interest and
Additional Amounts................................... 63
SECTION 1002. Maintenance of Office or Agency...................... 63
SECTION 1003. Money for Securities Payments to Be Held in Trust.... 65
iv
SECTION 1004. Existence................................ 67
SECTION 1005. Maintenance of Properties................ 67
SECTION 1006. Insurance................................ 67
SECTION 1007. Payment of Taxes and Other Claims........ 67
SECTION 1008. Provision of Financial Information....... 68
SECTION 1009. Statement as to Compliance............... 68
SECTION 1010. Additional Amounts....................... 68
SECTION 1011. Waiver of Certain Covenants.............. 69
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article................. 70
SECTION 1102. Election to Redeem; Notice to Trustee.... 70
SECTION 1103. Selection by Trustee of Securities to Be
Redeemed................................. 70
SECTION 1104. Notice of Redemption..................... 71
SECTION 1105. Deposit of Redemption Price.............. 72
SECTION 1106. Securities Payable on Redemption Date.... 72
SECTION 1107. Securities Redeemed in Part.............. 73
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article................. 74
SECTION 1202. Satisfaction of Sinking Fund Payments
with Securities.......................... 74
SECTION 1203. Redemption of Securities for Sinking
Fund..................................... 74
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article................. 75
SECTION 1302. Repayment of Securities.................. 75
SECTION 1303. Exercise of Option....................... 76
SECTION 1304. When Securities Presented for Repayment
Become Due and Payable................... 76
SECTION 1305. Securities Repaid in Part................ 78
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article; Company's
Option to Effect Defeasance or Covenant
Defeasance............................... 78
SECTION 1402. Defeasance and Discharge................. 78
SECTION 1403. Covenant Defeasance...................... 79
SECTION 1404. Conditions to Defeasance or Covenant
Defeasance............................... 79
v
SECTION 1405. Deposited Money and Government
Obligations to Be Held in Trust; Other
Miscellaneous Provisions................. 81
ARTICLE FIFTEEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 1501. Purposes for Which Meetings May Be
Called................................... 83
SECTION 1502. Call, Notice and Place of Meetings....... 83
SECTION 1503. Persons Entitled to Vote at Meetings..... 83
SECTION 1504. Quorum; Action........................... 83
SECTION 1505. Determination of Voting Rights; Conduct
and Adjournment of Meetings.............. 85
SECTION 1506. Counting Votes and Recording Action of
Meetings................................. 86
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
EXHIBIT A - FORMS OF CERTIFICATION
vi
FEDERAL REALTY INVESTMENT TRUST
Reconciliation and tie between Trust Indenture Act of 1939
(the "1939 Act") and Indenture, dated as of September 1, 1998
Trust Indenture Act Section Indenture Section
(s)310(a)(1)....................................... 607
(a)(2)....................................... 607
(b).......................................... 607, 608
(s)312(a).......................................... 704
(s)312(c).......................................... 701
(s)313(a).......................................... 702
(c).......................................... 702
(s)314(a).......................................... 703
(a)(4)....................................... 1009
(c)(1)....................................... 102
(c)(2)....................................... 102
(e).......................................... 102
(s)315(b).......................................... 601
(s)316(a) (last sentence).......................... 101 ("Outstanding")
(a)(1)(A).................................... 512
(a)(1)(B).................................... 513
(b).......................................... 508
(s)317(a)(1)....................................... 503
(a)(2)....................................... 504
(s)318(a).......................................... 111
(c).......................................... 111
______________________
NOTE: This reconciliation and tie shall not, for any purpose, be
deemed to be a part of the Indenture.
Attention should also be directed to Section 318 (c) of the 1939 Act,
which provides that the provisions of Sections 310 to and including 317 of the
1939 Act are a part of and govern every qualified indenture, whether or not
physically contained therein.
vii
INDENTURE, dated as of September 1, 1998, between FEDERAL REALTY
INVESTMENT TRUST, a business trust organized under the laws of the District of
Columbia (hereinafter called the "Company"), having its principal office at 1626
East Jefferson Street, Rockville, Maryland 20852 and First Union National Bank,
as Trustee hereunder (hereinafter called the "Trustee"), having its Corporate
Trust Office at 230 S. Tryon Street, Charlotte, North Carolina 28288-1179.
RECITALS OF THE COMPANY
The Company deems it necessary to issue from time to time for
its lawful purposes senior debt securities (hereinafter called the "Securities")
evidencing its unsecured and unsubordinated indebtedness, and has duly
authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, unlimited as to primcipal amount,
to bear interest at the rates or formulas, to mature at such times and to have
such other provisions as shall be fixed as hereinafter provided.
This Indenture is subject to the provisions of the Trust
Indenture Act of 1939, as amended ("TIA), that are deemed to be incorporated
into this Indenture and shall, to the extent applicable, be governed by such
provisions.
All things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the holders thereof ("Holders"), it is mutually covenanted and
agreed, for the equal and proportionate benefit of all Holders of the
Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article, and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the TIA, either
directly or by reference therein, have the meanings
1
assigned to them therein, and the terms "cash transaction" and "self-
liquidating paper", as used in TIA Section 311, shall have the meanings
assigned to them in the rules of the Commission adopted under the TIA;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified
---
in Section 104.
"Additional Amounts" means any additional amounts which are required
------------------
by a Security or by or pursuant to a Board Resolution, under circumstances
specified therein, to be paid by the Company in respect of certain taxes imposed
on certain Holders and which are owing to such Holders.
"Affiliate" of any specified Person means any other Person directly or
---------
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any authenticating agent appointed by the
--------------------
Trustee pursuant to Section 611.
"Authorized Newspaper" means a newspaper, printed in the English
--------------------
language or in an official language of the country of publication, customarily
published on each Business Day, whether or not published on Saturdays, Sundays
or holidays, and of general circulation in each place in connection with which
the term is used or in the financial community of each such place. Whenever
successive publications are required to be made in Authorized Newspapers, the
successive publications may be made in the same or in different Authorized
Newspapers in the same city meeting the foregoing requirements and in each case
on any Business Day.
"Bankruptcy Law" has the meaning specified in Section 501.
--------------
"Bearer Security" means any Security established pursuant to Section
---------------
201 which is payable to bearer.
2
"Board of Trustees" means the board of trustees of the Company, the
-----------------
executive committee or any committee of that board duly authorized to act
hereunder.
"Board Resolution" means a copy of a resolution certified by the
----------------
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Trustees and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of Payment or any
------------
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 301, any day, other than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions in that Place of Payment or
particular location are authorized or required by law, regulation or executive
order to close.
"CEDEL" means Centrale de Livraison de Valeurs Mobilieres, S.A., or
-----
its successor.
"Commission" means the Securities and Exchange Commission, as from
----------
time to time constituted, created under the Securities Exchange Act of 1934, or,
if at any time after execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Shares" means, with respect to any Person, capital stock
-------------
issued by such Person other than Preferred Stock.
"Company" means the Person named as the "Company" in the first
-------
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" and "Company Order" mean, respectively, a written
--------------- -------------
request or order signed in the name of the Company by one trustee and one
executive officer of the Company, and delivered to the Trustee.
"Conversion Event" means the cessation of use of (i) a Foreign
----------------
Currency both by the government of the country which issued such currency and
for the settlement of transactions by a central bank or other public
institutions of or within the international banking community, (ii) the ECU
both within the European Monetary System and for the settlement of transactions
by public institutions of or within the European Communities or (iii) any
currency unit (or composite currency) other than the ECU for the purposes for
which it, was established.
3
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 230 S. Tryon Street,
Charlotte, North Carolina 28288-1179.
"corporation" includes corporations, associations, partnerships,
companies and business trusts.
"coupon" means any interest coupon appertaining to a Bearer Security.
"Custodian" has the meaning specified in Section 501.
"Defaulted Interest" has the meaning specified in Section 307.
"Dollar" or "$" means a dollar or other equivalent unit in such coin or
currency of the United States of America as at the time shall be legal tender
for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
Office, or its successor as operator of the Euroclear System.
"European Communities" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"European Monetary System" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"Event of Default" has the meaning specified in Article Five.
"Foreign Currency" means any currency, currency unit or composite
currency, including, without limitation, the ECU issued by the government of one
or more countries other than the United States of America or by any recognized
confederation or association of such governments.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, as used in the United States applied on a consistent basis.
"Government Obligations" means securities which are (i) direct
obligations of the United States of America or the government which issued the
Foreign Currency in which the Securities of a par-
4
ticular series are payable, for the payment of which its full faith and credit
is pledged or (ii) obligations of a Person controlled or supervised by and
acting as an agency or instrumentality of the United States of America or such
government which issued the foreign currency in which the Securities of such
series are payable, the payment of which is unconditionally guaranteed as a full
faith and credit obligation by the United States of America or such other
government, which, in either case, are not callable or redeemable at the option
of the issuer thereof, and shall also include a depository receipt issued by a
bank or trust company as custodian with respect to any such Government
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest on or principal of
the Government Obligation evidenced by such depository receipt.
"Holder" means, in the case of a Registered Security, the Person in
whose name a Security is registered in the Security Register and, in the case of
a Bearer Security, the bearer thereof and, when used with respect to any coupon,
shall mean the bearer thereof.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
and shall include the terms of particular series of Securities established as
contemplated by Section 301; provided, however, that, if at any time more than
one Person is acting as Trustee under this instrument, "Indenture" shall mean,
with respect to any one or more series of Securities for which such Person is
Trustee, this instrument as originally executed or as it may from time to time
be supplemented or amended by one or more indentures supplemental hereto entered
into pursuant to the applicable provisions hereof and shall include the terms of
the or those particular series of Securities for which such Person is Trustee
established as contemplated by Section 301, exclusive, however, of any
provisions or terms which relate solely to other series of Securities for which
such Person is not Trustee, regardless of when such terms or provisions were
adopted, and exclusive of any provisions or terms adopted by means of one or
more indentures supplemental hereto executed and delivered after such Person had
become such Trustee but to which such Person, as such Trustee, was not a party.
"Indexed Security" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
5
"Interest", when used with respect to an Original Issue Discount
--------
Security which by its terms bears interest only after Maturity, shall mean
interest payable after Maturity, and, when used with respect to a Security which
provides for the payment of Additional Amounts pursuant to Section 1010,
includes such Additional Amounts.
"Interest Payment Date", when used with respect to any Security, means
---------------------
the Stated Maturity of an installment of interest on such Security.
"Maturity", when used with respect to any Security, means the date on
--------
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, notice of redemption, notice of option to elect
repayment or otherwise.
"Officers' Certificate" means a certificate signed by a trustee and an
---------------------
executive officer of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
------------------
counsel for the Company or who may be an employee of or other counsel for the
Company and who shall be satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides
--------------------------------
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Securities, means, as of the
-----------
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
------
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
or repayment at the option of the Holder money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities and any coupons appertaining thereto, provided that, if such
--------
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made;
(iii) Securities, except to the extent provided in Sections 1402 and
1403, with respect to which the Company has affected
6
defeasance and/or covenant defeasance as provided in Article Fourteen;
(iv) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(v) Securities converted into Common Shares or Preferred Shares
pursuant to or in accordance with this Indenture if the terms of such
Securities provide for convertibility pursuant to Section 301;
provided, however, that in determining whether the Holders of the requisite
- -------- -------
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, and for the purpose of making the
calculations required by TIA Section 313, (i) the principal amount of an
Original Issue Discount Security that may be counted in making such
determination or calculation and that shall be deemed to be Outstanding for such
purpose shall be equal to the amount of principal thereof that would be (or
shall have been declared to be) due and payable, at the time of such
determination, upon a declaration of acceleration of the maturity thereof
pursuant to Section 502, (ii) the principal amount of any Security denominated
in a Foreign Currency that may be counted in making such determination or
calculation and that shall be deemed Outstanding for such purpose shall be equal
to the Dollar equivalent, determined pursuant to Section 301 as of the date such
Security is originally issued by the Company, of the principal amount (or, in
the case of an Original Issue Discount Security, the Dollar equivalent as of
such date of original issuance of the amount determined as provided in clause
(i) above) of such Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or calculation and that shall
be deemed outstanding for such purpose shall be equal to the principal face
amount of such Indexed Security at original issuance, unless otherwise provided
with respect to such Security pursuant to Section 301, and (iv) Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in making such calculation or in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities which the
Trustee knows to be so owned shall be so disregarded. Securities so owned which
have 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
7
or any other obligor upon the Securities or any Affiliate of the Company or of
such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
------------
principal of (and premium, if any) or interest on any Securities or coupons on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
------
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment", when used with respect to the Securities of or within
----------------
any series, means the place or places where the principal of (and premium, if
any) and interest on such Securities are payable as specified as contemplated by
Sections 301 and 1002.
"Predecessor Security" of any particular Security means every previous
--------------------
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange for or in lieu of
mutilated, destroyed, lost or stolen Security or a Security to which a
mutilated, destroyed, lost or stolen coupon appertains shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security or
the Security to which the mutilated, destroyed, lost or stolen coupon
appertains.
"Preferred Shares" means, with respect to any Person, capital shares issued
----------------
by such Person that are entitled to a preference or priority over any other
capital shares issued by such Person upon any distribution of such Person's
assets, whether by dividend or upon liquidation.
"Redemption Date", when used with respect to any Security to be redeemed,
---------------
in whole or in part, means the date fixed for such redemption by or pursuant to
this Indenture.
"Redemption Price", when used with respect to any Security to be redeemed,
----------------
means the price at which it is to be redeemed pursuant to this Indenture.
"Registered Security" shall mean any Security which is registered in the
-------------------
Security Register.
"Regular Record Date" for the interest payable on any Interest Payment Date
-------------------
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 301, whether or not a Business Day.
8
"Repayment Date" means, when used with respect to any Security to be repaid
--------------
at the option of the Holder, the date fixed for such repayment by or pursuant to
this Indenture.
"Repayment Price" means, when used with respect to any Security to be
---------------
repaid at the option of the Holder, the price at which it is to be repaid by or
pursuant to this Indenture.
"Responsible Officer", when used with respect to the Trustee, means the
-------------------
chairman or vice-chairman of the board of directors, the chairman or
vice-chairman of the executive committee of the board of directors, the
president, any vice president (whether or not designated by a number or a word
or words added before or after the title "vice president"), the secretary, any
assistant secretary, the treasurer, any assistant treasurer, any corporate trust
officer, the controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of such officer's
knowledge and familiarity with the particular subject.
"Security" has the meaning stated in the first recital of this Indenture
--------
and, more particularly, means any Security or Securities authenticated and
delivered under this Indenture; provided, however, that, if at any time there is
-------- -------
more than one Person acting as Trustee under this Indenture, "Securities" with
respect to the Indenture as to which such Person is Trustee shall have the
meaning stated in the first recital of this Indenture and shall more
particularly mean Securities authenticated and delivered under this Indenture,
exclusive, however, of Securities of any series as to which such Person is not
Trustee.
"Security Register" and "Security Registrar" have the respective meanings
----------------- ------------------
specified in Section 305.
"Significant Subsidiary" means any Subsidiary which is a "significant
----------------------
subsidiary" (as defined in Article I, Rule 1.02 of Regulation S-X, promulgated
under the Securities Act of 1933) of the Company.
"Special Record Date" for the payment of any Defaulted Interest on the
-------------------
Registered Securities of or within any series means a date fixed by the 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 or a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
9
"Subsidiary" means a corporation a majority of the outstanding voting
----------
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries of the Company. For purposes of this definition, "voting
stock" means stock having voting power for the election of directors, whether at
all times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939,
------------------- ---
as amended and as in force at the date as of which this Indenture was executed,
except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in the first
-------
paragraph of this Indenture until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder;
provided, however, that if at any time there is more than one such Person,
- -------- -------
"Trustee" as used with respect to the Securities of any series shall mean only
the Trustee with respect to Securities of that series.
"United States" means, unless otherwise specified with respect to any
-------------
Securities pursuant to Section 301, the United States of America (including the
states and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction.
"United States person" means, unless otherwise specified with respect
--------------------
to any Securities pursuant to Section 301, an individual who is a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
"Yield to Maturity" means the yield to maturity, computed at the time
-----------------
of issuance of a Security (or, if applicable, at the most recent redetermination
of interest on such Security) and as set forth in such Security in accordance
with generally accepted United States bond yield computation principles.
SECTION 102. Compliance Certificates and Opinions. Upon any
-----------------------------------
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this
10
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
delivered pursuant to Section 1009) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such condition or
covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee. In any case where
--------------------------------------
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion as to some matters and one or more other such Persons as to other
matters, and any such Person may certify or give an opinion as to such matters
in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon an Opinion of Counsel, or a
certificate or representations by counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the opinion, certificate or
representations with respect to the matters upon which is certificate or opinion
is based are erroneous. Any such Opinion of Counsel or certificate or
representations may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information as to such factual matters is in the
possession of the Company, unless such counsel knows that the certificate or
opinion or representations as to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
11
SECTION 104. Acts of Holders. (a) Any request, demand,
---------------
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders of the Outstanding Securities of
all series or one or more series, as the case may be, may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Holders in person or by agents duly appointed in writing. If Securities of
a series are issuable as Bearer Securities, any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders of Securities of such series may, alternatively, be
embodied in and evidenced by the record of Holders of Securities of such series
voting in favor thereof, either in person or by proxies duly appointed in
writing, at any meeting of Holders of Securities of such series duly called and
held in accordance with the provisions of Article Fifteen, or a combination of
such instruments and any such record. Except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
or record or both are delivered to the Trustee and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any such record
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments
or so voting at any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any Person of a
Security, shall be sufficient for any purpose of this Indenture. The record of
any meeting of Holders of Securities shall be proved in the manner provided in
Section 1506.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be proved by the
Security Register.
(d) The ownership of Bearer Securities may be proved by the
production of such Bearer Securities or by a certificate executed, as
depositary, by any trust company, bank, banker or other depositary, wherever
situated, if such certificate shall be deemed by the Trustee to be
satisfactory, showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhi-
12
?ited to it, the Bearer Securities therein described; or such facts may be
proved by the certificate or affidavit of the Person holding such Bearer
Securities, if such certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such ownership of any
Bearer Security continues until (1) another certificate or affidavit bearing a
later date issued in respect of the same Bearer Security is produced, or (2)
such Bearer Security is produced to the Trustee by some other Person, or (3)
such Bearer Security is surrendered in exchange for a Registered Security, or
(4) such Bearer Security is no longer Outstanding. The ownership of Bearer
Securities may also be proved in any other manner which the Trustee deems
sufficient.
(e) If the Company shall solicit from the Holders of Registered
Securities any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, in or pursuant to a Board
Resolution, fix in advance a record date for the determination of Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do
so. Notwithstanding TIA Section 316(c), such record date shall be the record
date specified in or pursuant to such Board Resolution, which shall be a date
not earlier than the date 30 days prior to the first solicitation of Holders
generally in connection therewith and not later than the date such solicitation
is completed. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become effective pursuant
to the provisions of this Indenture not later than eleven months after the
record date.
In the absence of any such record date fixed by the Company, regardless
as to whether a solicitation of the Holders is occurring on behalf of the
Company or any Holder, the Trustee may, at its option, fix in advance a record
date for the determination of such holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Trustee shall have no obligation to do so. Any such record date shall be a date
not more than 30 days prior to the first solicitation of holders generally in
connection therewith no later than the date of such solicitation.
(f) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall
13
bind every future Holder of the same Security and the Holder of every Security
issued upon the registration of transfer thereof or in exchange therefore or in
lieu thereof in respect of anything done, omitted or suffered to be done by the
Trustee, any Security Registrar, any Paying Agent, any Authenticating Agent or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 105. Notices, etc. to Trustee and Company. Any request,
demand, authorization, direction, notice, consent, waiver or Act of Holders or
other document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished
or filed in writing to or with the Trustee at 230 S. Tryon Street,
Charlotte, North Carolina, 28288-1179; Attention: Susan Schwartz.
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first class
postage prepaid, to the Company addressed to it at the address
of its principal office specified in the first paragraph of this
Indenture or at any other address previously furnished in writing
to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver. Where this Indenture
provides for notice of any event to Holders of Registered Securities by the
Company or the Trustee, such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed, first-class
postage prepaid, to each such Holder affected by such event, at his address as
it appears in the Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. In
any case where notice to Holders of Registered Securities is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders of Registered Securities or the sufficiency of any
notice to Holders of Bearer Securities given as provided herein. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of or irregularities in regular
mail service or by reason of any other cause it shall be impacticable to give
such notice by mail, then such notification to Holders of Registered Securities
as shall be made with the approval of the Trustee shall constitute a sufficient
notification to such Holders for every purpose hereunder.
14
Except as otherwise expressly provided herein or otherwise specified
with respect to any Securities pursuant to Section 301, where this Indenture
provides for notice to Holders of Bearer Securities of any event, such notice
shall be sufficiently given if published in an Authorized Newspaper in New York
City and in such other city or cities as may be specified in such Securities on
a Business Day, such publication to be not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such notice. Any
such notice shall be deemed to have been given on the date of such publication
or, if published more than once, on the date of the first such publication.
If by reason of the suspension of publication of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause if shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be given
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to any particular Holder of Bearer Securities as provided above, nor
any defect in any notice so published, shall affect the sufficiency of such
notice with respect to other Holders of Bearer Securities or the sufficiency of
any notice to Holders of Registered Securities given as provided herein.
Any request, demand, authorization, direction, notice, consent or
waiver required or permitted under this Indenture shall be in the English
language, except that any published notice may be in an official language of the
country of publication.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 107. 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 108. Successors and Assigns. All covenants and agreements in
----------------------
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 109. Separability Clause. In case any provision in this
-------------------
Indenture or in any Security or coupon shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
15
SECTION 110. Benefits of Indenture. Nothing in this Indenture or in
---------------------
the Securities or coupons, express or implied, shall give to any Person, other
than the parties hereto, any Security Registrar, any Paying Agent, any
Authenticating Agent and their successors hereunder and the Holders any benefit
or any legal or equitable right, remedy or claim under this Indenture.
SECTION 111. Governing Law. This Indenture and the Securities and
-------------
coupons shall be governed by and construed in accordance with the law of the
State of New York. This Indenture is subject to the provisions of the TIA that
are required to be part of this Indenture and shall, to the extent applicable,
be governed by such provisions.
SECTION 112. Legal Holidays. In any case where any Interest Payment
--------------
Date, Redemption Date, Repayment Date, sinking fund payment date, Stated
Maturity or Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or any
Security or coupon other than a provision in the Securities of any series which
specifically states that such provision shall apply in lieu hereof), payment of
interest or any Additional Amounts or principal (and premium, if any) need not
be made at such Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the same force and effect
as if made on the Interest Payment Date, Redemption Date, Repayment Date or
sinking fund payment date, or at the Stated Maturity or Maturity, provided that
--------
no interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, Repayment Date, sinking fund
payment date, Stated Maturity or Maturity, as the case may be.
SECTION 113. Immunity of Shareholders, Trustees, Officers and Agents
-------------------------------------------------------
of the Company. In accordance with Section 8.3 of the Third Amended and Restated
- --------------
Declaration of Trust of the Company ("Declaration of Trust"), the Trustee
recognizes and agrees that the obligations of the Company under the Indenture
and the Securities and all documents delivered in the name of the Company in
connection herewith and therewith do not and shall not constitute personal
obligations of the trustees, officers, employees, agents or shareholders of the
Company or any of them, and shall not involve any claim against or personal
liability on the part of any of them, and that all persons including the Trustee
shall look solely to the assets of the Company for the payment of any claim
thereunder or for the performance thereof and shall not seek recourse against
such trustees, officers, employees, agents or shareholders of the Company or any
of them or any of their personal assets for such satisfaction. The performance
of the obligations of the Company under the Indenture and the Securities and all
documents delivered in the name of the Company in connection therewith shall not
be deemed a waiver of any rights or powers of the Company, trustees or
shareholders under the Declaration of Trust.
16
ARTICLE TWO
SECURITIES FORMS
SECTION 201. Forms of Securities. The Registered Securities,
if any, of each series and the Bearer Securities, if any, of each series and
related coupons shall be in substantially the forms as shall be established in
one or more indentures supplemental hereto or approved from time to time by or
pursuant to a Board Resolution in accordance with Section 301, shall have such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture or any indenture supplemental hereto,
and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements placed thereon as the Company may
deem appropriate and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Securities may be listed, or to conform to usage.
Unless otherwise specified as contemplated by Section 301,
Bearer Securities shall have interest coupons attached.
The definitive Securities and coupons shall be printed,
lithographed or engraved or produced by any combination of these methods on a
steel engraved border or steel engraved borders or may be produced in any other
manner, all as determined by the officers executing such Securities or coupons,
as evidenced by their execution of such Securities or coupons.
SECTION 202. Form of Trustee's Certificate of Authentication.
Subject to Section 611, the Trustee's certificate of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein referred
to in the within mentioned Indenture.
FIRST UNION NATIONAL BANK
as Trustee
By________________________________
Authorized Signatory
SECTION 203. 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 (8) 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 shall represent the aggregate amount of Outstanding Securities
of
17
such series from time to time endorsed thereon and 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 by the Trustee in
such manner and upon instructions given by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the Trustee
pursuant to Section 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 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 permanent global Security (i) in the
case of a permanent global Security in registered form, the Holder of such
permanent global Security in registered form, or (ii) in the case of permanent
global Security in bearer form, Euroclear or CEDEL.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated delivered under this
Indenture is unlimited.
18
The Securities may be issued in one or more series. There shall be
established in one or more Board Resolutions or pursuant to authority granted by
one or more Board Resolutions and, subject to Section 303, set forth, or
determined in the manner provided, in an Officers' Certificate, or established
in one or more indentures supplemental hereto, prior to the issuance of
Securities of any series, any or all of the following, as applicable (each of
which (except for the matters set forth in clauses (1), (2) and (15) below), if
so provided, may be determined from time to time by the Company with respect to
unissued Securities of the series when issued from time to time):
(1) the title of the Securities of the series (which shall
distinguish the Securities of such series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series that may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, 1107 or 1305);
(3) the date or dates, or the method by which such date or dates will
be determined, on which the principal of the Securities of the series shall
be payable;
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method by which such rate or rates shall be
determined, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which such interest will be payable and the Regular Record
Date, if any, for the interest payable on any Registered Security on any
Interest Payment Date, or the method by which such date shall be
determined, and the basis upon which interest shall be calculated if other
than that of a 360-day year of twelve 30-day months;
(5) the place or places, if any, other than or in addition to the
Borough of Manhattan, New York City, where the principal of (and premium,
if any), interest, if any, on, and Additional Amounts, if any, payable in
respect of, Securities of the series shall be payable, any Registered
Securities of the series may be surrendered for registration of transfer,
exchange or conversion and notices or demands to or upon the Company in
respect of the Securities of the series and this Indenture may be served;
(6) the period or periods within which, the price or prices at which,
the currency or currencies, currency unit or units or composite currency or
currencies in which, and other terms and conditions upon which Securities
of the series may be
19
redeemed, in whole or in part, at the option of the Company, if the Company is
to have the option;
(7) the obligation, if any, of the Company to redeem, repay or purchase
Securities of the series pursuant to any sinking fund or analogous provision or
at the option of a Holder thereof, and the period or periods within which or the
date or dates on which, the price or prices at which, the currency or
currencies, currency unit or units or composite currency or currencies in which,
and other terms and conditions upon which Securities of the series shall be
redeemed, repaid or purchased, in whole or in part, pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which any Registered Securities of the series
shall be issuable and, if other than the denomination of $5,000, the
denomination or denominations in which any Bearer Securities of the series shall
be issuable;
(9) if other than the Trustee, the identity of each Security Registrar
and/or Paying Agent;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series that shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502 or,
if applicable, the portion of the principal amount of Securities of the series
that is convertible in accordance with the provisions of this Indenture, or the
method by which such portion shall be determined;
(11) if other than Dollars, the Foreign Currency or Currencies in which
payment of the principal of (and premium, if any) or interest or Additional
Amounts, if any, on the Securities of the series shall be payable or in which
the Securities of the series shall be denominated;
(12) whether the amount of payments of principal of (and premium, if any)
or interest, if any, on the Securities of the series may be determined with
reference to an index, formula or other method (which index, formula or method
may be based, without limitation, on one or more currencies, currency units,
composite currencies, commodities, equity indices or other indices), and the
manner in which such amounts shall be determined;
(13) whether the principal of (and premium, if any) or interest or
Additional Amounts, if any, on the Securities of the series are to be payable,
at the election of the Company or a Holder thereof, in a currency or currencies,
currency unit or units or composite currency or currencies other than that in
which such Securities are denominated or stated to be payable, the period or
periods within which, and the terms and conditions
20
upon which, such election may be made, and the time and manner of, and identity
of the exchange rate agent with responsibility for, determining the exchange
rate between the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are denominated or stated to be
payable and the currency or currencies, currency unit or units or composite
currency or currencies in which such Securities are to be so payable;
(14) provisions, if any, granting special rights to the Holder of
Securities of the series upon the occurrence of such events as may be specified;
(15) any deletions from, modifications of or additions to the Events of
Default or covenants of the Company with respect to Securities of the series,
whether or not such Events of Default or covenants are consistent with the
Events of Default or covenants set forth herein;
(16) whether Securities of the series are to be issuable as Registered
Securities, Bearer Securities (with or without coupons) or both, any
restrictions applicable to the offer, sale or delivery of Bearer Securities and
the terms upon which Bearer Securities of the series may be exchanged for
Registered Securities of the series and vice versa (if permitted by applicable
laws and regulations), whether any Securities of the series are to be issuable
initially in temporary global from and whether any Securities of the series are
to be issuable in permanent global form with or without coupons and, if so,
whether beneficial owners of interests in any such permanent global Security may
exchange such interest for Securities of such series and of like tenor of any
authorized form and denomination and the circumstances under which any such
exchanges may occur, if other than in the manner provided in Section 305, and,
if Registered Securities of the series are to be issuable as a global Security,
the identity of the depositary for such series;
(17) the date as of which any Bearer Securities of the series and any
temporary global Security representing Outstanding Securities of the series
shall be dated if other than the date of original issuance of the first Security
of the series to be issued;
(18) the Person to whom any interest on any Registered Security of the
series shall be payable, if other than the Person in whose name that Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, the manner in which, or the Person
to whom, any interest on any Bearer Security of the series shall be payable, if
otherwise than upon presentation and surrender of the coupons appertaining
thereto as they severally mature, and the extent to which, or the manner in
which, any
21
interest payable on a temporary global Security on an Interest Payment Date
will be paid if other than in the manner provided in Section 304;
(19) the applicability, if any, if Sections 1402 and/or 1403 to the
Securities of the series and any provisions in modification of, in addition to
or in lieu of any of the provisions of Article Fourteen;
(20) if the Securities of such series are to be issuable in definitive form
(whether upon original issue or upon exchange of a temporary Security of such
series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, then the form and/or terms of such
certificates, documents or conditions;
(21) whether and under what circumstances the company will pay Additional
Amounts as contemplated by Section 1010 on the Securities of the series to any
Holder who is not a United States person (including any modification to the
definition of such term) in respect of any tax, assessment or governmental
charge and, if so, whether the Company will have the option to redeem such
Securities rather than pay such Additional Amounts (and the terms of any such
option);
(22) the obligation, if any, of the Company to permit the conversion of the
Securities of such series into the Company's Common Shares or Preferred Shares,
as the case may be, and the terms and conditions upon which such conversion
shall be effected (including, without limitation, the initial conversion price
or rate, the conversion period, any adjustment of the applicable conversion
price and any requirements relative to the reservation of such shares for
purposes of conversion; and
(23) any other terms of the series (which terms shall not be inconsistent
with the provisions of this Indenture).
All Securities of any one series and the coupons appertaining to any Bearer
Securities of such series shall be substantially identical except, in the case
of Registered Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolution (subject to Section 303) and
set forth in such Officers' Certificate or in any such indenture supplemental
hereto. All Securities of any one series need not be issued at the same time
and, unless otherwise provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such series.
If any of the terms of the Securities of any series are established by
action taken pursuant to one or more Board Resolutions, a copy of a appropriate
record of such action(s) shall be certified by the Secretary or an Assistant
Secretary of the Company
22
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the Securities of such series.
SECTION 302. Denominations. The Securities of each series shall be
-------------
issuable in such denominations as shall be specified as contemplated by Section
301. With respect to Securities of any series denominated in Dollars, in the
absence of any such provisions with respect to the Securities of any series, the
Registered Securities of such series, other than Registered Securities issued in
global form (which may be of any denomination), shall be issuable in
denominations of $1,000 and any integral multiple thereof and the Bearer
Securities of such series, other than Bearer Securities issued in global form
(which may be of any denomination), shall be issuable in a denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and Dating. The
----------------------------------------------
Securities and any coupons appertaining thereto shall be executed on behalf of
the Company by a trustee and an executive officer of the Company and attested by
its Secretary or one of its Assistant Secretaries. The signature of any of these
individuals on the Securities and coupons may be manual or facsimile signatures
of the present or any future such authorized officer and trustee and may be
imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities or coupons.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities of any series, together with any
coupon appertaining thereto, executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities; provided however, that, in
-------- -------
connection with its original issuance, no Bearer Security shall be mailed or
otherwise delivered to any location in the United States; and provided further
-------- -------
that, unless otherwise specified with respect to any series of Securities
pursuant to Section 301, a Bearer Security may be delivered in connection with
its original issuance only if the Person entitled to receive such Bearer
Security shall have furnished a certificate to Euroclear or Cedel, as the case
may be, in the form set forth in Exhibit A-1 to this Indenture or such other
certificate as may be specified with respect to any series of Securities
pursuant to Section 301, dated no earlier than 15 days prior to the earlier of
the date on which such Bearer Security is delivered and the date on which any
temporary Security first becomes exchangeable for such Bearer Security in
accordance
23
with the terms of such temporary Security and this Indenture. If any Security
shall be represented by a permanent global Bearer Security, then, for purposes
of this Section and Section 304, the notation of a beneficial owner's interest
therein upon original issuance of such Security or upon exchange of a portion of
a temporary global Security shall be deemed to be delivery in connection with
its original issuance of such beneficial owner's interest in such permanent
global Security. Except as permitted by Section 306, the Trustee shall not
authenticate and deliver any Bearer Security unless all appurtenant coupons for
interest then matured have been detached and cancelled.
If all the Securities of any series are not to be issued at one time and
if the Board Resolution or supplemental indenture establishing such series shall
so permit, such Company Order may set forth procedures acceptable to the Trustee
for the issuance of such Securities and determining the terms of particular
Securities of such series, such as interest rate or formula, maturity date, date
of issuance and date from which interest shall accrue. In authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to TIA Section 315(a) through 315(d)) shall be fully protected to
relying upon.
(i) an Opinion of Counsel stating that
(a) the form or forms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture;
(b) the terms of such Securities and any coupons have been
established in conformity with the provisions of this Indenture; and
(c) such Securities, together with any coupons appertaining
thereto, when completed by appropriate insertions and executed and
delivered by the Company to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the
Trustee in accordance with this Indenture and issued by the Company
in the manner and subject to any conditions specified in such Opinion
of Counsel, will constitute legal, valid and binding obligations of
the Company, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization and other similar
laws of general applicability relating to or affecting the
enforcement of creditors' rights generally and to general equitable
principles; and
(ii) an Officers' Certificate stating that all conditions precedent
provided for in this Indenture relating to the issuance of the Securities have
been complied with and that, to the best of the knowledge of the signers of such
certificate, no
24
Event of Default with respect to any of the Securities shall have occurred
and be continuing.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties,
obligations or immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the preceding
paragraph, if all the Securities of any series are not to be issued at one time,
it shall not be necessary to deliver an Officers' Certificate otherwise required
pursuant to Section 301 or a Company Order, or an Opinion of Counsel or an
Officer's Certificate otherwise required pursuant to the preceding paragraph at
the time of issuance of each Security of such series, but such order, opinion
and certificates, with appropriate modifications to cover such future issuances,
shall be delivered at or before the time of issuance of the first Security of
such series.
Each Registered Security shall be dated the date of its authentication
and each Bearer Security shall be dated as of the date specified as contemplated
by Section 301.
No Security or coupon shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security or Security to which such coupon appertains a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized signatory, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture. Notwithstanding the foregoing, if any Security
shall have been authenticated and delivered hereunder but never issued and sold
by the Company, and the Company shall deliver such Security to the Trustee for
cancellation as provided in Section 309 together with a written statement (which
need not comply with Section 102 and need not be accompanied by an Opinion of
Counsel) stating that such Security has never been issued and sold by the
Company, for all purposes of this Indenture such Security shall be deemed never
to have been authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
SECTION 304. Temporary Securities. (a) Pending the preparation of
--------------------
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued, in registered form, or, if
25
authorized, in bearer form with one or more coupons or without coupons, and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities. In the case of Securities of any series,
such temporary Securities may be in global form.
Except in the case of temporary Securities in global form (which shall be
exchanged in accordance with Section 304(b) or as otherwise provided in or
pursuant to a Board Resolution), if temporary Securities of any series are
issued, the Company will cause definitive Securities of that series to be
prepared without unreasonable delay. After the preparation of definitive
Securities of such series, the temporary Securities of such series shall be
exchangeable for definitive Securities of such series upon surrender of the
temporary Securities of such series at the office or agency of the Company in a
Place of Payment for that series, without charge to Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series (accompanied
by any non-matured coupons appertaining thereto), the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations;
provided, however, that no definitive Bearer Security shall be delivered in
- -------- -------
exchange for a temporary Registered Security; and provided further that a
-------- -------
definitive Bearer Security shall be delivered in exchange for a temporary Bearer
Security only in compliance with the conditions set forth in Section 303. Until
so exchanged, the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
(b) Unless otherwise provided in or pursuant to a Board Resolution, this
Section 304(b) shall govern the exchange of temporary Securities issued in
global form other than through the facilities of The Depository Trust Company.
If any such temporary Security is issued in global form, then such temporary
global Security shall, unless otherwise provided therein, be delivered to the
London office of a depositary or common depositary (the "Common Depositary"),
for the benefit of Euroclear and CEDEL, for credit to the respective accounts of
the beneficial owners of such Securities (or to such other accounts as they may
direct).
Without unnecessary delay but in any event not later than the date
specified in, or determined pursuant to the terms of, any such temporary global
Security (the "Exchange Date"), the Company shall deliver to the Trustee
definitive Securities, in aggregate principal amount equal to the principal
amount of such temporary global Security, executed by the Company. On or after
the Exchange Date, such temporary global Security shall be surrendered by the
Common Depositary to the Trustee, as the Company's agent for such purpose, to be
exchanged, in whole or from time to time in part, for definitive Securities
without charge, and the Trustee shall authen-
26
ticate and deliver, in exchange for each portion of such temporary global
Security, an equal aggregate principal amount of definitive Securities of the
same series of authorized denominations and of like tenor as the portion of such
temporary global Security to be exchanged. The definitive Securities to be
delivered in exchange for any such temporary global Security shall be in bearer
form, registered form, permanent global bearer form or permanent global
registered form, or any combination thereof, as specified as contemplated by
Section 301, and, if any combination thereof is so specified, as requested by
the beneficial owner thereof; provided, however, that, unless otherwise
-------- -------
specified in such temporary global Security, upon such presentation by the
Common Depositary, such temporary global Security is accompanied by a
certificate dated the Exchange Date or a subsequent date and signed by Euroclear
as to the portion of such temporary global Security held for its account then to
be exchanged and a certificate dated the Exchange Date or a subsequent date and
signed by CEDEL as to the portion of such temporary global Security held for its
account then to be exchanged, each in the form set forth in Exhibit A-2 to this
Indenture or in such other form as may be established pursuant to Section 301;
and provided further that definitive Bearer Securities shall be delivered in
-------- -------
exchange for a portion of a temporary global Security only in compliance with
the requirements of Section 303.
Unless otherwise specified in such temporary global security, the
interest of a beneficial owner of Securities of a series in a temporary global
Security shall be exchanged for definitive Securities of the same series and of
like tenor following the Exchange Date when the account holder instructs
Euroclear or CEDEL, as the case may be, to request such exchange on his behalf
and delivers to Euroclear or CEDEL, as the case may be, a certificate in the
form set forth in Exhibit A-1 to this Indenture (or in such other form as may be
established pursuant to Section 301), dated no earlier than 15 days prior to the
Exchange Date, copies of which certificate shall be available from the offices
of Euroclear and CEDEL, the Trustee, any Authenticating Agent appointed for such
series of Securities and each Paying Agent. Unless otherwise specified in such
temporary global Security, any such exchange shall be made free of charge to the
beneficial owners of such temporary global Security, except that a Person
receiving definitive Securities must bear the cost of insurance, postage,
transportation and the like unless such Person takes delivery of such definitive
Securities in person at the offices of Euroclear or CEDEL. Definitive Securities
in bearer form to be delivered in exchange for any portion of a temporary global
Security shall be delivered only outside the United States.
Until exchanged in full as hereinabove provided, the temporary
Securities of any series shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities of the same series and of like
tenor authenticated and delivered hereunder, except that, unless otherwise
specified as contemplated
27
by Section 301, interest payable on a temporary global Security on an Interest
Payment Date for Securities of such series occurring prior to the applicable
Exchange Date shall be payable to Euroclear and CEDEL on such Interest Payment
Date upon delivery by Euroclear and CEDEL to the Trustee of a certificate or
certificates in the form set forth in Exhibit A-2 to this Indenture (or in such
other forms as may be established pursuant to Section 301), for credit without
further interest on or after such Interest Payment Date to the respective
accounts of Persons who are the beneficial owners of such temporary global
Security on such Interest Payment Date and who have each delivered to Euroclear
or CEDEL, as the case may be, a certificate dated no earlier than 15 days prior
to the Interest Payment Date occurring prior to such Exchange Date in the form
set forth as Exhibit A-1 to this Indenture (or in such other forms as may be
established pursuant to Section 301). Notwithstanding anything to the contrary
herein contained, the certifications made pursuant to this paragraph shall
satisfy the certification requirements of the preceding two paragraphs of this
Section 304(b) and of the third paragraph of Section 303 of this Indenture and
the interests of the Persons who are the beneficial owners of the temporary
global Security with respect to which such certification was made will be
exchanged for definitive Securities of the same series and of like tenor on the
Exchange Date or the date of certification if such date occurs after the
Exchange Date, without further act or deed by such beneficial owners. Except as
otherwise provided in this paragraph, no payments of principal or interest owing
with respect to a beneficial interest in a temporary global Security will be
made unless and until such interest in such temporary global Security shall have
been exchanged for an interest in a definitive Security. Any interest so
received by Euroclear and CEDEL and not paid as herein provided shall be
returned to the Trustee prior to the expiration of two years after such Interest
Payment Date in order to be repaid to the Company.
SECTION 305. Registration, Registration of Transfer and Exchange. The
---------------------------------------------------
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency of the Company in a Place of Payment a register for each
series of Securities (the registers maintained in such office or in any such
office or agency of the Company in a Place of Payment being herein sometimes
referred to collectively as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Registered Securities and of transfers of Registered Securities.
The Security Register shall be in written form or any other form capable of
being converted into written form within a reasonable time. The Trustee, at its
Corporate Trust Office, is hereby appointed "Security Registrar" for the purpose
of registering Registered Securities and transfers of Registered Securities on
such Security Register as herein provided. In the event that the Trustee shall
cease to be Security Registrar, Holders shall have the right to examine the
Security Register at all reasonable times.
28
Subject to the provisions of this Section 305, upon surrender for
registration of transfer of any Registered Security of any series at any office
or agency of the Company in a Place of Payment for that series, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Registered Securities
of the same series, of any authorized denominations and of a like aggregate
principal amount, bearing a number not contemporaneously outstanding, and
containing identical terms and provisions.
Subject to the provisions of this Section 305, at the option of the Holder,
Registered Securities of any series may be exchanged for other Registered
Securities of the same series, of any authorized denomination or denominations
and of a like aggregate principal amount, containing identical terms and
provisions, upon surrender of the Registered Securities to be exchanged at any
such office or agency. Whenever any such Registered Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Registered Securities which the Holder making the
exchange is entitled to receive. Unless otherwise specified with respect to any
series of Securities as contemplated by Section 301. Bearer Securities may not
be issued in exchange for Registered Securities.
If (but only if) permitted by the applicable Board Resolution and (subject
to Section 303) set forth in the applicable Officers' Certificate, or in any
indenture supplemental hereto, delivered as contemplated by Section 301, at the
option of the Holder, Bearer Securities of any series may be exchanged for
Registered Securities of the same series of any authorized denominations and of
a like aggregate principal amount and tenor, upon surrender of the Bearer
Securities to be exchanged at any such office or agency, with all unmatured
coupons and all matured coupons in default thereto appertaining. If the Holder
of a Bearer Security is unable to produce any such unmatured coupon or coupons
or matured coupon or coupons in default, any such permitted exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company in an amount equal to the face amount of such missing coupon or
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there is furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to any Paying Agent any
such missing coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such payment; provided,
--------
however, that, except as otherwise provided in Section 1002, interest
- -------
represented by coupons shall be payable only upon presentation and surrender of
those coupons at an office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any series is
surrendered at any such office or agency in a permitted exchange for a
Registered Security of the same series and like tenor
29
after the close of business at such office or agency on (i) any Regular Record
Date and before the opening of business at such office or agency on the relevant
Interest Payment Date or (ii) any Special Record Date and before the opening of
business at such office or agency on the related proposed date for payment of
Defaulted Interest, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date or proposed date for payment, as
the case may be, and interest or Defaulted Interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of such coupon when
due in accordance with the provisions of this Indenture. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
Notwithstanding the foregoing, except otherwise specified as
contemplated by Section 301, any permanent global Security shall be exchangeable
only as provided in this paragraph. If the depositary for any permanent global
Security is The Depository Trust Company ("DTC"), then, unless the terms of such
global Security expressly permit such global Security to be exchanged in whole
or in part for definitive Securities, a global Security may be transferred, in
whole but not in part, only to a nominee of DTC, or by a nominee of DTC to DTC,
or to a successor to DTC for such global Security selected or approved by the
Company or to a nominee of such successor to DTC. If at any time DTC notifies
the Company that it is unwilling or unable to continue as depositary for the
applicable global Security or Securities or if at any time DTC ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 if so
required by applicable law or regulation, the Company shall appoint a successor
depositary with respect to such global Security or Securities. If (x) a
successor depositary for such global Security or Securities is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such unwillingness, inability or ineligibility, (y) an Event of Default
has occurred and is continuing and the beneficial owners representing a majority
in principal amount of the applicable series of Securities represented by such
global Security or Securities advise DTC to cease acting as depositary for such
global Security or Securities or (z) the Company, in its sole discretion,
determines at any time that all Outstanding Securities (but not less than all)
of any series issued or issuable in the form of one or more global Securities
shall no longer be represented by such global Security or Securities, then the
Company shall execute, and the Trustee shall authenticate and deliver definitive
Securities of like series, rank, tenor and terms in definitive form in an
aggregate principal amount equal to the principal amount of such global Security
or Securities. If any beneficial owner of an interest in a permanent global
Security is otherwise entitled to exchange such interest for Securities
30
of such series and of like tenor and principal amount of another authorized form
and denomination, as specified as contemplated by Section 301 and provided that
any applicable notice provided in the permanent global Security shall have been
given, then without unnecessary delay but in any event not later than the
earliest date on which such interest may be so exchanged, the Company shall
execute, and the Trustee shall authenticate and deliver definitive Securities in
aggregate principal amount equal to the principal amount of such beneficial
owner's interest in such permanent global Security. On or after the earliest
date on which such interests may be so exchanged, such permanent global Security
shall be surrendered for exchange by DTC or such other depositary as shall be
specified in the Company Order with respect thereto to the Trustee, as the
Company's agent for such purposes; provided, however, that no such exchanges may
-------- -------
occur during a period beginning at the opening of business 15 days before any
selection of Securities to be redeemed and ending on the relevent Redemption
Date if the Security for which exchange is requested may be among those selected
for redemption; and provided further that not Bearer Security delivered in
-------- -------
exchange for a portion of a permanent global Security shall be mailed or
otherwise delivered to any location in the United States. If a Registered
Security is issued in exchange for any portion of a permanent global Security
after the close of business at the office or agency where such exchange occurs
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and the opening of business at such office or agency on the related proposed
date for payment of Defaulted Interest, interest or defaulted Interest, as the
case may be, will not by payable on such Interest Payment Date or proposed date
for payment, as the case may be, in respect of such Registered Security, but
will not be payable on such Interest Payment Date or proposed date for payment,
as the case may be, only to the Person to whom interest in respect of such
portion of such permanent global Security is payable in accordance with the
provisions of this Indenture.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of the transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange or redemption shall (if so required by the Company or
the Security Registrar) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company and the Security
Registrar, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental
31
charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 304, 906, 1107
or 1305 not involving any transfer.
The Company or the Trustee, as applicable, shall not be required, (i) to
issue, register the transfer of or exchange any Security if such Security may be
among those selected for redemption during a period beginning at the opening of
business 15 days before selection of the Securities to be redeemed under Section
1103 and ending at the close of business on (A) if such Securities are issuable
only as Registered Securities, the day of the mailing of the relevant notice of
redemption and (B) if such Securities are issuable as Bearer Securities, the day
of the first publication of the relevant notice of redemption or, if such
Securities are also issuable as Registered Securities and there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption in whole or in part, except, in the case of any Registered Security
to be redeemed in part, the portion thereof not to be redeemed, or (iii) to
exchange any Bearer Security so selected for redemption except that such a
Bearer Security may be exchanged for a Registered Security of that series and
like tenor, provided that such Registered Security shall be simultaneously
--------
surrendered for redemption, or (iv) to issue, register the transfer of or
exchange any Security which has been surrendered for repayment at the option of
the Holder, except the portion, if any, of such Security not to be so repaid.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities. If any
------------------------------------------------
mutilated Securities or a Security with a mutilated coupon appertaining to it is
surrendered to the Trustee or the Company, together with, in proper cases, such
security or indemnity as may be required by the Company or the Trustee to save
each of them or any agent of either of them harmless, the Company shall execute
and the Trustee shall authenticate and deliver in exchange therefor a new
Security of the same series and principal amount, containing identical terms and
provisions and bearing a number not contemporaneously outstanding, with coupons
corresponding to the coupons, if any, appertaining to the surrendered Security.
If there shall be delivered to the Company and to the Trustee (i) evidence
to their satisfaction of the destruction, loss or theft of any Security or
coupon, and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security or coupon has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for the Security to which a
destroyed, lost or stolen coupon appertains with all appurtenant coupons not
destroyed, lost or stolen), a new security of the same series and principal
amount, containing identi-
32
cal terms and provisions and bearing a number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining to such
destroyed, lost or stolen Security or to the Security to which such destroyed,
lost or stolen coupon appertains.
Notwithstanding the provisions of the previous two paragraphs, in case any
such mutilated, destroyed, lost or stolen Security or coupon has become or is
about to become due and payable, the Company in its discretion may, instead of
issuing a new Security, with coupons corresponding to the coupons, if any,
appertaining to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains, pay such Security or
coupon; provided, however, that payment of principal of (and premium, if any),
-------- -------
any interest on and any Additional Amounts with respect to, Bearer Securities
shall, except as otherwise provided in Section 1002, be payable only at an
office or agency located outside the United States and, unless otherwise
specified as contemplated by Section 301, any interest on Bearer Securities
shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security and its coupons, if any,
or the destroyed, lost or stolen coupon shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities of that series and their
coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights Preserved. Except as
----------------------------------------------
otherwise specified with respect to a series of Securities in accordance with
the provisions of Section 301, interest on any Registered Security that is
payable, and is punctually paid or duly provided for, on any Interest Payment
Date shall be paid to the Person in whose name that Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose pursuant to Section 1002;
33
provided, however, that each installment of interest on any Registered Security
- -------- -------
may at the Company's option be paid by (i) mailing a check for such interest,
payable to or upon the written order of the Person entitled thereto pursuant to
Section 308, to the address of such Person as it appears on the Security
Register or (ii) transfer to an account maintained by the payee located inside
the United States.
Unless otherwise provided as contemplated by Section 301 with respect
to the Securities of any series, payment of interest may be made, in the case of
a Bearer Security, by transfer to an account maintained by the payee with a bank
located outside the United States.
Unless otherwise provided as contemplated by Section 301, every
permanent global Security will provide that interest, if any, payable of any
Interest Payment Date will be paid to DTC, Euroclear and/or CEDEL, as the case
may be, with respect to that portion of such permanent global Security held for
its account by Cede & Co. or the Common Depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
In case a Bearer Security of any series is surrendered in exchange for
a Registered Security of such series after the close of business (at an office
or agency in a Place of Payment for such series) on any Regular Record Date and
before the opening of business (at such office or agency) on the next succeeding
Interest Payment Date, such Bearer Security shall be surrendered without the
coupon relating to such Interest Payment Date and interest will not be payable
on such Interest Payment Date in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
Except as otherwise specified with respect to a series of Securities
in accordance with the provisions of Section 301, any interest on any
Registered Security of any series that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered Holder thereof
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities of such series (or their
respective Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the Trustee in
34
writing of the amount of Defaulted Interest proposed to be paid on each
Registered Security of such series and the date of the proposed payment (which
shall not be less than 20 days after such notice is received by the Trustee),
and at the same time the Company shall deposit with the Trustee an amount of
money in the currency or currencies, currency unit or units or composite
currency or currencies in which the Securities of such series are payable
(except as otherwise specified pursuant to Section 301 for the Securities of
such series) equal to the aggregate amount proposed to be paid in respect of
such Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of Registered Securities of such series at his address as it
appears in the Security Register not less than 10 days prior to such Special
Record Date. The Trustee may, in its discretion, in the name and at the expense
of the Company, cause a similar notice to be published at least once in an
Authorized Newspaper in each place of payment, but such publications shall not
be a condition precedent to the establishment of such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special Record
Date therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names the Registered Securities of such series (or
their respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2). In case a Bearer Security of any series is surrendered at
the office or agency in a Place of Payment for such series in exchange for a
Registered Security of such series after the close of business at such office or
agency on any Special Record Date and before the opening of business at such
office or agency on the related proposed date for payment of Defaulted Interest,
such Bearer Security shall be surrendered without the coupon relating to such
proposed date of payment and Defaulted Interest will not be payable on such
proposed date of payment in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this Indenture.
35
(2) The Company may make payment of any Defaulted Interest on the
Registered Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 305,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners. Prior to due presentment of a
---------------------
Registered Security for registration of transfer, the Company, the Trustee and
any agent of the Company or the Trustee may treat the Person in whose name such
Registered Security is registered as the owner of such Security for the purpose
of receiving payment of principal of (and premium, if any), and (subject to
Sections 305 and 307) interest on, such Registered Security and for all other
purposes whatsoever, whether or not such Registered Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
Title to any Bearer Security and any coupons appertaining thereto
shall pass by delivery. The Company, the Trustee and any agent of the Company or
the Trustee may treat the Holder of any Bearer Security and the Holder of any
coupon as the absolute owner of such Security or coupon for the purpose of
receiving payment thereof or on account thereof and for all other purposes
whatsoever, whether or not such Security or coupon be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Security in global form or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Notwithstanding the foregoing, with respect to any global Security,
nothing herein shall prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by any depositary, as a Holder, with respect to
such global Security or impair, as between such depositary and owners of
beneficial interests in such global Security, the operation of customary
practices
36
governing the exercise of the rights of such depositary (or its nominee) as
Holder of such global Security.
SECTION 309. Cancellation. All Securities and coupons surrendered for
------------
payment, redemption, repayment at the option of the Holder, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee,
and any such Securities and coupons and Securities and coupons surrendered
directly to the Trustee for any such purpose shall be promptly cancelled by it;
provided, however, where the Place of Payment is located outside of the United
- -------- -------
States, the Paying Agent at such Place of Payment may cancel the Securities
surrendered to it for such purposes prior to delivering the Securities to the
Trustee. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee (or
to any other Person for delivery to the Trustee) for cancellation any Securities
previously authenticated hereunder which the Company has not issued and sold,
and all Securities so delivered shall be promptly cancelled by the Trustee. If
the Company shall so acquire any of the Securities, however, such acquisition
shall not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are surrendered to the
Trustee for cancellation. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. Cancelled Securities and coupons held by
the Trustee shall be destroyed by the Trustee and the Trustee shall deliver a
certificate of such destruction to the Company, unless by a Company Order the
Company directs their return to it.
SECTION 310. Computation of Interest. Except as otherwise specified as
-----------------------
contemplated by Section 301 with respect to Securities of any series, interest
on the Securities of each series shall be computed on the basis of a 360-day
year consisting of twelve 30-day months.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture. This Indenture
---------------------------------------
shall upon Company Request cease to be of further effect with respect to any
series of Securities specified in such Company Request (except as to any
surviving rights of registration of transfer or exchange of Securities of such
series herein expressly provided for and any right to receive Additional
Amounts, as provided in Section 1010), and the Trustee, upon receipt of a
Company Order, and at the expense of the Company, shall execute proper
37
instruments acknowledging satisfaction and discharge of this Indenture as to
such series when
(1) either
(A) all Securities of such series theretofore authenticated and
delivered and all coupons, if any, appertaining thereto (other than (i)
coupons appertaining to Bearer Securities surrendered for exchange for
Registered Securities and maturing after such exchange, whose surrender is
not required or has been waived as provided in Section 305, (ii) Securities
and coupons of such series which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 306, (iii) coupons
appertaining to Securities called for redemption and maturing after the
relevant Redemption Date, whose surrender has been waived as provided in
Section 1106, and (iv) Securities and coupons of such series for whose
payment money has theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section 1003) have been
delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has irrevocably
deposited or caused to be deposited with the Trustee as trust funds in
trust for the purpose an amount in the currency or currencies, currency
unit or units or composite currency or currencies in which the Securities
of such series are payable, sufficient to pay and discharge the entire
indebtedness on such Securities and such coupons not theretofore delivered
to the Trustee for cancellation, for principal (and premium, if any) and
interest, and any Additional Amounts with respect thereto, to the date of
such deposit (in the case of Securities which have become due and payable)
or to the Stated Maturity or Redemption Date, as the case may be;
38
(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 and Officers'
Certificate and an Opinion of Counsel, each stated that all conditions
precedent herein provided for relating to the satisfaction and discharge of
this Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee and any predecessor Trustee under
Section 606, the obligations of the Company to any Authenticating Agent under
Section 611 and, if money shall have been deposited with and held by the Trustee
pursuant to subclause (B) of clause (1) of this Section, the obligations of the
Trustee under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Funds. Subject to the provisions of
--------------------------
the last paragraph of Section 1003, all money deposited with the Trustee
pursuant to Section 401 shall be held in trust and applied by it, in accordance
with the provisions of the Securities, the coupons and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any), and any interest and
Additional Amounts for whose payment such money has been deposited with or
received by the Trustee, but such money need not be segregated from other funds
except to the extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Defaults. "Event of Default", wherever used
------------------
herein with respect to any particular series of Securities, means any one of the
following events (whatever the reason for such Event of Default and whether or
not it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon or any Additional
Amounts payable in respect of any Security of that series or of any coupon
appertaining thereto, when such interest, Additional Amounts or coupon
becomes due and payable, and continuance of such default for a period of 30
days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series when it becomes due and payable at its
Maturity; or
39
(3) default in the deposit of any sinking fund payment, when and as due by
the terms of any Security of that series; or
(4) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture with respect to any Security of that series (other
than a covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the Company
and the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(5) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company (including obligations under
leases required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles, but not including any indebtedness or
obligations for which recourse is limited to property purchased) in an aggregate
principal amount in excess of $5,000,000 or under any mortgage, indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed by the Company (including such
leases but not including such indebtedness or obligations for which recourse is
limited to property purchased) in an aggregate principal amount in excess of
$5,000,000 by the Company, whether such indebtedness now exists or shall
hereafter be created, which default shall have resulted in such indebtedness
becoming or being declared due and payable prior to the date on which it would
otherwise have become due and payable or such obligations being accelerated,
without such acceleration having been rescinded or annulled; or
(6) the Company or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an
involuntary case.
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors; or
(7) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
40
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case,
(B) appoints a Custodian of the Company or any Significant
Subsidiary or for all or substantially all of either of its property,
or
(C) orders the liquidation of the Company or any Significant
Subsidiary,
and the order or decree remains unstayed and in effect for 90 days; or
(8) any other Event of Default provided with respect to Securities
of that series.
As used in this Section 501, the term "Bankruptcy Law" means title 11, U.S. Code
or any similar Federal or State law for the relief of debtors and the term
"Custodian" means any receiver, trustee, assignee, liquidator or other similar
official under any Bankruptcy Law.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in principal amount of the Outstanding
Securities of that series may declare the principal (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereto) of all the Securities of
that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders), and upon any such
declaration such principal or specified portion thereof shall become immediately
due and payable.
At the 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 in the currency or currency unit or composite currency in
which the Securities of such series are payable (except as otherwise
specified pursuant to Section 301 for the Securities of such series):
(A) all overdue installments of interest on and any
Additional Amounts payable in respect of all Outstanding Securities
of that series and any related coupons,
41
(B) the principal of and premium, if any, on) any Outstanding
Securities of that series which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate or rates
borne by or provided for in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest and any Additional
Amounts at the rate or rates borne by or provided for in such
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of (or premium, if any) or
interest on Securities of that series which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. The Company covenants that if:
- -------
(1) default is made in the payment of any installment of interest or
Additional Amounts, if any, on any Security of any series and any related
coupon when such interest or Additional Amount becomes due and payable and
such default continues for period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at its Maturity,
then the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities of such series and coupons, the whole
amount then due and payable on such Securities and coupons for principal (and
premium, if any) and interest and Additional Amounts, with interest upon any
overdue principal (and premium, if any) and, to the extent that payment of such
interest shall legally enforceable, upon any overdue installments of interest or
Additional Amounts, if any, at the rate or rates borne by or provided for in
such Securities, and, in additional 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.
42
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as Trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon such Securities of such series and
collect the moneys adjudged or decreed to be payable in the manner provided by
law out of the property of the Company or any other obligor upon such Securities
of such series, wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series and any related coupons by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim. In case of the
--------------------------------
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor or their creditors, the
Trustee (irrespective of whether the principal of the Securities of any series
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal, premium, if any, or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(i) to file and prove a claim for the whole amount, or such lesser
amount as may be provided for in the Securities of such series, of
principal (and premium, if any) and interest and Additional Amounts, if
any, owing and unpaid in respect of the Securities and to file such other
papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized
by each Holder of Securities of such series and coupons to make such payments to
the Trustee, and in the event that
43
the Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee and any
predecessor Trustee, their agents and counsel, and any other amounts due the
Trustee or any predecessor Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
or coupon any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or coupons or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder of a
Security or coupon in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of
------------------------------------------------
Securities or Coupons. All rights of action and claims under this Indenture or
- ---------------------
any of the Securities or coupons may be prosecuted and enforced by the Trustee
without the possession of any of the Securities or coupons or the production
thereof in any proceeding relating thereto, and any such proceeding instituted
by the Trustee shall be brought in its own name as trustee of any express trust,
and any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the Holders of the
Securities and coupons in respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected. Any money collected
------------------------------
by the Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal (or premium, if any) or interest and any
Additional Amounts, upon presentation of the Securities or coupons, or both, as
the case may be, and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 606;
SECOND: To the payment of the amounts then due and unpaid upon the
Securities and coupons for principal (and premium, if any) and interest
and any Additional Amounts payable, in respect of which or for the benefit
of which such money has been collected, ratably, without preference or
priority of any kind, according to the aggregate amounts due and payable on
such Securities and coupons for principal (and premium, if any), interest
and Additional Amounts, respectively; and
THIRD: To the payment of the remainder, if any, to the Company.
44
SECTION 507. Limitation on Suits. No Holder of any Security of any
-------------------
series or any related coupon shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless;
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding;
and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal,
----------------------------------------------------
Premium, if any, Interest and Additional Amounts. Notwithstanding any other
- ------------------------------------------------
provision in this Indenture, the Holder of any Security or coupon shall have the
right which is absolute and unconditional to receive payment of the principal of
(and premium, if any) and (subject to Sections 305 and 307) interest on, and any
Additional Amounts in respect of, such Security or payment of such coupon on the
respective due dates expressed in such Security or coupon (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
45
SECTION 509. Restoration of Rights and Remedies. If the Trustee or
-----------------------------------
any Holder of a Security or coupon has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, the Company, the Trustee and the
Holders of Securities and coupons shall, subject to any determination in such
proceeding, be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the Holders
shall continue as though no such proceeding had instituted.
SECTION 510. Rights and Remedies Cumulative. Except as otherwise
------------------------------
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities or coupons in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders of Securities or coupons is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver. No delay or omission of
----------------------------
the Trustee or of any Holder of any Security or coupon to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders of Securities or coupons, as the
case may be.
SECTION 512. Control by Holders of Securities. The Holders of not
--------------------------------
less than a majority in principal amount of the Outstanding Securities of any
series shall have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to the Securities of such series,
provided that
- --------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction, and
(3) the Trustee need not take any action which might involve it in
personal liability or be unduly prejudicial to the Holders of Securities of
such series not joining therein.
46
SECTION 513. Waiver of Past Defaults. The Holders of not less than a
------------------------
majority in principal amount of the Outstanding Securities of any series may on
behalf of the Holders of all the securities of such series and any related
coupons waive any past default hereunder with respect to such series and its
consequences, except a default
(1) in the payment of the principal of (or premium, if any) or
interest on or Additional Amounts payable in respect of any Security of
such series or any related coupons, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 514. Waiver of Usury, Stay or Extension Laws. The Company
----------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
SECTION 515. Undertaking for Costs. All parties to this Indenture
---------------------
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of any undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
on any Security on or after the
47
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE SIX
THE TRUSTEE
SECTION 601. Notice of Defaults. Within 90 days after the occurrence
------------------
of any default hereunder with respect to the Securities of any series, the
Trustee shall transmit in the manner and to the extent provided in TIA Section
313(c), notice of such default hereunder known to the Trustee, unless such
default shall have been cured or waived; provided, however, that, except in the
-------- -------
case of a default in the payment of the principal of (or premium, if any) or
interest on or any Additional Amounts with respect to any Security of such
series, or in the payment of any sinking fund installment with respect to the
Securities of such series, the Trustee shall be protected in withholding such
notice if and so long as Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of the Holders
of the Securities and coupons of such series; and provided further that in the
-------- -------
case of any default or breach of the character specified in Section 501(4) with
respect to the Securities and coupons of such series, no such notice to Holders
shall be given until at least 60 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to the Securities of such series.
SECTION 602. Certain Rights of Trustee. Subject to the provisions of
-------------------------
TIA Section 315(a) through 315(d):
(1) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto,
to the Trustee for authentication and delivery pursuant to Section 303
which shall be sufficiently evidenced as provided therein) and any
resolution of the Board of Trustees may be sufficiently evidenced by a
Board Resolution;
(3) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action
48
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 of Securities of any series or any related coupons
pursuant to this Indenture, unless such Holders shall have offered to the
Trustee security or indemnity reasonably satisfactory to the Trustee
against the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, coupon or other paper or document, 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 make
reasonable examination of the books, records and premises of the Company,
personally or by agent or attorney following reasonable notice to the
Company;
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder; and
(8) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and reasonably believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Indenture.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured to it.
Except during the continuance of an Event of Default, the Trustee
undertakes to perform only such duties as are specifically
49
set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee.
SECTION 603. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the Trustee's
certificate of authentication, and in any coupons shall be taken as the
statements of the Company, and neither the Trustee nor any Authenticating Agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities or coupons, except that the Trustee represents that it is duly
authorized to execute and deliver this Indenture, authenticate the Securities
and perform its obligations hereunder. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
SECTION 604. May Hold Securities. The Trustee, any Paying Agent,
-------------------
Security Registrar, Authenticating Agent or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and coupons and, subject to TIA Sections 310(b) and 311, may
otherwise deal with the Company with the same rights it would have if it were
not Trustee, Paying Agent, Security Registrar, Authenticating Agent or such
other agent.
SECTION 605. Money Held in Trust. Money held by the Trustee in
-------------------
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 606. Compensation and Reimbursement. The Company agrees:
------------------------------
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its own part, arising out of or in
connection with the acceptance or
50
administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 501(6) or Section 501(7), the
expenses (including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (or premium, if any) or interest
on particular Securities or any coupons.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 607. Corporate Trustee Required; Eligibility; Conflicting
----------------------------------------------------
Interests. There shall at all times be a Trustee hereunder which shall be
- ---------
eligible to act as Trustee under TIA Section 310(a)(1) and shall have a combined
capital and surplus of at least $50,000,000. If such corporation publishes
reports of condition at least annually, pursuant to law or the requirements of
Federal, State, Territorial or District of Columbia supervising of examining
authority, then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Article.
SECTION 608. Resignation and Removal; Appointment of Successor. (a)
-------------------------------------------------
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 609.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If an
instrument of acceptance by a successor Trustee shall not have been delivered to
the Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of successor Trustee.
51
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal amount
of the Outstanding Securities of such series delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of TIA
Section 310(b) after written request therefor by the Company or by any
Holder of a Security who has been a bona fide Holder of a Security for at
least six months, or
(2) the Trustee shall cease to be eligible under Section 607 and
shall fail to resign after written request therefor by the Company or by
any Holder of a Security who has been a bona fide Holder of a Security for
at least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property
shall be appointed or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to all
Securities, or (ii) subject to TIA Section 315(e), any Holder of a Security who
has been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities and
the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause with
respect to the Securities of one or more series, the Company, by or pursuant to
a Board Resolution, shall promptly appoint a successor Trustee or Trustees with
respect to the Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Securities of one or
more of all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series). If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee with respect to the Securities
of such series and to that extent supersede the successor Trustee appointed by
the Company. If no successor Trustee with respect to the Securities of
52
any series shall have been so appointed by the Company or the Holders of
Securities and accepted appointment in the manner hereinafter provided, any
Holder of a Security who has been a bona fide Holder of a Security of such
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to Securities of such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to the Securities of any series and each appointment
of a successor Trustee with respect to the Securities of any series in the
manner provided for notices to the Holders of Securities in Section 106. Each
notice shall include the name of the successor Trustee with respect to the
Securities of such Series and the address of its Corporate Trust Office.
SECTION 609. Acceptance of Appointment by Successor. (a) In case of
--------------------------------------
the appointment hereunder of a successor Trustee with respect to all Securities,
every such successor Trustee shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on request of the Company of 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
provided for in Section 606.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto,
pursuant to Article Nine hereof, wherein each successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration
53
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 610. Merger, Conversion, Consolidation or Succession to
--------------------------------------------------
Business. Any corporation into which the Trustee may be merged or converted or
- --------
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
- --------
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities or coupons shall have
been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Securities or coupons so
authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities or coupons. In case any Securities or coupons
shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such securities or coupons, in
either its own name or that of its predecessor Trustee, with the full force and
effect which this Indenture provides for the certificate of authentication of
the Trustee.
54
SECTION 611. Appointment of Authenticating Agent. At any time
-----------------------------------
when any of the Securities remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to authenticate
Securities of such series issued upon exchange, registration of transfer or
partial redemption or repayment thereof, and Securities so authenticated shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee hereunder. Any such
appointment shall be evidenced by an instrument in writing signed by a
Responsible Officer of the Trustee, a copy of which instrument shall be promptly
furnished to the Company. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a bank or trust company or corporation
organized and doing business and in good standing under the laws of the United
States of America or of any State or the District of Columbia, authorized under
such laws to act as Authenticating Agent, having a combined capital and surplus
of not less than $50,000,000 and subject to supervision or examination by
Federal or State authorities. If such Authenticating Agent publishes reports of
condition at least annually, pursuant to law or the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Authenticating Agent shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company. The Trustee for any series of Securities may at any time
terminate the agency of an Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any
55
time such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee for such series may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall give
notice of such appointment to all Holders of Securities of the series with
respect to which such Authenticating Agent will serve in the manner set forth in
Section 106. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effects as if originally named as an
Authenticating Agent herein. No successor Authenticating Agent shall be
appointed unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation including reimbursement of its reasonable expenses
for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
First Union National Bank
as Trustee
By: __________________________________,
as Authenticating Agent
By: __________________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LIST AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Disclosure of Names and Addresses of Holders. Every
--------------------------------------------
Holder of Securities or coupons, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
Authenticating Agent nor any Paying Agent nor any Security Registrar shall be
held accountable by reason of the disclosure of any information as to the names
and addresses of the Holders of Securities in accordance with TIA Section 312,
regardless of the source from which such information ??? derived, and that the
Trustee shall not be held accountable by
56
reason of mailing any material pursuant to a request made under TIA Section
312(b).
SECTION 702. Reports by Trustee. Within 60 days after May 15 of each
------------------
year commencing with the first May 15 after the first issuance of Securities
pursuant to this Indenture, the Trustee shall transmit by mail to all Holders of
Securities as provided in TIA Section 313(c) a brief report dated as of such May
15 if required by TIA Section 313(a).
SECTION 703. Reports by Company. The Company will:
------------------
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not required to file
information, documents or reports pursuant to either of such Sections, then
it will file with the Trustee, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the supplementary
and periodic information, documents and reports which may be required
pursuant to Section 13 of the Securities Exchange Act of 1934 in respect of
a security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by
the Company with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to the Holders of Securities, within 30 days
after the filing thereof with the Trustee, in the manner and to the extent
provided in TIA Section 313(c), such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
SECTION 704. Company to Furnish Trustee Name and Addresses of
------------------------------------------------
Holders. The Company will furnish or cause to be furnished to the Trustee:
- -------
(a) semi-annually, not later than 15 days after the regular Record
Date for interest for each series of Securities, a Trust, in such form as the
Trustee may reasonably require, of the
57
names and addresses of the Holders of Registered Securities of such series as of
such Regular Record Date, or if there is no Regular Record Date for interest for
such series of Securities, semi-annually, upon such dates as are set forth in
the Board Resolution or indenture supplemental hereto authorizing such series,
and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of similar
form and content as of a date not more than 15 days prior to the time such list
is furnished,
provided, however, that, so long as the Trustee is the Security Registrar, no
- -------- -------
such list shall be required to be furnished.
ARTICLE EIGHT
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 801. Consolidations and Mergers of Company and Sales, Leases
-------------------------------------------------------
and Conveyances Permitted Subject to Certain Conditions. The Company may
- -------------------------------------------------------
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case, (1) either the Company shall be the continuing corporation, or the
successor corporation shall be a corporation organized and existing under the
laws of the United States or a State thereof and such successor corporation
shall expressly assume the due and punctual payment of the principal of (and
premium, if any) and any interest (including all Additional Amounts, if any,
payable pursuant to Section 1010) on all of the Securities, according to their
tenor, and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Company by
supplemental indenture, complying with Article Nine hereof, satisfactory to the
Trustee, executed and delivered to the Trustee by such corporation and (2)
immediately after giving effect to such transaction and treating any
indebtedness which becomes an obligation of the Company or any Subsidiary as a
result thereof as having been incurred by the Company or any Subsidiary at the
time of such transaction, no Event of Default, and no event which, after notice
or the lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing.
SECTION 802. Rights and Duties of Successor Corporation. In case of
------------------------------------------
any such consolidation, merger, sale, lease or conveyance and upon any such
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the fist part, and the predecessor
corporation, except in the event of a lease, shall be relieved of any further
obligation under this Indenture and the Securities. Such successor corporation
hereupon may cause to be signed, and may issue either in its own name or in
the name of the Company, any or all of the Securities
58
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation,
instead of the Company, and subject to all the terms, conditions and limitations
in this Indenture prescribed, the Trustee shall authenticate and shall deliver
any Securities which previously shall have been signed and delivered by the
officers of the Company to the Trustee for authentication, and any Securities
which such successor corporation thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 803. Officers' Certificate and Opinion of Counsel. Any
--------------------------------------------
consolidation, merger, sale, lease or conveyance permitted under Section 801 is
also subject to the condition that the Trustee receive an Officers' Certificate
and an Opinion of Counsel to the effect that any such consolidation, merger,
sale, lease or conveyance, and the assumption by any successor corporation,
complies with the provisions of this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders of Securities or coupons, the Company, when
authorized by or pursuant to a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental
hereto, in form satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities contained; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be
for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to
59
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default for the benefit of the Holders
of all or any series of Securities (and if such Events of Default are to be for
the benefit of less than all series of Securities, stating that such Events of
Default are expressly being included solely for the benefit of such series);
provided, however, that in respect of any such additional Events of Default such
- -------- -------
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default or may limit
the right of the Holders of a majority in aggregate principal amount of that or
those series of Securities to which such additional Events of Default apply to
waive such default; or
(4) to add to or change any of the provisions of this Indenture to provide
that Bearer Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal of or any premium or
interest on Bearer Securities, to permit Bearer Securities to be issued in
exchange for Registered Securities, to permit Bearer Securities to be issued in
exchange for Bearer Securities of other authorized denominations or to permit or
facilitate the issuance of Securities in uncertificated form, provided that any
--------
such action shall not adversely affect the interests of the Holders of
Securities of any series or any related coupons in any material respect; or
(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
- --------
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any series and any
related coupons as permitted by Sections 201 and 301, including the provisions
and procedures relating to Securities convertible into Common Shares or
Preferred Shares, as the case may be; 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
60
to provide for or facilitate the administration of the trusts hereunder by
more than one Trustee; or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provisions
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent with
the provisions of this Indenture, provided such provisions shall not
--------
adversely affect the interests of the Holders of Securities of any series
or any related coupons in any material respect; or
(10) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Section 401, 1402 and
1403; provided that any such action shall not adversely affect the
--------
interests of the Holders of Securities of such series and any related
coupons or any other series of Securities in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders. With the
-----------------------------------------------
consent of the Holders of not less than a majority in principal amount of all
Outstanding Securities affected by such supplemental indenture, by Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by or pursuant to a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities and any related coupons under this Indenture; provided, however, that
-------- -------
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby:
(1) change the Stated Maturity of the principal of (or premium, if
any, on) or any installment of principal of or interest on, any Security;
or reduce the principal amount thereof or the rate of amount of interest
thereon or any Additional Amounts payable in respect thereof, or any
premium payable upon the redemption thereof, or change any obligation of
the Company to pay Additional Amounts pursuant to Section 1010 (except as
contemplated by Section 801(1) and permitted by Section 901(1)), or reduce
the amount of the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502 or the amount thereof provable in
bankruptcy pursuant to Section 504, or adversely affect any right of
repayment at the option of the Holder of any Security, or change any Place
of Payment where, or the currency or currencies, currency unit or units or
composite currency or currencies in which, any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for
61
the enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption or repayment at the option of the Holder, on
or after the Redemption Date or the Repayment Date, as the case may be), or
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver with respect to such series (or compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the requirements of
Section 1504 for quorum or voting, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1011, except to increase the required percentage to effect such
action or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each Outstanding
Security affected thereby.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
SECTION 903. Execution of Supplemental Indentures. In executing, or
------------------------------------
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture. The
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures. Upon the execution
---------------------------------
of any supplemental indenture under this Article, this indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder and of any
coupon appended charter hereto shall be bound thereby.
62
SECTION 905. Conformity with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall conform to the requirements of
the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall, if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated and delivered by the Trustee in
exchange for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium, if any, Interest and
---------------------------------------------------
Additional Amounts. The Company covenants and agrees for the benefit of the
- ------------------
Holders of each series of Securities that it will duly and punctually pay the
principal of (and premium, if any) and interest on and any Additional Amounts
payable in respect of the Securities of that series in accordance with the terms
of such series of Securities, any coupons appertaining thereto and this
Indenture. Unless otherwise specified as contemplated by Section 301 with
respect to any series of Securities, any interest due on and any Additional
Amounts payable in respect of Bearer Securities on or before Maturity, other
than Additional Amounts, if any, payable as provided in Section 1010 in respect
of principal of (or premium, if any, on) such a Security, shall be payable only
upon presentation and surrender of the several coupons for such interest
installments as are evidenced thereby as they severally mature. Unless otherwise
specified with respect to Securities of any series pursuant to Section 301, at
the option to the Company, all payments of principal may be paid by check to the
registered Holder of the Registered Security or other person entitled thereto
against surrender of such Security.
SECTION 1002. Maintenance of Office or Agency. If Securities of a
-------------------------------
series are issuable only as Registered Securities, the Company shall maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment or
conversion, where Securities of that series may be surrendered for registration
of transfer or exchange and where notices and demands to or upon the Company in
respect of the Securities of that series and this Indenture may be served. If
Securities of a series are issuable as
63
Bearer Securities, the Company will maintain: (A) in the Borough of Manhattan,
New York City, an office or agency where any Registered Securities of that
series may be presented or surrendered for payment or conversion, where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange, where
notices and demands to or upon the Company in respect of the Securities of that
series and this Indenture may be served and where Bearer Securities of that
series and related coupons may be presented or surrendered for payment or
conversion in the circumstances described in the following paragraph (and not
otherwise); (B) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series which is located outside the United States, an
office or agency where Securities of that series and related coupons may be
presented and surrendered for payment (including payment of any Additional
Amounts payable on Securities of that series pursuant to Section 1010) or
conversion; provided, however, that if the Securities of that series are listed
-------- -------
on the Luxembourg Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, the Company will
maintain a Paying Agent for the Securities of that series in Luxembourg or any
other required city located outside the United States, as the case may be, so
long as the Securities of that series are listed on such exchange; and (C)
subject to any laws or regulations applicable thereto, in a Place of Payment for
that series located outside the United States an office or agency where any
Registered Securities of that series may be surrendered for registration of
transfer, where Securities of that series may be surrendered for exchange and
where notices and demands to or upon the Company in respect of the Securities of
that series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of each such office or agency. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust office of the Trustee, except that Bearer
Securities of that Series and the related coupons may be presented and
surrendered for payment (including payment of any Additional Amounts payable on
Bearer Securities of that series pursuant to Section 1010) or conversion at the
offices specified in the Security, in London, England and the Company hereby
appoints the same at its agent to receive such respective presentations,
surrenders, notices and demands, and the Company hereby appoints the Trustee
its agent to receive all such presentations, surrenders, notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, no payment of principal, premium or interest on or Additional
Amounts in respect of Bearer Securities shall made at any office or agency of
the Company in the United States or by check be mailed to any address in the
United States or by transfer to an account maintained with a bank located in the
United
64
States; provided, however, that, if the Securities of a series are payable in
-------- -------
Dollars, payment of principal of and any premium and interest on any Bearer
Security (including any Additional Amounts payable on Securities of such series
pursuant to Section 1010) shall be made at the office of the designated agent of
the Company's paying Agent in the Borough of Manhattan, New York City, if (but
only if) payment in Dollars of the full amount of such principal, premium,
interest or Additional Amounts, as the case may be, at all offices or agencies
outside the United States maintained for the purpose by the Company in
accordance with this indenture, is illegal or effectively precluded by exchange
controls or other similar restrictions.
The Company may from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all of such purposes, and may from time to time rescind
such designations; provided, however, that no such designation or rescission
-------- -------
shall in any manner relieve the Company of its obligation to maintain an office
or agency in accordance with the requirements set forth above Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency. Unless otherwise specified with respect to
any Securities pursuant to Section 301 with respect to a series of Securities,
the Company hereby designates as a Place of Payment for each series of
Securities the office or agency of the Company in the Borough of Manhattan, New
York City, and initially appoints the Trustee at its Corporate Trust Office as
Paying Agent and as its agent to receive all such presentations, surrenders,
notices and demands.
Unless otherwise specified with respect to any Securities pursuant to
Section 301, if and so long as the Securities of any series (i) are denominated
in Foreign Currency or (ii) may be payable in a Foreign Currency, or so long as
it is required under any other provision of the Indenture, then the Company will
maintain with respect to each such series of Securities, or as so required, at
least one exchange rate agent.
SECTION 1003. Money for Securities Payments to be held in Trust. If
-------------------------------------------------
the Company shall at any time act as its own Paying Agent with respect to any
series of any Securities and any related coupons, it will, on or before each due
date of the principal of (and premium, if any,) or interest on or Additional
Amounts in respect of, any of the Securities of that series, segregate and hold
in trust for the benefit of the Persons entitled thereto a sum in the currency
or currencies, currency unit or units or composite currency or currencies in
which the Securities of such series are payable except as otherwise specified
pursuant to Section 301 for the Securities of such series) sufficient to pay the
principal (and premium, if any) or interest or Additional Amounts so becoming
due until such sums shall be paid to such Persons or otherwise disposed
65
of as herein provided, and will promptly notify the Trustee of its action or
failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities and any related coupons, it will, before each due date of
the principal of (and premium, if any), or interest on or Additional Amounts in
respect of, any Securities of that series, deposit with a Paying Agent a sum (in
the currency or currencies, currency unit or units or composite currency or
currencies described in the preceding paragraph) sufficient to pay the principal
(and premium, if any) or interest or Additional Amounts, so becoming due, such
sum to be held in trust for the benefit of the Persons entitled to such
principal, premium or interest or Additional Amounts and (unless such Paying
Agent is the Trustee) the Company will promptly notify the Trustee of its action
or failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will
(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities or Additional Amounts in trust
for the benefit of the Persons entitled thereto until such sums shall be
paid to such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any such payment of
principal (and premium, if any) or interest or Additional Amounts; and
(3) at any time during the continuance of any such default upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct and Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such sums.
Except as otherwise provided in the Securities of any series, any
money deposited with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal ???? (and premium, if any) or
interest on, or any Additional Amounts in respect of, any Security of any series
and remaining unclaimed
66
for two years after such principal (and premium, if any), interest or Additional
Amounts has become due and payable shall be paid to the Company upon Company
Request or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment of such principal of (and
premium, if any) or interest on, or any Additional Amounts in respect of, any
Security, without interest thereon, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided, however, that the Trustee
-------- -------
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company cause to be published once, in an Authorized
Newspaper, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the company.
SECTION 1004. Existence. Subject to Article Eight, the Company will
---------
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights (charter and statutory) and
franchises; provided, however, that the Company shall not be required to
-------- -------
preserve any right or franchise if the Board of Directors shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company.
SECTION 1005. Maintenance of Properties. The Company will cause all
-------------------------
of its material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times.
SECTION 1006. Insurance. The Company will, and will cause each of
---------
its Subsidiaries to, keep all of its insurable properties insured against loss
or damage at least equal to their then full insurable value with insurers of
recognized responsibility and having a rating of at least A-:XII in Best's Key
Rating Guide.
SECTION 1007. Payment of Taxes and Other Claims. The Company will pay
---------------------------------
or discharge or cause to be paid or discharged, before the same shall become
delinquent, (1) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Company or any Subsidiary, and (2) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the property of the
Company or any Subsidiary; provided, however, that the Company shall not be
-------- -------
required to pay or discharge or cause to be paid or
67
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith.
SECTION 1008. Provision of Financial Information. Whether or not the
----------------------------------
Company is subject to Section 13 or 15(d) of the Securities Exchange Act of
1934, the Company will prepare the annual reports, quarterly reports and other
documents within 15 days of each of the respective dates by which the Company
would have been required to file with the Commission pursuant to such Section 13
of 15(d) and will (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, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 if the Company were subject to such
Sections, (ii) file with the Trustee copies of the annual reports, quarterly
reports and other documents which the Company would have been required to file
with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 if the Company were subject to such Sections and (iii) promptly upon
written request and payment of the reasonable cost of duplication and delivery,
supply copies of such documents to any prospective Holder.
SECTION 1009. Statement as to Compliance. The Company will deliver to
--------------------------
the Trustee, within 120 days after the end of each fiscal year, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this Indenture and, in the
event of any noncompliance, specifying such noncompliance and the nature and
status thereof. For purposes of this Section 1009, such compliance shall be
determined without regard to any period of grace or requirement of notice under
this Indenture.
Section 1010. Additional Amounts. If any Securities of a series
------------------
provide for the payment of Additional Amounts, the Company will pay to the
Holder of any Security of such series or any coupon appertaining thereto
Additional Amounts as may be specified as contemplated by Section 301. Whenever
in this Indenture there is mentioned, in any context except in the case of
Section 502(1), the payment of the principal of or any premium or interest on,
or in respect of, any Security of any series or payment of any related coupon or
the net proceeds received on the sale or exchange of any security of any series,
such mention shall be deemed to include mention of the payment of Additional
Amounts provided by the terms of such series established pursuant to Section 301
to the extent that, in such context, Additional Amounts are, were or would be
payable in respect thereof pursuant to such terms and express mention of the
payment of Additional Amounts (if applicable) in any provisions hereof shall not
be construed as excluding Additional Amounts in those provisions hereof where
such express mention is not made.
68
Except as otherwise specified as contemplated by Section 301, if the
Securities of a series provide for the payment of Additional Amounts, at least
10 days prior to the first Interest Payment Date with respect to that series of
Securities (or if the Securities of that series will not bear interest prior to
Maturity, the first day on which a payment of principal and any premium is
made), and at least 10 days prior to each date of payment of principal and any
premium or interest if there has been any change with respect to the matters set
forth in the below-mentioned Officers' Certificate, the Company will furnish the
Trustee and the Company's principal Paying Agent or Paying Agents, if other than
the Trustee, with an Officers' Certificate instructing the Trustee and such
Paying Agent or Paying Agents whether such payment of principal of and any
premium or interest on the Securities of that series shall be made to Holders of
Securities of that series or any related coupons who are not United States
persons without withholding for or on account of any tax, assessment or other
governmental charge described in the Securities of the series. If any such
withholding shall be required, then such Officers' Certificate shall specify by
country the amount, if any, required to be withheld on such payments to such
Holders of Securities of that series or related coupons and the Company will pay
to the Trustee or such Paying Agent the Additional Amounts required by the terms
of such Securities. In the event that the Trustee or any Paying Agent, as the
case may be, shall not so receive the above-mentioned certificate, then the
Trustee or such Paying Agent shall be entitled (i) to assume that no such
withholding or deduction is required with respect to any payment of principal or
interest with respect to any Securities of a series or related coupons until it
shall have received a certificate advising otherwise and (ii) to make all
payments of principal and interest with respect to the Securities of a series or
related coupons without withholding or deductions until otherwise advised. The
Company covenants to indemnify the Trustee and any Paying Agent for, and to hold
them harmless against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or in connection
with actions taken or omitted by any of them or in reliance on any Officers'
Certificate furnished pursuant to this Section or in reliance on the Company's
not furnishing such an Officers' Certificate.
SECTION 1011. Waiver of Certain Covenants. The Company may omit in any
---------------------------
particular instance to comply with any term, provision or condition set forth in
Sections 1004 to 1008, inclusive, if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Securities of such series, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Company and the duties of the Trustee
in respect of any such term, provision or condition shall remain in full force
and effect.
69
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article. Securities of any series which
------------------------
are redeemable before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
301 for Securities of any series) in accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee. The election of
-------------------------------------
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
less than all of the Securities of any series, the Company shall, at least 45
days prior to the giving of the notice of redemption in Section 1104 (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of such
Redemption Date and of the principal amount of Securities of such series to be
redeemed. In the case of any redemption of Securities prior to the expiration of
any restriction on such redemption provided in the terms of such Securities or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such restriction.
SECTION 1103. Selection by Trustee of Securities to be Redeemed. If
-------------------------------------------------
less than all the Securities of any series issued on the same day with the same
terms are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities of such series issued on such date with the same
terms not previously called for redemption, by such method as the Trustee shall
deem fair and appropriate and which may provide for the selection for redemption
of portions (equal to the minimum authorized denomination for Securities of that
series or any integral multiple thereof) of the principal amount of Securities
of such series of a denomination larger than the minimum authorized denomination
for Securities of that series.
The Trustee shall promptly notify the Company and the Security
Registrar (if other than itself) in writing of the Securities selected for
redemption and, in the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
70
SECTION 1104. Notice of Redemption. Notice of redemption shall be
--------------------
given in the manner provided in Section 106, not less than 30 days nor more than
60 days prior to the Redemption Date, unless a shorter period is specified by
the terms of such series established pursuant to Section 301, to each Holder of
Securities to be redeemed, but failure to give such notice in the manner herein
provided to the Holder of any Security designated for redemption as a whole or
in part, or any defect in the notice to any such Holder, shall not affect the
validity of the proceedings for the redemption of any other such Security or
portion thereof.
Any notice that is mailed to the Holders of Registered Securities in
the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price, accrued interest to the Redemption Date
payable as provided in Section 1106, if any, and Additional Amounts, if any,
(3) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amount) of the particular Security or Securities to be redeemed,
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without charge,
a new Security or Securities of authorized denominations for the principal
amount thereof remaining unredeemed,
(5) that on the Redemption Date the Redemption Price and accrued
interest to the Redemption Date payable as provided in Section 1106, if any,
will become due and payable upon each such Security, or the portion thereof, to
be redeemed and, if applicable, that interest thereon shall cease to accrue on
and after said date,
(6) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if any,
maturing after the Redemption Date, are to be surrendered for payment of the
Redemption Price and accrued interest, if any, or for conversion,
(7) that the redemption is for a sinking fund, if such is the case,
71
(8) that, unless otherwise specified in such notice, Bearer Securities
of any series, if any, surrendered for redemption must be accompanied by
all coupons maturing subsequent to the date fixed for redemption or the
amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the Company,
the Trustee for such series and any Paying Agent as furnished.
(9) if Bearer Securities of any series are to be redeemed and any
Registered Securities of such series are not to be redeemed, and if such
Bearer Securities may be exchanged for Registered Securities not subject to
redemption on this Redemption Date pursuant to Section 305 or otherwise,
the last date, as determined by the Company, on which such exchanges may be
made,
(10) the CUSIP number of such Security, if any, and
(11) if applicable, that a Holder of Securities who desires to convert
Securities for redemption must satisfy the requirements for conversion
contained in such Securities, the then existing conversion price or rate,
and the date and time when the option to convert shall expire.
Notice of redemption of Securities to be redeemed shall be given by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price. At least one Business Day
---------------------------
prior to any Redemption Date, the Company shall deposit with the Trustee or with
a Paying Agent (or, if the Company is acting as its own Paying Agent, which it
may not do in the case of a sinking fund payment under Article Twelve,
segregate and hold in trust as provided in Section 1003) an amount of money in
the currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
sufficient to pay on the Redemption Date the Redemption Price of, and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date. Notice of
-------------------------------------
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified in the currency or currencies, currency unit or units or
composite currency or currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section 301 for the
Securities of such series)(together with accrued interest, if any, to the
Redemption Date), and from and after such date (unless the Company
72
shall default in the payment of the Redemption Price and accrued interest) such
Securities shall, if the same were interest-bearing, cease to bear interest and
the coupons for such interest appertaining to any Bearer Securities so to be
redeemed, except to the extent provided below, shall be void. Upon surrender of
any such Security for redemption in accordance with said notice, together with
all coupons, if any, appertaining thereto maturing after the Redemption Date,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest, if any, to the Redemption Date; provided, however, that
-------- -------
installments of interest on Bearer Securities whose Stated Maturity is on or
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States (except as otherwise provided in Section 1002)
and, unless otherwise specified as contemplated by Section 301, only upon
presentation and surrender of coupons for such interest; and provided further
-------- -------
that, except as otherwise provided with respect to Securities convertible into
Common Stock or Preferred Stock, installments of interest on Registered
Securities whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for redemption shall not be
accompanied by all appurtenant coupons maturing after the Redemption Date, such
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Security
shall surrender to the Trustee or any Paying Agent any such missing coupon in
respect of which a deduction shall have been made from the Redemption Price,
such Holder shall be entitled to receive the amount so deducted; provided,
--------
however, that interest represented by coupons shall be payable only at an office
- -------
or agency located outside the United States (except as otherwise provided in
Section 1002) and, unless otherwise specified as contemplated by Section 301,
only upon presentation and surrender of those coupons.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Security.
SECTION 1107. Securities Redeemed in Part. Any Registered Security
---------------------------
which is to be redeemed only in part (pursuant to the provisions of this Article
or of Article Twelve) shall be surrendered at a Place of Payment therefor (with,
if the Company or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly
73
executed by, the Holder thereof or his attorney duly authorized in writing) and
the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security without service charge a new Security or Securities of
the same series, of any authorized denomination as requested by such Holder in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article. The provisions of this Article
------------------------
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 301 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of such Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of any Securities of any
series, the cash amount of any mandatory sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund payment shall be
applied to the redemption of Securities of any series as provided for by the
terms of Securities of such series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities. The
-----------------------------------------------------
Company may, in satisfaction of all or any part of any mandatory sinking fund
payment with respect to the Securities of a series, (1) deliver Outstanding
Securities of such series (other than any previously called for redemption)
together in the case of any Bearer Securities of such series with all unmatured
coupons appertaining thereto and (2) apply as a credit Securities of such
series which have been redeemed either at the election of the Company pursuant
to the terms of such Securities or through the application of permitted optional
sinking fund payments pursuant to the terms of such Securities, as provided for
by the terms of such Securities, or which have otherwise been acquired by the
Company; provided that such Securities so delivered or applied as a credit have
--------
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the applicable Redemption Price specified in
such Securities for redemption through operation of the sinking fund and the
amount of such mandatory sinking fund payment shall be reduced accordingly.
SECTION 1203. Redemption of Securities for Sinking Fund. Not less than
-----------------------------------------
60 days prior to each sinking fund payment date for securities of any series,
the Company will deliver to the Trustee an Officer's Certificate specifying the
amount of the next ensuing man-
74
datory sinking fund payment for that series pursuant to the terms of that
series, the portion thereof, if any, which is to be satisfied by payment of cash
in the currency or currencies, currency unit or units or composite currency or
currencies in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 301 for the Securities of such series)
and the portion thereof, if any, which is to be satisfied by delivering and
Crediting Securities of that series pursuant to Section 1202, and the optional
amount, if any, to be added in cash to the next ensuing mandatory sinking fund
payment, and will also deliver to the Trustee any Securities to be so delivered
and credited. If such Officers' Certificate shall specify an optional amount to
be added in cash to the next ensuing mandatory sinking fund payment, the Company
shall thereupon be obligated to pay the amount therein specified. Not less than
30 days before each such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 1103 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article. Repayment of Securities of any
------------------------
series before their Stated Maturity at the option of Holders thereof shall be
made in accordance with the terms of such Securities, if any, and (except as
otherwise specified by the terms of such series established pursuant to Section
301) in accordance with this Article.
75
Securities or portions thereof, as the case may be, to be repaid on such date.
SECTION 1303. Exercise of Option. Securities of any series subject to
------------------
repayment at the option of the Holders thereof will contain an "Option to Elect
Repayment" form on the reverse of such Securities. In order for any Security to
be repaid at the option of the Holder, the Trustee must receive at the Place of
Payment therefor specified in the terms of such Security (or at such other place
or places of which the Company shall from time to time notify the Holders of
such Securities) not earlier than 60 days nor later than 30 days prior to the
Repayment Date (1) the Security so providing for such repayment together with
the "Option to Elect Repayment" form on the reverse thereof duly completed by
the Holder (or by the Holder's attorney duly authorized in writing) or (2) a
telegram, telex, facsimile transmission or a letter from a member of a national
securities exchange, or the National Association of Securities Dealers, Inc.
("NASD"), or a commercial bank or trust company in the United States setting
forth the name of the Holder of the Security, the principal amount of the
Security, the principal amount of the Security to be repaid, the CUSIP number,
if any, or a description of the tenor and terms of the Security, a statement
that the option to elect repayment is being exercised thereby and a guarantee
that the Security to be repaid, together with the duly completed form entitled
"Option to Elect Repayment" on the reverse of the Security, will be received by
the Trustee not later than the fifth Business Day after the date of such
telegram, telex, facsimile transmission or letter; provided, however, that such
-------- -------
telegram , telex, facsimile transmission or letter shall only be effective if
such Security and form duly completed are received by the Trustee by such fifth
Business Day. If less than the entire principal amount of such Security is to be
repaid in accordance with the terms of such Security, the principal amount of
such Security to be repaid, in increments of the minimum denomination for
Securities of such series, and the denomination or denominations of the Security
or Securities to be issued to the Holder for the portion of the principal amount
of such Security surrendered that is not to be repaid, must be specified. The
principal amount of any Security providing for repayment at the option of the
Holder thereof may not be repaid in part if, following such repayment, the
unpaid principal amount of such Security would be less than the minimum
authorized denomination of Securities of the series of which such Security to be
repaid is a part. Except as otherwise may be provided by the terms of any
Security providing for repayment at the option of the Holder thereof, exercise
of the repayment option by the Holder shall be irrevocable unless waived by the
Company.
SECTION 1304. When Securities Presented for Repayment Become Due and
------------------------------------------------------
Payable. If Securities of any series providing for repayment at the option of
- -------
the Holders thereof shall have been surrendered as provided in this Article and
as provided by or pursuant to the terms of such Securities, such Securities or
the portions
76
thereof, as the case may be, to be repaid shall become due and payable and shall
be paid by the Company on the Repayment Date therein specified, and on and after
such Repayment Date (unless the Company shall default in the payment of such
Securities on such Repayment Date) such Securities shall, if the same were
interest-bearing, cease to bear interest and the coupons for such interest
appertaining to any Bearer Securities so to be repaid, except to the extent
provided below, shall be void. Upon surrender of any such Security for repayment
in accordance with such provisions, together with all coupons, if any,
appertaining thereto maturing after the Repayment Date, the principal amount of
such Security so to be repaid shall be paid by the Company, together with
accrued interest, if any, to the Repayment Date; provided, however, that coupons
-------- -------
whose Stated Maturity is on or prior to the Repayment Date shall be payable only
at an office or agency located outside the United States (except as otherwise
provided in Section 1002) and, unless otherwise specified pursuant to Section
301, only upon presentation and surrender of such coupons; and provided further
-------- -------
that, in the case of Registered Securities, installments of interest, if any,
whose Stated Maturity is on or prior to the Repayment Date shall be payable (but
without interest thereon, unless the Company shall default in the payment
thereof) to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to their terms and the provisions of Section 307.
If any Bearer Security surrendered for repayment shall not be
accompanied by all appurtenant coupons maturing after the Repayment Date, such
Security may be paid after deducting from the amount payable therefor as
provided in Section 1302 an amount equal to the face amount of all such missing
coupons, or the surrender of such missing coupon or coupons may be waived by the
Company and the Trustee if there be furnished to them such security or indemnity
as they may require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Security shall surrender to the Trustee or any
Paying Agent any such missing coupon in respect of which a deduction shall have
been made as provided in the preceding sentence, such Holder shall be entitled
to receive the amount so deducted; provided, however, that interest represented
-------- -------
by coupons shall be payable only at an office or agency located outside the
United States (except as otherwise provided in Section 1002) and, unless
otherwise specified as contemplated by Section 301, only upon presentation and
surrender of those coupons.
If the principal amount of any Security surrendered for repayment shall
not be so repaid upon surrender thereof, such principal amount (together with
interest, if any, thereon accrued to such Repayment Date) shall, until paid,
bear interest from the Repayment Date at the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) set forth in such
security.
77
SECTION 1305. Securities Repaid in Part. Upon surrender of any
-------------------------
Registered Security which is to be repaid in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge and at the expense of the Company, a new
Registered Security or Securities of the same series, of any authorized
denomination specified by the Holder, in an aggregate principal amount equal to
and in exchange for the portion of the principal of such Security so surrendered
which is not to be repaid.
ARTICLE FOURTEEN
DEFEASANCE AND COVENANT DEFEASANCE
SECTION 1401. Applicability of Article: Company's Option to Effect
----------------------------------------------------
Defeasance or Covenant Defeasance. If, pursuant to Section 301, provision is
- ---------------------------------
made for either or both of (a) defeasance of the Securities of or within a
series under Section 1402 or (b) covenant defeasance of the Securities of or
within a series under Section 1403, then the provisions of such Section or
Sections, as the case may be, together with the other provisions of this Article
(with such modifications thereto as may be specified pursuant to Section 301
with respect to any Securities), shall be applicable to such Securities and any
coupons appertaining thereto, and the Company may at its option by Board
Resolution, at any time, with respect to such Securities and any coupons
appertaining thereto elect to have Section 1402 (if applicable) or Section 1403
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
SECTION 1402. Defeasance and Discharge. Upon the Company's
------------------------
exercise of the above option applicable to this Section with respect to any
Securities of or within a series, the Company shall be deemed to have been
discharged from its obligations with respect to such Outstanding Securities and
any coupons appertaining thereto on the date the conditions set forth in Section
1404 are satisfied (hereinafter, "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Outstanding Securities and any
coupons appertaining thereto, which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 1405 and the other Sections of
this Indenture referred to in clauses (A) and (B) below, and to have satisfied
all of its other obligations under such Securities and any coupons appertaining
thereto and this Indenture insofar as such Securities and any coupons
appertaining thereto are concerned (and the Trustee, at the expense of the
Company, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder; (A) the rights of Holders of such outstanding Securities and any
coupons appertaining thereto to
78
receive, solely from the trust fund described in Section 1404 and as more fully
set forth in such Section, payments in respect of the principal of (and
premium, if any and interest, if any, on such Securities and any coupons
appertaining thereto when such payments are due, (B) the Company's obligations
with respect to such Securities under Sections 305, 306, 1002 and 1003 and with
respect to the payment of Additional Amounts, if any, on such Securities as
contemplated by Section 1010, (C) the rights, powers, trusts, duties and
immunities of the Trustee hereunder and (D) this Article. Subject to compliance
with this Article Fourteen, the Company may exercise its option under this
Section notwithstanding the prior exercise of its option under Section 1403 with
respect to such Securities and any coupons appertaining thereto.
SECTION 1403. Covenant Defeasance. Upon the Company's exercise of the
-------------------
above option applicable to this Section with respect to any Securities of or
within a series, the Company shall be released from its obligations under
Sections 1004 to 1008, inclusive, and, if specified pursuant to Section 301, its
obligations under any other covenant, with respect to such Outstanding
Securities and any coupons appertaining thereto on and after the date the
conditions set forth in Section 1404 are satisfied (hereinafter, "covenant
defeasance"), and such Securities and any coupons appertaining thereto shall
thereafter be deemed to be not "Outstanding" for the purposes of any direction,
waiver, consent or declaration or Act of Holders (and the consequences of any
thereof) in connection with Sections 1004 to 1008, inclusive, or such other
covenant, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect
to such Outstanding Securities and any coupons appertaining thereto, the Company
may omit to comply with and shall have no liability in respect of any term,
condition or limitation set forth in any such Section or such other covenant,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or such other covenant or by reason of reference in any such
Section or such other covenant to any other provision herein or in a default or
an Event of Default under Section 501(4) or 501(8) or otherwise, as the case may
be, but, except as specified above, the remainder of this Indenture and such
Securities and any coupons appertaining thereto shall be unaffected thereby.
SECTION 1404. Conditions to Defeasance or Covenant Defeasance. The
-----------------------------------------------
following shall be the conditions to application of Section 1402 of Section 1403
to any Outstanding Securities of or within a series and any coupons appertaining
thereto:
(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 607 who shall agree to comply with the provisions of this Article
Fourteen applicable to it) as trust funds in trust for the purpose of making
the
79
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities and any coupons appertaining
thereto, (1) an amount in such currency, currencies or currency unit in which
such Securities and any coupons appertaining thereto are then specified as
payable at Stated Maturity, or (2) Government Obligations applicable to such
Securities and coupons appertaining thereto (determined on the basis of the
currency, currencies or currency unit in which such Securities and coupons
appertaining thereto are then specified as payable at Stated Maturity) which
through the scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the due
date of any payment of principal of (and premium, if any) and interest, if any,
on such Securities and any coupons appertaining thereto, money in an amount, or
(3) a combination thereof, in any case, in an amount, sufficient, without
consideration of any reinvestment of such principal and interest, in the opinion
of a nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and discharge,
and which shall be applied by the Trustee (or other qualifying trustee) to pay
and discharge, (i) the principal of (and premium, if any) and interest, if any,
on such Outstanding Securities and any coupons appertaining thereto on the
Stated Maturity of such principal or installment of principal or interest and
(ii) any mandatory sinking fund payments or analogous payments applicable to
such Outstanding Securities and any coupons appertaining thereto on the day on
which such payments are due and payable in accordance with the terms of this
Indenture and of such Securities and any coupons appertaining thereto.
(b) Such defeasance or covenant defeasance shall not result in a breach
or violation of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Company is a party or by which it
is bound.
(c) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to such Securities and any
coupons appertaining thereto shall have occurred and be continuing on the date
of such deposit or, insofar as Sections 501(6) and 501(7) are concerned, at
any time during the period ending on the 91st day after the date of such deposit
(it being understood that this condition shall not be deemed satisfied until
the expiration of such period).
(d) In the case of an election under Section 1402, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (i) the Company
has received from, or there has been published by, the Internal Revenue Service
a
80
ruling or (ii) since the date of execution of this Indenture, there has been a
change in the applicable Federal income tax law, in either case to the effect
that, and based thereon such opinion shall confirm that, the Holders of such
Outstanding Securities and any coupons appertaining thereto will not recognize
income, gain or loss for Federal income tax purposes as a result of such
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such defeasance
had not occurred.
(e) In the case of an election under Section 1403, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of such Outstanding Securities and any coupons appertaining thereto will
not recognize income, gain or loss for Federal income tax purposes as a result
of such covenant defeasance and will be subject to Federal income tax on the
same amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 1402 or the covenant defeasance under
Section 1403 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 1402 or Section 1403 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the Trustee for such
trust funds or (ii) all necessary registrations under said Act have been
effected.
(g) Notwithstanding any other provisions of this Section, such
defeasance or covenant defeasance shall be effected in compliance with any
additional or substitute terms, conditions or limitations which may be imposed
on the Company in connection therewith pursuant to Section 301.
SECTION 1405. Deposited Money and Government Obligations to Be Held in
--------------------------------------------------------
Trust; Other Miscellaneous Provisions. Subject to the provisions of the last
- -------------------------------------
paragraph of Section 1003, all money and Government Obligations (or other
property as may be provided pursuant to Section 301) (including the proceeds
thereof) deposited with the Trustee (or other qualifying trustee, collectively
for purposes of this Section 1405, the "Trustee") pursuant to Section 1404 in
respect of any Outstanding Securities of any series and any coupons appertaining
thereto shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and any coupons appertaining thereto and this
indenture, to the payment,
81
either directly or through any Paying Agent including the Company acting as its
own Paying Agent as the Trustee may determine, to the Holders of such Securities
and any coupons appertaining thereto of all sums due and to become due thereon
in respect of principal (and premium, if any) and interest and Additional
Amounts, if any, but such money need not be segregated from other funds except
to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 301, if, after a deposit referred to in Section 1404(a) has been made,
(a) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 301 or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 1404(a) has been made in respect of such
Security, or (b) a Conversion Event occurs in respect of the currency or
currency unit in which the deposit pursuant to Section 1404(a) has been made,
the indebtedness represented by such Security and any coupons appertaining
thereto shall be deemed to have been, and will be, fully discharged and
satisfied through the payment of the principal of (and premium, if any), and
interest, if any, on such Security as the same becomes due out of the proceeds
yielded by converting (from time to time as specified below in the case of any
such election) the amount or other property deposited in respect of such
Security into the currency or currency unit in which such Security becomes
payable as a result of such election or Conversation Event based on the
applicable market exchange rate for such currency or currency unit in effect on
the second Business Day prior to each payment date, except, with respect to a
Conversion Event, for such currency or currency unit in effect (as nearly as
feasible) at the time of the Conversion Event.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 1404 or the principal and interest received in respect
thereof other than any such tax, fee or other charge which by law is for the
account of the Holders of such Outstanding Securities and any coupons
appertaining thereto.
Anything in this Article to the contrary notwithstanding, subject to
Section 606, the Trustee shall deliver or pay to the Company from time to time
upon Company Request any money or Government Obligations (or other property and
any proceeds therefrom) held by it as provided in Section 1404 which, in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect a defeasance or covenant defeasance, as applicable, in accordance with
this Article.
82
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
the Holders of at least 10% in principal amount of the Outstanding Securities of
any series shall have requested the Trustee to call a meeting of the Holders of
Securities of such series for any purpose specified in Section 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
83
a series shall constitute a quorum for a meeting of Holders of Securities of
such series; provided, however, that if any action is to be taken at such
-------- -------
meeting with respect to a consent or waiver which this Indenture expressly
provides may be given by the Holders of not less than a specified percentage in
principal amount of the Outstanding Securities of a series, the Persons entitled
to vote such specified percentage in principal amount of the Outstanding
Securities of such series shall constitute a quorum. In the absence of a quorum
within 30 minutes after the time appointed for any such meeting, the meeting
shall, if convened at the request of Holders of Securities of such series, be
dissolved. In any other case the meeting may be adjourned for a period of not
less than 10 days as determined by the chairman of the meeting prior to the
adjournment of such meeting. In the absence of a quorum at the reconvening of
any such adjourned meeting, such adjourned meeting may be further adjourned or a
period of not less than 10 days; at the reconvening of any meeting adjourned or
further adjourned for lack of a quorum, the persons entitled to vote 25% in the
aggregate principal amount of the Securities at the time outstanding shall
constitute a quorum for the taking of any action set forth in the notice of the
original meeting. Notice of the reconvening of any adjourned meeting shall be
given as provided in Section 1502(a), except that such notice need be given only
once not less than five days prior to the date on which the meeting is scheduled
to be reconvened.
Except as limited by the proviso to Section 902, any resolution
presented to a meeting or adjourned meeting duly reconvened at which a quorum is
present as aforesaid may be adopted by the affirmative vote of the persons
entitled to vote a majority in aggregate principal amount of the Outstanding
Securities represented at such meeting; provided, however, that, except as
-------- -------
limited by the proviso to Section 902, any resolution with respect to any
request, ????, authorization, direction, notice, consent, waiver or other ????
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 presented 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 ???? series and the related coupons,
whether or not present or represented at the meeting.
Notwithstanding the foregoing provisions of this Section ?04, if any
action is to be taken at a meeting of Holders of Securities of any series with
respect to any request, demand ??orization, direction, notice consent, waiver
or other action ??? this Indenture expressly provides may be made, given or
taken
84
by the Holders of a specified percentage in principal amount of all Outstanding
Securities affected thereby, or of the Holders of such series and one or more
additional series:
(i) there shall be no minimum quorum requirement for such meeting;
and
(ii) the principal amount of the Outstanding Securities of such series
that vote in favor of such request, demand, authorization, direction,
notice, consent, waiver or other action shall be taken into account in
determining whether such request, demand, authorization, direction, notice,
consent, waiver or other action has been made, given or taken under this
Indenture.
SECTION 1505. Determination of Voting Rights; Conduct and
-------------------------------------------
Adjournment of Meetings. (a) Notwithstanding any provisions of this Indenture,
- -----------------------
the Trustee may make such reasonable regulations as it may deem advisable for
any meeting of Holders of Securities of a series in regard to proof of the
holding of Securities of such series and of the appointment of proxies and in
regard to the appointment and duties of inspectors of votes, the submission and
examination of proxies, certificates and other evidence of the right to vote,
and such other matters concerning the conduct of the meeting as it shall deem
appropriate. Except as otherwise permitted or required by any such regulations,
the holding of Securities shall be proved in the manner specified in Section 104
and the appointment of any proxy shall be proved in the manner specified in
Section 104 or by having the signature of the Person executing the proxy
witnessed or guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such regulations
may provide that written instruments appointing proxies, regular on their face,
may be presumed valid and genuine without the proof specified in Section 104 or
other proof.
(b) The Trustee shall, by an instrument in writing appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders of Securities as provided in Section 1502(b), in which
case the Company or the Holders of Securities of the series calling the meeting,
as the case may be, shall in like manner appoint a temporary chairman. A
permanent chairman and a permanent secretary of the meeting shall be elected by
vote of the Persons entitled to vote a majority in principal amount of the
Outstanding Securities of such series represented at the meeting.
(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
85
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
representative 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.
* * * * *
This Indenture may be executed in any number of counterparts, each of which
so executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same Indenture.
86
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
FEDERAL REALTY INVESTMENT TRUST
By: __________________________________
Title:
Attest:
_________________________________
Title:
First Union National Bank
as trustee
By: _________________________________
Title:
Attest:
_________________________________
Title:
87
STATE OF MARYLAND )
) ss:
COUNTY OF MONTGOMERY )
On the _______ day of September 1998, before me personally came ___________
_______________________, to me known, who, being by me duly sworn, did depose
and say that he/she resides at _____________________________, ________________,
that he/she is ___________________ of FEDERAL REALTY INVESTMENT TRUST, one of
the parties described in and which executed the foregoing instrument, and that
he/she signed his/her name thereto by authority of the Board of Trustees.
[Notarial Seal]
__________________________
Notary Public
COMMISSION EXPIRES
STATE OF ________ )
) ss:
COUNTY OF _______ )
On the ______ day of September 1998, before me personally came
_____________________________, to me known, who, being by me duly sworn, did
depose and say that he/she resides at ______________________________, that
he/she is a _____________________ of First Union National Bank, one of the
parties described in and which executed the foregoing instrument, and that
he/she signed his/her name thereto by authority of the Board of Directors.
[Notarial Seal]
__________________________
Notary Public
COMMISSION EXPIRES
88
EXHIBIT A
FORMS OF CERTIFICATION
EXHIBIT A-1
FORM OF CERTIFICATE TO BE GIVEN BY PERSON ENTITLED
TO RECEIVE BEARER SECURITY OR TO OBTAIN INTEREST
PAYABLE PRIOR TO THE EXCHANGE DATE
CERTIFICATE
[Insert title or sufficient description of Securities to be delivered]
This is to certify that, as of the date hereof, and except as set forth
below, the above-captioned Securities held by you for our account (i) are owned
by person(s) that are not citizens or residents of the United States, domestic
partnerships, domestic corporations or any estate or trust the income of which
is subject to United States federal income taxation regardless of its source
("United States person(s)"), (ii) are owned by United States person(s) that
are (a) foreign branches of United States financial institutions (financial
institutions, as defined in United States Treasury Regulations Section
2.165-12(c) (1) (v) are herein referred to as "financial institutions")
purchasing for their own account or for resale, or (b) United States person(s)
who acquired the Securities through foreign branches of United States financial
institutions and who hold the Securities through such United States financial
institutions on the date hereof (and in either case (a) or (b), each such United
States financial institution hereby agrees, on its own behalf or through its
agent, that you may advise Federal Realty Investment Trust or its agent that
such financial institution will comply with the requirements of Section 165(j)
(3)(A), (B) or (C) of the United States Internal Revenue Code of 1986, as
amended, and the regulations thereunder), or (iii) are owned by United States
or foreign financial institution(s) for purposes of resale during the restricted
period (as defined in United States Treasury Regulations Section
1,163-5(c)(2)(i)(D)(7)), and, in addition, if the owner is a United States or
foreign financial institution described in clause (iii) above (whether or not
also described in clause (i) or (ii)), this is to further certify that such
financial institution has not acquired the Securities for purposes of resale
directly or indirectly to a United States person or to a person within the
United States or its possessions.
As used herein, "United States" means the United States of America
(including the States and the District of Columbia); and its
A-1
"possessions" include Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island and the Northern Marina Islands.
We undertake to advise you promptly by tested telex on or prior to the
date on which you intend to submit your certification relating to the
above-captioned Securities held by you for our account in accordance with your
Operating Procedures if any applicable statement herein is not correct on such
date, and in the absence of any such notification it may be assumed that this
certification applies as of such date.
This certificate excepts and does not relate to (U.S.S.) _____________
of such interest in the above-captioned Securities in respect of which we are
not able to certify and as to which we understand an exchange for an interest in
a Permanent Global Security or an exchange for and delivery of definitive
Securities (or, if relevant, collection of any interest) cannot be made until we
do so certify.
We understand that this certificate may be required in connection with
certain tax legislation in the United States. If administrative or legal
proceedings are commenced or threatened in connection with which this
certificate is or would be relevant, we irrevocably authorize you to produce
this certificate or a copy thereof to any interested party in such proceedings.
Dated: _______________________, 19____
[To be dated no earlier than the 15th day prior
to (i) the Exchange Date or (ii) the relevant
Interest Payment Date occurring prior to the
Exchange Date, as applicable]
[Name of Person Making Certification]
_____________________________________
[Authorized Signator]
Name:
Title:
A-2
Exhibit (4) (c)
[Form of Fixed Rate Redeemable or Non-Redeemable
Senior Security]
If the Holder of this Note (as indicated below) is The Depository
Trust Company (the "Depository") or a nominee of the Depository, this Note is a
Global Security and the following two legends apply:
Unless this Note is presented by an authorized representative of The Depository
Trust Company (55 Water Street, New York, New York) to the issuer or its agent
for registration of transfer, exchange or payment, and such Note issued is
registered in the name of CEDE & CO., or such other name as requested by an
authorized representative of the Depository, ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, since the
registered owner hereof, CEDE & CO., has an interest herein.
Unless and until this Note is exchanged in whole or in part for Notes in
certificated form, this Note may not be transferred except as a whole by the
Depository to a nominee thereof or by a nominee thereof to the Depository or
another nominee of the Depository or by the Depository or any such nominee to a
successor of the Depository or a nominee of such successor.
[Face of Security]
FEDERAL REALTY INVESTMENT TRUST
___% Note due ___
No. __________ $__________
FEDERAL REALTY INVESTMENT TRUST, a District of Columbia business trust
(herein referred to as the "Company", which term includes any successor
corporation under the Indenture referred to on the reverse hereof), for value
received, hereby promises to pay to ________________________________________ or
registered assigns the principal sum of _______________ Dollars on _____________
(the "Stated Maturity Date") [or date fixed for earlier redemption (the
"Redemption Date", and together with the Stated Maturity Date with respect to
principal repayable on such date, the "Maturity Date)], and to pay interest
thereon from _____________ or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, semi-annually on ____________
_______ and ____________ in each year (each, an "Interest Payment Date"),
commencing ______________, at the rate of _____% per annum, until the principal
hereof is paid or duly provided for. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
such Indenture, be paid to the Holder in whose name this Note (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest, which shall be the ____ or ____ (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date [at
the office or agency of the Company maintained for such purpose; provided,
however, that such interest may be paid, at the Company's option, by mailing a
check to such Holder at its registered address or by transfer of funds to an
account maintained by such Holder within the United States]. Any such interest
not so punctually paid or duly provided for shall forthwith cease to be payable
to the Holder on such Regular Record Date, and may be paid to the Holder in
whose name this Note (or one or more Predecessor Securities) is registered at
the close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee referred to on the reverse hereof, notice
whereof shall be given to Holders of Notes of this series not less than 10 days
prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in the Indenture. Interest
will be computed on the basis of a 360-day year
of twelve 30-day months.
The principal of this Note payable on the Stated Maturity Date [or
the principal of, premium, if any, and , if the Redemption Date is not an
Interest Payment Date, interest on this Note payable on the Redemption Date]
will be paid against presentation of this Note at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, in such coin or currency of the United States of America as at the time of
payment is legal tender for the payment of public and private debts.
Interest payable on this Note on any Interest Payment Date and on the
[Stated] Maturity Date [or Redemption Date], as the case may be, will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including ____________, if no interest has been paid on this Note) to but
excluding such Interest Payment Date or the [Stated] Maturity Date [or
Redemption Date], as the case may be. If any Interest Payment or the [Stated]
Maturity Date [or Redemption Date] falls on a day that is not a Business Day, as
defined below, principal, premium, if any and/or interest payable with respect
to such Interest Payment Date or [Stated] Maturity Date [or Redemption Date], as
the case may be, will be paid on the next succeeding Business Day with the same
force and effect as if it were paid on the date such payment was due, and no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date or [Stated] Maturity Date [or Redemption Date], as
the case may be. "Business Day" means any day, other than a Saturday or Sunday,
on which banks in the City of New York are not required or authorized by law or
executive order to close.
[If this Note is a Global Security, insert -- All payments of
principal, premium, if any, and interest in respect of this Note will be made by
the Company in immediately available funds.]
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the Certificate of Authentication hereon has been executed by
the Trustee by manual signature of one of its authorized signatories, this Note
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its facsimile corporate seal.
Dated: ________
FEDERAL REALTY INVESTMENT TRUST
By: ___________________________
Attest:
___________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes of the series designated therein referred to in the
within-mentioned Indenture.
FIRST UNION NATIONAL BANK
____________________________,
as Trustee
By:_________________________
Authorized Signatory
[Reverse of Security]
FEDERAL REALTY INVESTMENT TRUST
___% Note due _____
This Note 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 __________ September ____, 1998 (herein
called the "Indenture" between the Company and First Union National Bank, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture with respect to the series of which this Note is a part), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations 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 Note is one of the duly authorized series of
Securities designated as "___% Notes due _____" (collectively, the "Notes"), and
the aggregate principal amount of the Notes to be issued under such series is
limited to $________ (except for Notes authenticated and delivered upon transfer
of, or in exchange for, or in lieu of other Notes). All terms used in this Note
which are defined in the Indenture shall have the meanings assigned to them in
the Indenture.
If an Event of Default, as defined in the Indenture, shall occur and
be continuing, the principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided in the Indenture.
[If applicable, insert -- The Notes may not be redeemed prior to the
Stated Maturity Date.]
[If applicable, insert -- The Notes are subject to redemption [(1)] [If
applicable, insert -- on __________ in any year commencing with the year ____
and ending with the year ____ through operation of the sinking fund for this
series at a Redemption Price equal to 100% of the principal amount, [and] [(2)]
[If applicable, insert -- at any time [on or after _________], as a whole or in
part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): If redeemed on or before
__________, ____%, and if redeemed] during the 12-month period beginning
________ of the years indicated.
Redemption Redemption
Year Price Year Price
and thereafter at a Redemption Price equal to ____% of the principal amount,
together in the case of any such redemption [If applicable, insert -- (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date; provided, however, that installments of interest on this
Note whose Stated Maturity is on or prior to such Redemption Date will be
payable to the Holder of this Note, 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 Notes are subject to redemption (1)
on ______ in any year commencing with the year ____ and ending with the year
____ through operation of the sinking fund for this series at the Redemption
Prices for redemption through operation of the sinking fund (expressed as
percentages of the principal amount) set forth in the table below, and (2) at
any time [on or after _________], as a whole or in part, at the election of the
Company, at the Redemption Prices for redemption otherwise than through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below: If redeemed during the 12-month period beginning
________ of the years indicated,
Redemption Price
for Redemption Redemption Price for
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
and thereafter at a Redemption Price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date;
provided, however, that installments of interest on this Note whose Stated
Maturity is on or prior to such Redemption Date will be payable to the Holder of
this Note, 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.]
[Notwithstanding the foregoing, the Company may not, prior to
________, redeem any Notes as contemplated by [Clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding operation by the
application, directly or indirectly, of moneys borrowed having an interest cost
to the Company (calculated in accordance with generally accepted financial
practice) of less than ___% per annum.]
[The sinking fund for the Notes provides for the redemption on _______
in each year, beginning with the year ____ and ending with the year ___, of
[not less than] $_______ [("mandatory sinking fund") and not more than $_______]
aggregate principal amount of the Notes. [The Notes acquired or redeemed by the
Company otherwise than through [mandatory] sinking fund payments may be credited
against subsequent [mandatory] sinking fund payments otherwise required to be
made in the [describe order] order in which they become due.]]
[Notice of redemption will be given by mail to Holders of Securities,
not less than 30 nor more than 60 days prior to the Redemption Date, all as
provided in the Indenture.]
[In the event of redemption of this Note in part only, a new Note or
Notes for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.]
[If applicable, insert conversions conversion provisions set forth in
any Board Resolution or indenture supplemental to the Indenture.]
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the consent of the Holders of not
less than a majority of the aggregate principal amount of all Securities issued
under the Indenture at the time Outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of not less than a majority of
the aggregate principal amount of the Outstanding Securities, on behalf of the
Holders of all such Securities, to waive compliance by the Company with certain
provisions of the Indenture. Furthermore, provisions in the Indenture permit the
Holders of not less than a majority of the aggregate principal amount, in
certain instances, of the Outstanding Securities of any series to waive, on
behalf of all of the Holders of Securities of such series, certain past defaults
under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Note shall
be conclusive and binding upon such Holder and upon all future Holders of this
Note and other Notes issued upon the registration of transfer hereof or in
exchange herefor hereof or in lieu hereof, whether or not notation of such
consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Note at the times, places and rate, and in the coin or
currency, herein prescribed,
As provided in the Indenture and subject to certain limitations
therein [and herein] set forth, the transfer of this Note is registrable in the
Security Register of the Company upon surrender of this Note for registration of
transfer at the office or agency of the Company in any place where the principal
of (and premium, if any) and interest on this Note are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Company and the Security Registrar duly executed by, the Holder hereof or by
his attorney duly authorized in writing, and thereupon one or more new Notes, of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
As provided in the Indenture and subject to certain limitations
therein [and herein] set forth, this Note is exchangeable for a like aggregate
principal amount of Notes of different authorized denominations but otherwise
having the same terms and conditions, as requested by the Holder hereof
surrendering the same.
The Securities of this series are issuable only in registered form
without coupons in denominations of $______________ and any integral multiple
thereof.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith,
Prior to due presentment of this Note for registration of transfer,
the Company, the Trustee and any agent of the Company of the Trustee may treat
the Person in whose name this Note is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Indenture and the Notes shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
EXHIBIT 5
September 17, 1998
Federal Realty Investment Trust
1626 East Jefferson Street
Rockville, Maryland 20852-4041
Ladies and Gentlemen:
You have requested our opinion as counsel to Federal Realty Investment Trust,
a business trust organized under the laws of the District of Columbia with its
headquarters located in Bethesda, Maryland ("Trust"), in connection with a
combined registration statement on Form S-3 and Post-Effective Amendment No. 1
to registration statement no. 33-63687 (collectively, "Registration Statement"),
both being filed by you with the Securities and Exchange Commission
("Commission") under the Securities Act of 1933, as amended ("Act"), relating to
the offering from time to time, as set forth in the combined prospectus pursuant
to Rule 429 under the Act contained in such Registration Statement
("Prospectus") and as to be set forth in one or more supplements to the
Prospectus (each, a "Prospectus Supplement") of up to $500,000,000 aggregate
offering price of (i) one or more series of debt securities ("Debt Securities"),
(ii) one or more series of preferred shares ("Preferred Shares"), and (iii)
common shares of beneficial interest ("Common Shares) (collectively,
"Securities").
The Debt Securities will be direct unsecured obligations of the Trust and may
be either senior Debt Securities ("Senior Securities") or subordinated Debt
Securities ("Subordinated Securities"). The Senior Securities will be issued
pursuant to an Indenture dated December 1, 1993 ("Senior Indenture") between the
Trust and First Union National Bank of North Carolina ("Senior Trustee"). The
Subordinated Securities will be issued pursuant to an indenture dated December
1, 1993 ("Subordinated Indenture") between the Trust and First Union National
Bank of North Carolina ("Subordinated Trustee").
We have participated in the preparation of the Registration Statement and the
Prospectus included therein, and in connection therewith, have examined and
relied upon the originals or copies of such records, agreements, documents and
other instruments, including the Third Amended and Restated Declaration of Trust
of the Trust ("Declaration of Trust"), the Bylaws of the Trust, the minutes of
the meetings of the Trustees to date relating to the authorization and issuance
of the Securities and have made such inquiries of such officers and
representatives as we have deemed relevant and necessary as the basis for the
opinion hereinafter set forth. In such examination, we have assumed, without
independent verification, the genuineness of all signatures (whether original or
photostatic), the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, and the conformity to authentic original
documents of all documents submitted to us as certified or photostatic copies.
We have assumed, without independent verification, the accuracy of the relevant
facts stated therein.
Federal Realty Investment Trust
Septembe 17, 1998
Page 2
As to any other facts material to the opinion expressed herein that were not
independently established or verified, we have relied upon statements and
representations of officers and employees of the Trust.
Based upon the foregoing and subject to the qualifications set forth below, we
are of the opinion that:
1. The Senior Indenture and the Subordinated Indenture have been duly
authorized, duly executed and delivered by the Trust and are legally valid and
binding agreements of the Trust, enforceable against the Trust in accordance
with the terms of each such Indenture.
2. The Senior Debt Securities have been duly authorized by the Trust and when
the Senior Debt Securities have been duly established by the Senior Indenture,
duly authenticated by the Senior Trustee and duly executed and delivered on
behalf of the Trust against payment therefor in accordance with the terms and
provisions of the Senior Indenture and as contemplated by the Registration
Statement and/or the applicable Prospectus Supplement, the Senior Debt
Securities will constitute legally valid and binding obligations of the Trust,
enforceable against the Trust in accordance with their terms.
3. The Subordinated Debt Securities have been duly authorized by the Trust
and when the Subordinated Debt Securities have been duly established by the
Subordinated Indenture, duly authenticated by the Subordinated Trustee and duly
executed and delivered on behalf of the Trust against payment therefor in
accordance with the terms and provisions of the Subordinated Indenture and as
contemplated by the Registration Statement and/or the applicable Prospectus
Supplement, the Subordinated Debt Securities will constitute legally valid and
binding obligations of the Trust, enforceable against the Trust in accordance
with their terms.
4. The Preferred Shares have been duly authorized by the Trust and when the
Preferred Shares have been duly established in accordance with the terms of the
Declaration of Trust, and, upon issuance, delivery and payment therefor in the
manner contemplated by the Registration Statement and/or the applicable
Prospectus Supplement, the Preferred Shares will be validly issued, fully paid
and nonassessable and, except as hereinafter set forth, no personal liability
will attach to the ownership of the Preferred Shares.
5. The Trust has been duly organized and is validly existing under the laws
of the District of Columbia as a voluntary business association of the type
commonly known as a business trust and the Trust has authority to issue an
unlimited number of Common Shares, each without par value. It also is our
opinion that the Common Shares referred to in the Registration Statement, when
issued and sold as contemplated in the Registration Statement and/or the
applicable Prospectus Supplement, will be legally issued, fully paid and non-
assessable and, except as hereinafter set forth, no personal liability will
attach to the ownership of such Common Shares.
6. The Declaration of Trust provides that the holders of the Common Shares
and the Preferred Shares shall not be subject to any liability for the acts or
obligations of the Trust and that the funds and property of the Trust shall be
solely liable for such acts or obligations. The
Federal Realty Investment Trust
Septembe 17, 1998
Page 2
Declaration of Trust requires that, as far as practicable, each written
instrument creating an obligation of the Trust shall contain a provision to such
effect. We are of the opinion that no personal liability will attach to holders
of the Common Shares and the Preferred Shares in most jurisdictions for claims
under any written instrument containing such a provision, where adequate notice
is given of such provision. However, with respect to tort claims and contract
claims where shareholder liability is not so negated, claims for taxes and
certain statutory liabilities, a shareholder may, in some jurisdictions, be held
liable to the extent that claims are not satisfied by the Trust out of its
assets or insurance.
To the extent that the obligations of the Trust under the Senior Indenture and
Subordinated Indenture may be dependent upon such matters, we assume for
purposes of this opinion that the Senior Trustee and Subordinated Trustee are
duly organized, validly existing and in good standing under the applicable laws
of the jurisdiction of organization of each such Trustee; that the Senior
Trustee and the Subordinated Trustee each are in compliance generally with
respect to acting as a trustee under the applicable Indenture, and with all
applicable laws and regulations; and that the Senior Trustee and the
Subordinated Trustee have the requisite organizational and legal power and
authority to perform their respective obligations under such applicable
Indenture.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and we consent to the reference to our firm under the
caption "Legal Opinions" in the Prospectus.
Very truly yours,
KIRKPATRICK & LOCKHART LLP
By:___________________________________
Thomas F. Cooney, III
TFC:bak
Exhibit 8
[LETTERHEAD OF GOODWIN, PROCTER & HOAR LLP APPEARS HERE]
As of September 16, 1998
Federal Realty Investment Trust
1626 East Jefferson Street
Rockville, MD 20852-4041
Re: Federal Tax Matters
-------------------
Ladies and Gentlemen:
This opinion is delivered to you in our capacity as special tax counsel to
Federal Realty Investment Trust (the "Trust") in connection with the Trust's
Registration Statement filed with the Securities and Exchange Commission on Form
S-3 relating to up to $500,000,000 of debt securities, preferred shares and
common shares that may be issued by the Trust from time to time. This opinion
relates to the Trust's qualification for federal income tax purposes as a real
estate investment trust ("REIT") under the Internal Revenue Code of 1986, as
amended (the "Code").
In rendering this opinion, we have reviewed and relied upon copies of the
Trust's federal income tax returns on Form 1120-REIT for the taxable years of
the Trust ending on December 31, 1987 through December 31, 1997. We assume that
each of the foregoing returns was timely filed following timely filing of
application for automatic extension in each year.
We have reviewed and relied upon the description of the Trust, its
investments and its operations contained or incorporated by reference in the
Registration Statement and have had discussions with management of the Trust
concerning the investments and operations of the Trust. We have also reviewed
certain documents of the Trust relating to the ownership and operation of
selected real estate properties, leasehold interests, and other investments
owned by the Trust, including management agreements relating to such properties
and leasehold interests and forms of leases relating to the Trust's properties
and leasehold interests, and we rely upon representations made to us that such
documents, forms of leases and management agreements are representative of those
existing and in effect for the other properties and investments of the Trust.
Representations we have received from management of the Trust, have also
focused upon the number and holdings of shareholders of the Trust; the past and
present distribution policy of the Trust; various record keeping requirements;
and other matters which we deem
GOODWIN, PROCTER & HOAR LLP
Federal Realty Investment Trust
As of September 16, 1998
Page 2
relevant and upon which we rely for purposes of rendering this opinion,
including without limitation the Trust's quarterly REIT compliance workpapers
for each quarter of the Trust commencing January 1, 1987 as prepared by Grant
Thornton LLP, independent auditors for the Trust. Except as specifically noted
herein, we have not made an independent investigation of any of the facts set
forth in such representations or workpapers, and have assumed that the
statements contained in the representation of the Trust that, to the best of its
knowledge, at no time has the Trust been closely held within the meaning of
Sections 542(a)(2) and 856(h) of the Code, are, in fact, true. We have also
assumed, without investigation, that all documents, certificates, warranties and
covenants on which we have relied in rendering the opinion set forth below and
that were given and dated earlier than the date of this letter continue to
remain accurate, insofar as relevant to the opinion set forth herein, from such
earlier date through and including the date of this letter.
The conclusions set forth below are based upon the Code, the Income Tax
Regulations and Procedure and Administration Regulations promulgated thereunder
and existing administrative and judicial interpretations thereof, all of which
are subject to change. No assurance can therefore be given that the federal
income tax consequences described below will not be altered in the future.
Based upon and subject to the foregoing, we are of the opinion that
1. The Trust has qualified as a REIT for the taxable years ended December
31, 1987 through December 31, 1997; that the form of organization of the
Trust and its current operations, assets and contemplated income are
such that the Trust is in a position under present law to so qualify for
the taxable year ending December 31, 1998; and that the Trust should so
qualify for the taxable year ending December 31, 1998 and thereafter
provided that the Trust continues to meet the asset composition, source
of income, shareholder diversification, distribution and other
requirements of the Code necessary for the Trust to qualify as a REIT.
2. The statements in the Registration Statement set forth under the caption
"Federal Income Tax Considerations," to the extent such information
constitutes matters of law, summaries of legal matters, or legal
conclusions, have been reviewed by us and are accurate in all material
respects.
We express no opinion with respect to the transactions described in the
Registration Statement other than those expressly set forth herein. Moreover,
as indicated above, the
GOODWIN, PROCTER & HOAR LLP
Federal Realty Investment Trust
As of September 16, 1998
Page 3
Trust's qualification and taxation as a REIT depends upon the Trust's ability to
meet, through actual annual operating results, distribution levels, diversity of
stock ownership and the various qualification tests imposed under the Code, the
results of which will not be reviewed by us. Accordingly, no assurance can be
given that the actual results of the Trust's operations for any one taxable year
will satisfy such requirements. You should recognize that our opinion is not
binding on the IRS and that the IRS may disagree with the opinion contained
herein. Although we believe that our opinion will be sustained if challenged,
there can be no assurance that this will be the case. Except as specifically
discussed above, the opinion expressed herein is based upon the law as it
currently exists. Consequently, future changes in the law may cause the federal
income tax treatment of the transactions described herein to be materially and
adversely different from that described above.
We consent to being named as counsel to the Trust in the Registration
Statement, to the references in the Registration Statement to our firm and to
the inclusion of a copy of this opinion letter as an exhibit to the Registration
Statement.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
Exhibit 12
Statement Regarding
Computation of Ratios of Earnings to Fixed Charges and
of Ratios of Earnings to Combined Fixed Charges and Preferred Dividends
(in thousands)
Six months
ended June 30,
1993 1994 1995 1996 1997 1997 1998
-------- -------- -------- -------- -------- -------- --------
Income before gain on sale of real estate
and extraordinary item 16,114 20,466 23,655 28,764 40,129 19,287 24,657
Add:
Portion of rents representing interest 325 1,047 1,183 1,119 948 486 499
Interest on indebtedness, including
amortization of debt costs 31,550 31,462 39,268 45,555 47,288 23,988 26,097
-------- -------- -------- -------- -------- -------- --------
Income as adjusted 47,989 52,975 64,106 75,428 88,365 43,761 51,253
======== ======== ======== ======== ======== ======== ========
Fixed Charges:
Portion of rents representing interest 325 1,047 1,183 1,119 948 486 499
Interest on indebtedness, including
amortization of debt costs 31,550 31,462 39,268 45,555 47,288 23,988 26,097
Capitalized Interest 218 348 975 871 3,649 1,187 2,801
-------- -------- -------- -------- -------- -------- --------
Fixed charges 32,091 32,857 41,426 47,545 51,885 25,661 29,397
Preferred dividend -- -- -- -- 1,877 -- 3,975
-------- -------- -------- -------- -------- -------- --------
Combined fixed charges and
preferred dividends 32,091 32,857 41,426 47,545 53,762 25,661 33,372
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 1.50x 1.61x 1.55x 1.59x 1.70x 1.70x 1.74x
Ratio of earnings to combined fixed charges
and preferred dividend N/A N/A N/A N/A 1.64x N/A 1.54x
Exhibit 25(a)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
----------
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
----------
FIRST UNION NATIONAL BANK
(Exact name of trustee as specified in its charter)
United States National Bank 22-1147033
(State of incorporation if (I.R.S. employer
not a national bank) identification no.)
First Union National Bank
230 South Tryon Street, 9th Floor
Charlotte, North Carolina 28288-1179
(Address of principal (Zip Code)
executive offices)
Same as above
-------------
(Name, address and telephone number, including
area code, of trustee's agent for service)
Federal Realty Investment Trust
(Exact name of obliger as specified in its charter)
District of Columbia
(State or other jurisdiction of incorporation or organization)
52-0782497
(I.R.S. employer identification no.)
Steven J. Guttman
President and Trustee
1626 East Jefferson Street
Rockville, Maryland 20852-4041
(301)998-8100
(Address, including zip code, of principal executive offices)
--------------------
Senior & Subordinated Debt Securities
(Title of the indenture securities)
------------------------------------------------
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
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Federal Reserve Bank of Richmond, VA Richmond, VA
Comptroller of the Currency Washington, D.C.
Securities and Exchange Commission
Division of Market Regulation Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. Affiliations with obligor and underwriters. If the obligor or any
------------------------------------------
underwriter for the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
(See Note 1 on Page 4.)
Because the obligor is not in default on any securities issued under indentures
under which the applicant is trustee, Items 3 through 15 are not required
herein.
16. List of Exhibits.
----------------
All exhibits identified below are filed as a part of this statement of
eligibility.
1. A copy of the Articles of Association of First Union National Bank as
now in effect, which contain the authority to commence business and a
grant of powers to exercise corporate trust powers.
2
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the Articles of Association.
3. A copy of the authorization of the trustee to exercise corporate trust
powers, if such authorization is not contained in the documents
specified in exhibits (1) or (2) above.
4. A copy of the existing By-laws of First Union National Bank, or
instruments corresponding thereto.
5. Inapplicable.
6. The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939 is included at Page 4 of this Form T-1
Statement.
7. A copy of the latest report of condition of the trustee published
pursuant to law or to the requirements of its supervising or examining
authority is attached hereto.
8. Inapplicable.
9. Inapplicable.
3
NOTE
Note 1: Inasmuch as this Form T-1 is filed prior to the ascertainment by the
Trustee of all facts on which to base a responsive answer to Item 2, the answer
to said Item is based on incomplete information. Item 2 may, however, be
considered correct unless amended by an amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, First Union National Bank, a national association
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Charlotte, and State of North Carolina, on the _____ day of September, 1998.
FIRST UNION NATIONAL BANK
(trustee)
By: /s/ Shannon Schwartz
-------------------------------
Its: Asst. Vice President
---------------------------
CONSENT OF TRUSTEE
Under section 321(b) of the Trust Indenture Act of 1939, as amended, and in
connection with the proposed issuance by Federal Realty Investment Trust Senior
and Subordinated Debt Securities, First Union National Bank as the trustee
herein named, hereby consents that reports of examinations of said Trustee by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
FIRST UNION NATIONAL BANK
By: /s/ Shannon Schwartz
-------------------------------
Name: Shannon Schwartz
--------------------------
Title: Asst. Vice President
-------------------------
Dated: September 17, 1998
4
Legal Title of Bank: First Union National Bank Call Date: 6/30/98
Address: Two First Union Center ST-BK: 37-0351 FFIEC 031
City, State, Zip: Charlotte, NC 28288-0201 Page RC-1
FDIC Certificate #: 33869
-----
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1998
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
C400
Dollar Amount in Thousands RCFD Bil Mil Thou
- ----------------------------------------------------------------------------------------------------------------------
ASSETS /////////////////////////
1. Cash and balances due from depository institutions (from Schedule RC-A): /////////////////////////
a. Noninterest-bearing balances and currency and coin (1)............................ 0081 9,898,292 1.a.
b. Interest-bearing balances (2)..................................................... 0071 1,785,499 1.b.
2. Securities: /////////////////////////
a. Held-to-maturity securities (from Schedule RC-B, column A)........................ 1754 2,105,131 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D)...................... 1773 36,130,513 2.b.
3. Federal funds sold and securities purchased under agreements to resell................ 1350 4,551,009 3.
4. Loans and lease financing receivables /////////////////////////
a. Loans and leases, net of unearned income (from Schedule RC-C)RCFD 2122 136,146,290 ///////////////////////// 4.a.
b. LESS: Allowance for loan and lease losses.................. RCFD 3123 1,814,169 ///////////////////////// 4.b.
c. LESS: Allocated transfer risk reserve...................... RCFD 3128 0 ///////////////////////// 4.c.
d. Loans and leases, net of unearned income, /////////////////////////
allowance, and reserve (item 4.a minus 4.b and 4.c)............................... 2126 134,332,111 4.d.
5. Trading assets (from Schedule RC-D)................................................... 3545 5,786,208 5.
6. Premises and fixed assets (including capitalized leases).............................. 2145 3,278,523 6.
7. Other real estate owned (from Schedule RC-M).......................................... 2150 125,154 7.
8. Investments in unconsolidated subsidiaries and associated companies
(from Schedule RC-M).................................................................. 2180 345,634 8.
9. Customers' liability to this bank on acceptances outstanding.......................... 2155 1,091,060 9.
10. Intangible assets (from Schedule RC-M)................................................ 2143 5,221,760 10.
11. Other assets (from Schedule RC-F)..................................................... 2160 8,649,274 11.
12. Total assets (sum of items 1 through 11).............................................. 2170 213,300,168 12.
- ----------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
Legal Title of Bank: First Union National Bank Call Date: 6/30/98
Address: Two First Union Center ST-BK: 37-0351 FFIEC 031
City, State, Zip: Charlotte, NC 28288-0201 Page RC-1
FDIC Certificate #: 33869
-----
Schedule RC--Continued
Dollar Amount in Thousands Bil Mil Thou
- ---------------------------------------------------------------------------------------------------------------------
LIABILITIES ///////////////////////////
13. Deposits: ///////////////////////////
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, ///////////////////////////
part I)............................................................................ RCON 2200 133,606,970 13.a.
(1) Noninterest-bearing (1)................................. RCON 6631 26,221,093 /////////////////////////// 13.a.(1)
(2) Interest-bearing........................................ RCON 6636 107,385,877 /////////////////////////// 13.a.(2)
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, //////////////////////////
part II)............................................................................ RCFN 2200 9,377,311 13.b.
(1) Noninterest-bearing..................................... RCFN 6631 581,219 /////////////////////////// 13.b.(1)
(2) Interest-bearing........................................ RCFN 6636 8,796,092 /////////////////////////// 13.b.(2)
14. Federal funds purchased and securities sold under agreements to repurchase.............. RCFD 2800 22,988,933 14.
15. a. Demand notes issued to the U.S. Treasury............................................ RCON 2840 850,539 15.a.
b. Trading liabilities (from Schedule RC-D)............................................ RCFD 3548 4,824,321 15.b.
16. Other borrowed money (includes mortgage indebtedness and obligations under //////////////////////////
capitalized leases):.................................................................... //////////////////////////
a. With a remaining maturity of one year or less....................................... RCFD 2332 11,459,244 16.a.
b. With a remaining maturity of more than one year through three years................. RCFD A547 590,270 16.b.
c. With a remaining maturity of more than three years.................................. RCFD A548 437,360 16.c.
17. Not applicable.......................................................................... //////////////////////////
18. Bank's liability on acceptances executed and outstanding................................ RCFD 2920 1,5106,327 18.
19. Subordinated notes and debentures (2)................................................... RCFD 3200 3,512,216 19.
20. Other liabilities (from Schedule RC-G).................................................. RCFD 2930 7,361,602 20.
21. Total liabilities (sum of items 13 through 20).......................................... RCFD 2948 196,115,093 21.
22. Not applicable.......................................................................... //////////////////////////
EQUITY CAPITAL //////////////////////////
23. Perpetual preferred stock and related surplus........................................... RCFD 3838 160,540 23.
24. Common stock............................................................................ RCFD 3230 454,543 24.
25. Surplus (exclude all surplus related to preferred stock)................................ RCFD 3839 13,225,076 25.
26. a. Undivided profits and capital reserves.............................................. RCFD 3632 3,015,429 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities.............. RCFD 8434 330,722 26.b.
27. Cumulative foreign currency translation adjustments..................................... RCFD 3284 (1,235) 27.
28. Total equity capital (sum of items 23 through 27)....................................... RCFD 3210 17,185,075 28.
29. Total liabilities and equity capital (sum of items 21 and 28)........................... RCFD 3300 213,300,168 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best
describes the most comprehensive level of auditing work performed for the bank by Number
independent external auditors as of any date during 1996................................ RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified public
accounting firm which submits a report on the consolidated holding company
(but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external
auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
- ----------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposit.
(2) Includes limited-life preferred stock and related surplus.
6
Charter No. 22693
FIRST UNION NATIONAL BANK
ARTICLES OF ASSOCIATION
-----------------------
(as restated effective February 26, 1998)
For the purpose of organizing an Association to carry on the business of banking
under the laws of the United States, the undersigned do enter into the following
Articles of Association:
FIRST. The title of this Association shall be FIRST UNION NATIONAL BANK.
-----
SECOND. The main office of the Association shall be in Charlotte, County of
------
Mecklenburg, State of North Carolina. The general business of the Association
shall be conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not less
-----
than five nor more than twenty-five directors, the exact number of directors
within such minimum and maximum limits to be fixed and determined from time to
time by resolution of a majority of the full Board of Directors or by resolution
of the shareholders at any annual or special meeting thereof. Unless otherwise
provided by the laws of the United States, any vacancy in the Board of Directors
for any reason, including an increase in the number thereof, may be filled by
action of the Board of Directors.
FOURTH. The annual meeting of the shareholders for the election of directors
------
and the transaction of whatever other business may be brought before said
meeting shall be held at the main office or such other place as the Board of
Directors may designate, on the day of each year specified therefor in the By-
Laws, but if no election is held on that day, it may be held on any subsequent
day according to the provisions of law; and all elections shall be held
according to such lawful regulations as may be prescribed by the Board of
Directors.
Nominations for election to the Board of Directors may be made by the Board of
Directors or by any stockholder of any outstanding class of capital stock of the
bank entitled to vote for election of directors. Nominations, other than those
made by or on behalf of the existing management of the bank, shall be made in
writing and shall be delivered or mailed to the President of the bank and to the
Comptroller of the Currency, Washington, D.C., not less than 14
days nor more than 50 days prior to any meeting of stockholders called for the
election of directors, provided, however, that if less than 21 days' notice of
-------- -------
the meeting is given to shareholders, such nomination shall be mailed or
delivered to the President of the Bank and to the Comptroller of the Currency
not later than the close of business on the seventh day following the day on
which the notice of meeting was mailed. Such notification shall contain the
following information to the extent known to the notifying shareholder: (a) the
name and address of each proposed nominee; (b) the principal occupation of each
proposed nominee; (c) the total number of shares of capital stock of the bank
that will be voted for each proposed nominee; (d) the name and residence address
of the notifying shareholder; and (e) the number of shares of capital stock of
the bank owned by the notifying shareholder. Nominations not made in accordance
herewith may, in his discretion, be disregarded by the Chairman of the meeting,
and upon his instructions, the vote tellers may disregard all votes cast for
each such nominee.
FIFTH.
------
(a) General. The amount of capital stock of this Association shall be (I)
-------
25,000,000 shares of common stock of the par value of twenty dollars ($20.00)
each (the "Common Stock") and (ii) 160,540 shares of preferred stock of the par
value of one dollar ($ 1. 00) each (the "Non-Cumulative Preferred Stock"),
having the rights, privileges and preferences set forth below, but said capital
stock may be increased or decreased from time to time in accordance with the
provisions of the laws of the United States.
(b) Terms of the Non-Cumulative Preferred Stock.
-------------------------------------------
1. General. Each share of Non-Cumulative Preferred Stock shall be identical
-------
in all respects with the other shares of Non-Cumulative Preferred Stock. The
authorized number of shares of Non-Cumulative Preferred Stock may from time to
time be increased or decreased (but not below the number then outstanding) by
the Board of Directors. Shares of Non-Cumulative Preferred Stock redeemed by
the Association shall be canceled and shall revert to authorized but unissued
shares of Non-Cumulative Preferred Stock.
2. Dividends.
----------
(a) General. The holders of Non-Cumulative Preferred Stock shall be
-------
entitled to receive, when, as and if declared by the Board of Directors,
but only out of funds legally available therefor, non-cumulative cash
dividends at the annual rate of $83.75 per share, and no more, payable
quarterly on the first days of December, March, June and September,
respectively, in
2
each year with respect to the quarterly dividend period (or portion
thereof) ending on the day preceding such respective dividend payment
date, to shareholders of record on the respective date, not exceeding
fifty days preceding such dividend payment date, fixed for that purpose by
the Board of Directors in advance of payment of each particular dividend.
Notwithstanding the foregoing, the cash dividend to be paid on the first
dividend payment date after the initial issuance of Non-Cumulative
Preferred Stock and on any dividend payment date with respect to a partial
dividend period shall be $83.75 per share multiplied by the fraction
produced by dividing the number of days since such initial issuance or in
such partial dividend period, as the case may be, by 360.
(b) Non-cumulative Dividends. Dividends on the shares of Non-cumulative
------------------------
Stock shall not be cumulative and no rights shall accrue to the holders of
shares of Non-Cumulative Preferred Stock by reason of the fact that the
Association may fail to declare or pay dividends on the shares of Non-
Cumulative Preferred Stock in any amount in any quarterly dividend period,
whether or not the earnings of the Association in any quarterly dividend
period were sufficient to pay such dividends in whole or in part, and the
Association shall have no obligation at any time to pay any such dividend.
(c) Payment of Dividends. So long as any share of Non-Cumulative
--------------------
Preferred Stock remains outstanding, no dividend whatsoever shall be paid
or declared and no distribution made on any junior stock other than a
dividend payable in junior stock, and no shares of junior stock shall be
purchased, redeemed or otherwise acquired for consideration by the
Association, directly or indirectly (other than as a result of a
reclassification of junior stock, or the exchange or conversion of one
junior stock for or into another junior stock, or other than through the
use of the proceeds of a substantially contemporaneous sale of other
junior stock), unless all dividends on all shares of non-cumulative
Preferred Stock and non-cumulative Preferred Stock ranking on a parity as
to dividends with the shares of Non-Cumulative Preferred Stock for the
most recent dividend period ended prior to the date of such payment or
declaration shall have been paid in full and all dividends on all shares
of cumulative Preferred Stock ranking on a parity as to dividends with the
shares of Non-Cumulative Stock (notwithstanding that dividends on such
stock are cumulative) for all past dividend periods shall have been paid
in full. Subject to the foregoing, and not otherwise, such dividends
(payable in cash, stock or otherwise) as may be determined by the Board of
Directors may be declared and paid on any junior stock from time to time
out of any funds legally available therefor, and the Non-Cumulative
Preferred
3
Stock shall not be entitled to participate in any such dividends, whether
payable in cash, stock or otherwise. No dividends shall be paid or
declared upon any shares of any class or series of stock of the
Association ranking on a parity (whether dividends on such stock are
cumulative or non-cumulative) with the Non-Cumulative Preferred Stock in
the payment of dividends for any period unless at or prior to the time of
such payment or declaration all dividends payable on the Non-cumulative
Preferred Stock for the most recent dividend period ended prior to the
date of such payment or declaration shall have been paid in full. When
dividends are not paid in full, as aforesaid, upon the Non-Cumulative
Preferred Stock and any other series of Preferred Stock ranking on a
parity as to dividends (whether dividends on such stock are cumulative or
non-cumulative) with the Non-Cumulative Preferred Stock, all dividends
declared upon the Non-Cumulative Preferred Stock and any other series of
Preferred Stock ranking on a parity as to dividends with the Non-
Cumulative Preferred Stock shall be declared pro rata so that the amount
of dividends declared per share on the Non-cumulative Preferred Stock and
such other Preferred Stock shall in all cases bear to each other the same
ratio that accrued dividends per share on the Non-Cumulative Preferred
Stock (but without any accumulation in respect of any unpaid dividends for
prior dividend periods on the shares of Non-Cumulative Stock) and such
other Preferred Stock bear to each other. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on the Non-Cumulative Preferred Stock which may be in arrears.
3. Voting. The holders of Non-Cumulative Preferred Stock shall not have any
------
right to vote for the election of directors or for any other purpose.
4. Redemption.
----------
(a) Optional Redemption. The Association, at the option of the Board of
-------------------
Directors, may redeem the whole or any part of the shares of Non-
Cumulative Preferred Stock at the time outstanding, at any time or from
time to time after the fifth anniversary of the date of original issuance
of the Non-Cumulative Preferred Stock, upon notice given as hereinafter
specified, at the redemption price per share equal to $1,000 plus an
amount equal to the amount of accrued and unpaid dividends from the
immediately preceding dividend payment date (but without any accumulation
for unpaid dividends for prior dividend periods on the shares of Non-
Cumulative Preferred Stock) to the redemption date.
(b) Procedures. Notice of every redemption of shares of Non-Cumulative
Preferred Stock shall be mailed by first class mail, postage prepaid,
4
addressed to the holders of record of the shares to be redeemed at their
respective last addresses as they shall appear on the books of the
Association. Such mailing shall be at least 10 days and not more than 60
days prior to the date fixed for redemption. Any notice which is mailed in
the manner herein provided shall be conclusively presumed to have been
duly given, whether or not the shareholder receives such notice, and
failure duly to give such notice by mail, or any defect in such notice, to
any holder of shares of Non-Cumulative Preferred Stock designated for
redemption shall not affect the validity of the proceedings for the
redemption of any other shares of Non-Cumulative Preferred Stock.
In case of redemption of a part only of the shares of Non-Cumulative
Preferred Stock at the time outstanding the redemption may be either pro
rata or by lot or by such other means as the Board of Directors of the
Association in its discretion shall determine. The Board of Directors
shall have full power and authority, subject to the provisions herein
contained, to prescribe the terms and conditions upon which shares of the
Non-Cumulative Preferred Stock shall be redeemed from time to time.
If notice of redemption shall have been duly given, and, if on or before
the redemption date specified therein, all funds necessary for such
redemption shall have been set aside by the Association, separate and
apart from its other funds, in trust for the pro rata benefit of the
holders of the shares called for redemption, so as to be and continue to
be available therefor, then, notwithstanding that any certificate for
shares so called for redemption shall not have been surrendered for
cancellation, all shares so called for redemption shall no longer be
deemed outstanding on and after such redemption date, and all rights with
respect to such shares shall forthwith on such redemption date cease and
terminate, except only the right of the holders thereof to, receive the
amount payable on redemption thereof, without interest.
If such notice of redemption shall have been duly given or if the
Association shall have given to the bank or trust company hereinafter
referred to irrevocable authorization promptly to give such notice, and,
if on or before the redemption date specified therein, the funds necessary
for such redemption shall have been deposited by the Association with such
bank or trust company in trust for the pro rata benefit of the holders of
the shares called for redemption, then, notwithstanding that any
certificate for shares so called for redemption shall not have been
surrendered for cancellation, from and after the time of such deposit, all
shares so called for redemption shall no longer be deemed to be
outstanding and all rights with respect to such shares shall forthwith
cease and terminate, except
5
only the right of the holders thereof to receive from such bank or trust
company at any time after the time of such deposit the funds so deposited,
without interest. The aforesaid bank or trust company shall be organized
and in good standing under the laws of the United States of America or any
state thereof, shall have capital, surplus and undivided profits
aggregating at least $50,000,000 according to its last published statement
of condition, and shall be identified in the notice of redemption. Any
interest accrued on such funds shall be paid to the Association from time
to time. In case fewer than all the shares of Non-Cumulative Preferred
Stock represented by a stock certificate are redeemed, a new certificate
shall be issued representing the unredeemed shares without cost to the
holder thereof.
Any funds so set aside or deposited, as the case may be, and unclaimed at
the end of the relevant escheat period under applicable state law from
such redemption date shall, to the extent permitted by law, be released or
repaid to the Association, after which repayment the holders of the shares
so called for redemption shall look only to the Association for payment
thereof.
5. Liquidation.
-----------
(a) Liquidation Preference. In the event of any voluntary liquidation,
----------------------
dissolution or winding up of the affairs of the Association, the holders
of Non-cumulative Preferred Stock shall be entitled, before any
distribution or payment is made to the holders of any junior stock, to be
paid in full an amount per share equal to an amount equal to $1,000 plus
an amount equal to the amount of accrued and unpaid dividends per share
from the immediately preceding dividend payment date (but without any
accumulation for unpaid dividends for prior dividend periods on the shares
of Non-cumulative Preferred Stock) per share to such distribution or
payment date (the "liquidation amount").
In the event of any involuntary liquidation, dissolution or winding up of
the affairs of the Association, then, before any distribution or payment
shall be made to the holders of any junior stock, the holders of Non-
Cumulative Preferred Stock shall be entitled to be paid in full an amount
per share equal to the liquidation amount.
If such payment shall have been made in full to all holders of shares of
Non-Cumulative Preferred Stock, the remaining assets of the Association
shall be distributed among the holders of junior stock, according to their
6
respective rights and preferences and in each case according to their
respective numbers of shares.
(b) Insufficient Assets. In the event that, upon any such voluntary or
-------------------
involuntary liquidation, dissolution or winding up, the available assets
of the Association are insufficient to pay such liquidation amount on all
outstanding shares of Non-cumulative Preferred Stock, then the holders of
Non-Cumulative Preferred Stock shall share ratably in any distribution of
assets in proportion to the full amounts to which they would otherwise be
respectively entitled.
(c) Interpretation. For the purposes of this paragraph 5, the
--------------
consolidation or merger of the Association with any other corporation or
association shall not be deemed to constitute a liquidation, dissolution
or winding up of the Association.
6. Preemptive Rights. The Non-Cumulative Preferred Stock is not entitled to
-----------------
any preemptive, subscription, conversion or exchange rights in respect of
any securities of the Association.
7. Definitions. As used herein with respect to the Non-Cumulative Preferred
-----------
Stock, the following terms shall have the following meanings:
(a) The term "junior stock" shall mean the Common Stock and any other
class or series of shares of the Association hereafter authorized over
which the Non-Cumulative Preferred Stock has preference or priority in the
payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Association.
(b) The term "accrued dividends", with respect to any share of any class
or series, shall mean an amount computed at the annual dividend rate for
the class or series of which the particular share is a part, from, if such
share is cumulative, the date on which dividends on such share became
cumulative to and including the date to which such dividends are to be
accrued, less the aggregate amount of all dividends theretofore paid
thereon and, if such share is noncumulative, the relevant date designated
to and including the date to which such dividends are accrued, less the
aggregate amount of all dividends theretofore paid with respect to such
period.
(c) The term "Preferred Stock" shall mean all outstanding shares of all
series of preferred stock of the Association as defined in this Article
Fifth of the Articles of Association, as amended, of the Association.
7
8. Restriction on Transfer. No shares of Non-Cumulative Preferred Stock, or
-----------------------
any interest therein, may be sold, pledged, transferred or otherwise
disposed of without the prior written consent of the Association. The
foregoing restriction shall be stated on any certificate for any shares of
Non-Cumulative Preferred Stock.
9. Additional Rights. The shares of Non-Cumulative Preferred Stock shall not
-----------------
have any relative, participating, optional or other special rights and
powers other than as set forth herein.
SIXTH. The Board of Directors shall appoint one of its members President of
-----
this Association, who shall be Chairman of the Board, unless the Board appoints
another director to be the Chairman. The Board of Directors shall have the
power to appoint one or more Vice Presidents; and to appoint a cashier or such
other officers and employees as may be required to transact the business of this
Association.
The Board of Directors shall have the power to define the duties of the
officers and employees of the Association, to fix the salaries to be paid to
them; to dismiss them, to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all By-Laws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the location
-------
of the main office to any other place within the limits of Charlotte, North
Carolina, without the approval of the shareholders but subject to the approval
of the Comptroller of the Currency; and shall have the power to establish or
change the location of any branch or branches of the Association to any other
location, without the approval of the shareholders but subject to the approval
of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
------
terminated in accordance with the laws of the United States.
NINTH. The Board of Directors of this Association, or any three or more
-----
shareholders owning, in the aggregate, not less than 10 percent of the stock of
this Association, may call a special meeting of shareholders at any time.
Unless otherwise provided by the laws of the United States, a notice of the
time, place, and purpose of every annual and special meeting of the shareholders
shall be given by first-class mail, postage prepaid, mailed at least ten days
prior to the
8
date of such meeting to each shareholder of record at his address as shown upon
the books of this Association.
TENTH. Each director and executive officer of this Association shall be
-----
indemnified by the association against liability in any proceeding (including
without limitation a proceeding brought by or on behalf of the Association
itself) arising out of his status as such or his activities in either of the
foregoing capacities, except for any liability incurred on account of activities
which were at the time taken known or believed by such person to be clearly in
conflict with the best interests of the Association. Liabilities incurred by a
director or executive officer of the Association in defending a proceeding shall
be paid by the Association in advance of the final disposition of such
proceeding upon receipt of an undertaking by the director or executive officer
to repay such amount if it shall be determined, as provided in the last
paragraph of this Article Tenth, that he is not entitled to be indemnified by
the Association against such liabilities.
The indemnity against liability in the preceding paragraph of this Article
Tenth, including liabilities incurred in defending a proceeding, shall be
automatic and self-operative.
Any director, officer or employee of this Association who serves at the
request of the Association as a director, officer, employee or agent of a
charitable, not-for-profit, religious, educational or hospital corporation,
partnership, joint venture, trust or other enterprise, or a trade association,
or as a trustee or administrator under an employee benefit plan, or who serves
at the request of the Association as a director, officer or employee of a
business corporation in connection with the administration of an estate or trust
by the Association, shall have the right to be indemnified by the Association,
subject to the provisions set forth in the following paragraph of this Article
Tenth, against liabilities in any manner arising out of or attributable to such
status or activities in any such capacity, except for any liability incurred on
account of activities which were at the time taken known or believed by such
person to be clearly in conflict with the best interests of the Association, or
of the corporation, partnership, joint venture, trust, enterprise, Association
or plan being served by such person.
In the case of all persons except the directors and executive officers of the
Association, the determination of whether a person is entitled to
indemnification under the preceding paragraph of this Article Tenth shall be
made by and in the sole discretion of the Chief Executive Officer of the
Association. In the case of the directors and executive officers of the
Association, the indemnity against
9
liability in the preceding paragraph of this Article Tenth shall be automatic
and self-operative.
For purposes of this Article Tenth of these Articles of Association only, the
following terms shall have the meanings indicated:
(a) "Association" means First Union National Bank and its direct and indirect
wholly-owned subsidiaries.
(b) "Director" means an individual who is or was a director of the
Association.
(c) "Executive officer" means an officer of the Association who by resolution
of the Board of Directors of the Association has been determined to be an
executive officer of the Association for purposes of Regulation O of the Federal
Reserve Board.
(d) "Liability" means the obligation to pay a judgment, settlement, penalty,
fine (including an excise tax assessed with respect to an employee benefit
plan), or reasonable expenses, including counsel fees and expenses, incurred
with respect to a proceeding.
(e) "Party" includes an individual who was, is, or is threatened to be made a
named defendant or respondent in a proceeding.
(f) "Proceeding" means any threatened, pending, or completed claim, action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
and whether formal or informal.
The Association shall have no obligation to indemnify any person for an amount
paid in settlement of a proceeding unless the Association consents in writing to
such settlement.
The right to indemnification herein provided for shall apply to persons who
are directors, officers, or employees of banks or other entities that are
hereafter merged or otherwise combined with the Association only after the
effective date of such merger or other combination and only as to their status
and activities after such date.
The right to indemnification herein provided for shall inure to the benefit of
the heirs and legal representatives of any person entitled to such right.
10
No revocation of, change in, or adoption of any resolution or provision in the
Articles of Association or By-laws of the Association inconsistent with, this
Article Tenth shall adversely affect the rights of any director, officer, or
employee of the Association with respect to (i) any proceeding commenced or
threatened prior to such revocation, change, or adoption, or (ii) any proceeding
arising out of any act or omission occurring prior to such revocation, change,
or adoption, in either case, without the written consent of such director,
officer, or employee.
The rights hereunder shall be in addition to and not exclusive of any other
rights to which a director, officer, or employee of the Association may be
entitled under any statute, agreement, insurance policy, or otherwise.
The Association shall have the power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, or employee of the
Association, or is or was serving at the request of the Association as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, trade association, employee benefit plan, or other enterprise,
against any liability asserted against such director, officer, or employee in
any such capacity, or arising out of their status as such, whether or not the
Association would have the power to indemnify such director, officer, or
employee against such liability, excluding insurance coverage for a formal order
assessing civil money penalties against an Association director or employee.
Notwithstanding anything to the contrary provided herein, no person shall have
a right to indemnification with respect to any liability (i) incurred in an
administrative proceeding or action instituted by an appropriate bank regulatory
agency which proceeding or action results in a final order assessing civil money
penalties or requiring affirmative action by an individual or individuals in the
form of payments to the Association, (ii) to the extent such person is entitled
to receive payment therefor under any insurance policy or from any corporation,
partnership, joint venture, trust, trade association, employee benefit plan, or
other enterprise other than the Association, or (iii) to the extent that a court
of competent jurisdiction determines that such indemnification is void or
prohibited under state or federal law.
ELEVENTH. These Articles of Association may be amended at any regular or
--------
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of holders of a
greater amount of stock is required by law, and in that case, by the vote of the
holders of such greater amount.
11
BY-LAWS OF
FIRST UNION NATIONAL BANK
Charter No. 22693
As Restated Effective February 26, 1998
BY-LAWS OF
FIRST UNION NATIONAL BANK
ARTICLE I
Meetings of Shareholders
------------------------
Section 1.1 Annual Meeting. The annual meeting of the shareholders for
--------------------------
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held on the third Tuesday of April in
each year, commencing with the year 1998, except that the Board of Directors
may, from time to time and upon passage of a resolution specifically setting
forth its reasons, set such other date for such meeting during the month of
April as the Board of Directors may deem necessary or appropriate; provided,
however, that if an annual meeting would otherwise fall on a legal holiday, then
such annual meeting shall be held on the second business day following such
legal holiday. The holders of a majority of the outstanding shares entitled to
vote which are represented at any meeting of the shareholders may choose persons
to act as Chairman and as Secretary of the meeting.
Section 1.2 Special Meetings. Except as otherwise specifically provided
----------------
by statute, special meetings of the shareholders may be called for any purpose
at any time by the Board of Directors or by any three or more shareholders
owning, in the aggregate, not less than ten percent of the stock of the
Association. Every such special meeting, unless otherwise provided by law, shall
be called by mailing, postage prepaid, not less than ten days prior to the date
fixed for such meeting, to each shareholder at his address appearing on the
books of the Association, a notice stating the purpose of the meeting.
Section 1.3 Nominations for Directors. Nominations for election to the
-------------------------------------
Board of Directors may be made by the Board of Directors or by any stockholder
of any outstanding class of capital stock of the bank entitled to vote for the
election of directors. Nominations, other than those made by or on behalf of the
existing management of the bank, shall be made in writing and shall be delivered
or mailed to the President of the Bank and to the Comptroller of the Currency,
Washington, D.C., not less than 14 days nor more than 50 days prior to any
meeting of stockholders called for the election of directors, provided however,
that if less than 21 days' notice of such meeting is given to
2
shareholders, such nomination shall be mailed or delivered to the President of
the Bank and to the Comptroller of the Currency not later than the close of
business on the seventh day following the day on which the notice of meeting was
mailed. Such notification shall contain the following information to the extent
known to the notifying shareholder: (a) the name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the total
number of shares of capital stock of the bank that will be voted for each
proposed nominee; (d) the name and residence address of the notifying
shareholder; and (e) the number of shares of capital stock of the bank owned by
the notifying shareholder. Nominations not made in accordance herewith may, in
his discretion, be disregarded by the chairman of the meeting, and upon his
instructions, the vote tellers may disregard all votes cast for each such
nominee.
Section 1.4 Judges of Election. The Board may at any time appoint from
------------------------------
among the shareholders three or more persons to serve as Judges of Election at
any meeting of shareholders; to act as judges and tellers with respect to all
votes by ballot at such meeting and to file with the Secretary of the meeting a
Certificate under their hands, certifying the result thereof.
Section 1.5 Proxies. Shareholders may vote at any meeting of the
-------------------
shareholders by proxies duly authorized in writing, but no officer or employee
of this Association shall act as proxy. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and shall be filed with the records of the meeting.
Section 1.6 Quorum. A majority of the outstanding capital stock,
------------------
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
ARTICLE II
Directors
---------
Section 2.1 Board of Directors. The Board of Directors (hereinafter
------------------------------
referred to as the "Board"), shall have power to manage and administer the
business and affairs of the Association. Except as expressly limited by law, all
corporate powers of the Association shall be vested in and may be exercised by
said Board.
3
Section 2.2 Number. The Board shall consist of not less than five nor
------------------
more than twenty-five directors, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of a
majority of the full Board or by resolution of the shareholders at any meeting
thereof; provided, however, that a majority of the full Board of Directors may
not increase the number of directors to a number which, (1) exceeds by more than
two the number of directors last elected by shareholders where such number was
fifteen or less, and (2) to a number which exceeds by more than four the number
of directors last elected by shareholders where such number was sixteen or more,
but in no event shall the number of directors exceed twenty-five.
Section 2.3 Organization Meeting. The Secretary of the meeting upon
--------------------------------
receiving the certificate of the judges, of the result of any election, shall
notify the directors-elect of their election and of the time at which they are
required to meet at the Main Office of the Association for the purpose of
organizing the new Board and electing and appointing officers of the Association
for the succeeding year. Such meeting shall be held as soon thereafter as
practicable. If, at the time fixed for such meeting, there shall not be a quorum
present, the directors present may adjourn the meeting from time to time, until
a quorum is obtained.
Section 2.4 Regular Meetings. Regular meetings of the Board of Directors
----------------------------
shall be held at such place and time as may be designated by resolution of the
Board of Directors. Upon adoption of such resolution, no further notice of such
meeting dates or the places or times thereof shall be required. Upon the
failure of the Board of Directors to adopt such a resolution, regular meetings
of the Board of Directors shall be held, without notice, on the third Tuesday in
February, April, June, August, October and December, commencing with the year
1997, at the main office or at such other place and time as may be designated by
the Board of Directors. When any regular meeting of the Board would otherwise
fall on a holiday, the meeting shall be held on the next business day unless the
Board shall designate some other day.
Section 2.5 Special Meetings. Special meetings of the Board of Directors
----------------------------
may be called by the President of the Association, or at the request of three
(3) or more directors. Each member of the Board of Directors shall be given
notice stating the time and place, by telegram, letter, or in person, of each
such special meeting.
Section 2.6 Quorum. A majority of the directors shall constitute a
------------------
quorum at any meeting, except when otherwise provided by law; but a less
4
number may adjourn any meeting, from time to time, and the meeting may be held,
as adjourned, without further notice.
Section 2.7 Vacancies. When any vacancy occurs among the directors, the
---------------------
remaining members of the Board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the Board, or at a special meeting called for that purpose.
Section 2.8 Advisory Boards. The Board of Directors may appoint Advisory
---------------------------
Boards for each of the states in which the Association conducts operations. Each
such Advisory Board shall consist of as many persons as the Board of Directors
may determine. The duties of each Advisory Board shall be to consult and advise
with the Board of Directors and senior officers of the Association in such state
with regard to the best interests of the Association and to perform such other
duties as the Board of Directors may lawfully delegate. The senior officer in
such state, or such officers as directed by such senior officer, may appoint
advisory boards for geographic regions within such state and may consult with
the State Advisory Boards prior to such appointments.
ARTICLE III
Committees of the Board
-----------------------
Section 3.1 The Board of Directors, by resolution adopted by a majority
-----------
of the number of directors fixed by these By-Laws, may designate two or more
directors to constitute an Executive Committee and other committees, each of
which, to the extent authorized by law and provided in such resolution, shall
have and may exercise all of the authority of the Board of Directors and the
management of the Association. The designation of any committee and the
delegation thereto of authority shall not operate to relieve the Board of
Directors, or any member thereof, of any responsibility or liability imposed
upon it or any member of the Board of Directors by law. The Board of Directors
reserves to itself alone the power to act on (1) dissolution, merger or
consolidation, or disposition of substantially all corporate property, (2)
designation of committees or filling vacancies on the Board of Directors or on a
committee of the Board (except as hereinafter provided), (3) adoption, amendment
or repeal of By-laws, (4) amendment or repeal of any resolution of the Board
which by its terms is not so amendable or repealable, and (5) declaration of
dividends, issuance of stock, or recommendations to stockholders of any action
requiring stockholder approval.
The Board of Directors or the Chairman of the Board of Directors of the
Association may change the membership of any committee at any time, fill
5
vacancies therein, discharge any committee or member thereof either with or
without cause at any time, and change at any time the authority and
responsibility of any such committee.
A majority of the members of any committee of the Board of Directors may
fix such committee's rules of procedure. All action by any committee shall be
reported to the Board of Directors at a meeting succeeding such action, except
such actions as the Board may not require to be reported to it in the resolution
creating any such committee. Any action by any committee shall be subject to
revision, alteration, and approval by the Board of Directors, except to the
extent otherwise provided in the resolution creating such committee; provided,
however, that no rights or acts of third parties shall be affected by any such
revision or alteration.
ARTICLE IV
Officers and Employees
----------------------
Section 4.1 Officers. The officers of the Association may be a Chairman
--------------------
of the Board, a Vice Chairman of the Board, one or more Chairmen or Vice
Chairmen (who shall not be required to be directors of the Association), a
President, one or more Vice Presidents, a Secretary, a Cashier or Treasurer, and
such other officers, including officers holding similar or equivalent titles to
the above in regions, divisions or functional units of the Association, as may
be appointed by the Board of Directors. The Chairman of the Board and the
President shall be members of the Board of Directors. Any two or more offices
may be held by one person, but no officer shall sign or execute any document in
more than one capacity.
Section 4.2 Election, Term of Office, and Qualification. Each officer
-------------------------------------------------------
shall be chosen by the Board of Directors and shall hold office until the annual
meeting of the Board of Directors held next after his election or until his
successor shall have been duly chosen and qualified, or until his death, or
until he shall resign, or shall have been disqualified, or shall have been
removed from office.
Section 4.2(a) Officers Acting as Assistant Secretary. Notwithstanding
-----------------------------------------------------
Section 1 of these By-laws, any Senior Vice President, Vice President, or
Assistant Vice President shall have, by virtue of his office, and by authority
of the By-laws, the authority from time to time to act as an Assistant Secretary
of the Bank, and to such extent, said officers are appointed to the office of
Assistant Secretary.
6
Section 4.3 Chief Executive Officer. The Board of Directors shall
-----------------------------------
designate one of its members to be the President of this Association, and the
officer so designated shall be an ex officio member of all committees of the
Association except the Examining Committee, and its Chief Executive Officer
unless some other officer is so designated by the Board of Directors.
Section 4.4 Duties of Officers. The duties of all officers shall be
------------------------------
prescribed by the Board of Directors. Nevertheless, the Board of Directors may
delegate to the Chief Executive Officer the authority to prescribe the duties of
other officers of the corporation not inconsistent with law, the charter, and
these By-laws, and to appoint other employees, prescribe their duties, and to
dismiss them. Notwithstanding such delegation of authority, any officer or
employee also may be dismissed at any time by the Board of Directors.
Section 4.5 Other Employees. The Board of Directors may appoint from
---------------------------
time to time such tellers, vault custodians, bookkeepers, and other clerks,
agents, and employees as it may deem advisable for the prompt and orderly
transaction of the business of the Association, define their duties, fix the
salary to be paid them, and dismiss them. Subject to the authority of the Board
of Directors, the Chief Executive Officer or any other officer of the
Association authorized by him, may appoint and dismiss all such tellers, vault
custodians, bookkeepers and other clerks, agents, and employees, prescribe their
duties and the conditions of their employment, and from time to time fix their
compensation.
Section 4.6 Removal and Resignation. Any officer or employee of the
-----------------------------------
Association may be removed either with or without cause by the Board of
Directors. Any employee other than an officer elected by the Board of Directors
may be dismissed in accordance with the provisions of the preceding Section 4.5.
Any officer may resign at any time by giving written notice to the Board of
Directors or to the Chief Executive Officer of the Association. Any such
resignation shall become effective upon its being accepted by the Board of
Directors, or the Chief Executive Officer.
ARTICLE V
Fiduciary Powers
----------------
Section 5.1 Capital Management Group. There shall be an area of this
------------------------------------
Association known as the Capital Management Group which shall be responsible for
the exercise of the fiduciary powers of this Association. The Capital Management
Group shall consist of four service areas: Fiduciary Services, Retail Services,
Investments and Marketing. The Fiduciary Services unit shall consist of
7
personal trust, employee benefits, corporate trust and operations. The General
Office for the Fiduciary Services unit shall be located in Charlotte, N.C., with
City Trust Offices located in such cities within the State of North Carolina as
designated by the Board of Directors.
Section 5.2 Trust Officers. There shall be a General Trust Officer of
--------------------------
this Association whose duties shall be to manage, supervise and direct all the
activities of the Capital Management Group. Further, there shall be one or more
Senior Trust Officers designated to assist the General Trust Officer in the
performance of his duties. They shall do or cause to be done all things
necessary or proper in carrying out the business of the Capital Management Group
in accordance with provisions of applicable law and regulation.
Section 5.3 Capital Management/General Trust Committee. There shall be a
------------------------------------------------------
Capital Management/General Trust Committee composed of not less than four (4)
members of the Board of Directors or officers of this Association who shall be
appointed annually or from time to time by the Board of Directors of the
Association. The General Trust Officer shall serve as an ex-officio member of
the Committee. Each member shall serve until his successor is appointed. The
Board of Directors or the Chairman of the Board may change the membership of the
Capital Management/General Trust Committee at any time, fill vacancies therein,
or discharge any member thereof with or without cause at any time. The Committee
shall counsel and advise on all matters relating to the business or affairs of
the Capital Management Group and shall adopt overall policies for the conduct of
the business of the Capital Management Group including but not limited to:
general administration, investment policies, new business development, and
review for approval of major assignments of functional responsibilities. The
Committee shall meet at least quarterly or as called for by its Chairman or any
three (3) members of the Committee. A quorum shall consist of three (3) members.
In carrying out its responsibilities, the Capital Management/General Trust
Committee shall review the actions of all officers, employees and committees
utilized by this Association in connection with the activities of the Capital
Management Group and may assign the administration and performance of any
fiduciary powers or duties to any of such officers or employees or to the
Investment Policy Committee, Personal Trust Administration Committee, Account
Review Committee, Corporate and Institutional Accounts Committee, or any other
committees it shall designate. One of the methods to be used in the review
process will be the thorough scrutiny of the Report of Examination by the Office
of the Comptroller of the Currency and the reports of the Audit Division of
First Union Corporation, as they relate to the activities of the Capital
Management Group. These reviews shall be in addition to reviews of such reports
by the Audit Committee of the Board of Directors. The Chairman of the Capital
Management/ General Trust
8
Committee shall be appointed by the Chairman of the Board of Directors. He shall
cause to be recorded in appropriate minutes all actions taken by the Committee.
The minutes shall be signed by its Secretary and approved by its Chairman.
Further, the Committee shall summarize all actions taken by it and shall submit
a report of its proceedings to the Board of Directors at its next regularly
scheduled meeting following a meeting of the Capital Management/General Trust
Committee. As required by Section 9.7 of Regulation 9 of the Comptroller of the
Currency, the Board of Directors retains responsibility for the proper exercise
of the fiduciary powers of this Association.
The Fiduciary Services unit of the Capital Management Group will maintain
a list of securities approved for investment in fiduciary accounts and will from
time to time provide the Capital Management/General Trust Committee with current
information relative to such list and also with respect to transactions in other
securities not on such list. It is the policy of this Association that members
of the Capital Management/General Trust Committee should not buy, sell or trade
in securities which are on such approved list or in any other securities in
which the Fiduciary Services unit has taken, or intends to take, a position in
fiduciary accounts in any circumstances in which any such transaction could be
viewed as a possible conflict of interest or could constitute a violation of
applicable law or regulation. Accordingly, if any such securities are owned by
any member of the Capital Management/General Trust Committee at the time of
appointment to such Committee, the Capital Management Group shall be promptly so
informed in writing. If any member of the Capital Management/General Trust
Committee intends to buy, sell, or trade in any such securities while serving as
a member of the Committee, he should first notify the Capital Management Group
in order to make certain that any proposed transaction will not constitute a
violation of this policy or of applicable law or regulation.
Section 5.4 Investment Policy Committee. There shall be an Investment
---------------------------------------
Policy Committee composed of not less than seven (7) officers and/or employees
of this Association who shall be appointed annually or from time to time by the
Board of Directors. Each member shall serve until his successor is appointed.
Meetings shall be called by the Chairman or any two (2) members of the
Committee. A quorum shall consist of five (5) members. The Investment Policy
Committee shall exercise such fiduciary powers and perform such duties as may be
assigned to it by the Capital Management/General Trust Committee. All actions
taken by the Investment Policy Committee shall be recorded in appropriate
minutes, signed by the Secretary thereof, approved by its Chairman and submitted
to the Capital Management/General Trust Committee at its next ensuing regular
meeting for its review and approval.
9
Section 5.5 Personal Trust Administration Committee. There shall be a
---------------------------------------------------
Personal Trust Administration Committee composed of not less than five (5)
officers, who shall be appointed annually or from time to time by the Board of
Directors. Each member shall serve until his successor is appointed. Meetings
shall be called by the Chairman or any three (3) members of the Committee. A
quorum shall consist of three (3) members. The Personal Trust Administration
Committee shall exercise such fiduciary powers and perform such duties as may be
assigned to it by the Capital Management/General Trust Committee. All action
taken by the Personal Trust Administration Committee shall be recorded in
appropriate minutes signed by the Secretary thereof, approved by its Chairman,
and submitted to the Capital Management/General Trust Committee at its next
ensuing regular meeting for its review and approval.
Section 5.6 Account Review Committee. There shall be an Account Review
------------------------------------
Committee composed of not less than four (4) officers and/or employees of this
Association, who shall be appointed annually or from time to time by the Board
of Directors. Each member shall serve until his successor is appointed. Meetings
shall be called by the Chairman or any two (2) members of the Committee. A
quorum shall consist of three (3) members. The Account Review Committee shall
exercise such fiduciary powers and perform such duties as may be assigned to it
by the Capital Management/General Trust Committee. All actions taken by the
Account Review Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman and submitted to the Capital
Management/ General Trust Committee at its next ensuing regular meeting for its
review and approval.
Section 5.7 Corporate and Institutional Accounts Committee. There shall
-----------------------------------------------------------
be a Corporate and Institutional Accounts Committee composed of not less than
five (5) officers and/or employees of this Association, who shall be appointed
annually, or from time to time, by the Capital Management/General Trust
Committee and approved by the Board of Directors. Meetings may be called by the
Chairman or any two (2) members of the Committee. A quorum shall consist of
three (3) members. The Corporate and Institutional Accounts Committee shall
exercise such fiduciary powers and duties as may be assigned to it by the
General Trust Committee. All actions taken by the Corporate and Institutional
Accounts Committee shall be recorded in appropriate minutes, signed by the
Secretary thereof, approved by its Chairman and made available to the General
Trust Committee at its next ensuing regular meeting for its review and approval.
10
ARTICLE VI
Stock and Stock Certificates
----------------------------
Section 6.1 Transfers. Shares of stock shall be transferable on the
---------------------
books of the Association, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder by
such transfer shall, in proportion to his shares, succeed to all rights and
liabilities of the prior holder of such shares.
Section 6.2 Stock Certificates. Certificates of stock shall bear the
------------------------------
signature of the Chairman, the Vice Chairman, the President, or a Vice President
(which may be engraved, printed, or impressed), and shall be signed manually or
by facsimile process by the Secretary, Assistant Secretary, Cashier, Assistant
Cashier, or any other officer appointed by the Board of Directors for that
purpose, to be known as an Authorized Officer, and the seal of the Association
shall be engraved thereon. Each certificate shall recite on its face that the
stock represented thereby is transferable only upon the books of the Association
properly endorsed.
ARTICLE VII
Corporate Seal
--------------
Section 7.1 The President, the Cashier, the Secretary, or any Assistant
-----------
Cashier, or Assistant Secretary, or other officer thereunto designated by the
Board of Directors shall have authority to affix the corporate seal to any
document requiring such seal, and to attest the same. Such seal shall be
substantially in the following form.
ARTICLE VIII
Miscellaneous Provisions
------------------------
Section 8.1 Fiscal Year. The fiscal year of the Association shall be the
-----------------------
calendar year.
Section 8.2 Execution of Instruments. All agreements, indentures,
------------------------------------
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, notices,
applications, schedules, accounts, affidavits, bonds, undertakings, proxies, and
other
11
instruments or documents may be signed, executed, acknowledged, verified,
delivered or accepted in behalf of the Association by the Chairman of the Board,
the Vice Chairman of the Board, any Chairman or Vice Chairman, the President,
any Vice President or Assistant Vice President, the Secretary or any Assistant
Secretary, the Cashier or Treasurer or any Assistant Cashier or Assistant
Treasurer, or any officer holding similar or equivalent titles to the above in
any regions, divisions or functional units of the Association, or, if in
connection with the exercise of fiduciary powers of the Association, by any of
said officers or by any Trust Officer or Assistant Trust Officer (or equivalent
titles); provided, however, that where required, any such instrument shall be
attested by one of said officers other than the officer executing such
instrument. Any such instruments may also be executed, acknowledged, verified,
delivered or accepted in behalf of the Association in such other manner and by
such other officers as the Board of Directors may from time to time direct. The
provisions of this Section 8.2 are supplementary to any other provision of these
By-laws.
Section 8.3 Records. The Articles of Association, the By-laws, and the
-------------------
proceedings of all meetings of the shareholders, the Board of Directors,
standing committees of the Board, shall be recorded in appropriate minute books
provided for the purpose. The minutes of each meeting shall be signed by the
Secretary, Cashier, or other officer appointed to act as Secretary of the
meeting.
ARTICLE IX
By-laws
-------
Section 9.1 Inspection. A copy of the By-laws, with all amendments
----------------------
thereto, shall at all times be kept in a convenient place at the Head Office of
the Association, and shall be open for inspection to all shareholders, during
banking hours.
Section 9.2 Amendments. The By-laws may be amended, altered or repealed,
----------------------
at any regular or special meeting of the Board of Directors, by a vote of a
majority of the whole number of Directors.
12
Exhibit A
---------
First Union National Bank
Article X
Emergency By-laws
In the event of an emergency declared by the President of the United
States or the person performing his functions, the officers and employees of
this Association will continue to conduct the affairs of the Association under
such guidance from the directors or the Executive Committee as may be available
except as to matters which by statute require specific approval of the Board of
Directors and subject to conformance with any applicable governmental directives
during the emergency.
OFFICERS PRO TEMPORE AND DISASTER
Section 1. The surviving members of the Board of Directors or the
Executive Committee shall have the power, in the absence or disability of any
officer, or upon the refusal of any officer to act, to delegate and prescribe
such officer's powers and duties to any other officer, or to any director, for
the time being.
Section 2. In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of this
Association by its directors and officers as contemplated by these By-laws, any
two or more available members of the then incumbent Executive Committee shall
constitute a quorum of that Committee for the full conduct and management of the
affairs and business of the Association in accordance with the provisions of
Article II of these By-laws; and in addition, such Committee shall be empowered
to exercise all of the powers reserved to the General Trust Committee under
Section 5.3 of Article V hereof. In the event of the unavail-ability, at such
time, of a minimum of two members of the then incumbent Executive Committee, any
three available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Association in
accordance with the foregoing provisions of this section. This By-law shall be
subject to implementation by resolutions of the Board of Directors passed from
time to time for that purpose, and any provisions of these By-laws (other than
this section) and any resolutions which are contrary to the provisions of this
section or to the provisions of any such implementary
13
resolutions shall be suspended until it shall be determined by an interim
Executive Committee acting under this section that it shall be to the advantage
of this Association to resume the conduct and management of its affairs and
business under all of the other provisions of these By-laws.
Officer Succession
BE IT RESOLVED, that if consequent upon war or warlike damage or
disaster, the Chief Executive Officer of this Association cannot be located by
the then acting Head Officer or is unable to assume or to continue normal
executive duties, then the authority and duties of the Chief Executive Officer
shall, without further action of the Board of Directors, be automatically
assumed by one of the following persons in the order designated:
Chairman
President
Division Head/Area Administrator - Within this officer class, officers
shall take seniority on the basis of length of service in such office or,
in the event of equality, length of service as an officer of the
Association.
Any one of the above persons who in accordance with this resolution
assumes the authority and duties of the Chief Executive Officer shall continue
to serve until he resigns or until five-sixths of the other officers who are
attached to the then acting Head Office decide in writing he is unable to
perform said duties or until the elected Chief Executive Officer of this
Association, or a person higher on the above list, shall become available to
perform the duties of Chief Executive Officer of the Association.
BE IT FURTHER RESOLVED, that anyone dealing with this Association may
accept a certification by any three officers that a specified individual is
acting as Chief Executive Officer in accordance with this resolution; and that
anyone accepting such certification may continue to consider it in force until
notified in writing of a change, said notice of change to carry the signatures
of three officers of the Association.
Alternate Locations
The offices of the Association at which its business shall be conducted
shall be the main office thereof in each city which is designated as a City
Office (and branches, if any), and any other legally authorized location which
may be leased or acquired by this Association to carry on its business. During
an emergency resulting in any authorized place of business of this Association
being unable to function, the business ordinarily conducted at such location
shall be relocated
14
elsewhere in suitable quarters, in addition to or in lieu of the locations
heretofore mentioned, as may be designated by the Board of Directors or by the
Executive Committee or by such persons as are then, in accordance with
resolutions adopted from time to time by the Board of Directors dealing with the
exercise of authority in the time of such emergency, conducting the affairs of
this Association. Any temporarily relocated place of business of this
Association shall be returned to its legally authorized location as soon as
practicable and such temporary place of business shall then be discontinued.
Acting Head Offices
BE IT RESOLVED, that in case of and provided because of war or warlike
damage or disaster, the General Office of this Association, located in
Charlotte, North Carolina, is unable temporarily to continue its functions, the
Raleigh office, located in Raleigh, North Carolina, shall automatically and
without further action of this Board of Directors, become the "Acting Head
Office of this Association";
BE IT FURTHER RESOLVED, that if by reason of said war or warlike damage
or disaster, both the General Office of this Association and the said Raleigh
Office of this Association are unable to carry on their functions, then and in
such case, the Asheville Office of this Association, located in Asheville, North
Carolina, shall, without further action of this Board of Directors, become the
"Acting Head Office of this Association"; and if neither the Raleigh Office nor
the Asheville Office can carry on their functions, then the Greensboro Office of
this Association, located in Greensboro, North Carolina, shall, without further
action of this Board of Directors, become the "Acting Head Office of this
Association"; and if neither the Raleigh Office, the Asheville Office, nor the
Greensboro Office can carry on their functions, then the Lumberton Office of
this Association, located in Lumberton, North Carolina, shall, without further
action of this Board of Directors, become the "Acting Head Office of this
Association". The Head Office shall resume its functions at its legally
authorized location as soon as practicable.
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