Exhibit 4.4
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CAPITAL TRUST
and
WILMINGTON TRUST COMPANY,
as Trustee
---------------
8.25% STEP UP CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
---------------
INDENTURE
Dated as of July 28, 1998
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727411.13
CAPITAL TRUST
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of July 28, 1998
Trust Indenture
Act Section Indenture Section
---------------- -----------------
310(a)(1)................................................ 6.10
(a)(2)............................................. 6.10
(a)(3)............................................. Not Applicable
(a)(4)............................................. Not Applicable
(a)(5)............................................. 6.10
(b) ............................................. 6.8, 6.10
311(a)................................................... 6.11
(b) ............................................. 6.11
312(a)................................................... 4.1 and 4.2
(b) ............................................. 4.2
(c) ............................................. 4.2
313(a)(1)-(5) & (7)(8)................................... 6.6
(a)(6)............................................. Not Applicable
(b)(1)............................................. Not Applicable
(b)(2)............................................. 6.6
(c) ............................................. 6.6
(d) ............................................. 6.6
314(a)(1)-(3)............................................ 4.3
(a)(4)............................................. 3.4
(b) ............................................. Not Applicable
(c)(1)............................................. 2.6
(c)(2)............................................. 2.6
(c)(3)............................................. Not Applicable
(d) ............................................. Not Applicable
(e) ............................................. 15.5
(f) ............................................. Not Applicable
315(a)................................................... 6.1
(b) ............................................. 6.5
(c) ............................................. 6.1
(d) ............................................. 6.1
(d)(1)............................................. 6.1
(d)(2)............................................. 6.1
(d)(3)............................................. 6.1
(e) ............................................. 5.10
316(a)................................................... 7.4
(a)(1)(A).......................................... 5.8
(a)(1)(B).......................................... 5.1, 5.9
(a)(2)............................................. Not Applicable
(b) ............................................. 5.6
(c) ............................................. 7.1
317(a)(1)................................................ 5.2
727411.13
i
Trust Indenture
Act Section Indenture Section
--------------- -----------------
(a)(2) 5.2
(b) 3.3
318(a)................................................... 15.7
---------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
727411.13
ii
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS.....................................................................................1
Section 1.1 Certain Terms Defined...........................................................................1
ARTICLE II THE CONVERTIBLE DEBENTURES......................................................................9
Section 2.1 Designation and Principal Amount................................................................9
Section 2.2 Maturity........................................................................................9
Section 2.3 Form and Payment................................................................................9
Section 2.4 Exchange and Registration of Transfer of Convertible Debentures;
Restrictions on Transfers; Depositary...........................................................9
Section 2.5 Interest.......................................................................................11
Section 2.6 Authentication and Delivery of Convertible Debentures..........................................12
Section 2.7 Execution of Convertible Debentures............................................................13
Section 2.8 Certificate of Authentication..................................................................13
Section 2.9 Denomination and Date of Convertible Debentures; Payments of Interest..........................13
Section 2.10 Registration, Transfer and Exchange............................................................15
Section 2.11 Mutilated, Defaced, Destroyed, Lost and Stolen Convertible Debentures..........................15
Section 2.12 Cancellation of Convertible Debentures.........................................................16
Section 2.13 Temporary Convertible Debentures...............................................................16
ARTICLE III COVENANTS OF THE COMPANY.......................................................................17
Section 3.1 Payment of Principal and Interest..............................................................17
Section 3.2 Offices for Payment, etc.......................................................................17
Section 3.3 Paying Agents..................................................................................17
Section 3.4 Written Statement to Trustee...................................................................17
Section 3.5 Limitation on Dividends; Transactions with Affiliates..........................................18
Section 3.6 Covenants as to CT Trust.......................................................................18
Section 3.7 Existence......................................................................................18
ARTICLE IV HOLDERS OF CONVERTIBLE DEBENTURES LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE.................................................................18
Section 4.1 Company to Furnish Trustee Information as to Names and Addresses of
Holders of Convertible Debentures..............................................................18
Section 4.2 Preservation and Disclosure of Holders of Convertible Debentures' Lists........................19
Section 4.3 Reports by the Company.........................................................................20
ARTICLE V REMEDIES OF THE TRUSTEE AND HOLDERS OF
CONVERTIBLE DEBENTURES ON EVENT OF DEFAULT.....................................................20
Section 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of Default..........................20
Section 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt..................................22
Section 5.3 Application of Proceeds........................................................................23
Section 5.4 Restoration of Rights on Abandonment of Proceedings............................................24
Section 5.5 Limitations on Suits by Holders of Convertible Debentures......................................24
Section 5.6 Unconditional Right of Holders of Convertible Debentures to Institute Certain
Suits..........................................................................................24
Section 5.7 Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default........................24
Section 5.8 Control by Holders of Convertible Debentures...................................................24
Section 5.9 Waiver of Past Defaults........................................................................25
Section 5.10 Right of Court to Require Filing of Undertaking to Pay Costs...................................25
Section 5.11 Suits for Enforcement..........................................................................25
Section 5.12 Unconditional Right of Holders to Receive Principal and Interest and to
Convert........................................................................................26
727411.13
iii
Page
ARTICLE VI CONCERNING THE TRUSTEE.........................................................................26
Section 6.1 Duties of the Trustee..........................................................................26
Section 6.2 Rights of Trustee..............................................................................27
Section 6.3 Individual Rights of Trustee...................................................................27
Section 6.4 Trustee's Disclaimer...........................................................................27
Section 6.5 Notice of Defaults.............................................................................27
Section 6.6 Reports by Trustee to Holders..................................................................27
Section 6.7 Compensation and Indemnity.....................................................................28
Section 6.8 Replacement of Trustee.........................................................................28
Section 6.9 Successor Trustee by Merger....................................................................29
Section 6.10 Eligibility; Disqualification..................................................................29
Section 6.11 Preferential Collection of Claims Against Company..............................................29
ARTICLE VII CONCERNING THE HOLDERS OF CONVERTIBLE DEBENTURES...............................................29
Section 7.1 Evidence of Action Taken by Holders of Convertible Debentures..................................29
Section 7.2 Proof of Execution of Instruments..............................................................29
Section 7.3 Holders to be Treated as Owners................................................................30
Section 7.4 Convertible Debentures Owned by Company Deemed Not Outstanding.................................30
Section 7.5 Right of Revocation of Action Taken............................................................30
ARTICLE VIII SUPPLEMENTAL INDENTURES........................................................................30
Section 8.1 Supplemental Indentures Without Consent of Holders of Convertible
Debentures.....................................................................................30
Section 8.2 Supplemental Indentures With Consent of Holders of Convertible Debentures......................31
Section 8.3 Effect of Supplemental Indenture...............................................................32
Section 8.4 Documents to Be Given to Trustee...............................................................32
Section 8.5 Notation on Convertible Debentures in Respect of Supplemental Indentures.......................32
ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE......................................................32
Section 9.1 Company May Consolidate, etc., on Certain Terms................................................32
Section 9.2 Successor Corporation Substituted..............................................................33
Section 9.3 Opinion of Counsel to Trustee..................................................................33
ARTICLE X REDEMPTION OF THE CONVERTIBLE DEBENTURES.......................................................33
Section 10.1 Tax Event Redemption...........................................................................33
Section 10.2 Optional Redemption by Company.................................................................34
Section 10.3 No Sinking Fund................................................................................35
Section 10.4 Election to Redeem; Notice of Redemption; Partial Redemptions..................................35
Section 10.5 Payment of Convertible Debentures Called for Redemption........................................36
Section 10.6 Exclusion of Certain Convertible Debentures from Eligibility for Selection
for Redemption.................................................................................36
ARTICLE XI EXTENSION OF INTEREST PAYMENT PERIOD...........................................................37
Section 11.1 Extension of Interest Payment Period...........................................................37
Section 11.2 Notice of Extension............................................................................37
ARTICLE XII CONVERSION OF CONVERTIBLE DEBENTURES...........................................................37
Section 12.1 Conversion Rights..............................................................................37
Section 12.2 Conversion Procedures..........................................................................38
Section 12.3 Conversion Price Adjustments...................................................................39
Section 12.4 Merger, Consolidation or Sale of Assets........................................................42
Section 12.5 Notice of Adjustments of Conversion Price......................................................44
Section 12.6 Prior Notice of Certain Events.................................................................44
727411.13
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Page
Section 12.7 Certain Additional Rights......................................................................44
Section 12.8 Trustee Not Responsible for Determining Conversion Price or Adjustments........................45
Section 12.9 Reservation of Shares of Common Shares.........................................................45
Section 12.10 Payment of Certain Taxes upon Conversion.......................................................45
Section 12.11 Nonassessability...............................................................................45
ARTICLE XIII SUBORDINATION OF CONVERTIBLE DEBENTURES........................................................45
Section 13.1 Convertible Debentures Subordinate to Senior Indebtedness......................................45
Section 13.2 Payment Over of Proceeds upon Dissolution, Etc.................................................46
Section 13.3 Prior Payment to Senior Indebtedness upon Acceleration of Convertible
Debentures.....................................................................................46
Section 13.4 No Payment When Senior Indebtedness in Default.................................................47
Section 13.5 Payment Permitted in Certain Situations........................................................47
Section 13.6 Subrogation to Rights of Holders of Senior Indebtedness........................................47
Section 13.7 Provisions Solely to Define Relative Rights....................................................47
Section 13.8 Trustee to Effectuate Subordination............................................................48
Section 13.9 No Waiver of Subordination Provisions..........................................................48
Section 13.10 Notice to Trustee..............................................................................48
Section 13.11 Reliance on Judicial Order or Certificate of Liquidating Agent.................................49
Section 13.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.......................................49
Section 13.13 Rights of Trustee as Holder of Senior Indebtedness; Preservation of Trustee's
Rights.........................................................................................49
Section 13.14 Article Applicable to Paying Agents............................................................49
Section 13.15 Certain Conversions Deemed Payment.............................................................49
ARTICLE XIV EXPENSES.......................................................................................50
Section 14.1 Payment of Expenses............................................................................50
Section 14.2 Payment Upon Resignation or Removal............................................................50
ARTICLE XV MISCELLANEOUS PROVISIONS.......................................................................50
Section 15.1 Incorporators, Stockholders, Officers and Trustees of Company Exempt from
Individual Liability...........................................................................50
Section 15.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of
Convertible Debentures.........................................................................50
Section 15.3 Right to Assign; Successors and Assigns Bound by Indenture.....................................51
Section 15.4 Notices and Demands on Company, Trustee and Holders of Convertible
Debentures.....................................................................................51
Section 15.5 Officers' Certificates and Opinions of Counsel; Statements to Be Contained
Therein........................................................................................51
Section 15.6 Payments Due on Saturdays, Sundays and Holidays................................................52
Section 15.7 Conflict of Any Provision of Indenture with Trust Indenture Act................................52
Section 15.8 New York Law to Govern.........................................................................52
Section 15.9 Counterparts...................................................................................52
Section 15.10 Effect of Headings; Gender.....................................................................52
727411.13
v
THIS INDENTURE, dated as of July 28, 1998, between CAPITAL TRUST, a
California business trust (the"Company"), and Wilmington Trust Company, (the
"Trustee"),
W I T N E S S E T H:
WHEREAS, the Company desires and has requested the Trustee to join it
in the execution and delivery of this Indenture in order to establish and
provide for the issuance by the Company of Convertible Debentures designated as
its 8.25% Step Up Convertible Junior Subordinated Debentures (the "Convertible
Debentures"), a specimen copy of which is attached hereto as Exhibit A, on the
terms set forth herein;
WHEREAS, CT Convertible Trust I, a Delaware statutory business trust
("CT Trust" or the "Trust"), has offered to certain investors in a private
placement $150,000,000 aggregate liquidation amount of its 8.25% Step Up
Convertible Trust Preferred Securities (the "Convertible Preferred Securities"),
representing undivided beneficial interests in the assets of the Trust, and
proposes to invest the proceeds from such offering, together with the proceeds
of the issuance and sale by the Trust to the Company of $4,650,000 aggregate
liquidation amount of its Common Securities, in $154,650,000 aggregate principal
amount of the Convertible Debentures; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company and the Trustee, in accordance with its terms, have been done.
NOW, THEREFORE:
There is hereby established the terms of the Convertible Debentures to
be issued under this Indenture, which shall be as set forth herein and in the
form of Convertible Debentures attached hereto as Exhibit A, and in
consideration of the premises and the purchase and acceptance of the Convertible
Debentures by the holders thereof, the Company mutually covenants and agrees
with the Trustee, for the equal and proportionate benefit of all holders of the
Convertible Debentures, as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), or the definitions of which in the
Securities Act of 1933, as amended (the "Securities Act"), are referred to in
the Trust Indenture Act, including terms defined therein by reference to the
Securities Act (except as herein otherwise expressly provided or unless the
context otherwise clearly requires), shall have the meanings assigned to such
terms in the Trust Indenture Act and in the Securities Act as in force at the
date of this Indenture. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a
whole, as supplemented and amended from time to time, and not to any particular
Article, Section or other subdivision. The terms defined in this Article have
the meanings assigned to them in this Article and include the plural as well as
the singular.
"Additional Sums" shall have the meaning set forth in Section 2.5(c).
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Applicable Price" means (i) in the event of a Non-Share Fundamental
Change in which the holders of the Common Shares receive only cash, the amount
of cash received by a holder of one Common Share and (ii) in the event of any
other Fundamental Change, the average of the daily Closing Price for one Common
Share during the
727411.13
10 Trading Days immediately prior to the record date for the determination of
the holders of Common Shares entitled to receive cash, securities, property or
other assets in connection with such Fundamental Change or, if there is no such
record date, prior to the date upon which the holders of the Common Shares shall
have the right to receive such cash, securities, property or other assets.
"Applicants" has the meaning specified in Section 4.2(b).
"Board of Trustees" means either the Board of Trustees of the Company
or any duly authorized committee of that Board.
"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" means any day other than a Saturday, Sunday, or any
other day on which banking institutions in New York, New York or Wilmington,
Delaware are permitted or required by any applicable law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, units representing interests, participations, rights in or other
equivalents (however designated) of such Person's capital stock, including, with
respect to partnerships and business trusts, partnership interests (whether
general or limited), beneficial interests and any other interest or
participation that confers upon a Person the right to receive a share of the
profits and losses of, or distributions of assets of, such partnership or
business trust, and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or convertible into such
capital stock.
"Certificated Convertible Preferred Securities" means Convertible
Preferred Securities issued in definitive registered form.
"Closing Price" with respect to any security on any day means the last
reported sale price, regular way on such day, or, if no sale takes place on such
day, the average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the NYSE Composite Tape, or, if such
security is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on a national securities exchange, on the National Market System of the National
Association of Securities Dealers, Inc., or, if such security is not quoted or
admitted to trading on such quotation system, on the principal quotation system
on which such security is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security in the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
New York Stock Exchange member firm selected from time to time by the Board of
Trustees (or any committee duly authorized by the Board of Trustees) of the
Company for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Trustees (or any committee duly
authorized by the Board of Trustees) of the Company.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, as amended, or if at any
time after the execution and delivery of this Indenture 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 Securities" means undivided beneficial interests in the assets
of the CT Trust which rank pari passu with Convertible Preferred Securities
issued by the CT Trust; provided, however, that upon the occurrence of an Event
of Default, the rights of holders of Common Securities to payment in respect to
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Convertible Preferred Securities.
727411.13
2
"Common Securities Guarantee" means the Common Securities Guarantee
Agreement dated as of July 28, 1998 by the Guarantor.
"Common Shares" includes class A common shares of beneficial interest,
$1.00 par value, in the Company which has no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which is not subject to redemption
by the Company.
"Common Share Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of Trustees
of the Company) of the consideration received by holders of Common Shares
consists of common stock that, for the 10 Trading Days immediately prior to such
Fundamental Change, has been admitted for listing or admitted for listing
subject to notice of issuance on a national securities exchange or quoted on The
Nasdaq National Market; provided, however, that a Fundamental Change shall not
be a Common Share Fundamental Change unless either (i) the Company continues to
exist after the occurrence of such Fundamental Change and the outstanding
Convertible Debentures continue to exist as outstanding Convertible Debentures,
or (ii) not later than the occurrence of such Fundamental Change, the
outstanding Convertible Debentures are converted into or exchanged for
convertible debentures of a corporation succeeding to the business of the
Company, which convertible debentures have terms substantially similar to those
of the Convertible Debentures.
"Company" means Capital Trust, a California business trust, until a
successor corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall mean such successor
corporation.
"Compound Interest" shall have the meaning specified in Section 11.1.
"Convertible Debenture" or "Convertible Debentures" has the meaning
stated in the first recital of this Indenture and more particularly means any
Convertible Debentures authenticated and delivered under this Indenture.
"Convertible Preferred Securities" has the meaning specified in the
recitals to this Indenture.
"Conversion Agent" has the meaning assigned thereto in the Declaration.
"Conversion Date" has the meaning specified in Section 12.2(a).
"Conversion Price" has the meaning set forth in Section 12.1.
"Corporate Trust Office" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of execution of this Indenture is
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention:
Corporate Trust Administration.
"Coupon Rate" has the meaning specified in Section 2.5(a).
"Declaration" means the Declaration of Trust of CT Convertible Trust I,
a Delaware statutory business trust, dated as of July 28, 1998.
"Debt" of a Person means, all indebtedness of such Person which is for
money borrowed.
"defaulted interest" has the meaning specified in Section 2.9.
"Deferred Interest" has the meaning specified in Section 11.1.
"Delaware Trustee" has the meaning specified in the Declaration.
727411.13
3
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event (as described in the Declaration), the Trust is
to be dissolved in accordance with the Declaration, and the Convertible
Debentures held by the Institutional Trustee are to be distributed to the
holders of the Trust Securities issued by the Trust pro rata in accordance with
the Declaration.
"Dollar" means the coin or currency of the United States of America
which as of the time of payment is legal tender for the payment of public and
private debts.
"EOPLP" means EOP Operating Limited Partnership, an Delaware limited
partnership.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Expiration Date" has the meaning specified in Section 12.3(e).
"Extension Period" has the meaning specified in Section 11.1.
"Fundamental Change" means the occurrence of any transaction or event
or series of transactions or events pursuant to which all or substantially all
of the Common Shares shall be exchanged for, converted into, acquired for or
shall constitute solely the right to receive cash, securities, property or other
assets (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise); provided, however, in the case of any such series of transactions or
events, for purposes of adjustment of the Conversion Price, such Fundamental
Change shall be deemed to have occurred when substantially all of the Common
Shares shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets, but the adjustment shall be based upon the consideration that the
holders of Common Shares received in the transaction or event as a result of
which more than 50% of the Common Shares shall have been exchanged for,
converted into or acquired for, or shall constitute solely the right to receive,
such cash, securities, property or other assets.
"GM Trusts" means Mellon Bank N.A., as trustee for General Motors
Hourly-Rate Employes Pension Trust, a New York trust, and Mellon Bank N.A., as
trustee for General Motors Salaried Employes Pension Trust, a New York trust.
"Government Obligations" means securities which are (i) direct
obligations of the United States government for which its full faith and credit
is pledged or (ii) obligations of a Person controlled or supervised by, or
acting as an agency or instrumentality of, the United States government, the
payment of which obligations is unconditionally guaranteed by the United States
government, and which, in either case, are full faith and credit obligations of
the United States government, and which are not callable or redeemable at the
option of the issuer thereof prior to their stated maturity.
"Guarantor" means the Company in its capacity as guarantor under any
Trust Securities Guarantees.
"Holder" or "Holder of Convertible Debentures" or other similar terms
mean the person in whose name such Convertible Debenture is registered in the
Security Register.
"incur" means to issue, incur, assume, guarantee, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
the payment of, any Debt.
"Indenture" means this instrument as originally executed and delivered
or as it may from time to time be amended or supplemented as herein provided, as
so amended or supplemented or both, and shall include the forms and terms of the
Convertible Debentures appearing as Exhibit A to this instrument.
"Institutional Trustee" has the meaning specified in the Declaration.
727411.13
4
"Interest Payment Date," when used with respect to any Convertible
Debenture, means the Stated Maturity of an installment of interest on such
Convertible Debenture.
"Issuance Date" has the meaning set forth in Section 2.5(a).
"Lien" means any mortgage or deed of trust, pledge, assignment,
security interest, lien, charge, or other encumbrance or preferential
arrangement (including, without limitation, any conditional sale or other title
retention agreement having substantially the same economic effect as any of the
foregoing).
"Majority Holders" means Holders of not less than a majority in
aggregate principal amount of the Convertible Debentures at the time outstanding
immediately prior to the redemption pursuant to Section 10.1 or the Non-Share
Fundamental Change for which the Conversion Price is subject to adjustment
pursuant to Section 12.4 (voting as one class).
"Maturity" when used with respect to any Convertible Debenture means
the date on which the principal of such Convertible Debenture or an installment
of principal becomes due and payable as therein or herein provided, whether at
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Maturity Date" means the date on which the Convertible Debentures
mature and on which the principal shall be due and payable together with all
accrued and unpaid interest thereon including Additional Sums, if any, and (to
the extent permitted by applicable law) Compound Interest, if any.
"Ministerial Action" has the meaning specified in Section 10.1(a)
"90-Day Period" has the meaning specified in Section 10.1(a).
"Non-Share Fundamental Change" means any Fundamental Change other than
a Common Share Fundamental Change.
"Non-U.S. Person" means any person that is not a "U.S. person" as such
term is defined in Rule 902 under the Securities Act.
"Notice of Conversion" has the meaning specified in Section 12.2(a).
"Offeror" has the meaning specified in Section 2.4(c).
"Officers' Certificate" means a certificate signed on behalf of the
Company by the Chairman of the Board of Trustees or any vice chairman or the
president or any vice president and by the chief financial officer, the
treasurer, the controller, any assistant treasurer, the secretary or any
assistant secretary of the Company and delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 15.5.
"Opinion of Counsel" means a written opinion of legal counsel, who may
be an employee of or counsel to the Company, and who shall be reasonably
acceptable to the Trustee. Each Opinion of Counsel shall include the statements
provided for in Section 15.5, if and to the extent required hereby.
"Optional Redemption Price" has the meaning specified in Section 10.2.
"Outstanding" when used with reference to Convertible Debentures,
subject to the provisions of Section 7.4, means, as of any particular time, all
Convertible Debentures authenticated and delivered under this Indenture, except
(a) Convertible Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Convertible Debentures, or portions thereof, for the
payment or redemption of which moneys in the necessary amount and in
the required currency shall have been deposited in trust with the
727411.13
5
Trustee or with any Paying Agent (other than the Company) or shall have
been set aside, segregated and held in trust by the Company for the
Holders of such Convertible Debentures (if the Company shall act as its
own Paying Agent), provided that if such Convertible Debentures, or
portions thereof, are to be redeemed prior to the Maturity thereof,
notice of such redemption shall have been given as herein provided, or
provision satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Convertible Debentures that have been paid pursuant to
Section 2.11, converted into Common Shares pursuant to Article XII, or
in exchange for or in lieu of which other Convertible Debentures have
been authenticated and delivered pursuant to the Indenture (except with
respect to any such Convertible Debenture as to which proof
satisfactory to the Trustee and the Company is presented that such
Convertible Debenture is held by a person in whose hands such
Convertible Debenture is a legal, valid and binding obligation of the
Company).
"Paying Agent" means any Person (which may include the Company)
authorized by the Company to pay the principal of or interest, if any, on any
Convertible Debenture on behalf of the Company.
"Persons" or "Person" means any individual, corporation, partnership,
joint venture, limited liability company, 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 Convertible
Debentures, means the place or places where the principal of and interest, if
any, on the Convertible Debentures are payable as specified pursuant to Section
3.2.
"Predecessor Convertible Debenture" of a Convertible Debenture means
every previous Convertible Debenture evidencing all or a portion of the same
debt as that evidenced by such Convertible Debenture; and, for the purposes of
this definition, a Convertible Debenture authenticated and delivered under
Section 2.11 in exchange for or in lieu of a mutilated, destroyed, lost or
stolen Convertible Debenture shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Convertible Debenture.
"Preferred Securities Guarantee" means the Preferred Securities
Guarantee Agreement dated as of July 28, 1998 between the Guarantor and
Wilmington Trust Company, as Preferred Guarantee Trustee.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"principal" whenever used with reference to the Convertible Debentures
or any Convertible Debenture or any portion thereof, shall be deemed to include
"and premium, if any."
"Purchaser Share Price" means, with respect to any Common Share
Fundamental Change, the average of the daily Closing Price for one share of the
common stock received by holders of Common Shares (determined as provided
herein) in such Common Share Fundamental Change during the five Trading Days
immediately prior to the date fixed for the determination of the holders of
Common Shares entitled to receive such common stock or, if there is no such
date, prior to the date upon which the holders of Common Shares shall have the
right to receive such common stock, in each case, as adjusted in good faith by
the Board of Directors of the Company (whose good faith determination shall be
conclusive and described in a resolution of the Board of Directors submitted to
the Trustee) to appropriately reflect events of a type analogous to any of the
events that trigger adjustments to the Conversion Price as set forth in Section
12.3 herein.
"QIB" or "Qualified Institutional Buyer" shall mean "Qualified
Institutional Buyer" as such term is defined in Rule 144A under the Securities
Act.
"record date" has the meaning specified in Section 2.9.
727411.13
6
"Redemption Date" has the meaning specified in Section 10.1(a).
"Reference Date" has the meaning specified in Section 12.3(c).
"Reference Market Price" initially means $11.70 and, in the event of
any adjustment to the Conversion Price other than as a result of a Fundamental
Change, the Reference Market Price shall also be adjusted so that the ratio of
the Reference Market Price to the Conversion Price after giving effect to any
such adjustment shall also be the same as the ratio of the initial Reference
Market Price to the initial Conversion Price.
"Registrar" has the meaning specified in Section 2.10.
"Regulation S" means Regulation S under the Securities Act.
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative (i) in the case of such Senior Indebtedness issued pursuant to an
agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Responsible Officer" when used with respect to the Trustee means any
officer within the corporate trust department (or any successor department) of
the Trustee including any vice president, assistant vice president, assistant
secretary, senior trust officer, trust officer or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred at the Corporate Trust Office
because of his or her knowledge of and familiarity with the particular subject.
"Restricted Convertible Debenture" has the meaning specified in Section
2.4(a).
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Sales Notice" has the meaning specified in Section 2.4(c).
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning specified in Section 2.10.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (a) indebtedness of the
Company for money borrowed (but excluding trade accounts payable arising in the
ordinary course of business) under any credit agreements, notes, guarantees or
similar documents and (b) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by the Company; (ii) all capital lease
obligations of the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the Company
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreements or other similar instruments or agreements or foreign currency
hedge, exchange, purchase or similar instruments or agreements; (vi) all
obligations of the types referred to in clauses (i) through (v) of other Persons
for the payment of which the Company is responsible or liable as obligor,
guarantor or otherwise; and (vii) all obligations of the types referred to in
clauses (i) through (vi) above of other Persons secured by any lien on any
property or asset of the Company (whether or not such obligation is assumed by
the Company), whether outstanding on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company,
except for any such
727411.13
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indebtedness that is by its terms subordinated to or pari passu with the
Convertible Debentures. Such Senior Indebtedness shall continue to be Senior
Indebtedness irrespective of any deferrals, renewals, extensions or refundings
of, or amendments, modifications, supplements or waivers of any term of such
Senior Indebtedness.
"Stated Maturity" when used with respect to any Convertible Debenture
or any installment of principal thereof or interest thereon, means the date on
which the principal of such Convertible Debenture or such installment of
principal or interest is due and payable in accordance with the terms thereof.
"Subsidiary" means any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of the
outstanding Capital Stock (or other interests) entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, general
partners, managers, managing members, managing partners or trustees thereof or,
if such persons are not elected, to vote on any matter that is submitted to the
vote of all persons holding ownership interests in such entity is at the time
owned or controlled, directly or indirectly, by (i) the Company, (ii) the
Company and one or more Subsidiaries or (iii) one or more Subsidiaries.
"Trading Day" shall mean a day on which any securities are traded on
the national securities exchange or quotation system used to determine the
Closing Price.
"Transfer Restriction Termination Date" means the earlier of the first
date on which (i) the Convertible Preferred Securities, the Convertible
Debentures and any Common Shares issued or issuable upon the conversion or
exchange thereof (other than (A) such securities acquired by the Company or any
Affiliate thereof since the Issue Date of the Convertible Preferred Securities
and (B) Common Shares issued upon the conversion or exchange of any such
security described in clause (A) above) may be sold pursuant to Rule 144(k) (or
any successor provision) and (ii) all of such Convertible Preferred Securities,
Convertible Debentures and/or Common Shares shall have been sold pursuant to an
effective registration statement.
"Trust" or "CT Trust" means CT Convertible Trust I, a Delaware
statutory business trust.
"Trust Indenture Act" or "TIA" (except as otherwise provided in
Sections 8.1 and 8.2) means the Trust Indenture Act of 1939, as amended, as in
force at the date as of which this Indenture was originally executed.
"Trust Securities" means the Common Securities and the Convertible
Preferred Securities of CT Trust.
"Trust Securities Guarantees" means the Common Securities Guarantee and
the Preferred Securities Guarantee.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof until a successor Trustee shall have become such pursuant to
the provisions hereof, and thereafter, "Trustee" shall mean or include each
Person who is then a Trustee hereunder.
"United States of America" or "United States" means the United States
of America (including the states and the District of Columbia), its territories,
possessions, the Commonwealth of Puerto Rico and other areas subject to its
jurisdiction.
"U.S. Person" means (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or under
the laws of the United States or any state or political subdivision thereof,
(iii) an estate the income of which is subject to United States federal income
taxation regardless of its sources or (iv) a trust whose administration is
subject to the primary supervision of a United States court and which has one or
more United States fiduciaries who have the authority to control all substantial
decisions of the Trust.
"vice president" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title of "vice president."
"VRLP" means Vornado Realty L.P., a Delaware limited partnership.
727411.13
8
ARTICLE II
THE CONVERTIBLE DEBENTURES
Section 2.1 Designation and Principal Amount. There are hereby
authorized Convertible Debentures designated the "8.25% Step Up Convertible
Junior Subordinated Debentures," limited in aggregate principal amount to
$154,650,000 which amount shall be as set forth in any written order of the
Company for the authentication and delivery of Convertible Debentures pursuant
to Section 2.6 of this Indenture.
Section 2.2 Maturity. The Maturity Date is September 30, 2018.
Section 2.3 Form and Payment.
(a) Except as provided in Section 2.6, the Convertible Debentures shall
be issued in fully registered certificated form without coupons in denominations
of $1,000 in principal amount and integral multiples thereof. Principal and
interest on the Convertible Debentures issued in certificated form will be
payable, the transfer of such Convertible Debentures will be registrable and
such Convertible Debentures will be exchangeable for Convertible Debentures
bearing identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Security Register. Notwithstanding the foregoing, so long as the Holder of any
Convertible Debentures is the Institutional Trustee, the payment of the
principal of and interest (including Compound Interest and Additional Sums, if
any) on such Convertible Debentures held by the Institutional Trustee will be
made in immediately available funds at such place and to such account as may be
designated by the Institutional Trustee.
(b) The Convertible Debentures are subject to the terms set forth in
this Indenture including, without limitation, Exhibit A hereto, the terms of
which are hereby incorporated in their entirety by reference.
(c) The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the form of
Exhibit A to this Indenture.
(d) The definitive Convertible Debentures shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Convertible
Debentures, as evidenced by their execution of such Convertible Debentures.
Section 2.4 Exchange and Registration of Transfer of Convertible
Debentures; Restrictions on Transfers; Depositary.
(a) Each Convertible Debenture that bears or is required to bear the
legend set forth in this Section 2.4(a) (a "Restricted Convertible Debenture")
shall be subject to the restrictions on transfer provided in the legend set
forth in this Section 2.4(a), unless such restrictions on transfer shall be
waived by the written consent of the Company, and the Holder of each Restricted
Convertible Debenture, by such Holder's acceptance thereof, agrees to be bound
by such restrictions on transfer. As used in this Section 2.4(a) and in Section
2.4(b), the term "transfer" encompasses any sale, pledge, transfer or other
disposition of any Restricted Convertible Debenture.
Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Convertible Debenture shall bear a legend in substantially the
following form, unless otherwise agreed by the Company (with written notice
thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED
727411.13
9
IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON
AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION)
RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR, IF THIS
SECURITY IS CONVERTIBLE INTO COMMON SHARES, THE COMMON SHARES ISSUABLE
UPON CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO CAPITAL
TRUST (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, (C) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE
(OR, IF THIS CERTIFICATE EVIDENCES COMMON SHARES, THE TRANSFER AGENT
FOR THE COMMON SHARES), A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THE SECURITY EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (F)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE), AND (3) AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH
ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION
OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR
THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF THIS CERTIFICATE
EVIDENCES COMMON SHARES, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY
OR CT CONVERTIBLE TRUST I (THE "TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON
SHARES AND IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE,
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY
OR THE TRUST MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS
LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Convertible
Debenture or security issued in exchange or substitution therefor (other than
(i) Convertible Debentures acquired by the Company or any Affiliate thereof
since the issue date of the Convertible Preferred Securities and (ii) Common
Shares issued upon the conversion or exchange of any Convertible Debenture
described in clause (i) above) may upon surrender of such Convertible Debenture
for exchange to the Registrar in accordance with the provisions of this Section
2.4, be
727411.13
10
exchanged for a new Convertible Debenture or Convertible Debentures, of like
tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.4(a).
(b) Any Convertible Debenture or Common Shares issued upon the
conversion or exchange of a Convertible Debenture that, prior to the Transfer
Restriction Termination Date, is purchased or owned by the Company or any
Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Convertible Debentures or Common Shares, as the case may be, no longer
being "restricted securities" (as defined under Rule 144).
(c) Each Convertible Debenture shall be subject to the restrictions on
transfer provided in this Section 2.4(c).
(i) If a holder of a Convertible Debenture (the "Offeror")
desires to sell, assign, transfer, encumber, or otherwise dispose of
any of his Convertible Debentures, he shall give written notice to the
Company of his desire to do so and of the price per debenture and other
terms under which he proposes to dispose of his Convertible Debentures
(the "Sales Notice"), which Sale Notice shall constitute an offer on
the part of the Offeror to sell to the Company any such Convertible
Debentures upon the terms and conditions set forth in such notice.
(ii) Unless, within ten (10) days after the giving of the
Sales Notice by the Offeror pursuant to subparagraph (i) of this
Section 2.4(c), the Company shall give written notice to the Offeror
that the Company irrevocably commits to purchase the Convertible
Debentures subject of the Sale Notice at the price and under the terms
specified in the Sales Notice given by the Offeror, the Company shall
be deemed to have rejected the offer of the Offeror to sell the
Convertible Debentures subject of the Sale Notice and the Offeror shall
be free without restriction under this Section 2.4(c) to sell the
Convertible Debentures subject of the Sales Notice to any other Person,
provided however, if the price per debenture is less than 90% of the
price and the other terms are more favorable than those contained in
the Sales Notice, the Offeror shall again offer to sell the Convertible
Debentures in accordance with the provisions of subparagraph (i) of
this Section 2.4(c) before it may complete any such sale and provided
further, that the Convertible Debentures subject of the Sales Notice
shall again be subject to the provisions of subparagraph (i) of this
Section 2.4(c) if within ninety (90) days after the giving of the Sale
Notice, the Offeror shall not have completed the disposition of such
Convertible Debentures.
(iii) If the Company irrevocably commits to purchase the
Convertible Debentures as contemplated by subparagraph (ii) of this
Section 2.4(c), the closing of such purchase shall take place at the
principal place of business of the Company at 10:00 A.M. (New York City
time) on the third (3rd) day following the expiration of the ten (10)
day period referred to subparagraph (ii) of this Section 2.4(c), or if
such day is not a Business Day, then the next day that is a Business
Day.
(iv) The provisions of this Section 2.4(c) shall not apply to
one or more transfers of the Convertible Debentures (i) by the GM
Trusts to one or more trusts for the benefit of the employees of
General Motors Corporation or its Affiliates, (ii) by VRLP to any
Affiliate of Vornado Realty Trust or VRLP, or (iii) EOPLP to any
Affiliate of Equity Office Properties Trust or EOPLP.
Section 2.5 Interest.
(a) Each Convertible Debenture will bear interest at the rate of 8.25%
per annum from and including July 28,1998 (the "Issuance Date") to and including
September 30, 2004, such rate of interest per annum automatically increasing by
an additional .75% per annum (any such increase shall be cumulative with any
such prior increase(s)) on October 1, 2004 and again on each subsequent October
1, (the rate of interest in effect at any time is hereinafter referred to as the
"Coupon Rate"), until the principal thereof becomes due and payable, and on any
overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
Coupon Rate, compounded quarterly, payable (subject to the provisions of Article
XI) quarterly in arrears on March 31, June 30, September 30 and December 31 of
each year (each, an "Interest Payment Date"), commencing on September 30, 1998,
to the Person in whose name such Convertible
727411.13
11
Debenture or any Predecessor Convertible Debenture is registered, at the close
of business on the record date for such interest installment, which shall be the
close of business on the fifteenth day prior to that Interest Payment Date. For
purposes of demonstration, Schedule 2.5(a) hereto lists the Coupon Rate that
will be in effect during each year following the Issuance Date until the
Maturity Date.
If the Company pays any Common Dividend during any quarter ending on an
Interest Payment Date, the Coupon Rate in effect for such quarter shall
automatically increase by the Common Rate. For purposes of this Section 2.5(a),
the following terms have the following meanings:
(i) "Common Dividend" means any cash dividend or distribution
payable on the Common Shares of the Company.
(ii) "Common Rate" means, for any quarter, the fraction,
expressed as a percentage rate per annum, the numerator of which is the
aggregate dollar amount of Common Dividend paid on one Common Share
during such quarter and the denominator of which is $9.00 (subject to
adjustment in proportion to each adjustment to the Conversion Price
triggered by events occurring prior to such quarter).
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. The amount of interest
payable for any period shorter than a full quarterly period for which interest
is computed, will be computed on the basis of the actual number of days elapsed
per 30-day month. In the event that any date on which interest is payable on the
Convertible Debentures is not a Business Day, then payment of interest payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
(c) If at any time the Trust is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company will pay as additional sums ("Additional Sums") such
additional amounts as shall be required so that the net amounts received and
retained by the Trust after paying any such taxes, duties, assessments or other
governmental charges will not be less than the amounts the Trust would have
received had no such taxes, duties, assessments or other government charges been
imposed so long as the Trust is the holder of the Convertible Debentures.
Section 2.6 Authentication and Delivery of Convertible Debentures. At
any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Convertible Debentures in the aggregate
principal amount of up to $154,650,000 executed by the Company to the Trustee
for authentication, and the Trustee shall thereupon authenticate and make
available for delivery such Convertible Debentures to or upon the written order
of the Company, signed by both (i) the chairman of its Board of Trustees, or any
vice chairman of its Board of Trustees, or its president or any vice president
and (ii) its chief financial officer, treasurer or any assistant treasurer or
its secretary or any assistant secretary, without any further action by the
Company. In authenticating such Convertible Debentures and accepting the
additional responsibilities under this Indenture in relation to such Convertible
Debentures, the Trustee shall be entitled to receive and (subject to Section
6.1) shall be fully protected in relying upon:
(a) a copy of any resolution or resolutions of the Board of Trustees
relating to the issuance of such Convertible Debentures, in each case certified
by the secretary or an assistant secretary of the Company;
(b) a supplemental indenture, if any;
(c) an Opinion of Counsel, prepared in accordance with Section 15.5,
which shall state that the Convertible Debentures have been duly authorized,
and, when authenticated and delivered by the Trustee and issued by the Company
in the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and binding obligations of the Company
enforceable in accordance with their terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization or other laws relating to or
affecting the
727411.13
12
enforcement of creditors' rights generally and by general equitable principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
Notwithstanding the provisions of the preceding paragraph, if the
Convertible Debentures are not to be originally issued at one time, it shall not
be necessary to deliver the resolution of the Board of Trustees and Opinion of
Counsel otherwise required pursuant to such preceding paragraph at or prior to
the time of authentication of each Convertible Debenture if such documents are
delivered at or prior to the time of authentication upon original issuance of
the first Convertible Debentures to be issued. After the original issuance of
the first Convertible Debenture to be issued, any separate request by the
Company that the Trustee authenticate Convertible Debentures for original
issuance will be deemed to be a certification by the Company that it is in
compliance with all conditions precedent provided for in this Indenture relating
to the authentication and delivery of such Convertible Debentures.
The Trustee shall have the right to decline to authenticate and deliver
any Convertible Debentures under this Section if the Trustee is advised by
counsel in good faith that the issuance of such Convertible Debentures would
expose the Trustee to personal liability or is unlawful.
Section 2.7 Execution of Convertible Debentures. The Convertible
Debentures shall be signed on behalf of the Company by the chairman of its Board
of Trustees, or any vice chairman of its Board of Trustees, or its president or
any vice president and attested by its chief financial officer, treasurer or any
assistant treasurer or its secretary or any assistant secretary, under its
corporate seal. Such signatures may be the manual or facsimile signatures of
such officers. The seal of the Company may be in the form of a facsimile thereof
and may be impressed, affixed, imprinted or otherwise reproduced on the
Convertible Debentures. Typographical and other minor errors or defects in any
such reproduction of the seal or any such signature shall not affect the
validity or enforceability of any Convertible Debenture that has been duly
authenticated and delivered by the Trustee.
In case any officer of the Company who shall have signed any of the
Convertible Debentures shall cease to be such officer before the Convertible
Debenture so signed shall be authenticated and delivered by the Trustee or
disposed of by the Company, such Convertible Debenture nevertheless may be
authenticated and delivered or disposed of as though the person who signed such
Convertible Debenture had not ceased to be such officer of the Company; and any
Convertible Debenture may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Convertible Debenture, shall be the
proper officers of the Company, although at the date of the execution and
delivery of this Indenture any such person was not such an officer.
Section 2.8 Certificate of Authentication. Only such Convertible
Debentures as shall bear thereon a certificate of authentication substantially
in the form attached hereto as a part of Exhibit A and executed by the Trustee
by the manual signature of one of its authorized signatories shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose. The
execution of such certificate by the Trustee upon any Convertible Debenture
executed by the Company shall be conclusive evidence that the Convertible
Debenture so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Convertible Debenture shall have
been duly authenticated and delivered hereunder but never issued and sold by the
Company, the Company shall deliver such Convertible Debenture to the Trustee for
cancellation as provided in Section 2.12 together with a written statement
(which need not comply with Section 15.5 and need not be accompanied by an
Opinion of Counsel) stating that such Convertible Debenture has never been
issued and sold by the Company, for all purposes of this Indenture such
Convertible Debenture shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
Section 2.9 Denomination and Date of Convertible Debentures; Payments
of Interest. Convertible Debentures shall be issuable in denominations of $1,000
and any integral multiple thereof. The Convertible Debentures shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with such
plans as the officers of the Company executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.
727411.13
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Each Convertible Debenture shall be dated the date of its
authentication.
The term "record date" as used with respect to any interest payment
date (except for payment of defaulted interest) shall mean the close of business
on the fifteenth day preceding such interest payment date, whether or not such
record date is a Business Day.
Any interest on any Convertible Debenture which is payable, but is not
punctually paid or duly provided for, on any interest payment date, subject to
the provisions of Article XI (called "defaulted interest" for purposes of this
Section) shall forthwith cease to be payable to the Holder on the relevant
record date by virtue of his 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 clause (2) below:
(1) The Company may elect to make payment of any defaulted
interest to the persons in whose names any such Convertible Debentures
(or their respective predecessor Convertible Debentures) are registered
at the close of business on a special record date for the payment of
such defaulted interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
defaulted interest proposed to be paid on each Convertible Debentures
and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such defaulted
interest or shall make arrangements satisfactory to the Trustee for
such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the persons entitled
to such defaulted interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such
defaulted interest in respect of Convertible Debentures which shall not
be more than 15 nor 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 thereof to be
mailed, first class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days prior to
such special record date. Notice of the proposed payment of such
defaulted interest and the special record date therefor having been
mailed as aforesaid, such defaulted interest in respect of Convertible
Debentures shall be paid to the person in whose names such Convertible
Debentures (or their respective predecessor Convertible Debentures) are
registered on such special record date and such defaulted interest
shall no longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any defaulted interest on
the Convertible Debentures in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the
Convertible Debentures may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Convertible
Debenture delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Convertible Debenture shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Convertible
Debenture.
In the case of any Convertible Debenture which is converted into Common
Shares of the Company after any record date and on or prior to the next
succeeding Interest Payment Date (other than any Convertible Debenture whose
Maturity is prior to such Interest Payment Date), interest whose Stated Maturity
is on such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Convertible Debenture (or one or more Predecessor Convertible Debentures) is
registered at the close of business on such record date. However, if a
redemption date falls between a record date and the subsequent Interest Payment
Date, the amount of such payment shall include accumulated and unpaid interest
accrued to, but excluding, such redemption date. Except as otherwise expressly
provided in the first two sentences of this paragraph, in the case of any
Convertible Debenture which is converted, interest whose Stated Maturity is
after the date of conversion of such Convertible Debenture shall not be payable.
727411.13
14
Section 2.10 Registration, Transfer and Exchange. The provisions of
this Section 2.10 shall be subject in their entirety to the provisions of
Section 2.4. The Company will cause to be kept at each office or agency to be
maintained for the purpose as provided in Section 3.2 a register or registers
(herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company will provide for
the registration and the registration of the transfer or exchange of the
Convertible Debentures. The Trustee is hereby appointed and accepts the
appointment as Registrar (the "Registrar") for purposes of registering, and
registering transfers of, the Convertible Debentures.
Upon surrender for registration of transfer of any Convertible
Debenture at any such office or agency to be maintained for the purpose as
provided in Section 3.2, the Company shall execute and the Trustee shall
authenticate and make available for delivery in the name of the transferee or
transferees a new Convertible Debenture or Convertible Debentures and of a like
tenor and containing the same terms (other than the principal amount thereof, if
more than one Convertible Debenture is executed, authenticated and delivered in
respect to any Convertible Debenture so presented, in which case the aggregate
principal amount of the executed, authenticated and delivered Convertible
Debentures shall equal the principal amount of the Convertible Debenture
presented in respect thereof) and conditions.
At the option of the Holder thereof, Convertible Debentures may be
exchanged for a Convertible Debenture or Convertible Debentures having
authorized denominations and an equal aggregate principal amount, upon surrender
of such Convertible Debentures to be exchanged at the agency of the Company that
shall be maintained for such purpose in accordance with Section 3.2 and upon
payment, if the Company shall so require, of the charge hereinafter provided.
Whenever any Convertible Debentures are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Convertible
Debentures which the Holder making the exchange is entitled to receive. All
Convertible Debentures surrendered upon any exchange or transfer provided for in
this Indenture shall be promptly canceled by the Trustee and the Trustee will
deliver a certificate of cancellation thereof to the Company.
All Convertible Debentures issued upon any transfer or exchange of
Convertible Debentures shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Convertible Debentures surrendered upon such transfer or exchange.
Every Convertible Debenture presented or surrendered for registration
of transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge shall be made to the Holder for any registration of
transfer or exchange of Convertible Debentures, but the company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Convertible
Debentures, other than exchanges pursuant to Sections 2.13, 8.5 or 12.5 not
involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Convertible Debenture during a 15-day period prior to the day
of mailing of the relevant notice of redemption or (ii) to register the transfer
of or exchange any Convertible Debenture so selected for redemption in whole or
in part, except, in the case of any Convertible Debenture to be redeemed in
part, the portion thereof not redeemed.
Section 2.11 Mutilated, Defaced, Destroyed, Lost and Stolen Convertible
Debentures. In case any temporary or definitive Convertible Debenture shall
become mutilated or defaced or be destroyed, lost or stolen, then, in the
absence of notice to the Company or the Trustee that the Convertible Debenture
has been acquired by a bona fide purchaser, the Company shall execute, and upon
the written request of any officer of the Company, the Trustee shall
authenticate and make available for delivery a new Convertible Debenture and of
like tenor and principal amount and with the same terms and conditions, bearing
a number not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Convertible Debenture or in lieu of and substitution for
the Convertible Debenture so destroyed, lost or stolen. In every case the
applicant for a substitute Convertible Debenture shall furnish to the Company
and to the Trustee and to any agent of the Company or the Trustee such security
or indemnity as may be required by them to indemnify and defend and to save each
of them harmless and,
727411.13
15
in every case of destruction, loss or theft, evidence to their satisfaction of
the destruction, loss or theft of such Convertible Debenture and of the
ownership thereof and in the case of mutilation or defacement shall surrender
the Convertible Debenture to the Trustee or such agent.
Upon the issuance of any substitute Convertible Debenture, 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 or its agent) connected
therewith. In case any Convertible Debenture which has matured or is about to
mature or has been called for redemption in full shall become mutilated or
defaced or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Convertible Debenture, pay or authorize, the payment of the same
(without surrender thereof except in the case of a mutilated or defaced
Convertible Debenture); provided, however, that the applicant for such payment
shall furnish to the Company and to the Trustee and any agent of the Company or
the Trustee such security or indemnity as any of them may require to save each
of them harmless, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company and the Trustee and any agent of the
Company or the Trustee evidence to their satisfaction of the destruction, loss
or theft of such Convertible Debenture and of the ownership thereof.
Every substitute Convertible Debenture issued pursuant to the
provisions of this Section by virtue of the fact that any Convertible Debenture
is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen
Convertible Debenture shall be at any time enforceable by anyone and shall be
entitled to all the benefits of (but shall be subject to all the limitations of
rights set forth in) this Indenture equally and proportionately with any and all
other Convertible Debentures duly authenticated and delivered hereunder. All
Convertible Debentures shall be held upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive with respect to
the replacement or payment of mutilated, defaced, destroyed, lost or stolen
Convertible Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment of negotiable instruments or other
securities without their surrender.
Section 2.12 Cancellation of Convertible Debentures. All Convertible
Debentures surrendered for payment, redemption, conversion, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, shall, if surrendered to the Company or any agent of the
Company or the Trustee, be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be canceled by it; and no Convertible
Debentures shall be issued in lieu thereof, except as expressly permitted by any
of the provisions of this Indenture. The Company may at any time deliver to the
Trustee for cancellation any Convertible Debentures previously authenticated
hereunder which the Company has not issued and sold and all Convertible
Debentures so delivered shall be promptly canceled by the Trustee. If the
Company shall acquire any of the Convertible Debentures, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Convertible Debentures unless and until the same are delivered to the
Trustee for cancellation. All canceled Convertible Debentures shall be disposed
of as directed by a Company Order or, in the absence of such Company Order, in
accordance with the Trustee's customary practices. The Trustee shall provide a
certificate of destruction to the Company with respect to all Convertible
Debentures disposed of by the Trustee.
Section 2.13 Temporary Convertible Debentures. Pending the preparation
of definitive Convertible Debentures, the Company may execute and the Trustee
shall authenticate and make available for delivery temporary Convertible
Debentures (printed, lithographed, typewritten or otherwise reproduced, in each
case in form reasonably acceptable to the Trustee). Temporary Convertible
Debentures shall be issuable in any authorized denomination, and substantially
in the form of the definitive Convertible Debentures but with such omissions,
insertions and variations as may be appropriate for temporary Convertible
Debentures, all as may be determined by the Company with the reasonable
concurrence of the Trustee. Temporary Convertible Debentures may contain such
reference to any provisions of this Indenture as may be appropriate. Every
temporary Convertible Debenture shall be executed by the Company and be
authenticated by the Trustee upon the same conditions and in substantially the
same manner, and with like effect, as the definitive Convertible Debentures.
Without unreasonable delay the Company shall execute and shall furnish
definitive Convertible Debentures and thereupon temporary Convertible Debentures
may be surrendered in exchange therefor without charge to the Holder at each
office or agency to be maintained by the Company for that purpose pursuant to
Section 3.2, and the Trustee shall authenticate and make available for delivery
in exchange for such temporary Convertible Debentures an equal aggregate
principal amount of definitive Convertible Debentures of authorized
denominations. Until so
727411.13
16
exchanged, the temporary Convertible Debentures shall be entitled to the same
benefits under this Indenture as definitive Convertible Debentures.
ARTICLE III
COVENANTS OF THE COMPANY
Section 3.1 Payment of Principal and Interest. The Company covenants
and agrees for the benefit of the Convertible Debentures that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Convertible Debentures in accordance with the terms of such Convertible
Debentures and of this Indenture. The interest on Convertible Debentures
(together with any additional amounts payable pursuant to the terms of such
Convertible Debentures) shall be payable only to or upon the written order of
the Holders thereof and at the option of the Company may be paid by wire
transfer or by mailing checks for such interest payable to or upon the written
order of such Holders at their last addresses as they appear on the Security
Register.
Section 3.2 Offices for Payment, etc. So long as any of the Convertible
Debentures remain outstanding, the Company will maintain the following: an
office or agency in the Borough of Manhattan, City of New York (a) where the
Convertible Debentures may be presented for payment, (b) where the Convertible
Debentures may be presented for registration of transfer and for exchange as
provided in this Indenture, and (c) where notices and demands may be served upon
the Company in respect of the Convertible Debentures, or this Indenture.
The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. In case the
Company shall fail to so designate or maintain any such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Corporate Trust Office. The Trustee is hereby appointed, and accepts its
appointment as, Paying Agent.
Section 3.3 Paying Agents. Whenever the Company shall appoint a Paying
Agent other than the Trustee with respect to the Convertible Debentures, it will
cause such Paying Agent 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:
(a) that it will hold all sums received by it as such Paying
Agent for the payment of the principal of or interest on the
Convertible Debentures (whether such sums have been paid to it by the
Company or by any other obligor on the Convertible Debentures) in trust
for the benefit of the Holders of the Convertible Debentures or of the
Trustee, and upon the occurrence of an Event of Default and upon the
written request of the Trustee, pay over all such sums received by it
to the Trustee; and
(b) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Convertible Debentures) to make
any payment of the principal of or interest on the Convertible
Debentures when the same shall be due and payable.
The Company will, on or prior to each due date of the principal of or
interest on the Convertible Debentures, deposit in a timely manner with the
Paying Agent a sum sufficient to pay such principal or interest so becoming due,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action.
If the Company shall act as its own Paying Agent with respect to the
Convertible Debentures, it will, on or before each due date of the principal of
or interest on the Convertible Debentures, set aside, segregate and hold in
trust for the benefit of the holders of the Convertible Debentures a sum
sufficient to pay such principal or interest so becoming due. The Company will
promptly notify the Trustee of any failure to take such action.
Section 3.4 Written Statement to Trustee. The Company will deliver to
the Trustee, within 120 days after the end of each fiscal year of the Company
ending after the date hereof, a brief certificate (which need
727411.13
17
not comply with Section 15.5) from the principal executive, financial or
accounting officer of the Company as to his or her knowledge, after due inquiry,
of the Company's compliance with all conditions and covenants under this
Indenture (such compliance to be determined without regard to any period of
grace or requirement of notice provided under this Indenture), and if the
Company shall not be in compliance, specifying all such defaults or
non-compliance and the nature and status thereof.
Section 3.5 Limitation on Dividends; Transactions with Affiliates. If
any Convertible Debentures are outstanding and (i) there shall have occurred any
Event of Default or any event that, with the giving of notice or lapse of time
or both, would constitute an Event of Default, (ii) the Guarantor shall be in
default with respect to its payment or other obligations under the Preferred
Securities Guarantee or the Common Securities Guarantee, or (iii) the Company
shall have given notice of its election to defer payments of interest on
Convertible Debentures by extending the interest payment period as provided in
Article XI and such period, or any extension thereof, shall be continuing, then
the Company shall not (a) declare or pay any dividend on, make any distribution
with respect to, or redeem, purchase or make a liquidation payment with respect
to, any of its Capital Stock or (b) make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company that rank pari passu with or junior in interest to the Convertible
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the Convertible
Debentures (other than (i) as a result of a reclassification of the Capital
Stock of the Company or the exchange or conversion of one class or series of the
Capital Stock of the Company for another class or series of the Capital Stock of
the Company, (ii) the purchase of fractional interests in shares of the Capital
Stock of the Company pursuant to the conversion or exchange provisions of such
Capital Stock or the security being converted into or exchanged for such Capital
Stock, (iii) dividends or distributions in Common Shares of the Company, (iv)
any declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of Capital Stock under any such plan
in the future, or the redemption or repurchase of any such rights pursuant
thereto, (v) payments under the Trust Securities Guarantees, (vi) purchases of
Common Shares of the Company related to the issuance of Common Shares of the
Company or rights under any of the Company's benefit plans for its directors,
officers or employees and (vii) obligations under any dividend reinvestment and
stock purchase plans).
Section 3.6 Covenants as to CT Trust. For so long as the Trust
Securities remain outstanding, the Company will (a) maintain 100% direct or
indirect ownership of the Common Securities of CT Trust; provided, however, that
any permitted successor of the Company under this Indenture may succeed to the
Company's ownership of the Common Securities, (b) use its best efforts to cause
CT Trust (i) to remain a statutory business trust, except in connection with the
distribution of Convertible Debentures to the holders of Trust Securities in
liquidation of CT Trust, the redemption of all of the Trust Securities of CT
Trust, or certain mergers, consolidations or amalgamations, each as permitted by
the Declaration, and (ii) to continue to be classified as a grantor trust for
United States federal income tax purposes and (c) use its best efforts to cause
each holder of Trust Securities to be treated as owning an undivided beneficial
interest in the Convertible Debentures.
Section 3.7 Existence. Subject to Article IX, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Trustees shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the Holders.
ARTICLE IV
HOLDERS OF CONVERTIBLE DEBENTURES LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Holders of Convertible Debentures. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee a list in such form
as the Trustee may reasonably require of the names and addresses of the Holders
of the Convertible Debentures:
727411.13
18
(a) semiannually and not more than 15 days after each record
date for the payment of interest on such Convertible Debentures, as
hereinabove specified, as of such record date, and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after receipt by the Company of any such
request, such list to be as of a date not more than 15 days prior to
the time such information is furnished,
provided that if and so long as the Trustee shall be the Registrar, such list
shall not be required to be furnished.
Section 4.2 Preservation and Disclosure of Holders of Convertible
Debentures' Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
Convertible Debentures contained in the most recent list furnished to it as
provided in Section 4.1 or maintained by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Convertible Debentures
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Convertible Debenture for a period of at least six months preceding the date of
such application, and such application states that the applicants desire to
communicate with other Holders of Convertible Debentures (in which case the
applicants must all hold Convertible Debentures) or with Holders of all
Convertible Debentures with respect to their rights under this Indenture or
under such Convertible Debentures and such application is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five business days after the receipt of
such application, at is election, either
(i) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section, or
(ii) inform such applicants as to the approximate number of
Holders of Convertible Debentures or of all Convertible Debentures, as
the case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the provisions
of subsection (a) of this Section, as to the approximate cost of
mailing to such Holders of Convertible Debentures the form of proxy or
other communication, if any, specified in such application.
If the Trustee shall elect not to afford to such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of Convertible Debentures or all Holders of
Convertible Debentures, as the case may be, whose name and address appears in
the information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section, a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Convertible Debentures or could be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of such order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Holders of
Convertible Debentures with reasonable promptness after the entry of such order
and the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every Holder of Convertible Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of the Company or the Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Convertible Debentures in accordance with
the provisions of subsection (b) of this
727411.13
19
Section, regardless of the source from which such information was derived, and
that the Trustee shall not be held accountable by reason of mailing any material
pursuant to a request made under such subsection (b).
Section 4.3 Reports by the Company. The Company covenants:
(a) to 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 and any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act, or if the Company is not required to
file information, documents, or reports pursuant to either of such
Sections, then to file with the Trustee and the Commission to the
extent permitted, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and
periodic information, documents, and reports which may be required
pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on a national securities exchange as may be
prescribed from time to time in such rules and regulations;
(b) to 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
provided for in this Indenture as may be required from time to time by
such rules and regulations; and
(c) to transmit by mail to the Holders of Convertible
Debentures in the manner and to the extent required by Sections 6.6 and
15.4, within 30 days after the filing thereof with the Trustee, such
summaries of any information, documents, and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this
Section as may be required to be transmitted to such Holders by rules
and regulations prescribed from time to time by the Commission.
ARTICLE V
REMEDIES OF THE TRUSTEE AND HOLDERS OF
CONVERTIBLE DEBENTURES ON EVENT OF DEFAULT
Section 5.1 Event of Default Defined; Acceleration of Maturity; Waiver
of Default. "Event of Default" with respect to the Convertible Debentures
wherever used herein, means any one or more of the following events which shall
have occurred and be continuing (whatever the reason for such Event of Default
and whether it shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or any order, rule
or regulation of any administrative or governmental body):
(a) default in the payment of any interest (including any
Additional Sums and Compound Interest) upon or any additional amounts
payable in respect of any Convertible Debentures when it becomes due
and payable, and continuance of such default for a period of 30 days;
provided, however, that a valid extension of an interest payment period
by the Company in accordance with the terms of this Indenture shall not
constitute a default in the payment of interest for this purpose; or
(b) default in the payment of the principal of, or premium, if
any, on, any Convertible Debentures as and when the same shall become
due and payable whether at maturity, upon redemption, by declaration or
otherwise; or
(c) default in the performance, or breach of any covenant or
warranty of the Company contained in the Convertible Debentures or in
this Indenture (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of
30 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 aggregate principal amount of the
Outstanding Convertible Debentures a written notice
727411.13
20
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(d) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law or (B) a
decree or order adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of the Company or of all or any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and
the continuance of any such decree or order for relief or any such
other decree or order unstayed and in effect for a period of 90
consecutive days; or
(e) the commencement by the Company of a voluntary case or
proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or the consent by
it to the entry of a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case
or proceeding against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable
federal or state law, or the consent by it to the filing of such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of all or any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(f) failure by the Company to convert Convertible Debentures
into Common Shares of the Company upon an appropriate election by a
holder of Trust Securities or Convertible Debentures to convert such
Trust Securities or Convertible Debentures, as the case may be, into
such Common Shares (whether or not conversion or exchange is prohibited
by the subordination provisions set forth herein); or
(g) the CT Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence
except in connection with (i) the distribution of Convertible
Debentures to holders of Trust Securities in liquidation of their
interest in the CT Trust upon the occurrence of a Special Event or upon
the occurrence of events as described in Section 3 of Annex I to the
Declaration, (ii) the redemption of all of the outstanding Trust
Securities of the CT Trust, (iii) the conversion of all outstanding
Convertible Preferred Securities into Common Shares of the Company or
(iv) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration; or
(h) the Company shall have consummated a merger or
consolidation in which the successor will be taxed as a partnership for
federal income tax purposes, or the Company shall have transferred all
or substantially all of its assets to an entity other than a Subsidiary
which shall be taxed as a partnership for federal income tax purposes.
If an Event of Default occurs and is continuing, then and in each and
every such case, unless the principal of all Convertible Debentures shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Convertible Debentures then
Outstanding hereunder, by notice in writing to the Company (and to the Trustee
if given by such Holders), may declare the entire principal of, plus accrued and
unpaid interest on, all the Convertible Debentures (including Additional Sums,
if any, and, to the extent permitted by applicable law, Compound Interest, if
any) and any other amounts payable under this Indenture to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. These provisions, however, are subject to the
condition that if at any time after the principal and other amounts due on the
Convertible Debentures shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all the Convertible Debentures and the principal of any
and all Convertible Debentures which shall
727411.13
21
have become due otherwise than by such acceleration (with interest upon such
principal and, to the extent that payment of such interest is enforceable under
applicable law, Compound Interest to the date of such payment) or deposit in
Dollars such amount as shall be sufficient to cover reasonable compensation to
the Trustee, its agents, attorneys and counsel and all other expenses and
liabilities incurred, and all advances with interest made, by the Trustee, its
agents, attorneys and counsel and if any and all defaults under this Indenture,
other than the nonpayment of the principal and interest of Convertible
Debentures which shall have become due by such acceleration, shall have been
cured or waived as provided herein, then and in every such case the Holders of a
majority in aggregate principal amount of the Convertible Debentures then
Outstanding, by written notice to the Company and to the Trustee for the
Convertible Debentures, may waive all defaults and rescind and annul such
declaration and its consequences; but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
Section 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Company covenants that (a) in case default shall be made in the
payment of any installment of interest on any of the Convertible Debentures when
such interest shall have become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Convertible Debentures
when the same shall have become due and payable, whether upon Maturity or upon
any redemption or by declaration or otherwise, then upon demand of the Trustee
for the Convertible Debentures, the Company will pay to the Trustee for the
benefit of the Holders of the Convertible Debentures the whole amount that then
shall have become due and payable on all Convertible Debentures for principal of
or interest, as the case may be (with interest to the date of such payment upon
the overdue principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest at the
same rate as the rate of interest specified in the Convertible Debentures); and
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to, and all
expenses and liabilities incurred and all advances with interest made by, the
Trustee and each predecessor Trustee except as a result of its negligence or bad
faith.
Until such demand is made by the Trustee, the Company may pay the
principal of and interest on the Convertible Debentures to the persons entitled
thereto, whether or not the principal of and interest on the Convertible
Debentures are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee for the Convertible Debentures, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Company or other obligor upon such Convertible Debentures and collect in the
manner provided by law out of the property of the Company or other obligor upon
such Convertible Debentures, wherever situated, the moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings relative to the Company or
any other obligor upon the securities under Title 11 of the United States Code
or any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Company or
other obligor under the Convertible Debentures, or to the property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of any Convertible Debentures 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 pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the
Convertible Debentures, 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 reasonable compensation to, and all
expenses and liabilities incurred and all advances with interest made
by, the Trustee and each predecessor Trustee, and their respective
agents, attorneys and counsel, except as a result of negligence or bad
faith) and of the Holders of Convertible Debentures allowed in any
judicial
727411.13
22
proceedings relative to the Company or other obligor upon all
Convertible Debentures, or to the property of the Company or such
obligor, and
(b) to collect and receive any moneys or other property
payable or deliver able on any such claims, and to distribute all
amounts received with respect to the claims of the Holders of
Convertible Debentures and of the Trustee on their behalf; and any
trustee, receiver, liquidator, custodian or other similar official is
hereby authorized by each of the Holders of Convertible Debentures to
make payments to the Trustee for the Convertible Debentures, and, in
the event that such Trustee shall consent to the making of payments
directly to the Holders of Convertible Debentures, to pay to such
Trustee such amounts as shall be sufficient to cover reasonable
compensation to, and all expenses and liabilities incurred and all
advances with interest made by, such Trustee, each predecessor Trustee
and their respective agents, attorneys and counsel and all other
amounts due to such Trustee or any predecessor Trustee pursuant to
Section 6.7, except as a result of Trustee's negligence or bad faith.
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
Convertible Debentures any plan of reorganization, arrangement, adjustment or
composition affecting the Convertible Debentures or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of Convertible Debentures in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Convertible Debentures, may be enforced by the Trustee for the
Convertible Debentures without the possession of any of the Convertible
Debentures or the production thereof at any trial or other proceedings relative
thereto, any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Trustee, each predecessor Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Convertible
Debentures in respect of which such action was taken.
In any proceedings brought by the Trustee for the Convertible
Debentures (and also any proceedings involving the interpretation of any
provision of this Indenture to which the Trustee shall be a party), the Trustee
shall be held to represent all the Holders of the Convertible Debentures in
respect to which such action was taken, and it shall not be necessary to make
any Holders of such Convertible Debentures parties to any such proceedings.
Section 5.3 Application of Proceeds. Any moneys collected by the
Trustee for the Convertible Debentures pursuant to this Article in respect of
the Convertible Debentures shall be applied in the following order at the date
or dates fixed by such Trustee and, in case of the distribution of such moneys
on account of principal or interest, upon presentation of the several
Convertible Debentures in respect of which moneys have been collected and
stamping (or otherwise noting) thereon the payment, or issuing Convertible
Debentures in reduced principal amounts in exchange for the presented
Convertible Debentures if only partially paid, or upon surrender thereof if
fully paid:
FIRST: To the payment of costs and expenses applicable in
respect of which moneys have been collected, including reasonable
compensation to, and all expenses and liabilities incurred and all
advances with interest made by, the Trustee and each predecessor
Trustee and their respective agents and attorneys and all other amounts
due to the Trustee or any predecessor Trustee pursuant to Section 6.7,
except as a result of Trustee's negligence or bad faith;
SECOND: To the payment of the amounts then due and unpaid for
interest on the Convertible Debentures for which principal is not yet
due and payable in respect of which moneys have been collected, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference, according to the amounts then due and
payable on such Convertible Debentures for interest;
THIRD: To the payment of the amounts then due and unpaid for
principal of and interest on the Convertible Debentures for which
principal is due and payable in respect of which moneys have been
collected, such payments to be made ratably to the persons entitled
thereto, without discrimination or preference, according to the amounts
then due and payable on such Convertible Debentures of principal and
interest, respectively; and
727411.13
23
FOURTH: To the payment of the remainder, if any, to the
Company or any other Person lawfully entitled thereto.
Section 5.4 Restoration of Rights on Abandonment of Proceedings. In
case the Trustee for the Convertible Debentures or any Holder shall have
proceeded to enforce any right under this Indenture and such proceedings shall
have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to the determination in any such proceeding, the Company, the
Trustee and the Holders shall be restored respectively to their former positions
and rights hereunder, and all rights, remedies and powers of the Company, the
Trustee and the Holders of Convertible Debentures shall continue as though no
such proceedings had been taken.
Section 5.5 Limitations on Suits by Holders of Convertible Debentures.
No Holder of any Convertible Debenture shall have any right by virtue or by
availing of any provision of this Indenture to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under with
respect to this Indenture, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other remedy
hereunder, unless such Holder previously shall have given to the Trustee written
notice of any Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of not less than 25% in aggregate
principal amount of the Convertible Debentures then Outstanding shall have made
written request upon the Trustee to institute such action or proceedings in its
own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity, as it may require, against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity shall have failed to
institute any such action or proceeding and no direction inconsistent with such
written request shall have been given to the Trustee during such 60 day period
by Holders of a majority in principal amount of the Convertible Debentures then
Outstanding; it being understood and intended, and being expressly covenanted by
the taker and Holder of every Convertible Debenture with every other taker and
Holder of a Convertible Debenture and the Trustee, that no one or more Holders
of Convertible Debentures shall have any right in any manner whatever, by virtue
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other such Holder of Convertible Debentures, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Convertible
Debentures.
Section 5.6 Unconditional Right of Holders of Convertible Debentures to
Institute Certain Suits. Notwithstanding any provision in this Indenture and any
provision of any Convertible Debenture, the right of any Holder of any
Convertible Debenture to receive payment of the principal of and (subject to
Section 2.9 and Article XI) interest on such Convertible Debenture at the
respective rates, in the respective amount on or after the respective due dates
expressed in such Convertible Debenture, and to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 5.7 Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 2.11 and Section 5.5, no right
or remedy herein conferred upon or reserved to the Trustee or to the Holders of
Convertible Debentures 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.
No delay or omission of the Trustee or of any Holder of Convertible
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.5, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Convertible
Debentures may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or the Holders of Convertible Debentures.
Section 5.8 Control by Holders of Convertible Debentures. The Holders
of a majority in aggregate principal amount of the Convertible Debentures at the
time Outstanding 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
727411.13
24
power conferred on the Trustee with respect to the Convertible Debentures by
this Indenture; provided that such direction shall not be in conflict with any
rule of law or the provisions of this Indenture; and provided further that the
Trustee, being advised by counsel, shall have the right to decline to follow any
such direction if the Trustee shall determine that the action or proceedings so
directed would involve the Trustee in personal liability or if the Trustee in
good faith shall so determine that the actions or forbearance specified in or
pursuant to such direction would be unduly prejudicial to the interest of
Holders of the Convertible Debentures not joining in the giving of said
direction.
Section 5.9 Waiver of Past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Convertible Debentures at the time
Outstanding may on behalf of the Holders of all the Convertible Debentures waive
any past default hereunder or its consequences, except a default:
(a) in the payment of the principal of (or premium, if any) or
any interest on any Convertible Debenture as and when the same shall
become due by the terms of Convertible Debentures otherwise than by
acceleration (unless such default has been cured and sums sufficient to
pay all matured installments of interest and principal and any premium
has been deposited with the Trustee (in accordance with Section 5.1)),
or
(b) in respect of a covenant or provision hereof which under
Article VIII cannot be modified or amended without the consent of the
Holder of each Outstanding Convertible Debenture affected;
provided, however, that if the Convertible Debentures are held by the CT Trust
or the Institutional Trustee of such Trust, such waiver or modification to such
waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of Trust Securities of the CT Trust shall have consented to
such waiver or modification to such waiver; provided further, that if the
consent of the Holder of each Outstanding Convertible Debenture is required,
such waiver shall not be effective until each holder of the Trust Securities of
the CT Trust shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred 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 5.10 Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Convertible
Debenture, 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, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, 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 of Convertible
Debentures or group of Holders of Convertible Debentures holding in the
aggregate more than 10% in principal amount of the Outstanding Convertible
Debentures, or to any suit instituted by a Holder of Convertible Debentures for
the enforcement of the payment of the principal of or interest on any
Convertible Debenture on or after the due date expressed in such Convertible
Debenture or any date fixed for redemption.
Section 5.11 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
727411.13
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Section 5.12 Unconditional Right of Holders to Receive Principal and
Interest and to Convert. Notwithstanding any other provision in this Indenture,
the Holder of any Convertible Debenture shall have the right, which is absolute
and unconditional, to receive payment of the principal of and interest
(including Compound Interest and Additional Sums, if any) on such Convertible
Debenture on the respective Stated Maturities expressed in such Convertible
Debenture (or, in the case of redemption, on the redemption date) and to convert
such Convertible Debenture in accordance with Article XII and to institute suit
for the enforcement of any such payment and right to convert, and such rights
shall not be impaired without the consent of such Holder. If the Institutional
Trustee is the sole Holder of the Securities, any holder of the Preferred
Securities shall have the right to institute suit on behalf of the Trust for the
enforcement of any such payment and right to convert. The Company may not amend
the Indenture to remove the foregoing right to institute a suit directly against
the Company without the prior written consent of the Holders of all of the
Preferred Securities. If the right to institute a suit directly against the
Company is removed following the effectiveness of a registration statement in
respect of the Convertible Debentures, the Trust may become subject to the
reporting obligations under the Exchange Act. The Company shall have a right of
set-off to the extent of any payments made by the Company to such Holder in any
such suit.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 Duties of the Trustee.
(a) If an Event of Default has occurred and is continuing with respect
to the Convertible Debentures, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default with respect
to the Convertible Debentures:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming on their face to the
requirements of this Indenture. However, in the case of any such
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall examine the
certificates and opinions to determine whether or not they conform on
their face to the requirements of this Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent failure to act or its own willful misconduct, except that:
(i) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 6.1;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.8.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 6.1.
727411.13
26
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 6.2 Rights of Trustee. Subject to Section 6.1 and the
provisions of the Trust Indenture Act:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
(c) Subject to the provisions of Section 6.1(c), the Trustee shall not
be liable for any action it takes or omits to take in good faith which it
believes to be authorized or within its rights or powers.
(d) The Trustee may consult with counsel of its selection 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 in accordance with such
advice or Opinion of Counsel.
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee reasonable security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction.
(f) 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.
Section 6.3 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Convertible Debentures
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-
Registrar may do the same with like rights. However, the Trustee must comply
with Sections 6.10 and 6.11.
Section 6.4 Trustee's Disclaimer. The Trustee makes no representation
as to the validity or adequacy of this Indenture or the Convertible Debentures,
it shall not be accountable for the Company's use of the proceeds from the
Convertible Debentures and it shall not be responsible for any statement in the
registration statement for the Common Shares of the Company into which the
Convertible Debentures are convertible under the Securities Act or in the
Indenture or the Convertible Debentures (other than its certificate of
authentication).
Section 6.5 Notice of Defaults. If a default occurs and is continuing
with respect to any Convertible Debentures and if it is known to the Trustee
through oral or written notice to a Responsible Officer, the Trustee shall give
to each Holder of Convertible Debentures notice of the default within 90 days
after such default occurs. Except in the case of a default described in Section
5.1(a) or (b), the Trustee may withhold the notice if and so long as a committee
of its Responsible Officers in good faith determines that withholding the notice
is in the interest of Holders of Convertible Debentures.
Section 6.6 Reports by Trustee to Holders. Within 60 days after each
December 31 beginning with the December 31 following the date of this Indenture,
the Trustee shall mail to each Holder of Convertible Debentures and each other
person specified in TIA Section 313(c) a brief report dated as of such December
31 that
727411.13
27
complies with TIA Section 313(a) to the extent required thereby. The Trustee
also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders of
Convertible Debentures shall be filed with the Commission and each securities
exchange on which the Convertible Debentures are listed. The Company agrees
promptly to notify the Trustee whenever the Convertible Debentures become listed
on any securities exchange and of any delisting thereof.
Section 6.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time in Dollars such
compensation as shall be agreed to in writing between the Company and
the Trustee for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances with interest thereon
incurred or made by the Trustee in accordance with any provision of
this Indenture (including the reasonable compensation and the expenses,
advances with interest thereon and disbursements of its agents and
counsel), except to the extent any such expense, disbursement or
advance may be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee in Dollars for, and to hold it
harmless against, any loss, liability or expense arising out of or in
connection with the acceptance or administration of this trust or the
performance of its duties 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
(including the reasonable compensation and the expenses, advances with
interest thereon and disbursements of its agents and counsel), except
to the extent that any such loss, liability or expense may be
attributable to its negligence or bad faith.
As security for the performance of the obligations of the Company in
this Section 6.7, the Trustee shall have a lien prior to the Convertible
Debentures on all money or property held or collected by the Trustee, except
that held in trust to pay the principal of or interest, if any, on particular
Convertible Debentures.
"Trustee" for purposes of this Section 6.7 includes any predecessor
Trustee, provided that the negligence or bad faith of any Trustee shall not be
attributable to any other Trustee.
The Company's payment obligations pursuant to this Section 6.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a default specified in Sections 5.1(d) and 5.1(e), such
expenses are intended to constitute expenses of administration under bankruptcy
law.
Section 6.8 Replacement of Trustee. The Trustee may resign at any time
with respect to Convertible Debentures by so notifying the Company; provided,
however, no such resignation shall be effective until a successor Trustee has
accepted its appointment pursuant to this Section 6.8. The Holders of a majority
in aggregate principal amount of the Outstanding Convertible Debentures may
remove the Trustee at the time outstanding by so notifying the Trustee and the
Company. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the
Trustee or its property; or
(4) the Trustee otherwise becomes incapable of acting.
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If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to the Convertible Debentures,
the Company shall promptly appoint, by resolution of its Board of Trustees, a
successor Trustee with respect to the Convertible Debentures.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture with respect to the Convertible Debentures. The successor
Trustee shall mail a notice of its succession to Holders of Convertible
Debentures so affected. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 6.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Convertible
Debentures at the time Outstanding may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any Holder of
Convertible Debentures may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
Section 6.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
Section 6.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1) and Section 310(a)(5).
The Trustee shall have combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b).
Section 6.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE VII
CONCERNING THE HOLDERS OF CONVERTIBLE DEBENTURES
Section 7.1 Evidence of Action Taken by Holders of Convertible
Debentures.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided in this Indenture to be given or taken by a
specified percentage in principal amount of the Holders of Convertible
Debentures may be embodied in and evidenced by one or more instruments or
substantially similar tenor signed by such specified percentage of Holders of
Convertible Debentures in person or by agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee.
Proof of execution of any instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Sections
6.1 and 6.2) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Article.
(b) The ownership of such Convertible Debentures shall be provided by
the Security Register.
Section 7.2 Proof of Execution of Instruments. Subject to Sections 6.1
and 6.2, the execution of any instrument by a Holder of Convertible Debentures
or his agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee.
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Section 7.3 Holders to be Treated as Owners. The Company, the Trustee
and any agent of the Company or the Trustee may deem and treat the person in
whose name any Convertible Debenture shall be registered upon the Security
Register as the absolute owner of such Convertible Debenture (whether or not
such Convertible Debenture shall be overdue and notwithstanding any notification
of ownership or other writing thereon) for the purpose of receiving payment of
or on account of the principal of and (subject to Section 2.9) interest on such
Convertible Debenture and for all other purposes; and neither the Company nor
the Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary.
Section 7.4 Convertible Debentures Owned by Company Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Convertible Debentures have concurred in any
direction, consent or waiver under this Indenture, Convertible Debentures which
are owned by the Company or any other obligor on the Convertible Debentures with
respect to which such determination is being made or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on the Convertible Debentures with
respect to which such determination is being made shall be disregarded and
deemed not to be Outstanding for the purpose of any such determination (it being
understood that VRLP and any Affiliate of Vornado Realty Trust or VRLP and EOPLP
and any Affiliate of Equity Office Properties Trust or EOPLP shall not be deemed
to be under common control with the Company), except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver only Convertible Debentures which the Trustee knows
are so owned shall be so disregarded. Convertible Debentures 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 Convertible Debentures and that the pledgee is not the
Company or any other obligor upon the Convertible Debentures or any person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Convertible
Debentures.
Section 7.5 Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Convertible Debentures, as the case may be, specified in this
Indenture in connection with such action, any Holder of a Convertible Debenture
the serial number of which is shown by the evidence to be included among the
serial numbers of the Convertible Debentures the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Convertible Debenture. Except as aforesaid any such action taken
by the Holder of any Convertible Debentures shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such Convertible Debenture
and of any Convertible Debentures issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon any
such Convertible Debenture. Any action taken by the Holders of the percentage in
aggregate principal amount of the Convertible Debentures, as the case may be,
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the Holders of all the Convertible
Debentures affected by such action.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Holders of
Convertible Debentures. The Company, when authorized by a resolution of its
Board of Trustees and the Trustee for the Convertible Debentures may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force at the date of the execution thereof), in form satisfactory to such
Trustee, for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the
Trustee as security for the Convertible Debentures any property or
assets;
727411.13
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(b) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company
pursuant to Article IX;
(c) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the protection of
the Holders of Convertible Debentures;
(d) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may
be defective or inconsistent with any other provision contained herein
or in any supplemental indenture; or to make such other provisions in
regard to matters or questions arising under this Indenture or under
any supplemental indenture as the Board of Trustees may deem necessary
or desirable and which shall not materially and adversely affect the
interests of the Holders of the Convertible Debentures; or
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Convertible
Debentures.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee 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.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Convertible
Debentures at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
Section 8.2 Supplemental Indentures With Consent of Holders of
Convertible Debentures. With the consent (evidenced as provided in Article VII)
of the Holders of not less than a majority in aggregate principal amount of the
Convertible Debentures at the time Outstanding (voting as one class), the
Company, when authorized by a resolution of its Board of Trustees, and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Convertible Debentures;
provided, however, that no such supplemental indenture shall (a) except to the
extent permitted by Article XI, extend the Stated Maturity of any Convertible
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable on redemption thereof, or make the principal thereof or interest
thereon payable in any coin or currency other than that provided in the
Convertible Debentures or in accordance with the terms thereof, or impair or
affect the right of any Holder of Convertible Debentures to institute suit for
payment thereof, or adversely affect the right to convert Convertible
Debentures, or modify the subordination provisions of this Indenture in any
manner adverse to the Holders of Convertible Debentures without the consent of
the Holders of each Convertible Debenture so affected, or (b) reduce the
aforesaid percentage of Convertible Debentures, the consent of the Holders of
which is required for any such supplemental indenture, without the consent of
the Holders of each Convertible Debenture so affected; provided further, that no
such supplemental indenture shall result in the realization of unrelated
business income for the Holders of the Convertible Debentures without the
consent of each Holder of Convertible Debentures.
Upon the request of the Company, accompanied by a copy of a resolution
of the Board of Trustees certified by the secretary or assistant secretary of
the Company authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Holders of
Convertible Debentures as aforesaid and other documents, if any, required by
Section 7.1, the Trustee shall join with the Company in the execution of such
supplemental indenture or otherwise, in which case such Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
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It shall not be necessary for the consent of the Holders of Convertible
Debentures under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall give notice thereof to the Holders of then Outstanding Convertible
Debentures, by mailing a notice thereof by first-class mail to such Holders at
their addresses as they shall appear on the Security Register, and in each case
such notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Company to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
Section 8.3 Effect of Supplemental Indenture. Every supplemental
indenture executed pursuant to this Article VIII shall conform to the
requirements of the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Holders of Convertible Debentures
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be a part of the
terms and conditions of this Indenture for any and all purposes.
Section 8.4 Documents to Be Given to Trustee. The Trustee, subject to
the provisions of Section 6.1 and 6.2, shall receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article VIII complies with the applicable provisions
of this Indenture.
Section 8.5 Notation on Convertible Debentures in Respect of
Supplemental Indentures. Convertible Debentures authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article VIII may bear, upon the direction of the Company, a notation in
form satisfactory to the Trustee for the Convertible Debentures as to any matter
provided for by such supplemental indenture. If the Company or the Trustee shall
so determine, new Convertible Debentures so modified as to conform, in the
opinion of the Trustee and the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Convertible
Debentures then Outstanding.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms. The
Company may sell, transfer, lease or otherwise convey all or substantially all
of its assets on a consolidated basis to any Person, or consolidate or merge
with or into, any other Person, provided that in any such case, (a) either (i)
the Company shall be the continuing corporation, or (ii) if the Company is not
the continuing corporation, the successor corporation or Person which acquires
by sale, transfer, lease or other conveyance all or substantially all of the
assets of the Company, shall be a corporation organized and validly existing
under the laws of the United States of America or any state thereof or the
District of Columbia and shall expressly assume the due and punctual payment of
the principal of, premium, if any, and interest (including Additional Sums and
Compound Interest) on all of the Convertible Debentures according to their
tenor, and the due and punctual performance and observance of all of the
covenants, agreements and conditions of this Indenture to be performed or
observed by the Company by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation or entity, by
amendment thereto, (b) immediately after such merger or consolidation, or such
sale, transfer, lease or other conveyance, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have occurred and be continuing, and (c) the Company has delivered to the
Trustee an Officers' Certificate and an Opinion of Counsel, each stating that
the requirements of this Section have been complied with.
727411.13
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Section 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale, transfer, or conveyance (but not in the case of any
such lease), and following such an assumption by the successor corporation, such
successor corporation shall succeed to and be substituted for the Company, with
the same effect as if it had been named herein, and the Company shall be
discharged from all obligations and covenants under this Indenture and the
Convertible Debentures and may be liquidated and dissolved. Such successor
corporation 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 Convertible Debentures issuable
hereunder which theretofore shall not have been signed by the Company and be
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 make
available for delivery any Convertible Debentures which previously shall have
been signed and delivered by the officers of the Company to the Trustee for
authentication, and any Convertible Debentures, which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All of the Convertible Debentures so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Convertible
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Convertible Debentures had been issued at the
date of the execution hereof.
In case of any such consolidation, merger, sale, transfer, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Convertible Debentures thereafter to be issued as may be
appropriate.
Section 9.3 Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Section 6.1 and 6.2, may receive an Opinion of Counsel, prepared
in accordance with Section 15.5, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE X
REDEMPTION OF THE CONVERTIBLE DEBENTURES
Section 10.1 Tax Event Redemption.
(a) If a Tax Event (as defined in the Declaration) has
occurred and is continuing and:
(i) the Company has received a Redemption Tax Opinion (as
defined in the Declaration); or
(ii) after receiving a Dissolution Tax Opinion (as defined in
the Declaration), the Regular Trustees shall have been informed by tax
counsel rendering the Dissolution Tax Opinion that a No-Recognition
Opinion (as defined in the Declaration) cannot be delivered to the
Trust,
then, notwithstanding Section 10.2(a) but subject to Section 10.2(b), the
Company shall have the right upon not less than 30 days nor more than 60 days
notice to the Holders of the Convertible Debentures to redeem the Convertible
Debentures, in whole or in part, for cash within 90 days following the
occurrence of such Tax Event (the "90-Day Period") at a redemption price equal
to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon to the date of such redemption (the "Redemption Price"),
provided that if at the time there is available to the Company or the Trust the
opportunity to eliminate, within the 90-Day Period, the Tax Event by taking some
ministerial action ("Ministerial Action"), such as filing a form or making an
election, or pursuing some other similar reasonable measure which has no adverse
effect on the Company, the Trust or the Holders of the Trust Securities issued
by the Trust, the Company shall pursue such Ministerial Action in lieu of
redemption. If a redemption pursuant to the provisions of this Section 10.1
occurs on or before September 30, 2003, the Company shall provide notice of the
redemption 90 days prior to redemption (the "Early Tax Redemption Date") and pay
to the Holders of the Convertible Debentures on such date the Adjusted
Redemption Price as determined pursuant to the provisions of paragraph (b) of
this Section 10.1, provided that if the Adjusted Redemption Price is determined
to be less than the Redemption Price, the Company shall instead pay the
Redemption Price to the Holders of Convertible Debentures. The Redemption Price
or the Adjusted Redemption Price, as the case may be, shall be paid prior to
12:00 noon, New York time, on the date of such redemption or
727411.13
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such earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Redemption Price or the
Adjusted Redemption Price prior to the redemption date.
(b) For purposes of this Section 10.1, the Adjusted Redemption Price
shall be calculated pursuant to the provisions of this Section 10.1(b). Within
10 days after the date of notice of redemption has been provided, the Company
and the Majority Holders shall each appoint a nationally recognized "bulge
bracket" independent investment banking firm experienced in the valuation of
businesses and their securities (each an "Experienced Appraiser") (the two
Experienced Appraisers appointed by the Company and the Majority Holders are
hereinafter referred to collectively as the "Initial MWA Experienced
Appraisers") to objectively determine the fair market value of the Convertible
Debentures as of the Early Tax Redemption Date (the "Convertible Debenture Fair
Market Value"). The Initial MWA Experienced Appraisers shall be instructed (the
"MWA Instructions") to independently determine the Convertible Debenture Fair
Market Value as of the Early Tax Redemption Date assuming for this purpose that
the Convertible Debentures were to remain outstanding until September 30, 2003
(taking into account for this purpose the interest rate and the option embedded
in the Convertible Debentures). If the Initial MWA Experienced Appraisers shall
not agree on the Convertible Debenture Fair Market Value, then within 10 days
after the Appraisal Period, they shall jointly appoint a third Experienced
Appraiser to objectively determine the Convertible Debenture Fair Market Value
and, in connection therewith, provide to such firm information as to their
calculations of the Convertible Debenture Fair Market Value. The third
Experienced Appraiser shall be instructed to objectively determine the
Convertible Debenture Fair Market Value in accordance with the MWA Instructions
and to select the Convertible Debenture Fair Market Value determined by one of
the Initial MWA Experienced Appraisers that most closely approximates the
Convertible Debenture Fair Market Value determined by such third Experienced
Appraiser. Such appraisal and selection by such third Experienced Appraiser
shall be completed within 20 days after the date of appointment of such firm and
shall be final and binding on the Company and each Holder. The Convertible
Debenture Fair Market Value that most closely approximates the Convertible
Debenture Fair Market Value determined by such third Experienced Appraiser shall
constitute the "Adjusted Redemption Price." If the Adjusted Redemption Price is
determined to be less than the Redemption Price, the Company shall instead pay
the Redemption Price to the Holders of the Convertible Debentures. All costs and
expenses incurred in connection with the appraisals, including fees to
investment banking firms, necessary to determine the Convertible Debenture Fair
Market Value and the Adjusted Redemption Price shall be borne by the Company.
The Company covenants and agrees that it shall enter into engagement agreements
with the foregoing Experienced Appraisers containing customary terms and
conditions, including customary indemnification provisions.
Section 10.2 Optional Redemption by Company.
(a) Subject to the provisions of Section 10.2(b) and to the provisions
of this Article X generally, except as otherwise may be specified in Section
10.1 or elsewhere in this Indenture, the Company shall have the right to redeem
the Convertible Debentures, in whole or in part, from time to time, on or after
September 30, 2003. Any redemption pursuant to this paragraph will be made upon
not less than 30 days nor more than 60 days notice to the Holders of the
Convertible Debentures, at a price equal to 100% of the principal amount of the
Convertible Debentures (the "Optional Redemption Price") together with accrued
and unpaid interest (including Additional Sums, if any, and, to the extent
permitted by applicable law, Compounded Interest, if any) to, but excluding, the
redemption date.
If Convertible Debentures are redeemed on any March 31, June 30,
September 30, or December 31, accrued and unpaid interest shall be payable to
holders of record on the relevant record date.
The Company may not redeem fewer than all of the outstanding
Convertible Debentures unless all accrued and unpaid interest has been paid on
all Convertible Debentures for all quarterly interest payment periods
terminating on or prior to the date of redemption.
So long as the corresponding Trust Securities are outstanding, the
proceeds from the redemption of the Convertible Debentures will be used to
redeem the Trust Securities.
If the Convertible Debentures are only partially redeemed pursuant to
this Section 10.2, the Convertible Debentures will be redeemed pro rata. The
Optional Redemption Price, together with any required interest
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payment, shall be paid in immediately available funds prior to 12:00 noon, New
York time, on the redemption date or at such earlier time as the Company
determines provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemption Price, together with any required
interest payment, by 10:00 a.m., New York time, on the date such amounts are to
be paid. Partial redemptions must be in an amount not less than $1,000 principal
amount of Convertible Debentures.
If Convertible Debentures selected for partial redemption are converted
in part before termination of the conversion right with respect to the portion
of the Convertible Debentures so selected, the converted portion of the
Convertible Debentures shall be deemed (so far as may be) to be the portion
selected for redemption. Convertible Debentures (or portions thereof) which have
been converted during a selection of Convertible Debentures to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection. In
any case where more than one Convertible Debenture is registered in the same
name, the Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Convertible Debenture.
If any Convertible Debenture called for redemption is converted into
Common Shares of the Company, any money deposited with the Trustee or with any
Paying Agent or so segregated and held in trust for the redemption of such
Convertible Debenture shall (subject to any right of the Holder of such
Convertible Debenture or any Predecessor Convertible Debenture to receive
interest as provided in the last paragraph of Section 2.9) be paid to the
Company upon the Company's request or, if then held by the Company, shall be
discharged from such trust.
(b) If a partial redemption of the Convertible Debentures would result
in the delisting of the Convertible Preferred Securities issued by the Trust
from any national securities exchange or other organization on which the
Convertible Preferred Securities are then listed, the Company shall not be
permitted to effect such partial redemption and may only redeem the Convertible
Debentures in whole.
Section 10.3 No Sinking Fund. The Convertible Debentures are not
entitled to the benefit of any sinking fund or subject to any sinking fund.
Section 10.4 Election to Redeem; Notice of Redemption; Partial
Redemptions. The election of the Company to redeem any Convertible Debentures
shall be evidenced by, or pursuant to, a resolution of the Board of Trustees.
Notice of redemption to the Holders of Convertible Debentures required to be
redeemed or to be redeemed as a whole or in part at the option of the Company
shall be given by giving notice of such redemption as provided in Section 15.4,
at least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Convertible Debentures. Any notice which is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice. Neither the failure to
give notice by mail, nor any defect in the notice so mailed to the Holder of any
Convertible Debenture designated for redemption as a whole or in part shall
affect the validity of the proceedings for such redemption.
The notice of redemption to each such Holder shall specify the date
fixed for redemption, the "CUSIP" number or numbers for such Convertible
Debentures, the redemption price, the Place or Places of Payment, that payment
will be made upon presentation and surrender of such Convertible Debentures,
that interest accrued to the date fixed for redemption will be paid as specified
in such notice and that on and after said date interest thereon or on the
portions thereof to be redeemed will cease to accrue, the conversion rate or
price, the date on which the right to convert the Convertible Debentures to be
redeemed will terminate and the place or places where such Convertible
Debentures may be surrendered for conversion. If less than all of the
Convertible Debentures are to be redeemed, the notice of redemption shall
specify the number of the Convertible Debentures to be redeemed. In case any
Convertible Debenture is to be redeemed in part, the notice of redemption shall
state the portion of the principal amount thereof to be redeemed and shall state
that on and after the date fixed for redemption, upon surrender of such
Convertible Debenture, a new Convertible Debenture or Convertible Debentures in
principal amount equal to the unredeemed portion thereof will be issued.
The notice of redemption of Convertible Debentures to be redeemed at
the option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. If such
notice is to be given by the Trustee, the Company shall provide notice of such
redemption to the Trustee at least 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to
727411.13
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the Trustee). If such notice is given by the Company, the Company shall provide
a copy of such notice given to the Holders of such redemption to the Trustee at
least 2 days prior to the date such notice is given to such Holders, but in any
event at least 30 days and not more than 60 days prior to the date fixed for
redemption.
Not later than the redemption date specified in the notice of
redemption given as provided in this Section, the Company will have on deposit
with the Trustee or with one or more Paying Agents (or, if the Company is acting
as its own Paying Agent, set aside, segregate and hold in trust as provided in
Section 3.3) in funds available on such date an amount of money sufficient to
redeem on the redemption date all the Convertible Debentures so called for
redemption at the appropriate redemption price, together with accrued interest
to the date fixed for redemption. If less than all of the Outstanding
Convertible Debentures are to be redeemed at the election of the Company, the
Company will deliver to the Trustee at least 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee) an
Officers' Certificate stating the aggregate principal amount of Convertible
Debentures to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Convertible Debentures
shall relate, in the case of any Convertible Debenture redeemed or to be
redeemed only in part, to the portion of the principal amount of such
Convertible Debenture which has been or is to be redeemed.
Section 10.5 Payment of Convertible Debentures Called for Redemption.
If notice of redemption has been given as above provided, the Convertible
Debentures or portions of Convertible Debentures specified in such notice shall
become due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date fixed
for redemption, and on and after said date (unless the Company shall default in
the payment of such Convertible Debentures at the redemption price, together
with interest accrued to said date) interest on the Convertible Debentures or
portions of Convertible Debentures so called for redemption shall cease to
accrue, and, except as provided in Section 6.1, such Convertible Debentures
shall cease from and after the date fixed for redemption to be entitled to any
benefit or security under this Indenture, and the Holders thereof shall have no
right in respect of such Convertible Debentures except the right to receive the
redemption price thereof and unpaid interest to the date fixed for redemption.
On presentation and surrender of such Convertible Debentures at a Place of
Payment specified in said notice, said Convertible Debentures or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that, payment of interest becoming due on or prior to the
date fixed for redemption shall be payable to the Holders of such Convertible
Debentures registered as such on the relevant record date subject to the terms
and provisions of Section 2.9 hereof.
If any Convertible Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the Coupon
Rate.
Upon presentation of any Convertible Debenture redeemed in part only,
the Company shall execute and the Trustee shall authenticate and make available
for delivery to or on the order of the Holder thereof, at the expense of the
Company, a new Convertible Debenture or Convertible Debentures, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Convertible Debenture so presented.
Section 10.6 Exclusion of Certain Convertible Debentures from
Eligibility for Selection for Redemption. Convertible Debentures shall be
excluded from eligibility for selection for redemption if they are identified by
registration and certificate number in a written statement signed by an
authorized officer of the Company and delivered to the Trustee at least 30 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Company or (b) an entity specifically identified in such written statement
as directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company (it being understood that VRLP and any
Affiliate of Vornado Realty Trust or VRLP and EOPLP and any Affiliate of Equity
Office Properties Trust or EOPLP shall not be deemed to be under common control
with the Company).
727411.13
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ARTICLE XI
EXTENSION OF INTEREST PAYMENT PERIOD
Section 11.1 Extension of Interest Payment Period. As long as an Event
of Default under Section 5.1(a) of this Indenture shall not have occurred and be
continuing, subject to the condition that the Company file with the Trustee and
the transfer agent for the Convertible Preferred Securities and the Convertible
Debentures a Certificate signed by the chief financial officer or Treasurer of
the Company in the form attached hereto as Exhibit B ("Extension Certificate"),
the Company shall have the right, at any time and from time to time during the
term of the Convertible Debentures, to defer payments of interest by extending
the interest payment period of such Convertible Debentures for a period not
exceeding 20 consecutive quarters (the "Extension Period"), during which
Extension Period no interest shall be due and payable; provided that an
Extension Certificate shall be filed at the beginning of each quarter of such
Extension Period and that no Extension Period may extend beyond the Maturity
Date or any earlier redemption date. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to this Section 11.1, will bear interest
thereon at the Coupon Rate compounded quarterly for each quarter of the
Extension Period ("Compound Interest"). Each Extension Period, if any, will end
on an Interest Payment Date. At the end of the Extension Period, the Company
shall pay all interest accrued and unpaid on the Convertible Debentures,
including any Additional Sums and, to the extent permitted by law, Compound
Interest (together, "Deferred Interest") that shall be payable to the Holders of
the Convertible Debentures in whose names the Convertible Debentures are
registered in the Security Register at the close of business on the record date
next preceding such Interest Payment Date. Before the termination of any
Extension Period, the Company may further extend such period, provided that such
period together with all previous and further extensions thereof shall not
exceed 20 consecutive quarters, or extend beyond the Maturity Date or any
earlier redemption date. Upon the termination of any Extension Period and upon
the payment of all Deferred Interest then due, the Company may commence a new
Extension Period, subject to the foregoing requirements. No interest shall be
due and payable during an Extension Period, except at the end thereof, but the
Company may prepay at any time all or any portion of the interest accrued during
an Extension Period.
Section 11.2 Notice of Extension.
(a) If the Institutional Trustee is the only registered Holder of the
Convertible Debentures at the time the Company selects an Extension Period, the
Company shall give written notice to the Regular Trustees, the Institutional
Trustee and the Trustee of its selection of such Extension Period at least one
Business Day before the next succeeding date on which Distributions on the Trust
Securities issued by the Trust are payable. The Company shall cause the Trust to
give notice of the Company's selection of such Extension Period to holders of
the Convertible Preferred Securities.
(b) If the Institutional Trustee is not the only Holder of the
Convertible Debentures at the time the Company selects an Extension Period, the
Company shall give the Holders of the Convertible Debentures, the Institutional
Trustee and the Trustee written notice of its selection of such Extension Period
at least 10 Business Days before next succeeding Interest Payment Date.
(c) The quarter in which any notice is given pursuant to paragraphs (a)
or (b) of this Section 11.2 shall be counted as one of the 20 consecutive
quarters permitted in the maximum Extension Period permitted under Section 11.1.
ARTICLE XII
CONVERSION OF CONVERTIBLE DEBENTURES
Section 12.1 Conversion Rights. Subject to and upon compliance with the
provisions of this Article XII, the Convertible Debentures are convertible, at
the option of the Holders, at any time through the close of business on the last
Business Day prior to the Maturity Date (or, in the case of Convertible
Debentures called for redemption, prior to the close of business on the Business
Day prior to the corresponding redemption date) into
727411.13
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fully paid and nonassessable Common Shares of the Company at an initial
conversion rate of 85.47 Common Shares for each $1,000 in principal amount of
Convertible Debentures (equivalent to a conversion price of $11.70 per Common
Share (the "Conversion Price")), subject to adjustment and reset as described in
this Article XII. Subject to the following sentence, a Holder of Convertible
Debentures may convert any portion of the principal amount of the Convertible
Debentures into that number of fully paid and nonassessable Common Shares
obtained by dividing the principal amount of the Convertible Debentures to be
converted by such Conversion Price. At least $1,000,000 of the principal amount,
or the entire principal amount, if less than $1,000,000, of the Convertible
Debentures held by the converting Holder must be converted in connection with
any conversion into Common Shares pursuant to the foregoing. All calculations
under this Article XII shall be made to the nearest cent or to the nearest
1/100th of a share, as the case may be.
Section 12.2 Conversion Procedures.
(a) In order to convert all or a portion of the Convertible Debentures,
the Holder thereof shall deliver to the Conversion Agent an irrevocable notice
of conversion (the "Notice of Conversion") setting forth the principal amount of
Convertible Debentures to be converted, together with the name or names, if
other than the Holder, in which the Common Shares should be issued upon
conversion and, surrender to the Conversion Agent the Convertible Debentures to
be converted, duly endorsed or assigned to the Company or in blank. In addition,
a holder of Convertible Preferred Securities may exercise its right under the
Declaration to convert such Convertible Preferred Securities into Common Shares
by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Convertible Preferred Security for a
portion of the Convertible Debentures held by the Trust (at an exchange rate of
$1,000 principal amount of Convertible Debentures for each Convertible Preferred
Security) and (ii) to immediately convert such Convertible Debentures, on behalf
of such holder, into Common Shares of the Company pursuant to this Article XII
and surrendering such Convertible Preferred Securities, duly endorsed or
assigned to the Company or in blank. So long as any Convertible Preferred
Securities are outstanding, the Trust shall not convert any Convertible
Debentures except pursuant to a Notice of Conversion delivered to the Conversion
Agent by a holder of Convertible Preferred Securities.
If a Notice of Conversion is delivered on or after the record date and
prior to the subsequent Interest Payment Date, the Holder will be entitled to
receive the interest payable on the subsequent Interest Payment Date on the
portion of Convertible Debentures to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date. However, if a redemption date falls
between a record date and the subsequent Interest Payment Date, the Holder will
be entitled to receive, on such Interest Payment Date, the interest accrued to,
but excluding, the redemption date. Except as otherwise provided in the first
and second sentences of this paragraph, in the case of any Convertible Debenture
which is converted, interest whose Stated Maturity is after the date of
conversion of such Convertible Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Convertible
Debentures being converted, which shall be deemed to be paid in full. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"Conversion Date") by the Conversion Agent from the Holder or from a holder of
the Convertible Preferred Securities effecting a conversion thereof pursuant to
its conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Shares issuable upon such conversion
shall be treated for all purposes as the record holder or holders of such Common
Shares as of the Conversion Date. As promptly as practicable on or after the
Conversion Date, the Company shall issue and deliver at the office of the
Conversion Agent, unless otherwise directed by the Holder in the Notice of
Conversion, a certificate or certificates for the number of full Common Shares
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of
Common Shares into which the Convertible Debentures are convertible (together
with the cash payment, if any, in lieu of fractional share and the interest
payable pursuant to Section 12.2(a)) shall be deemed to satisfy the Company's
obligation to pay the principal amount at Maturity of the portion of Convertible
Debentures so converted and any unpaid interest (including Compound Interest)
accrued on such Convertible Debentures at the time of such conversion.
727411.13
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(c) No fractional Common Shares will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Convertible Debentures were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a Trading Day, on the next Trading Day, and the Conversion Agent in turn will
make such payment, if any, to the Holder of the Convertible Debentures or the
holder of the Convertible Preferred Securities so converted.
(d) In the event of the conversion of any Convertible Debenture in part
only, the Company shall execute and the Trustee shall authenticate and make
available for delivery to or on the order of the Holder thereof, at the expense
of the Company, a new Convertible Debenture or Convertible Debentures in the
aggregate principal amount equal to the unconverted portion thereof.
(e) In effecting the conversion transactions described in this Section
12.2, the Conversion Agent is acting as agent of the holders of Convertible
Preferred Securities (in the exchange of Convertible Preferred Securities for
Convertible Debentures) and as agent of the Holders of Convertible Debentures
(in the conversion of Convertible Debentures into Common Shares), as the case
may be. The Conversion Agent is hereby authorized (i) to exchange Convertible
Debentures held by the Trust from time to time for Convertible Preferred
Securities in connection with the conversion of such Convertible Preferred
Securities in accordance with this Article XII and (ii) to convert all or a
portion of the Convertible Debentures into Common Shares and thereupon to
deliver such Common Shares in accordance with the provisions of this Article XII
and to deliver to the Trust a new Convertible Debenture or Convertible
Debentures for any resulting unconverted principal amount.
Section 12.3 Conversion Price Adjustments. The Conversion Price shall
be adjusted from time to time as follows:
(a) In case the Company shall, while any of the Convertible Debentures
are outstanding, (i) pay a dividend or make a distribution with respect to
Common Shares in Common Shares, (ii) subdivide outstanding Common Shares, (iii)
combine outstanding Common Shares into a smaller number of shares or (iv) issue
by reclassification of its Common Shares any shares of Capital Stock of the
Company (other than the reclassifications covered by Section 12.4), the
conversion privilege and the Conversion Price for the Convertible Debentures
shall be adjusted so that the Holder of any Convertible Debenture thereafter
surrendered for conversion shall be entitled to receive the number of shares of
Capital Stock of the Company which such Holder would have owned immediately
following such action had such Convertible Debenture been converted immediately
prior thereto. An adjustment made pursuant to this subsection (a) shall become
effective immediately after the record date in the case of a dividend or other
distribution and shall become effective immediately after the effective date in
case of a subdivision, combination or reclassification (or immediately after the
record date if a record date shall have been established for such event).
(b) In case the Company shall, while any of the Convertible Debentures
are outstanding, issue rights or warrants to all holders of its Common Shares
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase Common Shares at a price per share
less than the current market price per Common Share (as determined pursuant to
subsection (g) below) on the record date mentioned below, the Conversion Price
for the Convertible Debentures shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in effect immediately
prior to the date of issuance of such rights or warrants by a fraction of which
the numerator shall be the number of Common Shares outstanding on the date of
issuance of such rights or warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered for
subscription or purchase would purchase at such current market price, and of
which the denominator shall be the number of Common Shares outstanding on the
date of issuance of such rights or warrants plus the number of additional Common
Shares offered for subscription or purchase. Such adjustment shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such rights or warrants. For the purposes of
this subsection, the number of Common Shares at any time outstanding shall not
include shares held in the treasury of the Company. In case any rights or
warrants referred to in this subsection in respect of which an adjustment shall
have been made shall expire unexercised within 45 days after the same shall have
been distributed or issued by the Company, the Conversion Price shall be
readjusted at the time of such expiration to the Conversion Price that would
have been in effect if no adjustment had been made on account of the
distribution or issuance of such expired rights or warrants.
727411.13
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(c) Subject to the last sentence of this subsection (c), in case the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Shares evidences of its indebtedness, shares of any class or series of Capital
Stock, cash or assets or rights or warrants to subscribe for or purchase any of
its securities (excluding any rights or warrants referred to in subsection (b),
any dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in subsection (a) of this Section 12.3), the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this subsection
(c) by a fraction of which the numerator shall be the current market price
(determined as provided in subsection (g)) per Common Share on the date fixed
for the payment of such distribution (the "Reference Date") less the fair market
value (as determined in good faith by the Board of Trustees, whose determination
shall be conclusive and evidenced by a resolution of the Board of Trustees), on
the Reference Date, of the portion of the evidences of indebtedness, shares of
Capital Stock, cash, assets, rights or warrants so distributed applicable to one
Common Share and the denominator shall be such current market price per Common
Share, such reduction to become effective immediately prior to the opening of
business on the day following the Reference Date. In the event that no such
dividend or distribution is so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not occurred. If the Board of Trustees determines
the fair market value of any distribution for purposes of this subsection (c) by
reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price per
Common Share (determined as provided in subsection (g)). For purposes of this
subsection (c), any dividend or distribution that includes Common Shares, or
rights or warrants of the type described in subsection (b), shall be deemed
instead to be a dividend or distribution of the evidences of indebtedness,
shares of Capital Stock, cash or assets or rights or warrants other than such
Common Shares, or such rights or warrants of the type described in subsection
(b) (making any Conversion Price reduction required by this subsection (c)),
immediately followed by a dividend or distribution of such Common Shares or such
rights or warrants of the type described in subsection (b) (making any further
Conversion Price adjustment required by subsection (a) or (b)), except (A) the
Reference Date of such dividend or distribution as defined in this subsection
(c) shall be substituted as (1) "the record date in the case of a dividend or
other distribution," and (2) "the record date for the determination of
stockholders entitled to receive such rights or warrants" and (3) "the date
fixed for such determination" within the meaning of subsections (a) and (b) and
(B) any Common Share included in such dividend or distribution shall not be
deemed outstanding for purposes of computing any adjustment of the Conversion
Price in subsection (b).
(d) In case the Company shall pay or make a dividend or other
distribution on its Common Shares exclusively in cash, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this subsection
(d) by a fraction of which the numerator shall be the current market price per
share (determined as provided in subsection (g)) of the Common Shares on the
date fixed for the payment of such distribution less the amount of cash so
distributed applicable to one Common Share and the denominator shall be such
current market price per Common Share (determined as provided in subsection
(g)), such reduction to become effective immediately prior to the opening of
business on the day following the date fixed for the payment of such
distribution. In the event that no such dividend or distribution is so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such Record Date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot offer)
made by the Company or any Subsidiary of the Company for all or any portion of
the Company's Common Shares shall expire and such tender or exchange offer shall
involve the payment by the Company or such subsidiary of consideration per
Common Share having a fair market value (as determined in good faith by the
Board of Trustees, whose determination shall be conclusive and evidenced by a
resolution of the Board of Trustees) on the last date (the "Expiration Date")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds the Closing Price of the Common Shares
on the Expiration Date, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this subsection (e) by a fraction (which shall not be greater
than one) of which the numerator shall be (i) the number of Common Shares
outstanding (including any tendered or exchanged shares) on the Expiration Date
times the Closing Price of the Common Shares on the Expiration Date minus (ii)
the fair market value (determined as aforesaid) of the aggregate consideration
paid
727411.13
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pursuant to such tender or exchange offer and the denominator shall be (i) the
number of Common Shares outstanding (including any tendered or exchanged shares)
on the Expiration Date minus the number of Common Shares purchased pursuant to
such tender or exchange offer times (ii) the Closing Price of the Common Shares
on the Expiration Date, such reduction to become effective immediately prior to
the opening of business on the day following the Expiration Date.
(f) In case a tender or exchange offer made by a Person other than the
Company or any Subsidiary of the Company for all or any portion of the Common
Shares shall expire and such tender or exchange offer shall involve the payment
by a Person other than the Company or any Subsidiary of the Company of
consideration per Common Share having a fair market value (as determined in good
faith by the Board of Trustees, whose determination shall be conclusive and
evidenced by a resolution of the Board of Trustees) at the applicable Expiration
Date that exceeds the Closing Price of the Common Shares on the Expiration Date
in which as of the closing date of the offer the Board of Trustees of the
Company is not recommending rejection of the offer, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subsection (f) by a fraction
(which shall not be greater than one) of which the numerator shall be (i) the
number of Common Shares outstanding (including any tendered or exchanged shares)
on the Expiration Date times the Closing Price of the Common Shares on the
Expiration Date minus (ii) the fair market value (determined as aforesaid) of
the aggregate consideration paid pursuant to such tender or exchange offer and
the denominator shall be (i) the number of Common Shares outstanding (including
any tendered or exchanged shares) on the Expiration Date minus the number of
Common Shares purchased pursuant to such tender or exchange offer times (ii) the
Closing Price of the Common Shares on the Expiration Date, such reduction to
become effective immediately prior to the opening of business on the day
following the Expiration Time; provided, however, that the reduction of the
Conversion Price contemplated by this subsection (f) will only be made if the
tender offer or exchange offer is made for an amount which increases that
Person's ownership of Common Shares to more than 25% of the total Common Shares
outstanding and provided, further, that the reduction of the Conversion Price
contemplated by this subsection (f) will not be made if as of the close of the
offer, the offering documents with respect to such offer include a commitment to
cause the Company to engage in a consolidation or merger of the Company or a
sale of all or substantially all of the assets of the Company.
(g) For the purpose of any computation under subsection (b), (c), (d),
(e) or (f), the current market price per Common Share on any date in question
shall be deemed to be the average of the daily Closing Prices for the five
Trading Day period ending on the earlier of the day in question and, if
applicable, the last Trading Day before the "ex" date with respect to the
issuance or distribution requiring such computation; provided, however, that if
more than one event occurs that would require an adjustment pursuant to
subsections (a) through (f), inclusive, the Board of Trustees shall in good
faith make such adjustments to the Closing Prices during such five Trading Day
period as it reasonably deems appropriate to effectuate the intent of the
adjustments in this Section 12.3, in which case any such determination by the
Board of Trustees shall be set forth in a Board Resolution and shall be
conclusive. For purposes of this paragraph, the term "ex" date, (1) when used
with respect to any issuance or distribution, means the first date on which the
Common Shares trade regular way on the New York Stock Exchange or on such
successor securities exchange as the Common Shares may be listed or in the
relevant market from which the Closing Prices were obtained without the right to
receive such issuance or distribution, and (2) when used with respect to any
tender or exchange offer means the first date on which the Common Shares trade
regular way on such securities exchange or in such market after the Expiration
Time of such offer.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by subsections (a) through (f), as the Board of
Trustees considers to be advisable to avoid or diminish any income tax to
holders of Common Shares or rights to purchase Common Shares resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. The Company from time to time may
reduce the Conversion Price by any amount for any period of time if the period
is at least twenty (20) days. Whenever the Conversion Price is reduced pursuant
to the preceding sentence, the Company shall mail to Holders of record of the
Convertible Debentures a notice of the reduction at least 15 days prior to the
date the reduced Conversion Price takes effect, and such notice shall state the
reduced Conversion Price and the period it will be in effect.
727411.13
41
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason of
this subsection (i) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
(j) If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of Convertible Debentures.
(k) Except as stated above, the Conversion Rate will not be adjusted
for the issuance of Common Shares or any securities convertible into, or
exchangeable for, Common Shares, or carrying the right to purchase any of the
foregoing.
Section 12.4 Merger, Consolidation or Sale of Assets.
(a) In the event that the Company shall be a party to any transaction
(including without limitation (i) any recapitalization or reclassification of
the Common Shares (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Common Shares, (ii) any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding Common Shares of the
Company), (iii) any sale or transfer of all or substantially all of the assets
of the Company, or (iv) any compulsory share exchange) pursuant to which either
Common Shares shall be converted into the right to receive other securities,
cash or other property, then lawful provision shall be made as part of the terms
of such transaction whereby the Holder of each Convertible Debenture then
outstanding shall have the right thereafter to convert such Convertible
Debenture only into:
(i) in the case of any such transaction that does not
constitute a Common Share Fundamental Change, the kind and amount of
the securities, cash or other property that would have been receivable
upon such transaction by a holder of the number of Common Shares
issuable upon conversion of such Convertible Debenture immediately
prior to such transaction, after giving effect to any adjustment in the
Conversion Price in accordance with clause (i) of subsection (c) of
this Section 12.4; and
(ii) in the case of any such transaction that constitutes a
Common Share Fundamental Change, common stock of the kind received by
holders of Common Share as a result of such Common Share Fundamental
Change in an amount determined in accordance with clause (ii) of
subsection (c) of this Section 12.4.
(b) The Company or, if the Company is not the surviving Person in such
transaction, the surviving Person, shall amend this Indenture as appropriate to
establish such right. Such amendment shall provide for adjustments which, for
events subsequent to the effective date thereof, shall be as nearly equivalent
as may be practicable to the adjustments provided for in this Article XII. The
above provisions shall similarly apply to successive transactions of the
foregoing type.
(c) Notwithstanding any other provision of this Section 12.4 to the
contrary, if any Fundamental Change occurs, then the Conversion Price in effect
will be adjusted immediately after such Fundamental Change as follows:
(i) in the case of a Non-Share Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Non-Share Fundamental Change shall be the lower of (A) the
Conversion Price in effect immediately prior to such Non-Share
Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to Section 12.3, and (B) the product of
(1) the greater of the Applicable Price and the then applicable
Reference Market Price and (2) a fraction, the numerator of which is
$1,000 and the denominator of which is (x) the amount of the Optional
Redemption Price set forth in Section 10.2 for $1,000 in principal
amount of Convertible Debentures if the redemption date were the date
of such Non-Share Fundamental Change plus (y) any then-accrued and
unpaid interest on $1,000 principal amount of Convertible Debentures
provided that if the Non-Share Fundamental
727411.13
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Change occurs prior to September 30, 2003, the Optional Redemption
Price for purposes of the foregoing will be recalculated pursuant to
the provisions of subparagraph (iii) below to provide for a lower
conversion price to account for the loss of the option value imbedded
in the Convertible Debentures immediately before the Non-Share
Fundamental Change; and
(ii) in the case of a Common Share Fundamental Change, the
Conversion Price of the Convertible Debentures immediately following
such Common Share Fundamental Change shall be the Conversion Price in
effect immediately prior to such Common Share Fundamental Change, but
after giving effect to any other prior adjustments effected pursuant to
Section 12.3, multiplied by a fraction, the numerator of which is the
Purchaser Share Price and the denominator of which is the Applicable
Price; provided, however, that in the event of a Common Share
Fundamental Change in which (A) 100% of the value of the consideration
received by a holder of Common Shares is common stock of the successor,
acquiror or other third party (and cash, if any, paid with respect to
any fractional interests in such common stock resulting from such
Common Share Fundamental Change) and (B) all of the Common Shares shall
have been exchanged for, converted into or acquired for, common stock
of the successor, acquiror or other third party (and any cash with
respect to fractional interests), the Conversion Price of the
Convertible Debentures immediately following such Common Share
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Share Fundamental Change multiplied by a fraction,
the numerator of which is one (1) and the denominator of which is the
number of shares of common stock of the successor, acquiror or other
third party received by a holder of one share Common Share as a result
of such Common Share Fundamental Change.
(iii) For purposes of Section 12.4(c)(i), the Optional
Redemption Price to be used for purposes of making the adjustment of
the Conversion Price set forth therein in the event a Non-Share
Fundamental Change occurs prior to September 30, 2003 (the
"Recalculated Optional Redemption Price") shall be determined pursuant
to the terms of this Section 12.4(c)(iii), provided that if the
Recalculated Optional Redemption Price is determined to be less than
the Optional Redemption Price, the Optional Redemption Price shall
instead be used for purposes of making the adjustment of the Conversion
Price set forth in Section 12.4(c)(i). Within 10 days of such Non-Share
Fundamental Change, the Company and the Majority Holders shall each
appoint an Experienced Appraiser (the two Experienced Appraisers
appointed by the Company and the Majority Holders are hereinafter
referred to collectively as the "Initial RORP Experienced Appraisers")
to objectively determine the Recalculated Optional Redemption Price.
The Initial RORP Experienced Appraisers shall be instructed to
independently recalculate the Optional Redemption Price so that such
price accounts for the lost option value embedded in the Convertible
Debenture as a result of the Non-Share Fundamental Change (the "RORP
Instructions"), which recalculated price shall constitute the
Recalculated Optional Redemption Price. The Initial RORP Experienced
Appraisers shall complete their appraisals and provide notice of their
determination to each other within 30 days after the Non-Share
Fundamental Change (the "RORP Appraisal Period"). If the Initial RORP
Experienced Appraisers shall not agree on the Recalculated Optional
Redemption Price, then within 10 days after the RORP Appraisal Period,
they shall jointly appoint a third Experienced Appraiser to objectively
determine the Recalculated Optional Redemption Price and, in connection
therewith, provide to such firm information as to their calculations of
the Recalculated Optional Redemption Price. The third Experienced
Appraiser shall be instructed to objectively determine the Recalculated
Optional Redemption Price in accordance with the RORP Instructions and
to select the Recalculated Optional Redemption Price determined by one
of the Initial RORP Experienced Appraisers that most closely
approximates the Recalculated Optional Redemption Price determined by
such third Experienced Appraiser (the "Selected Recalculated Optional
Redemption Price"). The appraisal of such third Experienced Appraiser
shall be completed within 20 days after the date of appointment of such
firm, whereupon it shall select the Selected Recalculated Optional
Redemption Price. The selection of the Selected Recalculated Optional
Redemption Price by the third Experienced Appraiser shall be final and
binding on the Company and each Holder. All costs and expenses incurred
in connection with the appraisals, including fees of investment
bankers, necessary to determine the Recalculated Optional Redemption
Price shall be borne by the Company. The Company covenants and agrees
that it shall enter into engagement agreements with the foregoing
Experienced Appraisers containing customary terms and conditions,
including customary indemnification provisions.
727411.13
43
Section 12.5 Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price
and shall prepare a certificate signed by the chief financial officer
or the treasurer of the Company setting forth the adjusted Conversion
Price and showing in reasonable detail the facts upon which such
adjustment is based, and such certificate shall forthwith be filed with
the Trustee and the transfer agent for the Convertible Preferred
Securities and the Convertible Debentures; and
(b) a notice stating the Conversion Price has been adjusted
and setting forth the adjusted Conversion Price shall as soon as
practicable be mailed by the Company to all record holders of
Convertible Preferred Securities and the Convertible Debentures at
their last addresses as they appear upon the transfer books of the
Company and the Trust.
Section 12.6 Prior Notice of Certain Events. In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Common Shares, other than (A) a dividend payable
in Common Shares or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 12.3(c) or (d), or (ii)
authorize a tender or exchange offer that would require an adjustment
pursuant to Section 12.3(e);
(b) the Company shall authorize the granting to all holders of
Common Shares of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or
warrants;
(c) of any reclassification of Common Shares (other than a
subdivision or combination of the outstanding Common Shares, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the
Company shall be required, or of the sale or transfer of all or
substantially all of the assets of the Company or of any compulsory
share exchange whereby the Common Shares are converted into other
securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation
or winding up of the Company;
then the Company shall (i) if any Convertible Preferred Securities are
outstanding, cause to be filed with the transfer agent for the Convertible
Preferred Securities, and shall cause to be mailed to the holders of record of
the Convertible Preferred Securities, at their last addresses as they shall
appear upon the stock transfer books of the Trust or (ii) shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 15 days prior to the applicable record or effective
date hereinafter specified, a notice stating (A) the date on which a record (if
any) is to be taken for the purpose of such dividend, distribution, rights or
warrants or, if a record is not to be taken, the date as of which the holders of
Common Shares of record to be entitled to such dividend, distribution, rights or
warrants are to be determined or (B) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Common Shares of record shall be entitled to exchange
their shares of Common Shares for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up (but no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the validity
of the corporate action required to be specified in such notice). If at any time
the Trustee shall not be the Conversion Agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
Section 12.7 Certain Additional Rights. In case the Company shall, by
dividend or otherwise, declare or make a distribution on the Common Shares
referred to in Section 12.3(c) or 12.3(d), the Holder of the Convertible
Debentures, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
Common Share into which the Convertible Debentures are converted, the portion of
the Common Shares, rights, warrants, evidences
727411.13
44
of indebtedness, shares of Capital Stock, cash and assets so distributed
applicable to one Common Share; provided, however, that, at the election of the
Company (whose election shall be evidenced by a resolution of the Board of
Trustees) with respect to all Holders so converting, the Company may, in lieu of
distributing to such Holder any portion of such distribution not consisting of
cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Trustees, whose determination shall be conclusive and evidenced by a resolution
of the Board of Trustees). If any conversion of Convertible Debentures described
in the immediately preceding sentence occurs prior to the payment date for a
distribution to holders of Common Shares which the Holder of Convertible
Debentures so converted is entitled to receive in accordance with the
immediately preceding sentence, the Company may elect (such election to be
evidenced by a resolution of the Board of Trustees) to distribute to such Holder
a due ▇▇▇▇ for the Common Shares, rights, warrants, evidences of indebtedness,
shares of Capital Stock, cash or assets to which such Holder is so entitled,
provided, that such due ▇▇▇▇ (a) meets any applicable requirements of the
principal national securities exchange or other market on which the Common
Shares are then traded and (b) requires payment or delivery of such Common
Shares, rights, warrants, evidences of indebtedness, shares of Capital Stock,
cash or assets no later than the date of payment or delivery thereof to holders
of Common Share receiving such distribution.
Section 12.8 Trustee Not Responsible for Determining Conversion Price
or Adjustments. Neither the Trustee nor any Conversion Agent shall at any time
be under any duty or responsibility to any Holder of any Convertible Debenture
to determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed. Neither the Trustee nor any
Conversion Agent shall be accountable with respect to the validity or value (or
the kind or amount) of any Common Shares or of any securities or property, which
may at any time be issued or delivered upon the conversion of any Convertible
Debenture; and neither the Trustee nor any Conversion Agent makes any
representation with respect thereto. Neither the Trustee nor any Conversion
Agent shall be responsible for any failure of the Company to make any cash
payment or to issue, transfer or deliver any Common Shares or stock certificates
or other securities or property upon the surrender of any Convertible Debenture
for the purpose of conversion. All Convertible Debentures delivered for
conversion shall be delivered to the Trustee to be canceled by or at the
discretion of the Trustee, which shall dispose of the same as provided in
Section 2.12 of this Indenture.
Section 12.9 Reservation of Shares of Common Shares. The Company shall
at all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Shares or treasury shares, for the purpose of
effecting the conversion of Convertible Debentures, the full number of Common
Shares of the Company then issuable upon the conversion of all outstanding
Convertible Debentures.
Section 12.10 Payment of Certain Taxes upon Conversion. The Company
will pay any and all taxes that may be payable in respect of the issue or
delivery of its Common Shares on conversion of Convertible Debentures pursuant
hereto. The Company shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the issue and delivery of its
Common Shares in a name other than that of the Holder of the Convertible
Debenture or Convertible Debentures to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
Section 12.11 Nonassessability. The Company covenants that all Common
Shares which may be issued upon conversion of Convertible Debentures will upon
issue in accordance with the terms hereof be duly and validly issued and fully
paid and nonassessable.
ARTICLE XIII
SUBORDINATION OF CONVERTIBLE DEBENTURES
Section 13.1 Convertible Debentures Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Convertible Debenture, by
the Holder's acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the indebtedness
represented by the Convertible Debentures and the payment of the principal of
(and premium, if any) and interest on each and
727411.13
45
all of the Convertible Debentures are hereby expressly made subordinate and
junior in right of payment to the prior payment in full of all Senior
Indebtedness of the Company, whether outstanding at the date of this Indenture
or thereafter incurred. No provision of this Article shall prevent the
occurrence of any default or Event of Default hereunder.
Section 13.2 Payment Over of Proceeds upon Dissolution, Etc. In the
event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Company, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Company voluntarily or
involuntarily, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Company for the benefit of creditors or (iv) any
other marshalling of assets of the Company, all amounts due upon all Senior
Indebtedness of the Company (including any interest thereon accruing after the
commencement of such proceedings) shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Company on account of the principal (and premium, if any) or
interest on the Convertible Debentures; and any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Convertible Debentures or
the Trustee would be entitled to receive from the Company, except for the
provisions of this Article, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, or by the Holders of the Convertible Debentures or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness
(including any interest thereon accruing after the commencement of such
proceedings) in full, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of the Convertible Debentures or
to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment, such payment or distribution shall be held
in trust for the benefit of and shall be paid over or delivered to the holders
of such Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, and their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company, as the case may be, remaining
unpaid to the extent necessary to pay such Senior Indebtedness in full, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares of Capital Stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which are
subordinated in right of payment to all Senior Indebtedness which may at the
time be outstanding to substantially the same extent as, or to a greater extent
than, the Convertible Debentures are so subordinated as provided in this
Article. The consolidation of the Company with, or the merger of the Company
into, another Person or the liquidation or dissolution of the Company following
the conveyance or transfer of its properties and assets substantially as an
entirety to another Person upon the terms and conditions set forth in Article IX
of this Indenture shall not be deemed a dissolution, winding up, liquidation,
reorganization, readjustment, composition, assignment for the benefit of
creditors or marshalling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance or
transfer such properties and assets substantially as an entirety, as the case
may be, shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions set forth in Article IX of this Indenture.
Section 13.3 Prior Payment to Senior Indebtedness upon Acceleration of
Convertible Debentures. In the event that any Convertible Debentures are
declared due and payable before their Stated Maturity, then and in such event
the holders of Senior Indebtedness shall be entitled to receive payment in full
of all amounts due or to become due on or in respect of all Senior Indebtedness
or provision shall be made for such payment in cash, before
727411.13
46
the Holders of the Convertible Debentures are entitled to receive any payment
(including any payment which may be payable by reason of the payment of any
other indebtedness of the Company being subordinated to the payment of the
Convertible Debentures) by the Company on account of the principal of (or
premium, if any) or interest on the Convertible Debentures or on account of the
purchase or other acquisition of Convertible Debentures.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Convertible Debenture
prohibited by the foregoing provisions of this Section, and if such fact shall,
at or prior to the time of such payment, have been made known to the Trustee or,
as the case may be, such Holder, then and in such event such payment shall be
paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.2 would be applicable.
Section 13.4 No Payment When Senior Indebtedness in Default. In the
event and during the continuation of any default by the Company in the payment
of principal, premium, if any, interest or any other payment due on any Senior
Indebtedness of the Company, as the case may be, beyond any applicable grace
period with respect thereto, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default, then, in
any such case, no payment shall be made by the Company with respect to the
principal (including redemption payments, if any) of, premium, if any, or
interest on the Convertible Debentures until such default is cured or waived or
ceases to exist or any such acceleration or demand for payment has been
rescinded.
Section 13.5 Payment Permitted in Certain Situations. Nothing contained
in this Article or elsewhere in this Indenture or in the Convertible Debentures
shall prevent (a) the Company, at any time except during the pendency of any
dissolution, winding-up, liquidation or reorganization of the Company, whether
voluntary or involuntary or any bankruptcy, insolvency, receivership or other
proceedings of the Company referred to in Section 13.2 or under the conditions
described in Section 13.3 or 13.4, from making payments at any time of principal
of or premium, if any, or interest on the Convertible Debentures, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of, or premium, if any, or interest on
the Convertible Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have knowledge that
such payment would have been prohibited by the provisions of this Article.
Section 13.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness or the provision for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Indebtedness, the Holders of Convertible Debentures
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness pursuant to the provisions of this Article
(equally and ratably with the holders of indebtedness of the Company which by
its express terms is subordinated to indebtedness of the Company to
substantially the same extent as the Convertible Debentures are subordinated to
the Senior Indebtedness and is entitled to like rights of subrogation) to the
rights of the holders of such Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Convertible Debentures shall be paid in full. For purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holders of Convertible Debentures or
the Trustee would be entitled except for the provisions of this Article, and no
payments over pursuant to the provisions of this Article to or for the benefit
of the holders of Senior Indebtedness by Holders of Convertible Debentures or
the Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of Convertible Debentures, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
Section 13.7 Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of Convertible Debentures on the one
hand and the holders of Senior Indebtedness on the other hand. Nothing contained
in this Article or elsewhere in this Indenture or in the Convertible Debentures
is intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of Convertible Debentures,
the obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the
727411.13
47
holders of Senior Indebtedness, is intended to rank equally with all other
general obligations of the Company), to pay to the Holders of Convertible
Debentures the principal of (and premium, if any) and interest on the
Convertible Debentures as and when the same shall become due and payable in
accordance with their terms; or (b) affect the relative rights against the
Company of the Holders of Convertible Debentures and creditors of the Company,
as the case may be, other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Convertible Debenture from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness to receive cash, property and securities otherwise payable
or deliverable to the Trustee or such Holder.
Section 13.8 Trustee to Effectuate Subordination. Each Holder of a
Convertible Debenture by such Holder's acceptance thereof authorizes and directs
the Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
Section 13.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Convertible Debentures, without incurring responsibility to the Holders of
Convertible Debentures and without impairing or releasing the subordination
provided in this Article or the obligations hereunder of the Holders of
Convertible Debentures to the holders of Senior Indebtedness do any one or more
of the following (a) change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Senior Indebtedness or otherwise amend or
supplement in any manner Senior Indebtedness or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
Section 13.10 Notice to Trustee. The Company shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
which would prohibit the making of any payment to or by the Trustee in respect
of the Convertible Debentures pursuant to the provisions of this Article.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Convertible Debentures pursuant to the provisions of this
Article, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 6.2
of this Indenture, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall have not received the
notice provided for in this Section at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Convertible Debentures, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.2 of this Indenture, the Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to
727411.13
48
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
Section 13.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 6.2 of this
Indenture, and the Holders of Convertible Debentures shall be entitled to
conclusively rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Convertible Debentures, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
Section 13.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of such Senior Indebtedness shall be read into this
Indenture against the Trustee. Except with respect to Section 13.4, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders or creditors if it
shall in good faith pay over or distribute to Holders of Convertible Debentures
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.
Section 13.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article XIII shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7 of this Indenture.
Section 13.14 Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 13.13 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
Section 13.15 Certain Conversions Deemed Payment. For purposes of this
Article only, (a) the issuance and delivery of junior securities (or cash paid
in lieu of fractional shares) upon conversion of Convertible Debentures in
accordance with Article XII shall not be deemed to constitute a payment or
distribution on account of the principal of or premium or interest on
Convertible Debentures or on account of the purchase or other acquisition of
Convertible Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities and cash paid in lieu of
fractional shares) upon conversion of a Convertible Debenture shall be deemed to
constitute payment on account of the principal of such Convertible Debenture.
For the purposes of this Section, the term "junior securities" means (i) shares
of any Capital Stock of any class of the Company and (ii) securities of the
Company which are subordinated in right of payment to all Senior Indebtedness
which may be outstanding at the time of issuance or delivery of such securities
to substantially the same extent as, or to a greater extent than, the
Convertible Debentures are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Indenture or in the Convertible
Debentures is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Indebtedness and the Holders of Convertible
Debentures, the right, which is absolute and unconditional, of the Holder of any
Convertible Debenture to convert such Convertible Debenture in accordance with
Article XII.
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ARTICLE XIV
EXPENSES
Section 14.1 Payment of Expenses. In connection with the offering, sale
and issuance of the Convertible Debentures to the Institutional Trustee and in
connection with the sale of the Trust Securities by the Trust, the Company, in
its capacity as borrower with respect to the Convertible Debentures, shall:
(a) pay all costs and expenses of the Trust (including, but
not limited to, costs and expenses relating to the organization of the
Trust, the fees and expenses of the Institutional Trustee and the
Delaware Trustee, the costs and expenses relating to the operation of
the Trust, including without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses
for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel
and telephone and other telecommunications expenses and costs and
expenses incurred in connection with the acquisition, financing, and
disposition of Trust assets);
(b) pay all costs and expenses related to the enforcement by
the Institutional Trustee of the rights of the holders of the Trust
Securities;
(c) be primarily liable for any indemnification obligations
arising with respect to the Declaration; and
(d) pay any and all taxes (other than United States
withholding taxes attributable to the Trust or its assets) and all
liabilities, costs and expenses with respect to such taxes of the
Trust.
Section 14.2 Payment Upon Resignation or Removal. Upon termination of
this Indenture or the removal or resignation of the Trustee pursuant to Section
6.8 of this Indenture, the Company shall pay to the Trustee all amounts accrued
to the date of such termination, removal or resignation. Upon termination of the
Declaration or the removal or resignation of the Delaware Trustee or the
Institutional Trustee, as the case may be, pursuant to Section 5.6 of the
Declaration, the Company shall pay to the Delaware Trustee or the Institutional
Trustee, and their respective counsel, as the case may be, all amounts accrued
to the date of such termination, removal or resignation.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Incorporators, Stockholders, Officers and Trustees of
Company Exempt from Individual Liability. No recourse under or upon any
obligations, covenant or agreement contained in this Indenture, in any
Convertible Debenture, or because of any indebtedness evidenced thereby, shall
be had against any incorporator, as such or against any past, present or future
shareholder, officer or director, trustee, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Convertible Debentures by the Holders thereof and as part of the consideration
of the issue of the Convertible Debentures.
Section 15.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Convertible Debentures. Nothing in this Indenture or in the
Convertible Debentures, expressed or implied, shall give or be construed to give
to any Person, firm or corporation, other than the parties hereto, any Paying
Agent and their successors hereunder, the holders of Senior Indebtedness, the
holders of Convertible Preferred Securities (to the extent provided herein) and
the Holders of the Convertible Debentures any legal or equitable right, remedy
or claim under this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and their successors and of the Holders of the Convertible
Debentures.
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Section 15.3 Right to Assign; Successors and Assigns Bound by
Indenture. The Company shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly-owned Subsidiary of the Company, other than an entity which will be taxed
as a partnership for federal income tax purposes; provided that, in the event of
any such assignment, the Company shall remain liable for all of its obligations
under this Indenture. Subject to the foregoing, this Indenture will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. The rights and obligations of the parties under this
Indenture may not otherwise be assigned by such parties.
All the covenants, stipulations, promises and agreements in this
Indenture by the parties hereto shall bind their respective successors and
assigns, whether so expressed or not.
Section 15.4 Notices and Demands on Company, Trustee and Holders of
Convertible Debentures. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Convertible Debentures to or on the Company may be given or
served by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Company is
filed by the Company with the Trustee) to Capital Trust, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: Chief Financial Officer. Any
notice, direction, request or demand by the Company or any Holder of Convertible
Debentures to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders of Convertible
Debentures of any event such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed by first-class
mail, postage prepaid to such Holders as their names and addresses appear in the
Convertible Debenture register within the time prescribed. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver. In
any case where notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, shall affect the
sufficiency of such notice, and any notice which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Company and
Holders of Convertible Debentures when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be reasonably acceptable to the Trustee shall be deemed to be a
sufficient giving of such notice.
Section 15.5 Officers' Certificates and Opinions of Counsel; Statements
to Be Contained Therein. Upon any application or demand by the Company to the
Trustee to take action under any of the provisions 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 demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition and the
definitions herein relating thereto, (b) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based, (c) a statement that, in the
opinion of such person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with and (d) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with.
Any certificate, statement or opinion of any officer of the Company may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the
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51
certificate or opinion or representations with respect to the matters upon which
his certificate, statement or opinion may be based as aforesaid are erroneous,
or in the exercise of reasonable care should know that the same are erroneous.
Any certificate, statement or opinion of counsel may be based, insofar as it
relates to factual matters or information with respect to which is in the
possession of the Company, upon the certificate, statement or opinion of or
representations by an officer or officers of the Company, unless such counsel
knows that the certificate, statement or opinion or representations with respect
to the matters upon which his certificate, statement or opinion may be based as
aforesaid are erroneous, or in the exercise of reasonable care should know that
the same are erroneous.
Any certificate, statement or opinion of an officer of the Company or
of counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
Section 15.6 Payments Due on Saturdays, Sundays and Holidays. Except as
otherwise provided in Section 2.5, if the date of Maturity of interest on or
principal of the Convertible Debentures or the date fixed for redemption or
repayment of any such Convertible Debenture shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day; provided that if such next succeeding
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the date of Maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
Section 15.7 Conflict of Any Provision of Indenture with Trust
Indenture Act. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required by the Trust Indenture Act, such required provision shall control.
Section 15.8 New York Law to Govern. THIS INDENTURE AND THE CONVERTIBLE
DEBENTURES SHALL BE DEEMED TO BE CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN
THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW
RULES OF SAID STATE.
Section 15.9 Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 15.10 Effect of Headings; Gender. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof. The use of the masculine, feminine or neuter
gender herein shall not limit in any way the applicability of any term or
provision hereof.
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52
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereto affixed and
attested, all as of the day and year first above written.
CAPITAL TRUST
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chief Executive Officer
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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53
SCHEDULE 2.5(a)
The following table lists the Coupon Rate in effect for the Convertible
Debentures for the periods specified from the Issuance Date through the Maturity
Date.
Period Coupon Rate
------ -----------
July 28, 1998 through September 30, 2004 8.25%
October 1, 2004 through September 30, 2005 9.00%
October 1, 2005 through September 30, 2006 9.75%
October 1, 2006 through September 30, 2007 10.50%
October 1, 2007 through September 30, 2008 11.25%
October 1, 2008 through September 30, 2009 12.00%
October 1, 2009 through September 30, 2010 12.75%
October 1, 2010 through September 30, 2011 13.50%
October 1, 2011 through September 30, 2012 14.25%
October 1, 2012 through September 30, 2013 15.00%
October 1, 2013 through September 30, 2014 15.75%
October 1, 2014 through September 30, 2015 16.50%
October 1, 2015 through September 30, 2016 17.25%
October 1, 2016 through September 30, 2017 18.00%
October 1, 2017 through Maturity Date 18.75%
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EXHIBIT A
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
No. __________ CUSIP NO. __________
CAPITAL TRUST
8.25% STEP UP CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING A
CONVERTIBLE DEBENTURE SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM,
UNLESS OTHERWISE AGREED BY THE COMPANY (WITH WRITTEN NOTICE THEREOF TO THE
TRUSTEE): THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR, IF THIS SECURITY IS
CONVERTIBLE INTO COMMON SHARES, THE COMMON SHARES ISSUABLE UPON CONVERSION OR
EXCHANGE OF THIS SECURITY EXCEPT (A) TO CT CAPITAL TRUST (THE "COMPANY") OR ANY
SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON SHARES, THE TRANSFER AGENT FOR THE COMMON
SHARES), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON SHARES, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY OR CT CONVERTIBLE TRUST I (THE "TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON SHARES AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE
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HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUST
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO
AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
NO LATER THAN 10 DAYS AFTER THE ISSUE DATE OF THE CONVERTIBLE DEBENTURES,
INFORMATION CONCERNING THE ISSUE PRICE, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT,
THE ISSUE DATE, AND THE YIELD TO MATURITY OF THE CONVERTIBLE DEBENTURES MAY BE
OBTAINED FROM THE CHIEF FINANCIAL OFFICER OF CAPITAL TRUST AT ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
Capital Trust, a California business trust (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, Wilmington Trust Company, as
Institutional Trustee (the "Institutional Trustee") for CT Convertible Trust I
or registered assigns, the principal sum of One Hundred Fifty Four Million Six
Hundred Fifty Thousand Dollars ($154,650,000) on September 30, 2018 and to pay
interest on said principal sum from July 28, 1998 (the "Issuance Date"), or from
the most recent interest payment date to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears on
March 31, June 30, September 30, and December 31 (each such date, an "Interest
Payment Date") of each year commencing September 30, 1998, at the rate of 8.25%
per annum from and including the Issuance Date to and including September 30,
2004, such rate of interest per annum automatically increasing by an additional
.75% per annum (any such increase shall be cumulative with any such prior
increase(s)) on October 1, 2004 and again on each subsequent October 1, until
the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any period shorter than a full quarterly period for which interest is
computed, will be computed on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on this
Convertible Debenture is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof) be paid
to the person in whose name this Convertible Debenture (or one or more
Predecessor Convertible Debentures, as defined in said Indenture) is registered
on the record date for such interest installment, which shall be the close of
business on the fifteenth day prior to such Interest Payment Date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be payable to the registered Holders on such record date and may be
paid to the Person in whose name this Convertible Debenture (or one or more
Predecessor Convertible Debentures) is registered at the close of business on a
special record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders of the
Convertible Debentures 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 Convertible Debentures may
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and the
interest on this Convertible Debenture shall be payable at the office or agency
of the Trustee maintained for that purpose in any coin or currency of the United
States of America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered Holder at
such address as shall appear in the Security Register. Notwithstanding the
foregoing, so long as the Holder of this Convertible Debenture is the
Institutional Trustee, the
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payment of the principal of (and premium, if any) and interest on this
Convertible Debenture will be made at such place and to such account as may be
designated by the Institutional Trustee.
If the Company pays any Common Dividend during any quarter ending on an
interest payment date, the Coupon Rate in effect for such quarter shall
automatically increase by the Common Rate. For purposes of this provision, the
following terms have the following meanings:
(i) "Common Dividend" means any cash dividend or distribution payable
on the Common Shares of the Company.
(ii) "Common Rate" means, for any quarter, the fraction, expressed as a
percentage rate per annum, the numerator of which is the aggregate dollar
amount of Common Dividend paid on one common share during such quarter and
the denominator of which is $9.00, (subject to adjustment in proportion to
each adjustment to the conversion price triggered by events occurring prior
to such quarter).
The indebtedness evidenced by this Convertible Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Convertible Debenture
is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Convertible Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
This Convertible Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
Capitalized terms used but not defined herein shall have the meaning given
them in the Indenture.
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727411.13
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
CAPITAL TRUST
By:
-------------------------------
Name:
Title:
Attest:
By:
------------------
Name:
Title:
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727411.13
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures described in the within-mentioned
Indenture.
Dated: July 28, 1998
WILMINGTON TRUST COMPANY,
as Trustee
By: ________________________________
Authorized Signatory
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727411.13
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of the 8.25% Step Up Convertible Junior
Subordinated Debentures (herein referred to as the "Convertible Debentures"),
all issued or to be issued under and pursuant to an Indenture dated as of July
28, 1998, duly executed and delivered between the Company and Wilmington Trust
Company, as Trustee (the "Trustee") (the "Indenture"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Convertible
Debentures. The Convertible Debentures are limited in aggregate principal amount
as specified in the Indenture.
Because of the occurrence and continuation of a Tax Event, in certain
circumstances, this Convertible Debenture may become due and payable at the
principal amount specified on the face hereof together with any interest accrued
thereon (the "Redemption Price"). If a redemption occurs on or before September
30, 2003, the Company shall pay to the Holders of the Convertible Debentures an
Adjusted Redemption Price specified in the Indenture. The Redemption Price or
Adjusted Redemption Price, as the case may be, shall be paid prior to 12:00
noon, New York City time, on the date of such redemption or at such earlier time
as the Company determines. The Company shall have the right to redeem this
Convertible Debenture at the option of the Company, upon not less than 30 nor
more than 60 days notice, without premium or penalty, in whole or in part at any
time on or after September 30, 2003 (an "Optional Redemption") at a price equal
to 100% of the principal amount of the Convertible Debentures (the "Optional
Redemption Price") together with accrued and unpaid interest (including
Additional Sums, if any, and, to the extent permitted by applicable law,
Compound Interest, if any) to, but excluding, the redemption date.
If Convertible Debentures are redeemed on any March 31, June 30, September
30, or December 31, accrued and unpaid interest shall be payable to holders of
record on the relevant record date.
So long as the corresponding Trust Securities are outstanding, the proceeds
from the redemption of any of the Convertible Debentures will be used to redeem
Trust Securities.
If the Convertible Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Convertible Debentures will be redeemed
pro rata.
In the event of redemption of this Convertible Debenture in part only, a
new Convertible Debenture or Convertible Debentures for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
and the interest accrued thereon may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of a majority of the aggregate principal amount
of the Convertible Debentures at the time Outstanding, evidenced as provided in
the Indenture, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Convertible Debentures; provided, however, that no such
supplemental indenture shall (i) extend the Stated Maturity of any Convertible
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable upon redemption thereof, or impair or affect the right of any
Holder to institute suit for the payment thereof, without the consent of the
Holder of each Convertible Debenture so affected, or (ii) reduce the aforesaid
percentage of Convertible Debentures, the Holders of which are required to
consent to any such supplemental indenture, without the consent of the Holder of
each Convertible Debenture. It is also provided in the Indenture that, with
respect to certain defaults or Events of Default regarding the Convertible
Debentures, prior to any declaration accelerating the maturity of such
Convertible Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Convertible Debentures (or, in the case of certain defaults
or Events of Default, all of the Convertible Debentures), may on behalf of the
Holders of all the Convertible Debentures waive any such past default or Event
of Default and its consequences. The preceding sentence shall not, however,
apply to a default in the payment of the principal of or premium, if any, or
interest on any of the Convertible Debentures. Any such consent or waiver by the
Holder of this Convertible
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Debenture (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such Holder and upon all future Holders and owners of this
Convertible Debenture and any Convertible Debenture which may be issued in
exchange or substitution therefor, irrespective of whether or not any notation
thereof is made upon this Convertible Debenture or such other Convertible
Debenture.
No reference herein to the Indenture and no provision of this Convertible
Debenture 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 Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
As long as an Event of Default under Section 5.1(a) of the Indenture shall
not have occurred and be continuing, the Company shall have the right at any
time during the term of the Convertible Debentures and from time to time to
extend the interest payment period of such Convertible Debentures for up to 20
consecutive quarters (an "Extension Period"), at the end of which period the
Company shall pay all interest then accrued and unpaid (together with interest
thereon at the rate specified for the Convertible Debentures to the extent that
payment of such interest is enforceable under applicable law). Before the
termination of any such Extension Period, the Company may further extend such
Extension Period, provided that such Extension Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence a
new Extension Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Convertible Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Convertible Debentures of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Convertible
Debenture, the Company, the Trustee, any paying agent and the Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Convertible Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, shareholder, officer or director, trustee, past, present or
future, as such, of the Company or of any predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released.
The Holder of any Convertible Debenture has the right, exercisable at any
time through the close of business (New York time) on the last Business Day
prior to the Maturity Date (or, in the case of a Convertible Debenture called
for redemption, prior to the close of business on the Business Day prior to the
corresponding redemption date), to convert the principal amount thereof (or any
portion thereof that is an integral multiple of $1,000) into Common Shares at
the initial conversion rate of 85.47 Common Shares for each Convertible
Debenture (equivalent to a Conversion Price of $11.70 per Common Share), subject
to adjustment under certain circumstances. At least $1,000,000 of the principal
amount, or the entire amount principle amount, if less than $1,000,000, of the
Convertible Debentures held by the converting Holder must be converted in
connection with any conversion into Common Shares pursuant to the foregoing.
To convert a Convertible Debenture, a Holder must (a) complete and sign a
conversion notice substantially in the form attached hereto, (b) surrender the
Convertible Debenture to a Conversion Agent, (c) furnish appropriate
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endorsements or transfer documents if required by the Conversion Agent and (d)
pay any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Convertible Debenture for conversion on or after the record date for the payment
of an installment of interest and prior to the opening of business on the next
Interest Payment Date, then, notwithstanding such conversion, the interest
payable on such Interest Payment Date will be paid to the registered Holder of
such Convertible Debenture on such record date. In such event, such Convertible
Debenture, when surrendered for conversion, need not be accompanied by payment
of an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. However, if a redemption date falls between a record date
and the subsequent Interest Payment Date, the Holder will be entitled to
receive, on such redemption date, the interest accrued to, but excluding, the
redemption date. The number of shares issuable upon conversion of a Convertible
Debenture is determined by dividing the principal amount of the Convertible
Debenture converted by the Conversion Price in effect on the Conversion Date. No
fractional shares will be issued upon conversion but a cash adjustment will be
made for any fractional interest. The outstanding principal amount of any
Convertible Debenture shall be reduced by the portion of the principal amount
thereof converted into Common Shares.
The Convertible Debentures are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Convertible Debentures are exchangeable for a like aggregate principal amount of
Convertible Debentures of a different authorized denomination, as requested by
the Holder surrendering the same.
THE INDENTURE AND THE CONVERTIBLE DEBENTURES SHALL BE DEEMED TO BE
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SAID STATE.
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[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: Capital Trust
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into Common Shares of CAPITAL TRUST in accordance with the terms of
the Indenture referred to in this Convertible Debenture, and directs that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.
Date: _______________, ____
in whole _____ Portions of Convertible Debenture to be converted
($1,000 or integral multiples-thereof):$____________
----------------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
Signature Guarantee:1 _______________________________
--------
1 Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Conversion Agent in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
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ASSIGNMENT
[FORM OF ASSIGNMENT FOR CONVERTIBLE DEBENTURES]
For value received__________________________ hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Convertible Debenture and hereby irrevocably constitutes and appoints
_______ attorney to transfer the said Convertible Debenture on the books of the
Company, with full power of substitution in the premises.
In connection with any transfer of the within Convertible Debenture occurring
prior to the Transfer Restriction Termination Date, the undersigned confirms
that such Convertible Debenture is being transferred:
/ / To Capital Trust or a subsidiary thereof; or
/ / Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
/ / To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
/ / Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
/ / Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended; or
/ / Pursuant to an effective registration statement.
and unless the box below is checked, the undersigned confirms that such
Convertible Debenture is not being transferred to an "affiliate" of the Company
as defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate"):
/ / The transferee is an Affiliate of the Company.
Dated: _____________________________
----------------------------------------
----------------------------------------
Signature(s)
-------------------------------------
Signature Guarantee2
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Convertible Debenture in every particular
without alteration or enlargement or any change whatever.
--------
2 (Signature must be guaranteed by an "eligible guarantor institution," that
is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include
membership or participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee program" as may be
determined by the Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.)
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EXHIBIT B
Wilmington Trust Company
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Attention: Corporate Trust Administration
Ladies and Gentleman:
Pursuant to Section 11.1 of the Indenture, dated as of July 28, 1998
between Capital Trust, a California business trust (the"Company") and Wilmington
Trust Company, (the "Trustee"), the Company has elected to defer payments of
interest by extending the interest payment period of such Convertible Debentures
(as defined in the Indenture) for the fiscal quarter ended [ ]. This will serve
to certify that the Company's election to defer such interest payments resulted
from a business judgment that the Company does not, and is not expected during
the period of extension to have or generate from ordinary operations the cash
resources, nor have the ability to borrow on favorable terms the necessary funds
in order to fund the payment of the deferred interest after due and good faith
consideration to the Company's financial condition and anticipated cash
requirements.
Sincerely yours,
[Chief Financial Officer] [Treasurer]
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