Exhibit 4(a)
, dated as of February 25, 1998 (this "Agreement"),
between Washington Real Estate Investment Trust, a Maryland real estate
investment trust (the "Company"), and Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx" and, in its capacity as the remarketing dealer
hereunder, the "Remarketing Dealer").
WHEREAS, the Company has issued $60,000,000 aggregate principal amount
of its 6.898% MandatOry Par Put Remarketed Securities-SM- due February 25,
2018 (the "MOPPRS-SM-"), pursuant to an indenture, dated as of August 1, 1996
(the "Indenture"), between the Company and The First National Bank of
Chicago, as trustee (the "Indenture Trustee"); and
WHEREAS, the MOPPRS are being sold initially pursuant to a distribution
agreement, dated January 16, 1998 (the "Distribution Agreement"), between the
Company and Xxxxxxx Xxxxx; and
WHEREAS, the Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-23157) under the Securities Act of 1933, as amended (the "1933 Act"), in
connection with the offering of debt securities, including the MOPPRS, which
registration statement was declared effective by order of the Commission on
March 19, 1997, and has filed such amendments thereto and such amended
prospectuses as may have been required to the date hereof, and will file such
additional amendments thereto and such additional amended prospectuses as may
hereafter be required; and
WHEREAS, Xxxxxxx Xxxxx is prepared to act as the Remarketing Dealer with
respect to the remarketing of the MOPPRS on February 25, 2008 (the
"Remarketing Date") pursuant to the terms of, but subject to the conditions
set forth in, this Agreement;
NOW, THEREFORE, for and in consideration of the covenants herein made,
and subject to the conditions herein set forth, the parties hereto agree as
follows:
Section 1. Definitions. Capitalized terms used and not defined in this
Agreement shall have the meanings assigned to them in the Indenture
(including the form of the MOPPRS).
Section 2. Representations and Warranties. (a) The Company represents
and warrants to the Remarketing Dealer as of the date hereof, the
Notification Date (as defined below), the Determination Date (as defined
below) and the Remarketing Date (each such date being hereinafter referred to
as a "Representation Date"), that (i) it has made all the filings with the
Commission that it is required to make under the Securities Exchange Act of
1934, as amended (the "1934 Act"), and the rules and regulations thereunder
(the "1934 Act Regulations") (collectively, the "1934 Act Documents"), (ii)
each 1934 Act Document complies in all material
respects with the requirements of the 1934 Act and 1934 Act Regulations, and
each 1934 Act Document did not at the time of filing with the Commission, and
as of each Representation Date, as modified or superseded by any subsequently
filed 1934 Act Document on or prior to such Representation Date, will not,
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and (iii) the applicable Remarketing Materials (as
defined herein), as of each Representation Date after the date hereof, as
modified or superseded by any subsequently filed 1934 Act Document on or
prior to such Representation Date (or, if applicable, by any document filed
pursuant to the 1933 Act and the rules and regulations thereunder (the "1933
Act Regulations")), will not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(b) The Company further represents and warrants to the Remarketing
Dealer as of each Representation Date as follows:
(i) The accountants who certified the financial statements and
supporting schedules thereto included or incorporated by reference in the
1934 Act Documents are independent public accountants as required by the
1933 Act and the 1933 Act Regulations.
(ii) The financial statements of the Company included or
incorporated by reference in the 1934 Act Documents, together with the
related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated,
and the statement of operations, shareholders' equity and cash flows of
the Company and its consolidated subsidiaries for the periods specified.
Such financial statements have been prepared in conformity with
generally accepted accounting principles ("GAAP") applied on a
consistent basis throughout the periods involved. The supporting
schedules, if any, included or incorporated by reference in the 1934 Act
Documents present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included or incorporated by reference in
the 1934 Act Documents present fairly the information shown therein and
have been compiled on a basis consistent with that of the audited
financial statements included or incorporated by reference in the 1934
Act Documents. Any historical summaries of revenue and certain
operating expenses included or incorporated by reference in the 1934 Act
Documents present fairly the revenue and those operating expenses
included in such summaries of the properties related thereto for the
periods specified in conformity with GAAP. In addition, any pro forma
financial statements of the Company and its subsidiaries and the related
notes thereto included or incorporated by reference in the 1934 Act
Documents present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been
2
properly compiled on the bases described therein, and the assumptions used
in the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(iii) Since the respective dates as of which information is given
in the 1934 Act Documents, except as otherwise stated therein, (A) there
has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those arising in the
ordinary course of business, that are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C)
except for regular dividends on the Company's common shares of
beneficial interest, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(iv) The Company has been duly organized and is validly existing as
a real estate investment trust of unlimited duration with transferable
shares of beneficial interest in good standing under the laws of the
State of Maryland, with full power and authority to own, lease and
operate its properties and to conduct its business as described in the
1934 Act Documents and to enter into and perform its obligations under
this Agreement; the Company is duly qualified to transact business and
is in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or be in
good standing would not result in a Material Adverse Effect; all of the
issued and outstanding shares of beneficial interest of the Company have
been duly authorized and are validly issued, fully paid and
non-assessable; and none of the outstanding shares of beneficial
interest of the Company were issued in violation of preemptive or other
similar rights of any securityholder of the Company.
(v) Each "significant subsidiary" of the Company (as such term is
defined in Rule 1-02 of Regulation S-X promulgated under the 1933 Act)
(each a "Subsidiary" and, collectively, the "Subsidiaries") (which term
includes corporations, limited and general partnerships, joint ventures
and other entities, and includes direct and indirect subsidiaries) has
been duly organized and is validly existing as a corporation or
partnership, as the case may be, in good standing under the laws of the
jurisdiction of its organization, has power and authority to own, lease
and operate its properties and to conduct its business as described in
the 1934 Act Documents and is duly qualified to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure so to qualify or be in
good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the 1934 Act Documents, all of the issued and
outstanding capital stock or other ownership interests of each
Subsidiary
3
has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of any Subsidiary was issued in violation of preemptive or
similar rights of any securityholder of such Subsidiary.
(vi) This Agreement has been duly authorized, executed and delivered
by the Company.
(vii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act of 1939, as amended (the "1939 Act"), and is a valid and legally
binding agreement of the Company, enforceable against the Company in
accordance with its terms, except as the enforcement thereof may be
limited by (1) bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally,
(2) general equitable principles (regardless of whether enforcement is
considered in a proceeding in equity or at law), (3) requirements that a
claim with respect to any debt securities issued under the Indenture
that are payable in a foreign currency or composite currency (or a
foreign or composite currency judgment in respect of such claim) be
converted into U.S. dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (4) governmental authority to
limit, delay or prohibit the making of payments outside the United
States.
(viii) The MOPPRS have been duly authorized and executed by the
Company and authenticated, issued and delivered in the manner provided
for in the Indenture and delivered against payment of the consideration
therefor as provided in the Distribution Agreement, and constitute valid
and legally binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the enforcement
thereof may be limited by (1) bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and (2) general equitable principles (regardless of
whether enforcement is considered in a proceeding in equity or at law);
the MOPPRS are in the form contemplated by the Indenture; each Holders
of MOPPRS is entitled to the benefits of the Indenture.
(ix) Neither the Company nor any of its subsidiaries is in
violation of its declaration of trust, partnership agreement, charter,
by-laws or other organizational document or in default in the
performance or observance of any obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument
to which the Company or any of its subsidiaries is a party or by which
it or any of them may be bound, or to which any property or assets of
the Company or any of its subsidiary is subject (collectively,
"Agreement and Instruments"), except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and
performance of this Agreement, the Indenture and the MOPPRS, the
consummation of the transactions
4
contemplated herein and in the registration statement relating to the
initial issuance of the MOPPRS (including the issuance and sale of the
MOPPRS and the use of the proceeds from the sale of the MOPPRS as
described in the prospectus relating to the initial issuance of the
MOPPRS under the caption "Use of Proceeds") and the compliance by the
Company with its obligations hereunder and under the Indenture and the
MOPPRS have been duly authorized by all necessary action on the part of
the Company and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any assets, properties or operations of the Company or any of its
subsidiaries pursuant to, the Agreements and Instruments (except for
such conflicts, breaches, defaults, events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the
declaration of trust, partnership agreement, charter, by-laws or other
organizational documents of the Company or any of its subsidiaries or
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition that gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
(x) There is no action, suit, proceeding, inquiry or investigation
before or brought by any court or governmental agency or body, domestic
or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its subsidiaries,
that is required to be disclosed in the 1934 Act Documents (other than
as disclosed therein), or that might reasonably be expected to result in
a Material Adverse Effect, or that might reasonably be expected to
materially and adversely affect the assets, properties or operations
thereof or the consummation of the transactions contemplated in this
Agreement or the performance by the Company of its obligations under
this Agreement, the Indenture and the MOPPRS. The aggregate of all
pending legal or governmental proceedings to which the Company or any of
its subsidiaries is a party or of which any of their respective assets,
properties or operations is the subject that are not described in the
1934 Act Documents, including ordinary routine litigation incidental to
the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xi) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the performance by the
Company of its obligations under this Agreement, the Indenture and the
MOPPRS, or in connection with the remarketing of the
5
MOPPRS hereunder or the consummation of the transactions contemplated by
this Agreement has been obtained or made and is in full force and effect.
(xii) The Company and its subsidiaries hold all licenses,
certificates and permits from governmental authorities that are
necessary to the conduct of their business the absence of which would
result in a Material Adverse Effect; and neither the Company nor any of
its subsidiaries has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement would result in a Material
Adverse Effect.
(xiii) The Company is not an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended.
(xiv) The MOPPRS are rated Baa1 by Xxxxx'x Investors Service, Inc.
and A- by Standard & Poor's Ratings Service, or such other rating as to
which the Company shall have most recently notified the Remarketing
Dealer pursuant to Section 3(a) hereof.
(xv) With respect to all tax periods regarding which the Internal
Revenue Service is or will be entitled to assert any claim, the Company
has met the requirements for qualification as a real estate investment
trust under Sections 856 through 860 of the Internal Revenue Code, as
amended, and the Company's present and contemplated operations, assets
and income continue to meet such requirements.
(xvi) The Company and its subsidiaries have good and marketable
title to, or valid and enforceable leasehold estates in, all items of
real and personal property referred to in the 1934 Act Documents as
owned or leased by them, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other than those
referred to in the 1934 Act Documents or those that are not material in
amount. The Company has no reason to believe that the lessee under any
lease (excluding leases for which rent payments due for the remainder of
such lease are less than $500,000) calling for annual lease payments in
excess of $500,000 is not financially capable of performing its
obligations thereunder.
(xvii) The Company and its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and
in such amounts as are prudent and customary in the businesses in which
they are engaged; and the Company has no reason to believe that it or
any of its subsidiaries will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage
from similar insurers as may be necessary to continue its business at a
cost that would not have a Material Adverse Effect; and the Company and
each of its subsidiaries has obtained title insurance on all of the
properties owned by each of them in an amount at least equal to the
original purchase price to acquire land and improvements and such title
insurance is in full force and effect.
6
(xviii) The Company has filed all federal, state and foreign income
tax returns that have been required to be filed and has paid all taxes
indicated by said returns and all assessments received by it to the
extent that such taxes have become due.
(xix) The Company has no knowledge of (a) the unlawful presence of
any hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, "Hazardous Materials") on any of the properties
owned by it or any of its subsidiaries, or of (b) any lawful spills,
releases, discharges or disposal of Hazardous Materials that have
occurred or are presently occurring off such properties as a result of
any construction on or operation and use of such properties, which
presence or occurrence, singly or in the aggregate, would result in a
Material Adverse Effect. In connection with the construction on or
operation and the use of the properties owned by the Company and its
subsidiaries, the Company has no knowledge of any failure to comply with
all applicable local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to the
generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials which failure would result in a
Material Adverse Effect.
References in the foregoing representations and warranties to the 1934
Act Documents shall be deemed to refer to the Registration Statement (as
defined in Section 3(b) below) and Prospectus (as defined in Section 3(b)
below), in each case including the documents incorporated by reference
therein, if such are required pursuant to Section 3(e) hereof.
(c) Any certificate signed by any trustee or officer of the Company and
delivered to the Remarketing Dealer or to counsel for the Remarketing Dealer
in connection with the remarketing of the MOPPRS shall be deemed a
representation and warranty by the Company to the Remarketing Dealer as to
the matters covered thereby.
Section 3. Covenants of the Company. The Company covenants with the
Remarketing Dealer as follows:
(a) The Company will provide prompt notice by telephone, confirmed in
writing (which may include facsimile or other electronic transmission), to
the Remarketing Dealer of (i) any notification or announcement by a
"nationally recognized statistical rating organization" (as defined by the
Commission for purposes of Rule 436(g)(2) under the 0000 Xxx) with regard to
the ratings of any securities of the Company, including, without limitation,
notification or announcement of a downgrade in or withdrawal of the rating of
any security of the Company or notification or announcement of the placement
of any rating of any securities of the Company under surveillance or review,
including placement on CreditWatch or on Watch List with negative
implications, or (ii) the occurrence at any time of any event set forth in
Section 8(b) of this Agreement.
(b) The Company will furnish to the Remarketing Dealer:
7
(i) if required as provided in paragraph (e) below for purposes of
the remarketing, a then currently effective registration statement under
the 1933 Act and a then current prospectus relating to the MOPPRS to be
used by the Remarketing Dealer for remarketing and resale of the MOPPRS
(such registration statement (whether consisting of the registration
statement relating to the initial issuance of the MOPPRS, or any
amendment thereto or a new registration statement) and any amendments
thereto, including any such prospectus (whether consisting of the
prospectus relating to the initial issuance of the MOPPRS or any
amendment or supplement thereto or a new prospectus) relating to the
MOPPRS constituting a part thereof, and all documents incorporated
therein by reference, as from time to time amended or supplemented
pursuant to the 1934 Act, the 1933 Act, or otherwise, are referred to
herein as the "Registration Statement" and the "Prospectus,"
respectively, except that if any revised prospectus shall be provided to
the Remarketing Dealer by the Company for use in connection with the
remarketing of the MOPPRS that differs from the Prospectus on file at
the Commission at the time the Registration Statement becomes effective,
the term "Prospectus" shall refer to such revised prospectus from and
after the time it is first provided to the Remarketing Dealer for such
use);
(ii) each 1934 Act Document filed after the date hereof; and
(iii) in connection with the remarketing of MOPPRS, such other
information as the Remarketing Dealer may reasonably request from time to
time.
The Company agrees to provide the Remarketing Dealer with as many copies
of the foregoing written materials and other Company approved information as
the Remarketing Dealer may reasonably request for use in connection with the
remarketing of MOPPRS and consents to the use thereof for such purpose.
(c) If, at any time during which the Remarketing Dealer would be
obligated to take any action under this Agreement, any event or condition
known to the Company relating to or affecting the Company, any subsidiary
thereof or the MOPPRS shall occur that could reasonably be expected to cause
any of the reports, documents, materials or information referred to in
paragraph (b) above or any document incorporated therein by reference
(collectively, the "Remarketing Materials") to contain an untrue statement of
a material fact or omit to state a material fact, the Company shall promptly
notify the Remarketing Dealer in writing of the circumstances and details of
such event or condition.
(d) So long as the MOPPRS are outstanding, the Company will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the 1934 Act Regulations.
(e) The Company will comply with the 1933 Act and the 1933 Act
Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and
the rules and regulations of the
8
Commission thereunder so as to permit the completion of the remarketing of
the MOPPRS as freely transferable securities, as contemplated in this
Agreement and in the prospectus relating to the initial issuance of the
MOPPRS. In furtherance of the foregoing, if it shall be necessary, in the
opinion of counsel for the Remarketing Dealer or for the Company to have a
Registration Statement and a Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations and the Commission's
interpretations of the 1933 Act and the 1933 Act Regulations, or if at any
time when a Prospectus is required by the 1933 Act to be delivered in
connection with remarketing and resales of the MOPPRS, any event shall occur
or condition shall exist as a result of which it is necessary, in the opinion
of counsel for the Remarketing Dealer or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company, at its expense, will promptly
(i) prepare and file with the Commission such Registration Statement and
Prospectus, or such amendment or supplement as may be necessary to correct
such statement or omission as referred to above or to make the Registration
Statement or the Prospectus comply with such requirements as referred to
above, (ii) furnish to the Remarketing Dealer such number of copies of such
Registration Statement and Prospectus or such amendment, supplement or other
document as the Remarketing Dealer may reasonably request and (iii) furnish
to the Remarketing Dealer an officers' certificate, an opinion (including a
statement as to the absence of material misstatements in or omissions from
the Registration Statement and Prospectus, as amended or supplemented) of
counsel for the Company reasonably satisfactory to the Remarketing Dealer and
a "comfort letter" from the Company's independent accountants, in each case
in form and substance reasonably satisfactory to the Remarketing Dealer, of
the same tenor as the officers' certificate, opinion and comfort letter,
respectively, delivered pursuant to the Distribution Agreement, but modified
to relate to the Registration Statement and Prospectus as amended or
supplemented to the date thereof.
(f) The Company agrees that neither it nor any of its subsidiaries or
affiliates shall defease, purchase or otherwise acquire, or enter into any
agreement to defease, purchase or otherwise acquire, any of the MOPPRS prior
to the remarketing thereof by the Remarketing Dealer, other than pursuant to
Section 4(g) or 4(h) of this Agreement.
(g) Notwithstanding any provision to the contrary set forth in the
Indenture, the Company shall (i) use its best efforts to maintain the MOPPRS
in book-entry form with The Depository Trust Company ("DTC") or any successor
thereto and to appoint a successor depositary to the extent necessary to
maintain the MOPPRS in book-entry form, and (ii) waive any discretionary
right it otherwise has under the Indenture to cause the MOPPRS to be issued
in certificated form.
(h) To the extent that a Registration Statement and a Prospectus are
required as contemplated in paragraph (e) above, the Company will comply with
covenants of the same tenor
9
as those set forth in the Distribution Agreement, but modified to relate to
the Registration Statement and Prospectus.
Section 4. Appointment and Obligations of the Remarketing Dealer. (a)
Unless this Agreement is otherwise terminated in accordance with Section 11
hereof, in accordance with the terms, but subject to the conditions, of this
Agreement, the Company hereby appoints Xxxxxxx Xxxxx, and Xxxxxxx Xxxxx
hereby accepts such appointment, as the exclusive Remarketing Dealer with
respect to $60,000,000 aggregate principal amount of MOPPRS, subject further
to repurchase of the MOPPRS in accordance with clause (g) of this section or
redemption of the MOPPRS in accordance with clause (h) of this section.
(b) It is expressly understood and agreed by the parties hereto that the
obligations of the Remarketing Dealer hereunder with respect to the MOPPRS to
be remarketed on the Remarketing Date are conditioned on (i) the issuance and
delivery of such MOPPRS pursuant to the terms and conditions of the
Distribution Agreement and (ii) the Remarketing Dealer's election on the
Notification Date to purchase the MOPPRS for remarketing on the Remarketing
Date. It is further expressly understood and agreed by and between the
parties hereto that, if the Remarketing Dealer has elected to remarket the
MOPPRS pursuant to clause (c) below, the Remarketing Dealer shall not be
obligated to set the Interest Rate to Maturity on any MOPPRS, to remarket any
MOPPRS or to perform any of the other duties set forth herein at any time
after the Notification Date that (i) any of the conditions set forth in
clause (a) of Section 8 hereof shall not have been fully and completely met
to the reasonable satisfaction of the Remarketing Dealer, or (ii) any of the
events set forth in clause (b) of Section 8 hereof shall have occurred.
(c) On a Business Day not later than five Business Days prior to the
Remarketing Date, the Remarketing Dealer shall notify the Company and the
Indenture Trustee as to whether it elects to purchase the MOPPRS on the
Remarketing Date (the "Notification Date"). If, and only if, the Remarketing
Dealer so elects, the MOPPRS shall be subject to mandatory tender to the
Remarketing Dealer for remarketing on the Remarketing Date, subject to the
conditions described herein.
(d) Subject to the Remarketing Dealer's election to remarket the MOPPRS
as provided in clause (c) above, the Interest Rate to Maturity shall be
determined by the Remarketing Dealer by 3:30 p.m., New York City time, on and
as of the third Business Day immediately preceding the Remarketing Date (the
"Determination Date") to the nearest one hundred-thousandth (0.00001) of one
percent per annum and will be equal to the sum of 5.598% (the "Base Rate")
plus the Applicable Spread (as defined below), which will be based on the
Dollar Price (as defined below) of the MOPPRS.
The "Applicable Spread" will be the lowest bid indication, expressed as
a spread (in the form of a percentage or in basis points) above the Base
Rate, obtained by the Remarketing Dealer on the Determination Date from the
bids quoted by five Reference Corporate Dealers (as defined below) for the
full aggregate principal amount of the MOPPRS at the Dollar Price, but
assuming
10
(i) an issue date equal to the Remarketing Date, with settlement on such date
without accrued interest, (ii) a maturity date equal to the Stated Maturity
Date of the MOPPRS and (iii) a stated annual interest rate, payable
semiannually on each Interest Payment Date for the MOPPRS, equal to the Base
Rate plus the spread bid by the applicable Reference Corporate Dealer. If
fewer than five Reference Corporate Dealers bid as described above, then the
Applicable Spread shall be the lowest of such bid indications obtained as
described above. The Interest Rate to Maturity announced by the Remarketing
Dealer, absent manifest error, shall be binding and conclusive upon the
Beneficial Owners and Holders of the MOPPRS, the Company and the Indenture
Trustee.
"Dollar Price" means, with respect to the MOPPRS, the present value, as
of the Remarketing Date, of the Remaining Scheduled Payments (as defined
below) discounted to the Remarketing Date, on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months), at the Treasury Rate (as
defined below).
"Reference Corporate Dealers" mean leading dealers of publicly traded
debt securities of the Company in The City of New York (which may include the
Remarketing Dealer or one of its affiliates) selected by the Remarketing
Dealer.
"Treasury Rate" means, with respect to the Remarketing Date, the rate
per annum equal to the semi-annual equivalent yield to maturity or
interpolated (on a day count basis) yield to maturity of the Comparable
Treasury Issues (as defined below), assuming a price for the Comparable
Treasury Issues (expressed as a percentage of its principal amount), equal to
the Comparable Treasury Price (as defined below) for such Remarketing Date.
"Comparable Treasury Issues" means the United States Treasury security
or securities selected by the Remarketing Dealer as having an actual or
interpolated maturity or maturities comparable to the remaining term of the
MOPPRS being remarketed.
"Comparable Treasury Price" means, with respect to the Remarketing Date,
(a) the offer prices for the Comparable Treasury Issues (expressed in each
case as a percentage of its principal amount) on the Determination Date, as
set forth on "Telerate Page 500" (or such other page as may replace Telerate
Page 500), or (b) if such page (or any successor page) is not displayed or
does not contain such offer prices on the Determination Date, (i) the average
of the Reference Treasury Dealer Quotations for the Remarketing Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations,
or (ii) if the Remarketing Dealer obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such Reference Treasury Dealer
Quotations. "Telerate Page 500" means the display designated as "Telerate
Page 500" on Dow Xxxxx Markets Limited (or such other page as may replace
Telerate Page 500 on such service) or such other service displaying the offer
prices specified in (a) above as may replace Dow Xxxxx Markets Limited.
11
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the Remarketing Date, the offer prices for the
Comparable Treasury Issues (expressed in each case as a percentage of its
principal amount) quoted to the Remarketing Dealer by such Reference Treasury
Dealer by 3:30 p.m., New York City time, on the Determination Date.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Xxxxxx Brothers Inc., Xxxxxxx Xxxxx, Xxxxxx Xxxxxxx & Co.
Incorporated and Salomon Brothers Inc and their respective successors;
provided, however, that if any of the foregoing or their affiliates shall
cease to be a primary U.S. Government securities dealer in The City of New
York (a "Primary Treasury Dealer"), the Remarketing Dealer shall substitute
therefor another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to the MOPPRS, the
remaining scheduled payments of the principal thereof and interest thereon,
calculated at the Base Rate only, that would be due after the Remarketing
Date to and including the Stated Maturity Date; provided, however, that if
the Remarketing Date is not an Interest Payment Date with respect to the
MOPPRS, the amount of the next succeeding scheduled interest payment thereon,
calculated at the Base Rate only, will be reduced by the amount of interest
accrued thereon, calculated at the Base Rate only, to the Remarketing Date.
(e) Subject to the Remarketing Dealer's election to remarket the MOPPRS
as provided in clause (c) above, the Remarketing Dealer shall notify the
Company, the Indenture Trustee and DTC by telephone, confirmed in writing
(which may include facsimile or other electronic transmission), by 4:00 p.m.,
New York City time, on the Determination Date of the Interest Rate to
Maturity applicable to the MOPPRS effective from and including the
Remarketing Date.
(f) In the event that the MOPPRS are remarketed as provided herein, the
Remarketing Dealer shall make, or cause the Indenture Trustee to make,
payment to the DTC Participant of each tendering Beneficial Owner of MOPPRS
subject to remarketing, by book entry through DTC by the close of business on
the Remarketing Date against delivery through DTC of such Beneficial Owner's
tendered MOPPRS, of 100% of the principal amount of the tendered MOPPRS that
have been purchased for remarketing by the Remarketing Dealer. The Company
shall make, or cause the Indenture Trustee to make, payment of interest to
each Beneficial Owner of MOPPRS due on the Remarketing Date by book entry
through DTC by the close of business on the Remarketing Date.
(g) Subject to Section 11(c) of this Agreement, in the event that (i)
the Remarketing Dealer for any reason does not notify the Company of the
Interest Rate to Maturity by 4:00 p.m., New York City time, on the
Determination Date, or (ii) prior to the Remarketing Date, the Remarketing
Dealer has resigned and no successor has been appointed on or before the
Determination Date, or (iii) the Remarketing Dealer has terminated this
Agreement pursuant to Section 8 or Section 11 hereof at any time after the
Remarketing Dealer elects on the Notification Date to remarket the MOPPRS, or
(iv) the Remarketing Dealer for any reason does not elect, by
12
notice to the Company and the Indenture Trustee not later than the
Notification Date, to purchase the MOPPRS for remarketing on the Remarketing
Date, or (v) the Remarketing Dealer for any reason does not purchase all
tendered MOPPRS on the Remarketing Date, the Company shall repurchase the
MOPPRS as a whole on the Remarketing Date at a price equal to 100% of the
principal amount of the MOPPRS plus all accrued and unpaid interest, if any,
on the MOPPRS to the Remarketing Date. In any such case, payment will be
made by the Company through the Indenture Trustee to the DTC Participant of
each tendering Beneficial Owner of MOPPRS, by book-entry through DTC by the
close of business on the Remarketing Date against delivery through DTC of
such Beneficial Owner's tendered MOPPRS.
(h) If the Remarketing Dealer elects to remarket the MOPPRS as provided
in clause (c) above, then not later than the Business Day immediately
preceding the Determination Date, the Company shall notify the Remarketing
Dealer and the Indenture Trustee if the Company irrevocably elects to
exercise its right to redeem the MOPPRS, in whole but not in part, from the
Remarketing Dealer on the Remarketing Date at the Optional Redemption Price.
The "Optional Redemption Price" shall be the greater of (i) 100% of the
principal amount of the MOPPRS and (ii) the sum of the present values of the
Remaining Scheduled Payments thereon, as determined by the Remarketing
Dealer, discounted to the Remarketing Date on a semiannual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate, plus
in either case accrued and unpaid interest from the Remarketing Date on the
principal amount being redeemed to the date of redemption. If the Company
elects to redeem the MOPPRS, it shall pay the redemption price therefor in
same-day funds by wire transfer to an account designated by the Remarketing
Dealer on the Remarketing Date.
(i) The Remarketing Dealer may, in accordance with the terms of the
Indenture, modify the tender and settlement procedures set forth in the
Indenture in order to facilitate the tender and settlement process.
(j) The tender and settlement procedures described above, including
provisions for payment by purchasers of MOPPRS in the remarketing or for
payment to selling Beneficial Owners of tendered MOPPRS, may be modified to
the extent required by DTC or, if agreed to by the Remarketing Dealer in
accordance with Section 8(b)(viii) of this Agreement, to the extent required
to facilitate the tender and remarketing of MOPPRS in certificated form, if
the book-entry system is no longer available for the MOPPRS at the time of
the remarketing.
Section 5. Fees and Expenses. Subject to Section 11 of this Agreement,
for its services in performing its duties set forth herein, the Remarketing
Dealer will not receive any fees or reimbursement of expenses from the
Company.
Section 6. Resignation of the Remarketing Dealer. The Remarketing
Dealer may resign and be discharged from its duties and obligations hereunder
at any time, such resignation to be effective 10 days after delivery of a
written notice to the Company and the Indenture Trustee of such resignation.
The Remarketing Dealer also may resign and be discharged from its duties and
13
obligations hereunder at any time, such resignation to be effective
immediately, upon termination of this Agreement in accordance with Section
11(b) hereof. It shall be the sole responsibility of the Company to appoint
a successor Remarketing Dealer.
Section 7. Dealing in the MOPPRS; Purchase of MOPPRS by the Company.
(a) Xxxxxxx Xxxxx, when acting as the Remarketing Dealer or in its individual
or any other capacity, may, to the extent permitted by law, buy, sell, hold
and deal in any of the MOPPRS. Xxxxxxx Xxxxx, as Holder or Beneficial Owner
of the MOPPRS, may exercise any vote or join as a Holder or Beneficial Owner,
as the case may be, in any action that any Holder or Beneficial Owner of
MOPPRS may be entitled to exercise or take pursuant to the Indenture with
like effect as if it did not act in any capacity hereunder. The Remarketing
Dealer, in its capacity either as principal or agent, may also engage in or
have an interest in any financial or other transaction with the Company as
freely as if it did not act in any capacity hereunder.
(b) The Company may purchase MOPPRS in the remarketing, provided that
the Interest Rate to Maturity established with respect to MOPPRS in the
remarketing is not different from the Interest Rate to Maturity that would
have been established if the Company had not purchased such MOPPRS.
Section 8. Conditions to Remarketing Dealer's Obligations. The
obligations of the Remarketing Dealer under this Agreement have been
undertaken in reliance on, and shall be subject to,(a) the due performance by
the Company of its obligations and agreements as set forth in this Agreement
and the accuracy of the representations and warranties in this Agreement and
any certificate delivered pursuant hereto, and (b) the further condition that
none of the following events shall have occurred at any time:
(i) the rating of any securities of the Company shall have been
down-graded or put under surveillance or review, including being put on
CreditWatch or Watch List with negative implications, or withdrawn by a
nationally recognized statistical rating organization;
(ii) without the prior written consent of the Remarketing Dealer, the
Indenture (including the MOPPRS) shall have been amended in any manner, or
otherwise contain any provision not contained therein as of the date
hereof, that in either case in the judgment of the Remarketing Dealer
materially changes the nature of the MOPPRS or the remarketing procedures
(it being understood that, notwithstanding the provisions of this clause
(ii), the Company shall not be prohibited from amending the Indenture);
(iii) trading in any securities of the Company shall have been
suspended or materially limited by the Commission or the American Stock
Exchange, or if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market shall have been
suspended or materially limited, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices shall
14
have been required, by any of said exchanges or by such system or by
order of the Commission, the National Association of Securities Dealers,
Inc. or any other governmental authority, or if a banking moratorium
shall have been declared by either Federal or New York authorities;
(iv) there shall have occurred any material adverse change in the
financial markets in the United States or the international financial
markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective
change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in
the judgment of the Remarketing Dealer, impracticable to remarket the
MOPPRS or to enforce contracts for the sale of the MOPPRS;
(v) an Event of Default (as defined in the Indenture), or any
event that, with the giving of notice or passage of time, or both, would
constitute an Event of Default, with respect to the MOPPRS shall have
occurred and be continuing;
(vi) a material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business, shall have occurred;
(vii) if a Prospectus is required under the 1933 Act to be
delivered in connection with the remarketing of the MOPPRS, the Company
shall fail to furnish to the Remarketing Dealer on the Remarketing Date
the officers' certificate, opinion and comfort letter referred to in
Section 3(e) of this Agreement and such other documents and opinions as
counsel for the Remarketing Dealer may reasonably require for the
purpose of enabling such counsel to pass upon the sale of MOPPRS in the
remarketing as herein contemplated and related proceedings, or in order
to evidence the accuracy and completeness of any of the representations
and warranties, or the fulfillment of any of the conditions, herein
contained; or
(viii) the MOPPRS are not maintained in book-entry form with DTC or
any successor thereto; provided, that the Remarketing Dealer, in its
sole discretion and subject to receipt of an opinion of counsel for the
Company reasonably satisfactory to the Remarketing Dealer, may waive the
foregoing condition if in the Remarketing Dealer's judgment the
Indenture and the MOPPRS can be amended, and they are amended, so as to
permit the remarketing of the MOPPRS in certificated form and otherwise
as contemplated herein;
and the Remarketing Dealer shall have received on the Remarketing Date a
certificate of the chief executive officer and of the chief financial officer
of the Company, dated as of the Remarketing Date, to the effect that (i) the
representations and warranties in this Agreement are
15
true and correct with the same force and effect as though expressly made at
and as of the Remarketing Date, (ii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to the Remarketing Date and (iii) none of the events
specified in the preceding clause (b) has occurred.
(c) In furtherance of the foregoing, the effectiveness of the
Remarketing Dealer's election on the Notification Date to remarket the MOPPRS
shall be subject to the condition that the Remarketing Dealer shall have
received a certificate of the chief executive officer and of the chief
financial officer of the Company, dated as of the Notification Date, to the
effect that (i) the Company has, prior to the Remarketing Dealer's election
on the Notification Date to remarket the MOPPRS, provided the Remarketing
Dealer with notice of all events as required under Section 3(a) of this
Agreement, (ii) the representations and warranties in this Agreement are true
and correct at and as of the Notification Date and (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Notification Date. Such
certificate shall be delivered by the Company to the Remarketing Dealer as
soon as practicable following notification by the Remarketing Dealer to the
Company on the Notification Date of its election to remarket the MOPPRS and
in any event prior to the Determination Date.
In the event of the failure of any of the foregoing conditions, the
Remarketing Dealer may terminate its obligations under this Agreement or
redetermine the Interest Rate to Maturity as provided in Section 11.
Section 9. Indemnification. (a) The Company agrees to indemnify and
hold harmless the Remarketing Dealer and its officers, directors and
employees and each person, if any, who controls the Remarketing Dealer within
the meaning of Section 20 of the 1934 Act as follows:
(i) against any loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of, (A) the failure to have an
effective Registration Statement under the 1933 Act relating to the
MOPPRS, if required, or the failure to satisfy the prospectus delivery
requirements of the 1933 Act because the Company failed to provide the
Remarketing Dealer with a Prospectus for delivery, or (B) any untrue
statement or alleged untrue statement of a material fact contained in
any of the Remarketing Materials (including any incorporated documents),
or (C) the omission or alleged omission therefrom of a material fact
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading, or (D) any
violation by the Company of, or any failure by the Company to perform
any of its obligations under, this Agreement, or (E) the acts or
omissions of the Remarketing Dealer in connection with its duties and
obligations to determine the Interest Rate to Maturity hereunder except
that are finally judicially determined to be due to its gross negligence
or willful misconduct;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or
16
threatened, or of any claim whatsoever arising out of, or based upon,
any of items (A) through (E) in clause (i) above; provided that (subject
to clause (d) below) such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably
withheld; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the
Remarketing Dealer), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever arising out of, or based upon, any of items (A) through (E)
in clause (i) above to the extent that any such expense is not paid
under (i) or (ii) above;
provided, however, that the foregoing indemnity shall not apply to any
losses, liabilities, claims, damages and expenses to the extent arising out
of any untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by the Remarketing Dealer
expressly for use in the Remarketing Materials.
(b) The Remarketing Dealer agrees to indemnify and hold harmless the
Company, its trustees and each of its officers who signed the Registration
Statement, from and against any loss, liability, claim, damage and expense,
as incurred, but only with respect to untrue statements or omissions made in
the Remarketing Materials in reliance upon and in conformity with information
furnished to the Company in writing by the Remarketing Dealer expressly for
use in such Remarketing Materials. The indemnity agreement in this paragraph
shall extend upon the same terms and conditions to each person, if any, who
controls the Company within the meaning of Section 20 of the 1934 Act.
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify
an indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a result
thereof and in any event shall not relieve it from any liability that it may
have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to clause (a) above, counsel to the indemnified
parties shall be selected by Xxxxxxx Xxxxx, and, in the case of parties
indemnified pursuant to clause (b) above, counsel to the indemnified parties
shall be selected by the Company. An indemnifying party may participate at
its own expense in the defense of any such action; provided, however, that
counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event
shall the indemnifying parties be liable for fees and expenses of more than
one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances. No indemnifying party
shall, without the prior written consent of the indemnified parties, settle
or compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or
17
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever in respect of which indemnification or contribution
could be sought under this Section 9 or Section 10 hereof (whether or not the
indemnified parties are actual or potential parties thereto), unless such
settlement, compromise or consent (i) includes an unconditional release of
each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as
to or an admission or fault, culpability or a failure to act by or on behalf
of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by clause (a) (ii) effected without its
written consent if (i) such settlement is entered into more than 45 days
after receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement
at least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party
shall not be liable for any settlement of the nature contemplated by Section
9(a)(ii) effected without its consent if such indemnifying party (i)
reimburses such indemnified party in accordance with such request to the
extent it considers such request to be reasonable and (ii) provides written
notice to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
(e) The indemnity agreements contained in this Section 9 shall remain
operative and in full force and effect, regardless of any investigation made
by or on behalf of the Remarketing Dealer, and shall survive the termination
or cancellation of this Agreement and the remarketing of any MOPPRS hereunder.
Section 10. Contribution. If the indemnification provided for in
Section 9 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such indemnified party, as incurred, (i) in
such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Remarketing Dealer on the other hand
from the remarketing of the MOPPRS pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company on
the one hand and of the Remarketing Dealer on the other hand in connection
with the acts, failures to act, statements or omissions that resulted in such
losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
18
The relative benefits received by the Company on the one hand and the
Remarketing Dealer on the other hand in connection with the remarketing of
the MOPPRS pursuant to this Agreement shall be deemed to be in the same
respective proportions as (i) the aggregate principal amount of the MOPPRS,
and (ii) the aggregate positive difference, if any, between the price at
which the MOPPRS are sold by the Remarketing Dealer in the remarketing and
the price paid by the Remarketing Dealer for the MOPPRS tendered on the
Remarketing Date.
The relative fault of the Company on the one hand and the Remarketing
Dealer on the other hand shall be determined by reference to, among other
things, the responsibility hereunder of the applicable party for any act or
failure to act relating to the losses, liabilities, claims, damages or
expenses incurred or, in the case of any losses, liabilities, claims, damages
or expenses arising out of any untrue or alleged untrue statement of a
material fact contained in any of the Remarketing Materials or the omission
or alleged omission to state a material fact therefrom, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or by the Remarketing Dealer and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Remarketing Dealer agree that it would not be just
and equitable if contribution pursuant to this Section 10 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable considerations referred to above in this Section 10.
The aggregate amount of losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this Section 10
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
act or failure to act or untrue or alleged untrue statement or omission or
alleged omission.
Notwithstanding the provisions of this Section 10, the Remarketing
Dealer shall not be required to contribute any amount in excess of the amount
by which the total price at which the MOPPRS remarketed by it and resold to
the public were sold to the public exceeds the amount of any damages that the
Remarketing Dealer has otherwise been required to pay by reason of any act or
failure to act for which it is responsible hereunder or any untrue or alleged
untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 10, each person, if any, who controls the
Remarketing Dealer within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as the
Remarketing Dealer, and each trustee of the Company, each
19
officer of the Company who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company.
Section 11. Termination of Agreement or Redetermination of Interest
Rate to Maturity.(a) This Agreement shall terminate as to the Remarketing
Dealer on the effective date of the resignation of the Remarketing Dealer
pursuant to Section 6 hereof or the repurchase of the MOPPRS by the Company
pursuant to Section 4(g) hereof or the redemption of the MOPPRS by the
Company pursuant to Section 4(h) hereof.
(b) In addition, the Remarketing Dealer may terminate all of its
obligations under this Agreement immediately by notifying the Company and the
Indenture Trustee of its election to do so, at any time on or before the
Remarketing Date, in the event that: (i) any of the conditions referred to
or set forth in Section 8(a) hereof have not been met or satisfied in full,
(ii) any of the events set forth in Section 8(b) shall have occurred at any
time or (iii) the Remarketing Dealer determines, in its reasonable
discretion, after consultation with the Company, that it shall not have
received all of the information, whether or not specifically referenced
herein, necessary to fulfill its obligations under this Agreement.
(c) Notwithstanding any provision herein to the contrary, in lieu of
terminating this Agreement pursuant to Section 11(b) above, upon the
occurrence of any of the events set forth therein, the Remarketing Dealer, in
its sole discretion at any time between the Determination Date and 3:30 p.m.,
New York City time, on the Business Day immediately preceding the Remarketing
Date, may elect to purchase the MOPPRS for remarketing and determine a new
Interest Rate to Maturity in the manner provided in Section 4(d) of this
Agreement, except that for purposes of determining the new Interest Rate to
Maturity pursuant to this paragraph the Determination Date referred to
therein shall be the date of such election and redetermination. The
Remarketing Dealer shall notify the Company, the Indenture Trustee and DTC by
telephone, confirmed in writing (which may include facsimile or other
electronic transmission), by 4:00 p.m., New York City time, on the date of
such election, of the new Interest Rate to Maturity applicable to the MOPPRS.
Thereupon, such new Interest Rate to Maturity shall supersede and replace
any Interest Rate to Maturity previously determined by the Remarketing Dealer
and, absent manifest error, shall be binding and conclusive upon the
Beneficial Owners and Holders of the MOPPRS on or after the Remarketing Date,
the Company and the Indenture Trustee; provided, however, that the
Remarketing Dealer, by redetermining the Interest Rate to Maturity upon the
occurrence of any event set forth in Section 11(b) as set forth above, shall
not thereby be deemed to have waived its right to determine a new Interest
Rate to Maturity or terminate this Agreement upon the occurrence of any other
event set forth in Section 11(b).
(d) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party,
except that, in the case of termination pursuant to Section 11(b) of this
Agreement, the Company shall reimburse the Remarketing Dealer for all of its
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the
20
Remarketing Dealer, and except further as set forth in Section 11(e) below.
Sections 1, 9, 10, 11(d) and 11(e) shall survive such termination and remain
in full force and effect.
(e) In the case of either (i) termination of this Agreement after the
Remarketing Dealer's election on the Notification Date to remarket the
MOPPRS, pursuant to Section 11(b) or (ii) termination of this Agreement due
to the occurrence, prior to the Remarketing Dealer's election on the
Notification Date to remarket the MOPPRS, of any event set forth in Section
8(b)(ii), (v) or (viii), upon the request of the Remarketing Dealer, the
Company shall immediately following the Call Price Determination Date (as
defined below) pay the Remarketing Dealer, in same-day funds by wire transfer
to an account designated by the Remarketing Dealer, the fair market value,
calculated as set forth below, of the Remarketing Dealer's right to purchase
and remarket the MOPPRS pursuant to this Agreement (the "Call Price").
In the case of termination of this Agreement pursuant to Section 11(b)
after the Remarketing Dealer elects on the Notification Date to remarket the
MOPPRS, the Call Price shall be equal to the excess of (i) the Dollar Price
of the MOPPRS determined as provided in Section 4 over (ii) the aggregate
principal amount of the MOPPRS.
In the case of termination of this Agreement due to the occurrence,
prior to the Remarketing Dealer's election on the Notification Date to
remarket the MOPPRS, of any event set forth in Section 8(b)(ii), (v) or
(viii), the Call Price shall be determined in good faith by the Remarketing
Dealer on a commercially reasonable basis by reference to, among other
factors, the formulation set forth in the preceding paragraph.
The Remarketing Dealer shall determine the applicable Call Price on the
Business Day immediately following the date of termination or notification of
the occurrence, prior to the Remarketing Dealer's election on the
Notification Date to remarket the MOPPRS, of any event set forth in Section
8(b)(ii), (v) or (viii), as the case may be, or as soon as practicable
thereafter (the "Call Price Determination Date"). The Remarketing Dealer
shall promptly notify the Company of the Call Price Determination Date and
the Call Price by telephone, confirmed in writing (which may include
facsimile or other electronic transmission). The Call Price, absent manifest
error, shall be binding and conclusive upon the parties hereto.
(f) This Agreement shall not be subject to termination by the Company.
Section 12. Remarketing Dealer's Performance; Duty of Care. The duties
and obligations of the Remarketing Dealer shall be determined solely by the
express provisions of this Agreement and the Indenture. No implied covenants
or obligations of or against the Remarketing Dealer shall be read into this
Agreement or the Indenture. In the absence of bad faith on the part of the
Remarketing Dealer, the Remarketing Dealer may conclusively rely upon any
document furnished to it, which purports to conform to the requirements of
this Agreement and the Indenture, as to the truth of the statements expressed
in any of such documents. The Remarketing Dealer shall be protected in acting
upon any document or communication
21
reasonably believed by it to have been signed, presented or made by the
proper party or parties. The Remarketing Dealer shall incur no liability
hereunder to any Beneficial Owner or Holder of MOPPRS in its individual
capacity or as Remarketing Dealer for any action or failure to act in
connection with the remarketing or otherwise. The Remarketing Dealer shall
incur no liability to the Company with respect to calculation of the Interest
Rate to Maturity, except as a result of gross negligence or willful
misconduct on its part.
Section 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE.
Section 14. Term of Agreement. Unless otherwise terminated in
accordance with the provisions hereof, this Agreement shall remain in full
force and effect from the date hereof until the earlier of the first day
thereafter on which no MOPPRS are outstanding or the completion of the
remarketing of the MOPPRS. Regardless of any termination of this Agreement
pursuant to any of the provisions hereof, the obligations of the Company
pursuant to Sections 9, 10 and 11 hereof shall remain operative and in full
force and effect until fully satisfied.
Section 15. Successors and Assigns. The rights and obligations of the
Company hereunder may not be assigned or delegated to any other person
without the prior written consent of the Remarketing Dealer. This Agreement
shall inure to the benefit of and be binding upon the Company and the
Remarketing Dealer and their respective successors and assigns, and will not
confer any benefit upon any other person, partnership, association or
corporation other than persons, if any, controlling the Remarketing Dealer
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934
Act, or any indemnified party to the extent provided in Section 9 hereof, or
any person entitled to contribution to the extent provided in Section 10
hereof. The terms "successors" and "assigns" shall not include any purchaser
of any MOPPRS merely because of such purchase.
Section 16. Headings. Section headings have been inserted in this
Agreement as a matter of convenience of reference only, and it is agreed that
such section headings are not a part of this Agreement and will not be used
in the interpretation of any provisions of this Agreement.
Section 17. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be invalid, inoperative or
unenforceable as applied in any particular case in any or all jurisdictions
because it conflicts with any provision of any constitution, statute, rule or
public policy or for any other reason, such circumstances shall not have the
effect of rendering the provision in question invalid, inoperative or
unenforceable in any other case, circumstance or jurisdiction, or of
rendering any other provision or provisions of this Agreement invalid,
inoperative or unenforceable to any extent whatsoever.
22
Section 18. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be regarded as an original and all of which
shall constitute one and the same document.
Section 19. Amendments. This Agreement may be amended by any
instrument in writing signed by each of the parties hereto so long as this
Agreement as amended is not inconsistent with the Indenture in effect as of
the date of any such amendment.
Section 20. Notices. Unless otherwise specified, any notices,
requests, consents or other communications given or made hereunder or
pursuant hereto shall be made in writing (which may include facsimile or
other electronic transmission) and shall be deemed to have been validly given
or made when delivered or mailed, registered or certified mail, return
receipt requested and postage prepaid, addressed as follows:
(a) to the Company:
Washington Real Estate Investment Trust
00000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Finger
Facsimile No.: (000)000-0000
(b) to Xxxxxxx Xxxxx:
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Swaps Option Desk
Facsimile No.: (000) 000-0000
With a copy to: Xxxxx Xxxxxxxx/Transaction Management Group
Facsimile No.: (000) 000-0000
or to such other address as the Company or the Remarketing Dealer shall
specify in writing.
23
IN WITNESS WHEREOF, each of the Company and the Remarketing Dealer has
caused this Agreement to be executed in its name and on its behalf by one of
its duly authorized officers as of the date first above written.
WASHINGTON REAL ESTATE
INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxx, Xx.
---------------------------------
Xxxxxx X. Xxxxxx, Xx.
President and Chief Executive Officer
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
By: /s/ Xxxxxxxxx Xxxx Xxxxx
----------------------------------
Name: Xxxxxxxxx Xxxx Xxxxx
Title: Vice President
24
