posam

Maryland
(State or other jurisdiction of
incorporation or organization)

52-1193298
(I.R.S. Employer
Identification No.)

Maryland
(State or other jurisdiction of
incorporation or organization)

52-0901263
(I.R.S. Employer
Identification No.)

Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement.

If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. o

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. o

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Pursuant to Rule 429 under the Securities Act, the prospectus included in this Registration Statement is a combined prospectus and relates to this Registration Statement, the Registration Statement on Form S-3 filed on November 16, 1995 (Nos. 33-64335 and 33-64335-01) (the “1995 Registration Statement”), and the Registration Statement on Form S-3 filed on October 3, 1996 (Nos. 333-13411 and 333-13411-01) (the “1996 Registration Statement” and, with the 1995 Registration Statement, the “Prior Registration Statements”), pursuant to which an aggregate of $338,366,900 in securities remains to be issued. This Registration Statement also constitutes Post-Effective Amendment No. 3 to the 1995 Registration Statement and Post-Effective Amendment No. 2 to the 1996 Registration Statement.

We may offer and sell from time to time in one or more classes or series and in amounts, at prices and on terms that we will determine at the time of the offering, with a total initial offering price of up to $3,000,000,000:



	•	“Shares” that are comprised of common stock of Starwood Hotels & Resorts Worldwide, Inc. and Class B shares of beneficial interest of Starwood Hotels & Resorts;



	•	preferred stock of Starwood Hotels & Resorts Worldwide, Inc. and/or preferred shares of beneficial interest of Starwood Hotels & Resorts;



	•	depositary shares or receipts relating to preferred stock and/or preferred shares;



	•	debt securities;



	•	warrants to purchase debt securities, common stock or preferred stock; and



	•	convertible notes.

Of the $3,000,000,000 aggregate offering price of these securities, up to $2,650,000,000 will be offered by Starwood Hotels & Resorts Worldwide, Inc. and up to $350,000,000 will be offered by Starwood Hotels & Resorts. Of this amount, any selling securityholder named in a prospectus supplement may offer and sell from time to time certain securities that it acquires or acquired in transactions that were not, or will not be, registered under the Securities Act of 1933. We will not receive any proceeds from the sale of securities by a selling securityholder.

This prospectus contains a general description of the securities which may be offered. We will provide specific terms of the securities to be sold by us in supplements to this prospectus. You should read this prospectus and any supplement carefully before you invest.

Our Shares are listed for trading on the New York Stock Exchange under the symbol “HOT.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

We have not authorized any dealer, salesman or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus and any prospectus supplement. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus or any prospectus supplement as if we had authorized it. This prospectus and any prospectus supplement are not an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which they relate. This prospectus and any prospectus supplement are not an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make an offer or solicitation in that jurisdiction. The information contained in this prospectus and any prospectus supplement is accurate as of the dates on their covers. When we deliver this prospectus or a supplement or make a sale pursuant to this prospectus, we are not implying that the information is current as of the date of the delivery or sale.

This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission (the “SEC”) using a “shelf” registration process. Under this shelf process, we may, over time, sell any combination of the securities described in this prospectus in one or more offerings up to a total dollar amount of $3,000,000,000. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus.

The prospectus supplement may also contain information about certain United States federal income tax considerations relating to the securities covered by the prospectus supplement.

Additionally, certain securities described in this prospectus may be offered and sold from time to time by any selling securityholders named in a prospectus supplement who have acquired, or will acquire, the securities from us in transactions that were not, or will not be registered, under the Securities Act of 1933, as described under the heading “Plan of Distribution.” Specific information with respect to any offer and sale by any selling securityholder will be set forth in the prospectus supplement relating to that transaction.

You should read both this prospectus and any prospectus supplement together with the additional information described under the heading “Where You Can Find More Information.”

Except as the context may otherwise require, references to “the Corporation” are to Starwood Hotels & Resorts Worldwide, Inc. and references to “the Trust” are to Starwood Hotels & Resorts, a subsidiary of the Corporation. References to “Starwood,” “the Company,” “we,” “us” or “our” are to the Corporation and its consolidated subsidiaries, including the Trust.

We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its Public Reference Room at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the SEC’s regional offices located at 7 World Trade Center, Suite 1300, New York, NY 10048, and Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, IL 60661. Please call the SEC at (800) SEC-0330 for further information on the Public Reference Room. Our filings with the SEC are also available at the office of the New York Stock Exchange. For more information on obtaining copies of our public filings at the New York Stock Exchange, you should call (212) 656-5060.

The SEC allows us to “incorporate by reference” the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and information that we file later with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings we make with the SEC under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we sell all the securities described in this prospectus.



	•	Our Joint Annual Report on Form 10-K for the year ended December 31, 2000.



	•	Our Joint Quarterly Reports on Form 10-Q for the periods ended March 31, 2001 and June 30, 2001.



	•	The descriptions of our Shares contained in our Registration Statements on Form 8-A filed with the SEC on October 3, 1986, January 4, 1999, and March 15, 1999, and any amendments or reports we may file with the SEC for the purpose of updating such descriptions.



	•	The description of our Series A Junior Participating Preferred Stock and related rights contained in our Registration Statement on Form 8-A filed with the SEC on March 15, 1999, and any amendments or reports we may file with the SEC for the purpose of updating such descriptions.

You may request a copy of these filings (other than an exhibit to a filing unless that exhibit is specifically incorporated by reference into that filing) at no cost, by writing or telephoning us at the following address:

You should rely only on the information incorporated by reference or provided by us in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with different information. We are only offering these securities in states where the offer is permitted. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front of those documents.

We are one of the world’s largest hotel and leisure companies. We conduct our hotel and leisure business both directly and through our subsidiaries. Our brand names include Sheraton®, Westin®, The Luxury Collection®, St. Regis®, W® and Four Points® by Sheraton. Through these brands, we are represented in most major markets of the world.

Our revenue and earnings are derived primarily from hotel and leisure operations, which include the operation of our owned hotels; management fees earned from hotels we manage pursuant to long-term management contracts; the receipt of franchise fees; and the development, ownership and operation of vacation ownership resorts, marketing and selling vacation ownership interests in the resorts and providing financing to customers who purchase such interests.

Our hotel and leisure business emphasizes the global operation of hotels and resorts primarily in the luxury and upscale segment of the lodging industry. We seek to acquire interests in or management rights with respect to properties in this segment. As of June 30, 2001, our portfolio of owned, managed and franchised hotels totaled 738 hotels with approximately 225,000 rooms in 80 countries. This portfolio is comprised of 164 hotels that we own or lease or in which we have a majority equity interest (substantially all of which hotels we also manage), 266 hotels we manage on behalf of third-party owners (including entities in which we have a minority equity interest) and 308 hotels for which we receive franchise fees. Additionally, we are selling vacation ownership interest inventory at nine resorts.

Starwood Hotels & Resorts was organized in 1969, and Starwood Hotels & Resorts Worldwide, Inc. was incorporated in 1980, both under the laws of Maryland.

Our principal executive offices are located at 1111 Westchester Avenue, White Plains, New York 10604, and our telephone number is (914) 640-8100.

Set forth below is a discussion of the risks applicable generally to an investment in our company. The prospectus supplement applicable to offered securities will contain a discussion of the risks applicable to an investment in the particular types of securities that are being offered under that prospectus supplement. Prior to making a decision about investing in our securities, you should carefully consider the specific factors discussed below and under the caption “Risk Factors” in the applicable prospectus supplement, together with all of the other information contained in the prospectus supplement or appearing or incorporated by reference in the registration statement of which this prospectus is a part.

We are subject to all the operating risks common to the hotel and leisure industry. Operating risks common to the hotel and leisure industry include:



	•	changes in general economic conditions;



	•	decreases in the level of demand for rooms and related services;



	•	cyclical over-building in the hotel and leisure industry;



	•	restrictive changes in zoning and similar land use laws and regulations or in health, safety and environmental laws, rules and regulations;



	•	changes in travel patterns; and



	•	changes in operating costs including, but not limited to, energy and labor costs.

In addition, our hotel management contracts are typically long-term arrangements, but most allow the hotel owner to replace us if certain financial or performance criteria are not met. Our ability to meet these financial and performance criteria is subject to, among other things, the risks described in this section. Additionally, our operating results would be adversely affected if we could not maintain existing management, franchise or representation agreements or obtain new agreements on favorable terms.

General economic conditions may negatively impact our results. Moderate or severe economic downturns or adverse conditions may negatively affect our operations. These conditions may be widespread or isolated to one or more geographic regions. In addition, recessions or other general economic conditions, including increases in transportation and fuel costs, may have a negative impact on our results of operations. Sustained recessionary periods, both in the U.S. and internationally, may adversely affect the levels of business and leisure travel, and therefore the demand for lodging and related services. There can be no assurance that the recent slowdown in the U.S. economy will not continue to have a negative effect on the lodging industry and our results of operations.

We must compete for customers. The hotel and leisure industry is highly competitive. Our properties compete for customers with other hotel and resort properties, and, with respect to our vacation ownership resorts, with owners reselling their vacation ownership interests in their geographic markets. Some of our competitors may have substantially greater marketing and financial resources than we do, and they may improve their facilities, reduce their prices or expand or improve their marketing programs in ways that adversely affect our operating results.

We must compete for properties. We compete with other hotel and leisure companies for properties. Some of these competitors may have substantially greater financial resources than we do and may be able to pay more to acquire properties than we are able to pay. In addition, competition for properties may increase the cost of acquiring properties.

The hotel and leisure industry is seasonal in nature. The hotel and leisure industry is seasonal in nature; however, the periods during which we experience higher hotel revenue vary from property to property and depend principally upon location. Our revenue historically has been lower in the first quarter than in the second, third or fourth quarters.

The hotel and leisure business is capital intensive. In order for our properties to remain attractive and competitive, we have to spend money periodically to keep them well maintained, modernized and refurbished. This creates an ongoing need for cash and, to the extent expenditures cannot be funded from cash generated by our operations, we may be required to borrow or otherwise obtain these funds. Accordingly, our financial results may be sensitive to the cost and availability of funds.

Real estate investments are subject to numerous risks. Because we own and lease hotels and resorts, we are subject to the risks that generally relate to investments in real property. The investment returns available from equity investments in real estate depend in large part on the amount of income earned and capital appreciation generated by the related properties, as well as the expenses incurred. In addition, a variety of other factors affect income from properties and real estate values, including governmental regulations, real estate, zoning, tax and eminent domain laws, interest rate levels and the availability of financing. For example, new or existing real estate, zoning or tax laws can make it more expensive and/or time-consuming to develop real property or expand, modify or renovate hotels. When interest rates increase, the cost of acquiring, developing, expanding or renovating real property increases and real property values may decrease as the number of potential buyers decreases. Similarly, as financing becomes less available, it becomes more difficult both to acquire and to sell real property. Finally, governments can, under eminent domain laws, take real property. Sometimes this taking is for less compensation than the owner believes the property is worth. Any of these factors could have a material adverse impact on our results of operations or financial condition, as well as on our ability to make distributions to our shareholders. In addition, equity real estate investments, such as the investments we hold and any additional properties that we may acquire, are relatively difficult to sell quickly. If our properties do not generate revenue sufficient to meet operating expenses, including debt service and capital expenditures, our income will be adversely affected.

Hotel and resort development is subject to timing, budgeting and other risks. We intend to develop hotel and resort properties as suitable opportunities arise. We cannot assure you that any development project will be completed on time or within budget. New project development has a number of risks, including risks associated with:



	•	construction delays or cost overruns that may increase project costs;



	•	receipt of zoning, occupancy and other required governmental permits and authorizations;



	•	development costs incurred for projects that are not pursued to completion;



	•	so-called “acts of God” such as earthquakes, hurricanes, floods or fires that could adversely impact a project; and



	•	governmental restrictions on the nature or size of a project.

We cannot assure you that any development project will be completed on time or within budget.

Our vacation ownership business is subject to extensive regulation and risk of default. We market and sell vacation ownership interests, which typically entitle the buyer to ownership of a fully-furnished resort unit for a one-week period on either an annual or an alternate-year basis. We also acquire, develop and operate vacation ownership resorts, and provide financing to purchasers of vacation ownership interests. These activities are all subject to extensive regulation by the federal government and the states in which vacation ownership resorts are located and in which its vacation ownership interests are marketed and sold. In addition, the laws of most states in which we sell vacation ownership interests grant the purchaser of this type of interest the right to rescind the purchase contract at any time within a statutory rescission period. Although we believe that we are in material compliance with all applicable federal, state, local and foreign laws and regulations to which vacation ownership marketing, sales and operations are currently subject, changes in these requirements or a determination by a regulatory authority that we were not in compliance could adversely affect us. Additionally, if the purchaser of a vacation ownership interest defaults, we may not have recovered our marketing, selling, and general and administrative costs related to the sale of the vacation ownership interest.

Environmental regulations could make us liable for cleaning up hazardous substances. Environmental laws, ordinances and regulations of various federal, state, local and foreign governments regulate certain of our properties and could make us liable for the costs of removing or cleaning up hazardous or toxic substances on, under or in property we currently own or operate or that we previously owned or operated. Those laws could impose liability without regard to whether we knew of, or were responsible for, the presence of hazardous or toxic substances. The presence of hazardous or toxic substances, or the failure to properly clean up such substances when present, could jeopardize our ability to develop, use, sell or rent the real property or to borrow using the real property as collateral. If we arrange for the disposal or treatment of hazardous or toxic wastes, we could be liable for the costs of removing or cleaning up wastes at the disposal or treatment facility, even if we never owned or operated that facility. Other laws, ordinances and regulations could require us to manage, abate or remove lead- or asbestos-containing materials. Similarly, the operation and closure of storage tanks are often regulated by federal, state, local and foreign laws. Finally, certain laws, ordinances and regulations, particularly those governing the management or preservation of wetlands, coastal zones and threatened or endangered species, could limit our ability to develop, use, sell or rent our real property.

International operations are subject to special political and monetary risks. We have significant international operations which as of June 30, 2001 included 110 owned, managed or franchised properties in Europe (including 33 properties with majority ownership); 39 owned, managed or franchised properties in Latin America (including 14 properties with majority ownership); 71 owned, managed or franchised properties in the Asia Pacific region (including 4 properties with majority ownership); and 58 managed or franchised properties in the Africa/ Middle East region (no properties with majority ownership). International operations generally are subject to various political and other risks that are not present in U.S. operations. These risks include the risk of war or civil unrest, expropriation and nationalization. In addition, some international jurisdictions restrict the repatriation of non-U.S. earnings. Various international jurisdictions also have laws limiting the right and ability of non-U.S. entities to pay dividends and remit earnings to affiliated companies unless specified conditions have been met. In addition, sales in international jurisdictions typically are made in local currencies, which subject us to risks associated with currency fluctuations. Currency devaluations, in particular with respect to the Euro, and unfavorable changes in international monetary and tax policies could have a material adverse effect on our profitability and financing plans, as could other changes in the international regulatory climate and international economic conditions. Other than Italy, where our risks are heightened due to the relatively large number of properties we own, our international properties are geographically diversified and are not concentrated in any particular region.

We are uncertain what long-term effect the adoption of the Euro will have on us. On January 1, 1999, 11 of the 15 member countries of the European Union established fixed conversion rates between their existing sovereign currencies and the Euro. Following the introduction of the Euro, the legacy currencies of the member countries will remain legal tender during a transition period ending on January 1, 2002. During the transition period, both the legacy currency and the Euro will be legal tender in the respective member countries, and currency conversions will be computed by a triangulation with reference to conversion rates between the respective currencies and the Euro. We currently operate in substantially all the member countries. The effect on us of the adoption of the Euro by the member countries in which we operate is currently uncertain. However, it is possible that the Euro adoption will result in increased competition within the European market. In addition, a number of our information systems are not currently Euro compliant. We are currently in the process of updating our information systems to make them Euro compliant. As of June 30, 2001, 57 properties have converted to the Euro without significant impact to the properties’ operations or information systems; however, there is no assurance that we or third party vendors of applications used by us will successfully bring all of our systems into compliance. Our failure to update our information systems could result in disruptions in the processing of transactions in Euros or computed by reference to the Euro.

Our business may be adversely affected by too many, too few or the wrong acquisitions. We intend to make acquisitions that complement our business. There can be no assurance, however, that we will be able

to identify acquisition candidates or complete acquisitions on commercially reasonable terms or at all or integrate any such completed acquisitions into our existing operations. If additional acquisitions are made, there can be no assurance that any anticipated benefits will actually be realized. Similarly, there can be no assurance that we will be able to obtain additional financing for acquisitions, or that the ability to obtain such financing will not be restricted by the terms of our current debt agreements.

Investing through partnerships or joint ventures decreases our ability to manage risk. Instead of acquiring or developing hotels and resorts directly, we have from time to time invested, and may continue to invest, as a co-venturer. Joint venturers often have shared control over the operation of the joint venture assets. Therefore, joint venture investments may involve risks such as the possibility that the co-venturer in an investment might become bankrupt, or have economic or business interests or goals that are inconsistent with our business interests or goals, or be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives. Consequently, actions by a co-venturer might subject hotels and resorts owned by the joint venture to additional risk. Although we generally seek to maintain sufficient control of any joint venture, we may be unable to take action without the approval of our joint venture partners. Alternatively, our joint venture partners could take actions binding on the joint venture without our consent. Additionally, should a joint venture partner become bankrupt, we could become liable for our partner’s share of joint venture liabilities.

We may not be able to successfully dispose of properties. We periodically review our business with the view to identifying properties or other assets that we believe no longer complement our business. There can be no assurance, however, that if we identify such properties that we will be able to complete dispositions on commercially reasonable terms or at all. In particular, we have announced our expectation to market our CIGA S.p.A. portfolio of 22 hotels for sale, potentially encumbered by our management agreements, in whole or in part. There is, however, no guarantee that such a sale will materialize or be consummated, and if consummated, there is no guarantee of the terms of any such transaction.

We are subject to risks associated with debt financing. As a result of incurring debt, we are subject to the following risks associated with debt financing:



	•	the risk that cash flow from operations will be insufficient to meet required payments of principal and interest;



	•	the risk that (to the extent that we maintain floating rate indebtedness) interest rates will fluctuate; and



	•	risks resulting from the fact that the agreements governing our loan and credit facilities contain covenants imposing certain limitations on our ability to acquire and dispose of assets.

In addition, although we anticipate that we will be able to repay or refinance our existing indebtedness and any other indebtedness when it matures, there can be no assurance that we will be able to do so or that the terms of such refinancings will be favorable. Our leverage may have important consequences including the following:



	•	our ability to obtain additional financing for acquisitions, working capital, capital expenditures or other purposes, if necessary, may be impaired or such financing may not be available on terms favorable to us;



	•	a substantial decrease in operating cash flow or an increase in our expenses could make it difficult for us to meet our debt service requirements and force us to modify our operations; and



	•	our higher level of debt and resulting interest expense may place us at a competitive disadvantage with respect to certain competitors with lower amounts of indebtedness and/or higher credit ratings.

While our senior debt is currently rated investment grade by two of the rating agencies, there can be no assurance we will be able to maintain this rating. In the event our senior debt is not investment grade, we

Our officers and directors may have certain conflicts of interests. Barry S. Sternlicht is the Chairman and Chief Executive Officer of the Corporation and the Trust. Mr. Sternlicht also serves as the President and Chief Executive Officer of, and may be deemed to control, Starwood Capital Group, L.L.C. (“Starwood Capital”), a real estate investment firm. We have entered into a non-compete agreement with Starwood Capital whereby Starwood Capital agreed that, with certain exceptions, Starwood Capital would not compete directly or indirectly with us within the United States and, in particular, not purchase or acquire interests in any hotel in the United States, including any debt interest where it is anticipated that equity will be acquired by the debtholder within one year from the acquisition of such debt interest, unless such opportunity is first presented to us. In each case, the Governance Committee of our board of directors (or other committee of independent directors) will decide whether or not we will pursue the opportunity. In addition, certain of our officers and directors have interests in businesses that may, from time to time, do business with us. To the extent such individuals have a material interest in such businesses, any agreements relating thereto are subject to approval by the Governance Committee (or other committee of independent directors).

We may not be able to attract and retain key officers and other highly qualified personnel. Our future success and our ability to manage future growth depend in large part upon the efforts of our senior management and our ability to attract and retain key officers and other highly qualified personnel. Competition for such personnel is intense. There can be no assurance that we will continue to be successful in attracting and retaining qualified personnel. Accordingly, there can be no assurance that our senior management will be able to successfully execute and implement our growth and operating strategies.

Failure of the trust to qualify as a real estate investment trust would increase our tax liability. Qualifying as a real estate investment trust, or REIT, requires compliance with highly technical and complex tax provisions that courts and administrative agencies have interpreted only to a limited degree. Due to the complexities of our ownership structure and operations, the Trust is more likely than are other REITs to face interpretative issues for which there are no clear answers. Also, facts and circumstances that we do not control may affect the Trust’s ability to qualify as a REIT. The Trust believes that since the taxable year ended December 31, 1995, it has qualified as a REIT under the Internal Revenue Code of 1986, as amended. The Trust intends to continue to operate so as to qualify as a REIT. However, the Trust cannot assure you that it will continue to qualify as a REIT. If the Trust failed to qualify as a REIT for any prior tax year, the Trust would be liable to pay a significant amount of taxes for those years. Similarly, if the Trust fails to qualify as a REIT in the future, our liability for taxes would increase.

Additional legislation could eliminate or reduce certain benefits of our structure. On January 6, 1999, we consummated a reorganization pursuant to an Agreement and Plan of Restructuring dated as of September 16, 1998, as amended, among the Corporation, ST Acquisition Trust, a wholly owned subsidiary of the Corporation, and the Trust. Pursuant to the reorganization, the Trust became our subsidiary and we hold all its outstanding Class A shares. The reorganization was proposed in response to the Internal Revenue Service Restructuring and Reform Act of 1998, or H.R. 2676, which made it difficult for us to acquire and operate additional hotels while still maintaining our former status as a “grandfathered paired share real estate investment trust.” While we believe that the reorganization was the best alternative in light of H.R. 2676 and that our new structure does not raise the same concerns that led Congress to enact such legislation, no assurance can be given that additional legislation, regulations or administrative interpretations will not be adopted that could eliminate or reduce certain benefits of the reorganization and have a material adverse effect on our results of operations, financial condition and prospects.

Our financial and operating performance may be adversely affected by so-called “acts of God,” such as natural disasters, in both locations where we own and/or operate significant properties and areas of the world from which we draw a large number of customers. Some types of losses, such as from earthquakes and environmental hazards may be either uninsurable or too expensive to justify insuring against. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in a hotel or resort, as well as the anticipated future revenue from the hotel or resort. In that event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property. Similarly, wars, political unrest and other forms of civil strife have caused in the past, and may cause in the future, our results to differ materially from anticipated results.

Certain information included or incorporated by reference in this prospectus, any prospectus supplement and other documents filed with the SEC may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future are forward-looking statements. Such statements are characterized by terminology such as “believe,” “hope,” “may,” “anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,” “project,” “positioned,” “strategy” and similar expressions. These statements are based on assumptions and assessments made by our management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Any forward-looking statements are not guarantees of our future performance and are subject to risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements. We disclaim any duty to update any forward-looking statements. Some of the factors that may cause actual results, developments and business decisions to differ materially from those contemplated by such forward-looking statements include the risk factors discussed above.

Unless we specify otherwise in a prospectus supplement, the net proceeds from the sale of securities we offer will be used for general corporate purposes or to refinance existing debt obligations. Until so utilized, we expect to invest such net proceeds in interest-bearing time deposits or short-term marketable securities. We will not receive any proceeds from the sale of securities by a selling securityholder.

Our consolidated ratios of earnings to fixed charges and of earnings to fixed charges and preferred stock dividends for each of the periods indicated are as set forth in the table below.

Our ratios of earnings to fixed charges and of earnings to fixed charges and preferred stock dividends of the Trust for each of the periods indicated are as set forth in the table below.

“Earnings” consist of income from continuing operations before income taxes, minority equity in net income, amortization of interest capitalized, distributions in excess of equity earnings and losses and fixed charges. “Fixed charges” consist of interest expense (including interest costs capitalized) and other financing charges.

The debt securities will have the terms described in this prospectus unless the prospectus supplement describes different terms.

Each series of debt securities will be issued under an indenture between the Corporation and a trustee chosen by us. The trustee for each series of debt securities will be identified in the applicable prospectus supplement. The indenture is a contract between us and the trustee. The trustee serves two principal roles:



	•	the trustee can enforce your rights against us if an Event of Default described below occurs; and



	•	the trustee performs various administrative duties.

The following description is a summary of selected provisions relating to the debt securities and the indenture. The summary is not complete. We have filed the form of indenture as an exhibit to the registration statement of which this prospectus is a part. You should not rely on this summary, because the indenture and not this summary defines your rights as a holder of the debt securities. When debt securities are offered in the future, the prospectus supplement will explain the particular terms of those securities

The debt securities will be either senior debt securities or subordinated debt securities. Unless otherwise specified in the applicable prospectus supplement, any senior debt securities we offer will be unsecured obligations of the Corporation and will rank on an equal basis with all other unsecured debt obligations of the Corporation. The indenture does not limit the total principal amount of debt securities that we can issue. We may issue the debt securities in one or more series as we may authorize from time to time. In addition, we may “reopen” a previous issue of debt securities by issuing additional debt securities of that series.

A prospectus supplement and a supplemental indenture (or resolutions of our board of directors in lieu of a supplemental indenture) relating to any series of debt securities being offered will include specific terms relating to the offering. These terms will include some or all of the following:



	•	the title of the debt securities;



	•	any limit on the total principal amount of the debt securities;



	•	whether the debt securities are senior debt securities or subordinated debt securities or a combination thereof;



	•	the dates on which the principal and premium, if any, of the debt securities will be payable;



	•	the interest rate (or method of determining the rate) that the debt securities will bear and the interest payment dates for the debt securities;



	•	the place where we will pay (or the method of payment of) principal, premium and interest on the debt securities;



	•	any optional redemption periods and prices and any specific terms or conditions related to optional redemptions and the method of selection of debt securities if less than all of the debt securities of the series are redeemed;



	•	whether we will issue the debt securities in registered or bearer form;



	•	any special provisions relating to bearer securities or global securities representing individual bearer securities;



	•	any sinking fund or other provisions that would obligate us to repurchase or otherwise redeem the debt securities;



	•	any rights of the holders of the debt securities to convert or exchange the debt securities into or for other securities or property and the terms and conditions governing such conversion or exchange, including the initial conversion or exchange price or rate and the conversion or exchange period and any applicable limitations on the ownership or transferability of any securities receivable on conversion or exchange;



	•	the denominations in which we will issue the debt securities, if other than $1,000 and any integral multiple thereof;



	•	the manner in which we will determine the amounts of principal, premium or interest payments on the debt securities if these amounts may be determined by reference to an index or based on a formula;



	•	if prior to maturity the actual principal amount of the debt securities payable at maturity is not determinable, the manner in which we will determine the deemed principal amount of the debt securities payable at maturity;



	•	any changes or additions to the defeasance or discharge provisions;



	•	the currency in which we will pay principal, premium and interest on the debt securities if other than the United States dollar;



	•	if other than the entire principal amount, the portion of the principal amount of the debt securities (a) payable if the maturity of the debt securities is accelerated or (b) provable in bankruptcy;



	•	whether payment of principal, premium and interest will be with or without deduction for, and with or without reimbursement of, taxes, assessments or governmental charges;



	•	any provisions relating to any security provided for the debt securities;



	•	any changes in or additions to the Events of Default (as defined below);



	•	whether we will issue the debt securities in the form of global securities and the terms and conditions of the global securities;



	•	any trustees, authenticating or paying agents, transfer agents or registrars with respect to the debt securities;



	•	any changes or additions to the covenants described below; and



	•	any other terms of the debt securities.

We may issue debt securities at a discount below their stated principal amount. Even if we do not issue the debt securities below their stated principal amount, for United States federal income tax purposes the debt securities may be deemed to have been issued with a discount because of certain interest payment characteristics. We will describe in a prospectus supplement the United States federal income tax considerations applicable to debt securities issued at a discount or deemed to be issued at a discount. We will also describe in a prospectus supplement any special United States federal income tax considerations or other restrictions or terms applicable to the debt securities being issued, including, as applicable, securities issuable in bearer form, offered exclusively to foreigners or denominated in a foreign currency.

We may issue debt securities in fully registered form without coupons or in a form registered as to principal only with coupons or in bearer form with coupons. Unless specified in the prospectus supplement, the debt securities will be in fully registered form without coupons. In addition, we may issue debt securities in the form of one or more global securities as described below.

Principal of, premium, if any, and interest, if any, on fully registered securities will be payable at the place or places we designate for such purpose, or we may pay interest by check mailed to the persons in whose names the securities are registered at the close of business on the day or days specified in the prospectus supplement accompanying this prospectus. The principal of, premium, if any, and interest, if any, on debt securities in other forms will be payable in the manner and at the place we designate as specified in the applicable prospectus supplement.

You may present fully registered securities for transfer or exchange at the corporate trust office of the trustee or any other office or agency we maintain for that purpose, without the payment of any service charge except for any tax or governmental charge incidental to the transfer or exchange. Provisions for the transfer or exchange of securities in other forms will be set forth in the applicable prospectus supplement.

We may issue the debt securities in whole or in part in the form of one or more global securities. A global security is a security, typically held by a depositary, that represents the beneficial interests of a number of purchasers of such security. We will deposit global securities with the depositary identified in the prospectus supplement. Unless it is exchanged in whole or in part for debt securities in definitive form,

We will describe the specific terms of the depositary arrangement with respect to a series of debt securities in a prospectus supplement. We expect that the following provisions will generally apply to our depositary arrangements.

Ownership of beneficial interests in a global security will be limited to “participants” or persons that may hold interests through participants. The term “participants” means institutions that have established accounts with the depositary or its nominee. Upon the issuance of a global security, and the deposit of the global security with or on behalf of the depositary, the depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of the debt securities represented by the global security to the accounts of participants. The underwriters or agents participating in the distribution of the debt securities will designate the accounts to be credited. If we offer and sell the debt securities directly or through agents, either we or our agents will designate the accounts. Ownership of beneficial interests in the global security will be shown on, and the transfer of that ownership will be effected only through, records maintained by the depositary and its participants. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of the securities. Such laws may impair the ability to transfer beneficial interests in a global security.

Principal of, any premium on and any interest payments on debt securities represented by a global security registered in the name of a depositary or its nominee will be made to the depositary or its nominee as the registered owner of the global security. We and the trustee will treat the depositary or its nominee as the sole owner or holder of the debt securities represented by a global security for all purposes, including for paying principal, premium and interest. Except as set forth below, owners of beneficial interests in a global security will not:



	•	be entitled to have the debt securities represented by the global security registered in their names;



	•	receive or be entitled to receive physical delivery of the debt securities in definitive form; or



	•	be considered the owners or holders of the debt securities.

Therefore, we and the trustee do not have any direct responsibility or liability for the payment of principal of, premium, if any, on or interest, if any, on any debt securities represented by a global security to owners of beneficial interests in the global security.

We expect that the depositary or its nominee, upon receipt of any payments, will on the same date credit participants’ accounts with payments in amounts proportionate to their respective beneficial interests in the principal amount of the global security as shown on the depositary’s or its nominee’s records. We also expect that payments by participants to owners of beneficial interest in the global security will be governed by standing instructions and customary practices, as is the case with the securities held for the accounts of customers registered in “street names” and will be the responsibility of these participants and will not be the responsibility of the depositary or its nominee, the trustee or us. We or the trustee are responsible only for paying principal, premium, if any, and interest, if any, to the depositary or its nominee. The depositary or its nominee and the direct and indirect participants are responsible for disbursing these payments to the owners of beneficial interests in the global securities.

If the depositary is at any time unwilling or unable to continue as depositary and a successor depositary is not appointed by us within ninety days, we will issue individual debt securities in exchange for the global security. In addition, we may at any time in our sole discretion determine not to have any of the debt securities of a series represented by global securities and, in such event, will issue debt securities of such series in exchange for the global security.

Neither we, nor the trustee or any paying agent will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in the global security or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests. No such person will be liable for any delay by the depositary or any of its participants in

identifying the owners of beneficial interests in a global security, and we, the trustee and any paying agent may conclusively rely on instructions from the depositary or its nominee for all purposes.

Senior debt securities will rank on an equal basis with all other unsecured debt obligations of the Corporation except subordinated debt.

Subordinated debt securities will rank subordinated and junior in right of payment, to the extent set forth in the prospectus supplement relating to the subordinated debt securities, to all “senior debt” (which will be defined in the applicable prospectus supplement) of the Corporation.

If the Corporation defaults in the payment of any principal of, or premium, if any, or interest on any senior debt when it becomes due and payable after any applicable grace period, then, unless and until the default is cured or waived or ceases to exist, the Corporation cannot make a payment on account of or redeem or otherwise acquire the subordinated debt securities.

If there is any insolvency, bankruptcy, liquidation or other similar proceeding relating to the Corporation, its creditors or its property, then all senior debt must be paid in full before any payment may be made to any holders of subordinated debt securities.

Furthermore, if the Corporation defaults in the payment of the principal of and accrued interest on any subordinated debt securities that is declared due and payable upon an event of default under the indenture, holders of all senior debt will first be entitled to receive payment in full in cash before holders of the subordinated debt can receive any payments.

Unless the applicable prospectus supplement specifies that one or more of the following covenants does not apply, we will comply with the covenants described below. Debt securities may have additional or different covenants as specified in the applicable prospectus supplement.

The indenture requires us and our “Restricted Subsidiaries” to comply with certain restrictive covenants as described below. The indenture does not require us to maintain any Restricted Subsidiaries and we do not intend to maintain any Restricted Subsidiaries. Accordingly, if we elect not to maintain any Restricted Subsidiaries, the indenture will not provide any limitations on the activity of any of our subsidiaries (including the Trust). However, the indenture contains certain provisions applicable to any subsidiaries maintained as Restricted Subsidiaries, and such provisions are described below.

Sale and Lease-back. The indenture provides that neither we nor any Restricted Subsidiary may enter into any sale and lease-back transaction (except for temporary leases of a term of not more than three years and except for leases between the Corporation and a Restricted Subsidiary or between Restricted Subsidiaries) involving the leasing by the Corporation or any Restricted Subsidiary of any Principal Property, more than 120 days after the acquisition thereof or the completion of construction and commencement of full operation thereof, unless either:



	•	we apply an amount equal to the greater of the fair value (as determined by our board of directors) of such property or the net proceeds of such sale, within 120 days, to the retirement of the debt securities or other indebtedness ranking on a parity with the debt securities, or to the acquisition, construction, development or improvement of properties, facilities or equipment used for operating purposes which are, or upon such acquisition, construction, development or improvement will be, a Principal Property or a part thereof, or



	•	at the time of entering into such transaction, such Principal Property could have been subjected to a mortgage-securing indebtedness, in a principal amount equal to the Capitalized Lease-back Obligation with respect to such Principal Property under the next to last bullet point of the provision for limitations on liens referred to below without securing the debt securities as contemplated by that provision.

Liens. The indenture prohibits the Corporation and its Restricted Subsidiaries from creating any mortgages or other liens upon any Principal Property (without securing the debt securities equally and ratably with all other indebtedness secured thereby), with the following exceptions:



	•	mortgages or other liens on any such property acquired, constructed or improved by the Corporation or a Restricted Subsidiary to secure or provide for the payment of any part of the purchase price of such property or the cost of such construction or improvement or any mortgage or other lien on any such property existing at the time of acquisition thereof;



	•	any mortgage or other lien on any property of another company existing at the time it is acquired by merger, consolidation or acquisition of substantially all of its stock or its assets;



	•	pledges or deposits to secure payment of workers’ compensation or insurance premiums, or relating to tenders, bids, contracts (except contracts for the payment of money) or leases;



	•	pledges or liens in connection with tax assessments or other governmental charges, or as security required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or right;



	•	pledges or liens to secure a stay of process in proceedings to enforce a contested liability, or required in connection with the institution of legal proceedings or in connection with any other order or decree in any such proceeding or in connection with any contest of any tax or other governmental charge, or deposits with a governmental agency entitling the Corporation or a Restricted Subsidiary to maintain self-insurance or to participate in other specified insurance arrangements;



	•	mechanics’, carriers’, workmen’s and other like liens;



	•	encumbrances in favor of the U.S. Government to secure progress or advance payments;



	•	mortgages or other liens securing any indebtedness incurred to finance the cost of property leased to the U.S. Government at a rental rate sufficient to pay the principal of and interest on such indebtedness;



	•	mortgages or other liens securing indebtedness of a Restricted Subsidiary to the Corporation or to a Restricted Subsidiary;



	•	mortgages or other liens affecting property securing indebtedness of a governmental authority issued to finance the cost of a pollution control program with respect to operations of the Corporation or a Restricted Subsidiary;



	•	renewals, extensions and replacements of any permitted mortgage, lien, deposit or encumbrance, provided the amount secured is not increased;



	•	mortgages or other liens on any such property existing on the date of the indenture;



	•	the creation of any other mortgage, pledge or other lien if, after giving effect to the creation thereof, the total of (i) the aggregate principal amount of indebtedness of the Corporation and its Restricted Subsidiaries secured by all mortgages, pledges or other liens created under this provision, plus (ii) the aggregate amount of Capitalized Lease-back Obligations of the Corporation and its Restricted Subsidiaries under the entire unexpired terms of all leases entered into in connection with sale and lease-back transactions which would have been precluded by the provision for limitations on such transactions described above, but for the satisfaction of the condition referred to in the second bullet point of the description of the provision above, will not exceed an amount equal to 15% of Consolidated Net Tangible Assets; and



	•	any other exceptions provided in an applicable prospectus supplement.

The lease of any property and rental obligations thereunder (whether or not involving a sale and lease-back and whether or not capitalized) shall not be deemed to create a lien. The sale or other transfer

of (a) timber or other natural resources in place for a period of time until, or in an amount such that, the purchaser will realize therefrom a specified amount of money (however determined) or a specified amount of such resources, or (b) any other interest in property of the character commonly referred to as a “production payment,” shall not be deemed to create a lien.

Consolidation, Merger or Sale. The indenture provides that, except as otherwise provided in any prospectus supplement, the Corporation may consolidate with or merge into any other person or convey, transfer or lease its properties and assets substantially as an entirety to another person, if among other things:



	•	the resulting, surviving or transferee person (if other than the Corporation) assumes all our obligations under the debt securities and the indenture; and



	•	the Corporation or such successor person is not immediately thereafter in default under the indenture.

Upon the assumption of the Corporation’s obligations by such a person upon the sale of all or substantially all the assets in compliance with the indenture, the Corporation shall be discharged from all obligations under the debt securities and the indenture. Although such transactions are permitted under the indenture, certain of the foregoing transactions could constitute a “change in control,” as described in any prospectus supplement, permitting each holder to require the Corporation to purchase the debt securities of such holder as described in any prospectus supplement.

Designation of Restricted Subsidiaries and Unrestricted Subsidiaries. Our board of directors may at any time designate a Restricted Subsidiary as an Unrestricted Subsidiary or rescind the designation of an Unrestricted Subsidiary as such. Any subsidiary may be the subject of a series of such designations and rescissions, without limitation, except that:



	•	a subsidiary may not become an Unrestricted Subsidiary if, upon the effectiveness thereof, it would own any capital stock of, or hold any indebtedness of, any Restricted Subsidiary; and



	•	an Unrestricted Subsidiary may not become a Restricted Subsidiary unless such subsidiary has outstanding no lien upon its property which such subsidiary would be prohibited, under the restriction on liens described above, from creating immediately after it becomes a Restricted Subsidiary and, with certain exceptions, such subsidiary is not a party to any lease which it would have been prohibited, under the restriction on sale and lease-back transactions described above, from entering into had it been a Restricted Subsidiary at the time it entered into such lease.

Certain Definitions Used in the Covenants. Set forth below are certain definitions used in the indenture.

“Capitalized Lease-back Obligation” means the total net rental obligations of the Corporation or a Restricted Subsidiary under any lease entered into as part of a sale and lease-back transaction involving a Principal Property discounted to present value at the rate of 9% per annum.

“Consolidated Net Tangible Assets” means the total of all assets appearing on the consolidated balance sheet of the Corporation and its Restricted Subsidiaries prepared in accordance with accounting principles generally accepted in the United States as of a date not more than 90 days prior to the date as of which the Consolidated Net Tangible Assets are to be determined, but excluding:



	•	the book amount of all separated intangible assets,



	•	all depreciation, valuation and other reserves,



	•	current liabilities,



	•	any minority interest in the stock and surplus of Restricted Subsidiaries,



	•	investments in subsidiaries that are not Restricted Subsidiaries,



	•	deferred income and deferred liabilities, and

“Principal Property” means any single property owned by the Corporation or a Restricted Subsidiary having a gross book value in excess of 2% of Consolidated Net Tangible Assets, except any property or portion of a property that our board of directors by resolution declares is not of material importance to the total business conducted by us and our Restricted Subsidiaries as an entirety.

“Restricted Subsidiary” means any subsidiary other than an Unrestricted Subsidiary.



	•	any subsidiary 50% or less of the voting stock of which is owned directly by the Corporation and/or one or more Restricted Subsidiaries or



	•	any subsidiary designated as an Unrestricted Subsidiary by our board of directors.

The indenture (including the terms and conditions of the debt securities) may be modified or amended by us and the trustee, with respect to any series of debt securities, without the consent of the holder of such series of debt securities, for the purposes of, among other things:



	•	adding to our covenants for the benefit of the holders of the debt securities of such series;



	•	surrendering any right or power conferred upon us in respect of such series;



	•	providing for the assumption of our obligations to the holders of the debt securities of such series in the case of a permitted merger, consolidation, conveyance, transfer or lease;



	•	complying with the requirements of the SEC in connection with the registration of the debt securities of such series under the Securities Act and the qualification of the indenture under the Trust Indenture Act, provided that such modification or amendment does not, in the good faith opinion of our board of directors and the trustee, adversely affect the interests of the holders of the debt securities of such series in any material respect; and



	•	curing any ambiguity or correcting or supplementing any defective provision contained in the indenture; provided that such modification or amendment does not materially adversely affect the interests of the holders of the debt securities of such series.

Modifications and amendments to the indenture or to the terms and conditions of the debt securities of such series may also be made, and past defaults by us may be waived, either:



	•	with the written consent of the holders of at least a majority in aggregate principal amount at maturity of the debt securities of such series at the time outstanding; or



	•	by the adoption of a resolution at a meeting of holders by at least a majority in aggregate principal amount at maturity of the debt securities of such series represented at such meeting.

However, no such modification, amendment or waiver may, without the written consent or the affirmative vote of the holder of each debt security so affected:



	•	change the stated maturity of such debt security;



	•	reduce the principal amount at maturity, redemption price or purchase price on such debt security;



	•	change the currency of payment of such debt security or interest thereon;



	•	reduce the percentage in aggregate principal amount at maturity of any debt security outstanding necessary to modify or amend the indenture or to waive any past default; or



	•	impair the right to institute suit for the enforcement of any payment with respect to such debt security.

The indenture provides that the following are “Events of Default” with respect to any series of the debt securities issued thereunder:



	•	default in the payment of the principal of (or premium, if any, on) any debt security of such series when and as the same shall be due and payable;



	•	default for 30 days in the payment of any installment of interest on any debt security of such series;



	•	default in the deposit of any sinking fund payment when and as due and payable on the terms of any debt securities of such series;



	•	default for 60 days after notice in the performance of any other covenant in respect of the debt securities of such series contained in the indenture;



	•	acceleration of certain debt instruments of at least $100,000,000 aggregate principal amount of the Corporation, which acceleration shall not have been rescinded or annulled within 30 days after notice;



	•	certain events in bankruptcy, insolvency or reorganization of the Corporation; or



	•	any other event of default described in the prospectus supplement for such series.

An Event of Default with respect to any particular series of debt securities issued under an indenture does not necessarily constitute an Event of Default with respect to any other series of debt securities issued under such indenture. The trustee may withhold notice to the holders of any debt securities of any default (except in the payment of principal or interest) if it considers such withholding is in the interests of such holders.

If an Event of Default with respect to any series of debt securities shall have occurred and be continuing, the trustee or the holders of not less than 25% in aggregate principal amount of such series of debt securities may declare the principal of all the debt securities of such series to be due and payable immediately; provided, however, that subject to certain conditions, any such declaration and its consequences may be rescinded and annulled by the holders of not less than a majority in aggregate principal amount of the debt securities of such series.

The indenture will require the Corporation to file annually with the trustee a certificate, signed by a specified officer, stating whether or not such officer has obtained knowledge of any default by the Corporation in the performance, observance or fulfillment of any condition or covenant of such indenture, and, if so, specifying each such default and the nature thereof.

Subject to provisions relating to its duties in case of a default, a trustee shall be under no obligation to exercise any of its rights or powers under the indenture at the request, order or direction of any holders, unless the holders shall have offered to such trustee reasonable indemnity.

Subject to such provisions for indemnification, the holders of a majority in principal amount of the debt securities of any series may direct the time, method and place of conducting any proceeding or any remedy available to the appropriate trustee, or exercising any trust or power conferred upon such trustee, with respect to the debt securities of such series.

With certain exceptions, the Corporation may satisfy and discharge its obligations under the indenture with respect to any series of debt securities:



		of such series that have not then been delivered to the trustee for cancellation when or after such securities have become due and payable; and



	•	by paying all other sums payable by the Corporation under the indenture with respect to the debt securities of such series.

Under federal income tax law as of the date of this prospectus, such deposit and discharge may be treated as a disposition of the related debt securities. Each holder might be required to recognize gain or loss equal to the difference between the holder’s cost or other tax basis in the debt securities and the amount of cash plus the fair market value of any property received upon such disposition. Holders might be required to include as income a different amount than would be includable without the discharge. Prospective investors are urged to consult their own tax advisors as to the tax consequences of a discharge, including the applicability and effect of tax laws other than the federal income tax law.

A series of debt securities may have no conditions for defeasance or may have additional or different conditions for defeasance as described in the applicable prospectus supplement.

We may appoint a separate trustee for any series of debt securities. We may maintain banking and other commercial relationships with the trustee and its affiliates in the ordinary course of business and the trustee may own debt securities and serve as trustee under our other indentures.

The indenture and the debt securities will be governed by and construed in accordance with the laws of the State of New York.

The Corporation. The Corporation is authorized to issue one billion shares of common stock, par value $0.01 per share (“Corporation Shares”). The Corporation is also authorized to issue:



	•	50 million shares of excess common stock, par value $0.01 per share (“Excess Corporation Common Stock”);



	•	200 million shares of preferred stock, par value $0.01 per share (“Corporation Preferred Shares”). Corporation Preferred Shares are issuable in classes or series with such rights, preferences, privileges and restrictions as our board of directors may determine, including voting rights, redemption provisions, dividend rates, liquidation preferences and conversion rights; and



	•	100 million shares of excess preferred stock, par value $0.01 per share (“Excess Corporation Preferred Stock” and, together with the Excess Corporation Common Stock, the “Excess Corporation Stock”).

As of June 30, 2001, 199,418,839 Corporation Shares were issued and outstanding, and no shares of Corporation Preferred Shares or Excess Corporation Stock had been issued.

The Trust. The Trust is authorized to issue one billion Class B Shares, par value $0.01 per share (“Class B Shares”). The Trust is also authorized to issue:



	•	five thousand Class A Shares, par value $0.01 per share (“Class A Shares”);



	•	200 million Excess Trust Shares, par value $0.01 per share (“Excess Common Trust Shares”);



	•	30 million Class A Exchangeable Preferred Shares, par value $0.01 per share (“Class A EPS”);



	•	15 million Class B Exchangeable Preferred Shares, par value $0.01 per share (“Class B EPS”);



	•	55 million Trust Preferred Shares, par value $0.01 per share (“Trust Preferred Shares”). Trust Preferred Shares are issuable in classes or series with such rights, preferences, privileges and restrictions as the Trust’s board of trustees may determine, including voting rights, redemption provisions, dividend rates, liquidation preferences and conversion rights; and



	•	50 million Excess Preferred Shares, par value $0.01 per share (“Excess Preferred Trust Shares” and, together with the Excess Common Trust Shares, the “Excess Trust Shares”).

As of June 30, 2001, 100 Class A Shares, 199,418,839 Class B Shares, 549,951 Class A EPS and 1,094,934 Class B EPS were issued and outstanding, and no Excess Trust Shares had been issued.

General. Each Corporation Share is attached to and is traded on the New York Stock Exchange (the “NYSE”) with one Class B Share. We refer to such attached shares as “Shares.” Shares are listed for trading on the NYSE under the symbol “HOT.” Any additional Shares we issue will also be listed on the NYSE.

Voting Rights. Each Corporation Share is entitled to one vote in the election of directors and other matters; Class B Shares are not entitled to vote, except upon any amendment, alteration or repeal of any provision of the declaration of trust of the Trust that materially and adversely affects the rights of holders of Class B Shares disproportionately to the effect on holders of Class A Shares. Holders of Shares are not entitled to cumulative voting rights in the election of directors.

Dividends. Subject to certain conditions and to the prior rights of holders of preferred shares of the Trust (including Class A EPS and Class B EPS), holders of Shares will be entitled to receive a non-cumulative dividend on the Class B Share component of their Shares if and when the dividend is authorized by the board of trustees of the Trust. The dividend may not be paid under certain

circumstances. Holders of Shares may receive dividends on the Corporation Shares component of their Shares if and when declared by our board of directors. In February 2001, we announced that our board of trustees planned to increase the annual dividend rate for 2001 to $0.80. Certain of our debt instruments restrict the ability of the Trust to declare and pay cash dividends.

Other Rights. Holders of Shares have no conversion, sinking fund, redemption or preemptive rights to subscribe for any securities of the Trust or the Corporation, as the case may be. Subject to the rights of Class A EPS, Class B EPS, Class A Shares and any other preferred shares and/or excess shares, Shares will have equal dividend, distribution, and other rights, and will have a liquidation preference equal to 10% of the assets of the Trust legally available for liquidating distributions subject to certain adjustments. The Shares will have no preference, exchange, or appraisal rights except as expressly required by the Maryland laws governing real estate investment trusts formed under Maryland law and corporations formed under the Maryland General Corporation Law (the “MGCL”).

Registrar and Transfer Agent. The registrar and transfer agent for the Shares is ChaseMellon Shareholder Services, Los Angeles, California.

The Trust and the Corporation have entered into an Amended and Restated Intercompany Agreement dated as of January 6, 1999, pursuant to which all outstanding Class B Shares and Corporation Shares are attached on a one-to-one basis and trade as a Share. The following is a summary of certain provisions of the Intercompany Agreement. This summary is not complete. We have filed the Intercompany Agreement as an exhibit to the Trust’s Form 8-A filed with the SEC on December 21, 1998. You should not rely on this summary, because the Intercompany Agreement and not this summary defines your rights as a holder of Shares.

Transfer of Shares. Under the Intercompany Agreement, Class B Shares are transferable only with an equal number of Corporation Shares, and Corporation Shares are transferable only with an equal number of Class B Shares. Certificates evidencing Class B Shares and Corporation Shares are required by the Intercompany Agreement to include a reference to this transfer restriction. The declaration of trust of the Trust and the charter of the Corporation contain similar restrictions on the transfer of Class B Shares and Corporation Shares, as well as other restrictions on the transfer and ownership of Class B Shares and Corporation Shares. The Intercompany Agreement also provides that all Excess Trust Shares and all shares of Excess Corporation Stock that may be issued in respect of Class B Shares and Corporation Shares will be attached in the same manner as the Class B Shares and Corporation Shares are attached.

Issuance of Shares. Under the Intercompany Agreement, the Trust may not issue Class B Shares and the Corporation may not issue Corporation Shares unless provision is made for the acquisition by the same person of the same number of shares of the other entity.

Share Dividends, Reclassifications and other Similar Events. Neither the Trust nor the Corporation may issue any securities convertible into Class B Shares or Corporation Shares or issue any rights or warrants to purchase Class B Shares or Corporation Shares, unless the other entity concurrently takes the same action. If the Trust or the Corporation declares or pays a distribution payable in Class B Shares or Corporation Shares or subdivides, combines or reclassifies such shares, the number and class of securities that are attached to and trade with one another will be appropriately adjusted.

Exchange Rights. After January 6, 2004, or earlier if certain events occur and are continuing, the Corporation has the right to exchange Class B Shares for cash, Corporation Shares or other property. After exercising this right, the Corporation may transfer the Class B Shares it has received in the exchange without requiring the transferee to acquire any Corporation Shares and may amend the Intercompany Agreement to adjust the number and classes of securities comprising a Share without the consent of the board of trustees.

Amendment. The Intercompany Agreement may be amended by the board of trustees and the board of directors, provided that an amendment materially and adversely affecting the exchange rights pertaining to the Class B Shares must be approved by a majority of the outstanding Class B Shares.

Starwood Hotels & Resorts Holdings, Inc., a wholly owned subsidiary of the Corporation, is the sole holder of all outstanding Class A Shares, which are not registered with the SEC and do not trade on any exchange.

Dividends. Subject to the prior rights of Class B Shares, Class A EPS and Class B EPS and other preferred shares of the Trust, holders of Class A Shares may receive dividends if and when declared by the board of trustees of the Trust. Dividends on Class A Shares may be paid in cash, shares or other form.

Voting Rights. Each Class A Share is entitled to one vote in the election of trustees and other matters and has the right to vote on any amendment, alteration or repeal of any provision of the declaration of trust of the Trust that materially and adversely affects the rights of the holders of the Class A Shares. Holders of Class A Shares are not entitled to cumulative voting rights in the election of trustees. Accordingly, Starwood Hotels & Resorts Holdings, Inc., as the sole holder of the Class A Shares, will be the only person entitled to vote in the election of trustees of the Trust.

Other Rights. Holders of Class A Shares have no conversion, sinking fund, redemption or preemptive rights to subscribe for any securities of the Trust. In the event of the voluntary or involuntary liquidation, dissolution or winding up of the Trust, and after the payment in full of any liquidation preference of any outstanding shares of beneficial interest in the Trust (other than shares that do not entitle the holders to a liquidation preference with respect to the Class A Shares), including the Class A EPS and Class B EPS, holders of Class A Shares will be able to receive certain preferential liquidating distributions.

The following sets forth certain general terms and provisions of our outstanding Trust Preferred Shares.

Dividend Rights. The holders of Class A EPS are entitled to receive a preferred dividend based on the payment (with certain exceptions) of any dividend on the Corporation Shares or any liquidating distribution in respect of the Corporation Shares, and participate in any dividend paid on the Class B Shares (with certain exceptions). These dividends accrue automatically and are cumulative from the date on which they accrue. No dividend on the Class B Shares may be declared unless each share of Class A EPS receives a corresponding dividend.

Liquidation Rights. If the Trust liquidates, dissolves or winds up its business, either voluntarily or involuntarily, the holders of Class A EPS will be entitled to receive a liquidating distribution in an amount equal to the Class A Liquidation Preference described below and to participate on the basis described below in any liquidating distribution to holders of Class B Shares. Holders of Class A EPS have the right to receive these distributions prior to any distribution or payment to holders of Class B Shares or any other class or series of shares of beneficial interest in the Trust ranking junior to the Class A EPS. The “Class A Liquidation Preference” of a share of Class A EPS as of any date equals the sum of (x) the fair market value as of such date of the number of Class A Underlying Corporation Shares (as defined below) for which each Class A EPS is exchangeable as of such date plus (y) the amount of any accrued but unpaid preferred dividends in respect of each share of Class A EPS. In addition, the holders of Class A EPS will be entitled to participate ratably with the holders of Class B Shares in any liquidating distributions to such holders. For such purpose, each share of Class A EPS will be deemed to represent a

Exchange Rights. Shares of Class A EPS are exchangeable for Shares at any time at the option of the holder based on a one-to-one exchange ratio; provided, however, that we may instead, at our option, deliver the cash equivalent of some or all of such Shares. In addition, under some circumstances we may either deliver a promissory note in lieu of cash, or may publicly offer and sell Shares and deliver the proceeds of the offering; if we elect either of these options the holder of Class A EPS may elect to withdraw its exchange request. The exchange ratio of shares of Class A EPS for Shares is subject to adjustment from time to time based on the occurrence of stock dividends, stock splits, reverse stock splits and other similar events in respect of the Shares. The number of Shares for which each share of Class A EPS is exchangeable at any given time has two components: the Corporation Share component is referred to as the “Class A Underlying Corporation Share” and the Class B Share component is referred to as the “Class A Underlying Trust Share.” In addition, if holders of Class B Shares or Corporation Shares should be entitled to receive securities or other assets with respect to or in exchange for Class B Shares or Corporation Shares as a result of:



	•	a capital reorganization or reclassification of the Class B Shares or the Corporation Shares;



	•	a consolidation or merger of the Trust or the Corporation with another entity; or



	•	the sale, transfer, or lease of assets of the Trust or the Corporation to another person,

then, as a condition of such transaction, the Class A EPS will become exchangeable for the kind and amount of securities or other assets which such holders would have been entitled to receive if they had exchanged their Class A EPS immediately prior to the effective date of such transaction. If there are any accrued but undeclared dividends on any Class A EPS being exchanged, the number of Shares to be delivered will be increased accordingly.

Voting Rights. Except as required by law, the holders of Class A EPS are entitled to vote on any matter on which the holders of Class B Shares are entitled to vote. Each share of Class A EPS will entitle the holder to cast a number of votes equal to the largest whole number of Class A Underlying Trust Shares for which such shares of Class A EPS could be exchanged at such time.



	•	receive a preferred dividend based on the payment (with certain exceptions) of any dividend on the Corporation Shares or any liquidating distribution in respect of the Corporation Shares; and



	•	participate in any dividend paid on the Class B Shares (with certain exceptions).

These dividends accrue automatically and are cumulative from the date on which they accrue. No dividend on the Class B Shares may be declared unless each share of Class B EPS receives a corresponding dividend.

Liquidation Rights. If the Trust liquidates, dissolves or winds up its business, either voluntarily or involuntarily, the holders of Class B EPS will be entitled to receive a liquidating distribution in an amount equal to the Class B Liquidation Preference described below and to participate on the basis described below in any liquidating distribution to holders of Class B Shares. Holders of Class B EPS have the right to receive these distributions prior to any distribution or payment to holders of Class B Shares or any other class or series of shares of beneficial interest in the Trust ranking junior to the Class B EPS. The “Class B Liquidation Preference” of a share of Class B EPS as of any date equals the sum of (x) $38.50 plus (y) the amount of any accrued but unpaid dividends in respect of each share of Class B EPS. In addition, the holders of Class B EPS will be entitled to participate ratably with the holders of Class B Shares in any liquidating distributions to such holders. For such purpose, each share of Class B EPS will be deemed to

Exchange or Redemption of Class B EPS at the Option of the Holders. Holders of Class B EPS have the option, at any time prior to January 2, 2004, to exchange their shares for a like number of shares of Class A EPS, subject to adjustment. At any time from and after January 2, 2003, a holder of Class B EPS may require us to do one of two things:



	•	redeem the Class B EPS for cash equal to $38.50 plus accrued but unpaid dividends; or



	•	convert each share of Class B EPS into a number of shares of Class A EPS equal to (x) $38.50 plus accrued but unpaid dividends, divided by (y) the Underlying Share Value of one share of Class A EPS. As used in this prospectus, “Underlying Share Value” as of a given date means the product of (A) the average closing price of the Shares on the principal national securities exchange on which the shares are listed during the five trading days preceding such date multiplied by (B) the number of Shares for which each share of Class A EPS is then exchangeable.

Prior to January 2, 2004, an exchanging holder may elect whether to receive cash or Shares; after this date, we will have the right to elect whether to deliver cash or Shares.

Exchange or Redemption of Class B EPS at the Option of the Trust. At any time and from time to time after January 2, 2003, we have the option to redeem the Class B EPS, in whole or in part, for cash or exchange the Class B EPS, in whole or in part, for Class A EPS, although prior to January 2, 2004, we must redeem such shares of Class B EPS for cash and not shares of Class A EPS. Prior to January 2, 2003, the exchange ratio of shares of Class B EPS for shares of Class A EPS is subject to adjustment from time to time based on the occurrence of stock dividends, stock splits, reverse stock splits and other similar events in respect of the Class A EPS. The number of Shares for which each share of Class B EPS is indirectly exchangeable at any given time has two components: the Corporation Share component is referred to as the “Class B Underlying Corporation Share” and the Class B Share component is referred to as the “Class B Underlying Trust Share.” In addition, if holders of Class A EPS should be entitled to receive securities or other assets with respect to or in exchange for Class A EPS as a result of:



	•	a capital reorganization or reclassification of the Class A EPS;



	•	a consolidation or merger of the Trust or the Corporation with another entity; or



	•	the sale, transfer, or lease of assets of the Trust or the Corporation to another person,

then, as a condition of such transaction, the Class B EPS will become exchangeable for the kind and amount of securities or other assets which such holders would have been entitled to receive if they had exchanged their Class B EPS immediately prior to the effective date of such transaction. If there are any accrued but undeclared dividends on any Class B EPS being exchanged, the number of shares of Class A EPS to be delivered will be increased accordingly.

Special Default Rights. If we default in our exchange or redemption obligations and do not cure such default within 30 days, then:



	•	the holders of the Class B EPS will have the right to designate two additional trustees for the Trust;



	•	the dividend rate on the Class B EPS will be increased;



	•	the holders of Class B EPS will have certain registration rights; and



	•	certain redemption or exchange dates will be extended.

Upon the occurrence and during the continuation of any default that remains uncured for 30 days, cumulative dividends will accrue (with certain exceptions) on the $38.50 stated value of the Class B EPS at a rate per annum equal to LIBOR plus 4% and will be payable quarterly.

Voting Rights. Except as required by law and as described above with respect to the designation of additional trustees, the holders of Class B EPS are entitled to vote on any matter on which the holders of Class B Shares are entitled to vote. Each share of Class B EPS will entitle the holder to cast a number of votes equal to the largest whole number of Class B Underlying Trust Shares for which such shares of Class B EPS could be exchanged at such time.

The following description briefly summarizes the material terms of preferred stock that may be offered under this prospectus, other than pricing and related terms that are disclosed in the accompanying prospectus supplement. You should read the particular terms of any series of preferred stock offered by the Corporation and/or the Trust which will be described in more detail in any prospectus supplement relating to such series, together with the more detailed provisions of the Corporation’s charter and/or the Trust’s declaration of trust and the articles supplementary relating to each particular series of preferred stock for provisions that may be important to you. The articles supplementary relating to the particular series of preferred stock offered by the accompanying prospectus supplement and this prospectus will be filed as an exhibit to a document incorporated by reference in the registration statement. The prospectus supplement will also state whether any of the terms summarized below do not apply to the series of preferred stock being offered. For a description of our outstanding preferred stock, see “— Trust Preferred Shares.”

General. Under the Corporation’s charter and the Trust’s declaration of trust, the board of directors of the Corporation and the board of trustees of the Trust are authorized to issue shares of preferred stock of the Corporation or preferred shares of beneficial interest of the Trust (which preferred shares may be referred to in this prospectus as “preferred stock”), respectively, in one or more series, and to establish from time to time a series of preferred stock with the following terms specified:



	•	the number of shares to be included in the series,



	•	the preferences, conversion and other rights, voting powers and terms or conditions of redemption of the shares of the series, and



	•	the qualifications, limitations as to dividends and other distributions, or restrictions of the series, except as otherwise stated in the applicable charter documents.

The Corporation and the Trust may each authorize and issue a series of preferred stock, the shares of which series may be attached and trade together as a unit. Or, the Corporation or the Trust may authorize and issue a series of preferred stock without the issuance by the other entity of a corresponding series. Prior to the issuance of any series of preferred stock, the board of directors or the board of trustees, as applicable, will adopt resolutions creating and designating the series as a series of preferred stock and the Corporation or the Trust, as applicable, will file articles supplementary with the State Department of Assessments and Taxation of Maryland.

The rights of the holders of the preferred stock offered may be adversely affected by the rights of holders of any shares of preferred stock that may be issued in the future. The board of directors and the board of trustees may cause shares of preferred stock to be issued in public or private transactions for any proper corporate or trust purpose. Examples of proper corporate and trust purposes include issuances to obtain additional financing in connection with acquisitions or otherwise, and issuances to officers, directors and employees of the Corporation and its subsidiaries pursuant to benefit plans or otherwise. Shares of preferred stock issued by the Corporation and/or the Trust may have the effect of rendering more difficult or discouraging an acquisition of us deemed undesirable by our board of directors and board of trustees.

The preferred stock will be, when issued, fully paid and nonassessable. Holders of preferred stock will not have any preemptive or subscription rights to acquire more stock of the Corporation or the Trust, as applicable.

The transfer agent, registrar, dividend disbursing agent and redemption agent for shares of each series of preferred stock will be named in the prospectus supplement relating to such series.

Rank. Unless otherwise specified in the prospectus supplement relating to the shares of any series of preferred stock, such shares will rank on an equal basis with each other series of preferred stock and prior to, in the case of the Corporation, the Corporation Shares and, in the case of the Trust, the Class A Shares and Class B Shares, as to dividends and distributions of assets.

Dividends. Holders of each series of preferred stock will be entitled to receive cash dividends, when, as and if declared by the board of directors or board of trustees, as applicable, out of funds legally available for dividends. The rates and dates of payment of dividends will be set forth in the prospectus supplement relating to each series of preferred stock. Dividends will be payable to holders of record of preferred stock as they appear on the books of the Corporation and/or the Trust or, if applicable, the records of the depositary referred to below under “Description of Depositary Shares,” on the record dates fixed by the board of directors and/or the board of trustees. Dividends on any series of preferred stock may be cumulative or noncumulative.

The Corporation or the Trust, as applicable, may not declare, pay or set apart for payment dividends on the preferred stock unless full dividends on any other series of preferred stock of the Corporation or the Trust, as applicable, that ranks on an equal or senior basis have been paid or sufficient funds have been set apart for payment for



	•	all prior dividend periods of the other series of preferred stock that pay dividends on a cumulative basis, or



	•	the then current dividend period of the other series of preferred stock that pay dividends on a noncumulative basis.

Partial dividends declared on shares of preferred stock and any other series of preferred stock ranking on an equal basis as to dividends will be declared pro rata. A pro rata declaration means that the ratio of dividends declared per share to accrued dividends per share will be the same for all series of preferred stock.

Similarly, the Corporation or the Trust, as applicable, may not declare, pay or set apart for payment non-stock dividends or make other payments on the Corporation Shares, the Class B Shares, the Class A Shares or any other stock of the Corporation or the Trust, as applicable, ranking junior to the preferred stock until full dividends on the preferred stock have been paid or set apart for payment for



	•	all prior dividend periods if the preferred stock pays dividends on a cumulative basis, or



	•	the then current dividend period if the preferred stock pays dividends on a noncumulative basis.

Conversion and Exchange. The prospectus supplement for any series of preferred stock will state the terms, if any, on which shares of that series are convertible into or exchangeable for Shares.

Redemption. If so specified in the applicable prospectus supplement, a series of preferred stock may be redeemable at any time, in whole or in part, at the option of the Corporation or the Trust, as applicable, or the holder thereof and may be mandatorily redeemed. Any partial redemptions of preferred stock will be made in a way that the board of directors or board of trustees, as applicable, decides is equitable. Unless the Corporation or the Trust, as applicable, defaults in the payment of the redemption price, dividends will cease to accrue after the redemption date on shares of preferred stock called for redemption and all rights of holders of such shares will terminate except for the right to receive the redemption price.

Liquidation Preference. Upon any voluntary or involuntary liquidation, dissolution or winding up of the Corporation or the Trust, as applicable, holders of each series of preferred stock will be entitled to receive distributions upon liquidation in the amount set forth in the prospectus supplement relating to such series of preferred stock, plus an amount equal to any accrued and unpaid dividends. Such distributions will be made before any distribution is made on any securities ranking junior relating to liquidation, including Shares and Class A Shares. If the liquidation amounts payable relating to the preferred stock of any series and any other securities ranking on a parity regarding liquidation rights are not paid in full, the

holders of the preferred stock of such series and such other securities will share in any such distribution of available assets of the Corporation or the Trust, as applicable, on a ratable basis in proportion to the full liquidation preferences. Holders of such series of preferred stock will not be entitled to any other amounts from the Corporation or the Trust, as applicable, after they have received their full liquidation preference.

Voting Rights. The holders of shares of preferred stock will have no voting rights, except:



	•	as otherwise stated in the prospectus supplement,



	•	as otherwise stated in the articles supplementary for such series, or



	•	as required by applicable law.

Ownership Limits; Restrictions on Transfer; Repurchase and Redemption of Shares

Our governing documents provide (subject to certain exceptions) that no one person or group may own or be deemed to own more than 8% of our outstanding stock or shares of beneficial interest, whether measured by vote, value or number of shares. There is an exception for shareholders who owned more than 8% as of February 1, 1995, who may not own or be deemed to own more than the lesser of 9.9% and the percentage of shares they held on that date, provided, that if the percentage of shares beneficially owned by such a holder decreases after February 1, 1995, such a holder may not own or be deemed to own more than the greater of 8% and the percentage owned after giving effect to the decrease. We may waive this limitation if we are satisfied that such ownership will not jeopardize the Trust’s status as a REIT. In addition, if shares which would cause the Trust to be beneficially owned by fewer than 100 persons are issued or transferred to any person, such issuance or transfer shall be null and void. Any ownership of our capital stock constitutes an on-going agreement to comply with this limitation and to give us written notice of any event that would violate it.

If a transfer or other event occurs that would, if effective, result in someone owning our capital stock in violation of this 8% limitation, such transfer will be deemed void with respect to the number of shares that would be owned in violation of the 8% limitation. The shares that exceed the limit would automatically be exchanged for Excess Trust Shares or Excess Corporation Stock, as applicable (collectively, “Excess Stock”), to the extent necessary to ensure that the transfer or other event would not result in ownership of our capital stock in excess of the 8% limitation.

Any Excess Trust Shares and Excess Corporation Stock that we may issue in exchange for Shares will be “attached” in the same manner that the Class B Shares and the Corporation Shares are currently attached. While outstanding, Excess Stock will be held in trust. We will appoint the trustees of the trust, who shall be independent of the Trust, the Corporation and the holder of Excess Stock. The beneficiary of the trust shall be one or more charitable organizations selected by the trustee. If, after the transfer or other event resulting in an exchange of shares in the Trust or the stock of the Corporation for Excess Stock and prior to our discovery of such exchange, dividends or distributions are paid with respect to the capital stock that was exchanged for Excess Stock, then such dividends or distributions are to be repaid to the trustee upon demand.

While Excess Stock is held in trust, an interest in that trust may be transferred by the trustee only to a person whose ownership of shares in the Trust or the stock of the Corporation will not violate the 8% limitation. At the time of this transfer the Excess Stock will be automatically exchanged for the same number of shares in the Trust or the stock of the Corporation of the same type and class as the shares in the Trust or the stock of the Corporation for which the Excess Stock was originally exchanged. Our governing documents provide that holders of Excess Stock may not receive an amount that reflects any appreciation in the shares in the Trust or the stock of the Corporation for which such Excess Stock was exchanged during the period that such Excess Stock was outstanding. Any excess amount so received must be turned over to the charitable beneficiary of the trust.

Our governing documents further provide that we may purchase, for a period of 90 days during the time the Excess Stock is held in trust, all or any portion of the Excess Stock from the original transferee-

shareholder at the lesser of the price paid for the shares in the Trust or the stock of the Corporation by the purported transferee and the closing market price for the shares in the Trust or the stock of the Corporation on the date we exercise our option to purchase. The 90-day period begins on the date of the violative transfer if the original transferee-shareholder gives us notice of the transfer or, if no notice is given, on the date we determine that a violative transfer has been made.

All persons who own or are deemed to own 5% or more, or such other percentage as may be applicable, of our outstanding capital stock must file an affidavit with us before January 30 of each year. In addition, each shareholder upon demand must disclose to us in writing such information with respect to the direct, indirect and constructive ownership of shares as we deem necessary to comply with our governing documents or applicable laws and regulations.

In addition to those described above, certain provisions in our governing documents may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with us rather than pursue non-negotiated takeover attempts.

Our board of directors is divided into three classes as nearly equal as possible. Each class is elected for a three-year term. At each annual meeting of shareholders, approximately one-third of the members of the board of directors are elected for a three-year term and the other directors remain in office until their three-year terms expire. Furthermore, our governing documents provide that no director may be removed without cause. Any removal for cause requires the affirmative vote of the holders of at least two-thirds of all the votes entitled to be cast for the election of directors.

Thus, control of the board of directors cannot be changed in one year without removing the directors for cause as described above. Consequently, at least two annual meetings must be held before a majority of the members of the board of directors can be changed. Our charter provides that the charter cannot be amended without the approval of the holders of at least a majority of the outstanding shares entitled to vote thereon.

In order to protect our shareholders from coercive or unfair takeover tactics, on March 15, 1999, we adopted a Rights Agreement. Pursuant to the Rights Agreement, our board of directors declared a distribution of one right to purchase a Share consisting of 1/1000th of one share (a “Preferred Fraction”) of Series A Junior Participating Preferred Stock at an exercise price of $125 per Share, subject to certain antidilution adjustments, for each outstanding Corporation Share. The board of directors also authorized the issuance of one Right for each Corporation Share issued after the record date and before the earliest of:



	•	the Distribution Date (as defined below);



	•	redemption or exchange of the Rights; and



	•	April 5, 2009.

As of the date of the registration statement of which this prospectus is a part, the Rights (1) are attached to and can be transferred only with the Corporation Shares, (2) are not exercisable, and (3) are represented by the certificates representing the Corporation Shares. The Rights will separate from the Corporation Shares and become exercisable, and the “Distribution Date” will occur, upon the earlier of:

Once a person or group has become an acquiring person, each holder of a Right other than the acquiring person has the right to receive, upon exercise of the Right, Shares having a market value of twice the then-current exercise price of the Right, or, in some cases, cash, property or other of our securities. Similarly, unless specific conditions are met, if after a person or group has become an acquiring person:



	•	we engage in a merger or other business combination in which we are not the surviving corporation,



	•	we are acquired in a merger or other business combination in which we are the surviving corporation but as a result of the merger or combination, all or a part of the Corporation Shares are converted into securities of another entity, cash or other property, or



	•	50% or more of the Corporation’s assets or earning power are sold or otherwise transferred,

then, in any of these events, the Rights will become exercisable for stock of the acquiror having a market value of twice the then-current exercise price of the Rights, or, in some cases, cash or other property.

We may redeem all the Rights, but not less than all the Rights, at a price of $.01 per Right at any time before the earlier of:



	•	10 days after a person or group first becomes an acquiring person; and



	•	April 5, 2009.

We may, at our option, pay the redemption price in cash, Shares or any other form of consideration that we determine is appropriate. Immediately upon our election to redeem the Rights, the right to exercise the Rights will terminate and the only right that a holder of Rights will have will be to receive payment of the redemption price.

Until a Right is exercised, the holder of a Right, as such, has no rights as a shareholder, including the right to vote or to receive dividends or other distributions.

The purchase price payable, and the number of Preferred Fractions or other securities issuable, upon exercise of the Rights and the redemption price are subject to adjustment from time to time to prevent dilution under circumstances specified in the Rights Agreement.

The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group that attempts to acquire us without conditioning the offer on a substantial number of Rights being acquired or approval of our board of directors. The Rights should not interfere with any merger or other business combination approved by our board of directors. A full description of all the terms and conditions of the Rights is contained in a Rights Agreement, which is incorporated into this registration statement by reference and a copy of which was filed with the SEC on March 15, 1999 as an exhibit to our Registration Statement on Form 8-A filed with the SEC on that date. Because this is a summary, it is not a complete description of the provisions governing the Rights. For a complete description of all the terms of the Rights, you should carefully read the complete Rights Agreement.

Under the MGCL, certain “business combinations” (including mergers, consolidations, share exchanges, or, in certain circumstances, asset transfers or issuances or reclassifications of equity securities) between a Maryland corporation or a Maryland real estate investment trust and any person who beneficially owns 10% or more of the voting power of the corporation’s or trust’s shares or an affiliate of the corporation or trust who, at any time within the two-year period prior to the date in question, was the beneficial owner of 10% or more of the voting power of the then-outstanding voting shares of the

corporation or trust or an affiliate thereof, are prohibited or restricted unless exempted. We have exempted all “business combinations” involving any party from the business combination provisions of the MGCL.

Under Maryland law, under certain circumstances “control shares” of a Maryland corporation or a Maryland real estate investment trust acquired in a “control share acquisition” may have no voting rights. We have exempted all control share acquisitions involving any person from the MGCL.

We may, at our option, elect to offer fractional shares of serial preferred stock, rather than full shares of serial preferred stock. If we do, we will issue to the public receipts for depositary shares, and each of these depositary shares will represent a fraction of a share of a particular series of preferred stock. We will specify that fraction in the prospectus supplement.

The shares of any series of preferred stock underlying the depositary shares will be deposited under a deposit agreement between the Corporation and/or the Trust, as applicable, and a depositary selected by us. The depositary will be a bank or trust company and will have its principal office in the United States and a combined capital and surplus of at least $50 million. Subject to the terms of the deposit agreement, each owner of a depositary share will be entitled, in proportion to the applicable fractional interest in shares of preferred stock underlying that depositary share, to all the rights and preferences of the preferred stock underlying that depositary share. Those rights include dividend, voting, redemption, conversion and liquidation rights.

The depositary shares will be evidenced by depositary receipts issued under the deposit agreement. We will issue depositary receipts to those persons who purchase the fractional interests in the preferred stock underlying the depositary shares, in accordance with the terms of the offering.

The following summary of the deposit agreement, the depositary shares and the depositary receipts is not complete. You should refer to the form of the deposit agreement that is filed as an exhibit to this registration statement.

The depositary will distribute all cash dividends or other cash distributions received in respect of the preferred stock to the record holders of related depositary shares in proportion to the number of depositary shares owned by those holders.

If we make a distribution other than in cash, the depositary will distribute property received by it to the record holders of depositary shares that are entitled to receive the distribution, unless the depositary determines that it is not feasible to make the distribution. If this occurs, the depositary may, with our approval, sell the property and distribute the net proceeds from the sale to the applicable holders.

Whenever we redeem shares of preferred stock that are held by the depositary, the depositary will redeem, as of the same redemption date, the number of depositary shares representing the shares of preferred stock so redeemed. The redemption price per depositary share will be equal to the applicable fraction of the redemption price per share payable with respect to that series of the preferred stock. If fewer than all the depositary shares are to be redeemed, the depositary will select the depositary shares to be redeemed by lot or pro rata as determined by the depositary.

Depositary shares called for redemption will no longer be outstanding after the applicable redemption date, and all rights of the holders of those depositary shares will cease, except the right to receive any money, securities, or other property upon surrender to the depositary of the depositary receipts evidencing those depositary shares.

Upon receipt of notice of any meeting at which the holders of preferred stock are entitled to vote, the depositary will mail the information contained in the notice of meeting to the record holders of the depositary shares underlying that preferred stock. Each record holder of those depositary shares on the record date (which will be the same date as the record date for the preferred stock) will be entitled to

instruct the depositary as to the exercise of the voting rights pertaining to the amount of the preferred stock underlying that holder’s depositary shares. The depositary will try, as far as practicable, to vote the number of shares of preferred stock underlying those depositary shares in accordance with those instructions, and we will agree to take all action that the depositary deems necessary in order to enable the depositary to do so. The depositary will not vote the shares of preferred stock to the extent it does not receive specific instructions from the holders of depositary shares underlying the preferred stock.

We and the depositary may amend the form of depositary receipt evidencing the depositary shares and any provision of the deposit agreement at any time. However, any amendment that materially and adversely alters the rights of the holders of depositary shares will not be effective unless the amendment has been approved by the holders of at least a majority of the depositary shares then outstanding. The deposit agreement may be terminated by us or by the depositary only if (a) all outstanding depositary shares have been redeemed or (b) there has been a final distribution of the underlying preferred stock in connection with our liquidation, dissolution or winding up and the preferred stock has been distributed to the holders of depositary receipts.

We will pay all transfer and other taxes and governmental charges arising solely from the existence of the depositary arrangements. We will also pay charges of the depositary in connection with the initial deposit of the preferred stock and any redemption of the preferred stock. Holders of depositary receipts will be required to pay transfer and other taxes and governmental charges and such other charges as are expressly provided in the deposit agreement to be for their accounts.

The depositary may resign at any time by delivering a notice to us of its election to do so. We may remove the depositary at any time. Any such resignation or removal will take effect upon the appointment of a successor depositary and its acceptance of its appointment. We must appoint a successor depositary within 60 days after delivery of the notice of resignation or removal. The successor depositary must be a bank or trust company having its principal office in the United States and having a combined capital and surplus of at least $50 million.

The depositary will be required to forward to holders of depositary receipts all reports and communications from us that we deliver to the depositary and that we are required to furnish to the holders of the preferred stock.

Neither we nor the depositary will be liable if either of us is prevented or delayed by law or any circumstance beyond our control in performing our respective obligations under the deposit agreement. Our obligations and those of the depositary will be limited to performing in good faith our respective duties under the deposit agreement. Neither we nor the depositary will be obligated to prosecute or defend any legal proceeding relating to any depositary shares or preferred stock unless satisfactory indemnity is furnished. We and the depositary may rely upon written advice of counsel or accountants, or upon information provided by persons presenting preferred stock for deposit, holders of depositary receipts or other persons we believe to be competent and on documents we believe to be genuine.

We may issue warrants to purchase debt securities (“debt warrants”), preferred stock (“preferred stock warrants”), or Shares (“common stock warrants” and, collectively with the preferred stock warrants, the “stock warrants”). We may issue warrants independently or together with any other securities we offer

pursuant to a prospectus supplement and the warrants may be attached to or separate from the securities. We will issue each series of warrants under a separate warrant agreement that we will enter into with a bank or trust company, as warrant agent. We will describe additional terms of the warrants and the applicable warrant agreements in the applicable prospectus supplement.

We will describe in the applicable prospectus supplement the terms of the debt warrants being offered, the warrant agreement relating to the debt warrants and the debt warrant certificates representing the debt warrants, which may include the following:



	•	the title of the debt warrants;



	•	the price or prices at which the debt warrants will be issued;



	•	the aggregate number of the debt warrants;



	•	the designation and terms of the debt securities purchasable upon exercise of the debt warrants, and the procedures and conditions relating to the exercise of the debt warrants;



	•	the designation and terms of any related debt securities with which the debt warrants are issued, and the number of the debt warrants issued with each security;



	•	the date, if any, on and after which the debt warrants and the related debt securities will be separately transferable;



	•	the principal amount of debt securities purchasable upon exercise of each debt warrant, and the price at which the principal amount of the debt securities may be purchased upon exercise;



	•	the date on which the right to exercise the debt warrants will commence, and the date on which the right will expire;



	•	the maximum or minimum number of the debt warrants that may be exercised at any time;



	•	whether the debt warrants represented by the debt warrant certificates or debt securities that may be issued upon exercise of the debt warrants will be issued in registered or bearer form;



	•	information with respect to book-entry procedures, if any;



	•	the currency or currency units in which the offering price, if any, and the exercise price are payable;



	•	a discussion of the material United States federal income tax considerations applicable to the exercise of the debt warrants;



	•	the antidilution provisions, if any, and the redemption or call provisions, if any, applicable to the debt warrants; and



	•	any other terms of the debt warrants, including terms, procedures and limitations relating to the exercise of the debt warrants.

Holders may exchange debt warrant certificates for new debt warrant certificates of different denominations, and may exercise debt warrants at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement. Prior to the exercise of their debt warrants, holders of debt warrants will not have any of the rights of holders of the securities purchasable upon the exercise and will not be entitled to payments of principal, premium or interest on the securities purchasable upon the exercise.

We will describe in the applicable prospectus supplement the terms of the preferred stock warrants or common stock warrants being offered, which may include the following:



	•	the title of the warrants;



	•	the price or prices at which the warrants will be issued;



	•	the aggregate number of the warrants issued;



	•	the designation and terms of the preferred stock or Shares for which the warrants are exercisable;



	•	if applicable, the designation and terms of the preferred stock or Shares with which the warrants are issued;



	•	the number of the warrants issued with each Share or share of preferred stock;



	•	if applicable, the date on and after which the warrants and the related preferred stock or Share will be separately transferable;



	•	the number of Shares or shares of preferred stock purchasable upon exercise of the warrants and the exercise price of the warrants;



	•	the date on which the right to exercise the warrants will commence, and the date on which the right will expire;



	•	the maximum or minimum number of the warrants that may be exercised at any time;



	•	the currency or currency units in which the offering price, if any, and the exercise price are payable;



	•	if applicable, a discussion of the material United States federal income tax considerations applicable to the exercise of the warrants;



	•	any antidilution provisions of the warrants;



	•	any redemption or call provisions applicable to the warrants; and



	•	any other terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.

Each warrant will entitle the holder of the warrant to purchase for cash at the exercise price set forth in the applicable prospectus supplement the principal amount of debt securities, Shares or shares of preferred stock being offered. Holders may exercise warrants at any time up to the close of business on the expiration date set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants are void.

Holders may exercise warrants as set forth in the prospectus supplement relating to the warrants being offered. Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the prospectus supplement, we will, as soon as practicable, forward the debt securities or shares of preferred stock or Shares purchasable upon the exercise of the warrant. If less than all the warrants represented by the warrant certificate are exercised, we will issue a new warrant certificate for the remaining warrants.

In order to facilitate an underwritten offering of Shares or any other of our equity securities, underwriters may purchase a series of notes convertible into such Shares or other equity securities (“Convertible Notes”). The Convertible Notes will be automatically converted into Shares or other equity

securities (at a conversion price equal to the public offering price of the Shares or such other securities, as the case may be) upon certification to the Convertible Note Trustee (defined below) of the transfer of beneficial ownership of the Convertible Notes to any person or entity which is not an underwriter or a selected dealer in the offering or an affiliate of any of either. The automatic conversion will take place without physical delivery of the Convertible Notes to any transferee of an underwriter, selected dealer or affiliate; such transferee will receive only a certificate for the Shares issued upon such conversion. The structure of such an offering is designed to avoid the possibility that the underwriters, selected dealers and the affiliates of either, or any of them, would acquire 8% or more of the Shares in violation of the 8% ownership limitation.

Because the Convertible Notes automatically will be converted into Shares upon sale to the public, we do not expect a market for the Convertible Notes to develop. We are providing the following description of the Convertible Notes in the event that any Convertible Notes are acquired and held by any underwriter, selected dealer or affiliate of any of either, in whose hands the Convertible Notes do not automatically convert into Shares.

We will issue the Convertible Notes under an indenture (the “Convertible Note Indenture”) to be dated as of the date of such underwritten offering between us and the trustee for such notes under the indenture (the “Convertible Note Trustee”). The following statements relating to the Convertible Notes and the Convertible Note Indenture are summaries, do not purport to be complete and are qualified in their entirety by reference to the Convertible Notes and the Convertible Note Indenture.

The Convertible Notes will not bear interest. The Convertible Notes will be issued in registered form in denominations of the same dollar amount as a multiple of the public offering price of the Shares and will be unsecured, several obligations of the Trust and the Corporation maturing on the date six months after the date of the Convertible Note Indenture. At our option, the maturity date of the Convertible Notes may be extended at any time or from time to time, by written notice to the Convertible Note Trustee prior to the maturity date, including any extension thereof, to a date not later than the second anniversary of the initial maturity date.

There are no redemption or sinking fund provisions applicable to the Convertible Notes and the Convertible Notes are not subject to our redemption prior to maturity.



	•	our failure to pay principal owing in respect of any Convertible Note when due;



	•	our failure to comply with any of our other agreements in the Convertible Notes or the Convertible Note Indenture, continued for 90 days after notice is given as provided in the Convertible Note Indenture; and



	•	certain events of bankruptcy, insolvency or reorganization.

If an Event of Default occurs and is continuing, either the Convertible Note Trustee or the holders of at least 25% in aggregate principal amount of the Convertible Notes outstanding may declare the entire principal amount of the Convertible Notes to be due and payable immediately.

The Convertible Note Indenture provides that, subject to the duty of the Convertible Note Trustee during default to act with the required standard of care, the Convertible Note Trustee will be under no obligation to exercise any of its rights or powers under the Convertible Note Indenture unless it shall have received reasonable security and indemnity from the holders of the Convertible Notes against any costs, expenses or liabilities. Subject to such provisions for the indemnification of the Convertible Note Trustee, the holders of a majority in aggregate principal amount of the outstanding Convertible Notes will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Convertible Note Trustee or exercising any trust or power conferred on the Convertible Note Trustee.

The Convertible Note Indenture does not require us to furnish to the Convertible Note Trustee any periodic evidence as to the absence of any default under the Convertible Note Indenture or our compliance with the terms of the Convertible Note Indenture.

The Convertible Note Indenture or the Convertible Notes may be amended or supplemented without the consent of the noteholders in certain circumstances and with the consent of holders of at least a majority of the principal amount of the Convertible Notes at the time outstanding, subject to certain exceptions. Any past default, or compliance with any provision may be waived with the consent of the holders of a majority of the principal amount of the Convertible Notes at the time outstanding.

The following is a summary of some of the material United States federal income tax considerations that may be relevant to a prospective holder of Shares or debt securities we may offer. This summary is based upon the Internal Revenue Code of 1986, as amended (the “Code”), as currently in effect, applicable Treasury Regulations under the Code and judicial and administrative interpretations of the Code, all of which are subject to change, including changes that may be retroactive. This summary is for information purposes only and does not purport to deal with all aspects of taxation that may be relevant to holders of Shares or debt securities in light of their personal investment or tax circumstances. Except as specifically provided, the discussion below does not address foreign, state or local tax consequences, nor does it specifically address the tax consequences to taxpayers subject to special treatment under the federal income tax laws. We will address the United States federal income tax consequences applicable to other securities we may offer in a prospectus supplement.

Sidley Austin Brown & Wood, our special tax counsel, is opining on certain United States federal income tax consequences with respect to our securities. This opinion has been filed as an exhibit to the registration statement of which this prospectus is a part.

WE URGE EACH OF YOU TO CONSULT WITH YOUR TAX ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND SALE OF SECURITIES INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND SALE OF SECURITIES.

As used herein, the term “U.S. Shareholder” means a holder of Shares who is: (1) a citizen or resident of the United States; (2) a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof; (3) an estate the income of which is subject to United States federal income tax regardless of its source; or (4) a trust described in Section 7701(a)(30) of the Code, taking into account effective dates, transition rules and elections. As long as the Trust qualifies as a REIT, distributions made by the Trust to U.S. Shareholders up to the amount of the Trust’s current or accumulated earnings and profits, and not designated as capital gain dividends, will be taken into account by U.S. Shareholders as ordinary income and will not be eligible for the dividends-received deduction otherwise available to corporations. Distributions made by the Corporation to U.S. Shareholders up to the amount of the Corporation’s current or accumulated earnings and profits will be taken into account by U.S. Shareholders as ordinary income. Provided certain conditions are met, U.S. shareholders that are corporations should be entitled to the dividends-received deduction with respect to amounts treated as ordinary income.

To the extent they do not exceed the Trust’s actual net capital gain for the taxable year, distributions that are properly designated by the Trust as capital gain dividends will be taxed as long-term capital gain without regard to the period for which the U.S. Shareholders have held their Shares. Any dividend declared by the Trust in October, November or December of any year payable to a U.S. Shareholder of record on a specified date in any such month will be treated as both paid by the Trust and received by the

If the Trust elects to retain and pay tax on its net capital gains, the Trust’s U.S. Shareholders will be required to include their proportionate share of the undistributed long-term capital gains in income and will receive a credit for their share of the tax paid by the Trust. The basis of the U.S. Shareholders’ Class B Shares will be increased by the amount of the undistributed long-term capital gains (less their share of the amount of tax paid by the Trust) included in the U.S. Shareholders’ income.

In general, a U.S. Shareholder will recognize capital gain or loss on the disposition of Shares equal to the difference between the amount realized on such disposition and the U.S. Shareholder’s adjusted basis in those Shares. This gain or loss will generally constitute long-term capital gain or loss if the U.S. Shareholder held the Shares for more than one year. However, any loss upon a sale or exchange of Class B Shares by a U.S. Shareholder who has held those shares for six months or less, after applying certain holding period rules, will be treated as a long-term capital loss to the extent of distributions from the Trust that are treated by the U.S. Shareholder as long-term capital gain.

In general, distributions by the Trust and the Corporation will not, subject to certain exceptions applicable to the Trust, be “unrelated business taxable income” (“UBTI”) to a qualified plan, IRA or other tax-exempt entity (a “Tax-Exempt Shareholder”) provided the Tax-Exempt Shareholder has not held its Shares as “debt financed property” within the meaning of Section 514 of the Code. Similarly, income from the sale of Class B Shares or Corporation Shares will not, subject to certain exceptions, constitute UBTI unless the Tax-Exempt Shareholder has held such Class B Shares or Corporation Shares as a dealer under Section 512(b)(5) of the Code or as “debt-financed property” within the meaning of Section 514 of the Code.

The rules governing the United States federal income taxation of the ownership and disposition of Shares by holders of Shares who are not U.S. Shareholders (hereinafter referred to as “Non-U.S. Shareholders”) are complex, and no attempt is made herein to provide more than a brief summary of such rules.

In general, a Non-U.S. Shareholder will be subject to regular United States federal income tax with respect to its investment in Shares if the income or gain attributable to such investment is “effectively connected” with the Non-U.S. Shareholder’s conduct of a trade or business in the United States. A corporate Non-U.S. Shareholder that receives income that is — or is treated as — effectively connected with a United States trade or business may also be subject to the branch profits tax under Section 884 of the Code, which is payable in addition to regular United States corporate income tax. The following discussion will apply to Non-U.S. Shareholders whose income or gain attributable to such investment in Shares is not so effectively connected.

Distributions by the Trust to a Non-U.S. Shareholder that are neither attributable to gain from sales or exchanges by the Trust of United States real property interests nor designated by the Trust as capital gains dividends, and all distributions by the Corporation, will be treated as dividends of ordinary income to the extent of current or accumulated earnings and profits. The Trust and the Corporation expect to withhold United States federal income tax at the rate of 30% on the gross amount of any such distributions made to a Non-U.S. Shareholder unless (1) a lower rate is provided for under an applicable tax treaty and the Non-U.S. Shareholder files the required form evidencing eligibility for that reduced rate with the Trust and the Corporation or (2) the Non-U.S. Shareholder files an IRS Form W-8ECI with the Trust and the Corporation claiming that the distribution is “effectively connected” income.

Distributions to a Non-U.S. Shareholder that are attributable to gain from sales or exchanges by the Trust of United States real property interests will cause the Non-U.S. Shareholder to be treated as recognizing such gain as income effectively connected with a United States trade or business. Non-U.S. Shareholders will thus generally be taxed at the same rates applicable to U.S. Shareholders. Also, such gain will be subject to a 30% branch profits tax in the hands of a Non-U.S. Shareholder that is a corporation and that is not entitled to an exemption under a tax treaty. The Trust is required to withhold and remit to the IRS 35% of any distribution that is or could be designated a capital gains dividend. That amount is creditable against the Non-U.S. Shareholder’s United States federal income tax liability.

Gain recognized by a Non-U.S. Shareholder upon a sale or other disposition of Corporation Shares generally will not be subject to United States federal income tax if (1) the Corporation is not a “United States real property holding corporation” (“USRPHC”) or (2)(a) the Corporation Shares are regularly traded on an established securities market (e.g., the NYSE, where the Shares are currently traded) at the time of the sale or other disposition and (b) the selling Non-U.S. Shareholder held 5% or less (by value) of the outstanding Corporation Shares during a specified period, unless, in the case of a Non-U.S. Shareholder who is a non-resident alien individual, such individual is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions apply. Although it is uncertain as to whether the Corporation is a USRPHC, there are no assurances that the Corporation is not, or will not become, a USRPHC.

Gain recognized by a Non-U.S. Shareholder upon a sale or other disposition of Class B Shares generally will not be subject to United States federal income tax if (1) the Trust is a “domestically controlled REIT” or (2)(a) the Class B Shares are regularly traded on an established securities market (e.g., the NYSE, where the Shares are currently traded) at the time of the sale or other disposition and (b) the selling Non-U.S. Shareholder held 5% or less (by value) of the outstanding Class B Shares at all times during a specified period, unless, in the case of a Non-U.S. Shareholder who is a non-resident alien individual, such individual is present in the United States for 183 days or more in the taxable year of the disposition and certain other conditions apply. A domestically controlled REIT is defined generally as a REIT in which at all times during a specified testing period less than 50% in value of the stock is held directly or indirectly by foreign persons. The Trust believes that it currently qualifies as a domestically controlled REIT.

This discussion applies only with respect to debt securities that are held as capital assets within the meaning of Section 1221 of the Code, and addresses only initial purchasers of the debt securities who purchase the debt securities at the initial offering price.

As used herein, the term “U.S. Noteholder” means a holder of debt securities who is: (1) a citizen or resident of the United States; (2) a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof; (3) an estate the income of which is subject to United States federal income tax regardless of its source; or (4) a trust described in Section 7701(a)(30) of the Code, taking into account effective dates, transition rules and elections.

The Corporation intends to characterize and treat the debt securities as indebtedness — as opposed to a stock or other equity-type interest — for all United States federal income tax purposes. Pursuant to Section 385(c) of the Code, such characterization will generally be binding upon all holders of debt securities, but not upon the IRS.

Interest paid or accrued in respect of debt securities will be includable in the U.S. Noteholder’s gross income, as ordinary interest income, in accordance with its regular method of tax accounting. A prospectus supplement and a supplemental indenture relating to any series of debt securities being offered will disclose the amount of the original issue discount, if any, attributable to the difference between the purchase price of the debt securities and their stated redemption price at maturity and the applicable rules with respect to the accrual of such original issue discount. If debt securities are issued at a discount that does not exceed 0.25% of the stated redemption price at maturity multiplied by the number of whole years to maturity, the amount of any original issue discount on the debt securities will generally be considered de minimis and thus treated as zero.

Unless a nonrecognition provision of the Code applies, a sale, exchange, retirement at maturity, redemption prior to maturity, including pursuant to an offer or exercise of a call option by the Corporation, or other disposition of debt securities will be a taxable event for United States federal income tax purposes. A U.S. Noteholder will recognize gain or loss equal to the difference between (1) the amount of cash plus the fair market value of any property received upon such disposition, and (2) the U.S. Noteholder’s tax basis in the debt security. Except with respect to that portion of the amount realized on disposition that represents accrued and unpaid interest, which will constitute ordinary income, such gain or loss generally will constitute capital gain or loss and will generally be long-term capital gain or loss if the debt securities were held for more than 12 months at the time of such sale, exchange, redemption or other disposition. For non-corporate U.S. Noteholders the excess of net long-term capital gains over net short-term capital losses is taxed under current law at a maximum rate of 20%. Gain on the disposition of capital assets held for one year or less is subject to United States federal income tax at ordinary income tax rates. Certain limitations exist on the deductibility of capital losses by both corporations and individual taxpayers.

The following discussion applies to any holder of debt securities who is not a U.S. Noteholder, as defined above. Such holders are hereafter referred to as “Non-U.S. Noteholders.”

Payments of interest by the Corporation or its agent (in its capacity as such) to a Non-U.S. Noteholder will not be subject to United States federal withholding tax, provided that (1) such Non-U.S. Noteholder does not actually or constructively own 10% or more of the total combined voting power of all classes of our stock entitled to vote; (2) such Non-U.S. Noteholder is not a controlled foreign corporation for United States federal income tax purposes (as defined in Section 957 of the Code) that is related, directly or indirectly, to the Corporation through stock ownership; (3) such interest payments are not effectively connected with the conduct by the Non-U.S. Noteholder of a trade or business within the United States; and (4) the certification requirements of Section 871(h) or Section 881(c) of the Code, as applicable, are satisfied. Under the certification rules, the beneficial owner of debt securities must certify to the Corporation or its agent, under penalties of perjury, that it is a Non-U.S. Noteholder and provide a completed IRS Form W-8BEN or substitute form. A Non-U.S. Noteholder who does not meet all of the above described requirements will generally be subject to United States federal withholding tax at a flat rate of 30% on payments of interest on the debt securities, unless (1) such Non-U.S. Noteholder otherwise qualifies for a withholding tax exemption or reduced withholding rate under an applicable treaty, or (2) the payments of interest by the Corporation or its agent (in its capacity as such) to such holder are effectively connected with the conduct by the Non-U.S. Noteholder of a trade or business in the United States.

If payments of interest with respect to the debt securities are effectively connected with the conduct by a Non-U.S. Noteholder of a trade or business within the United States, such Non-U.S. Noteholder, even though exempt from United States federal withholding tax, will be subject to United States federal

income tax on such interest and on any gain realized on a sale, exchange, retirement or other disposition of debt securities in the same manner as if it were a U.S. Noteholder. In addition, pursuant to Section 884(c) of the Code, if such Non-U.S. Noteholder is a foreign corporation it may be subject to a branch profits tax equal to 30% of its effectively connected earnings and profits for that taxable year, unless it qualifies for a lower rate under an applicable income tax treaty.

Any gain realized upon a sale, exchange, retirement or other disposition of debt securities by a Non-U.S. Noteholder generally will not be subject to United States federal income or withholding taxes, unless (1) such gain is effectively connected with the conduct by such Non-U.S. Noteholder of a trade or business within the United States or, under an applicable tax treaty, is attributable to a United States permanent establishment maintained by such Non-U.S. Noteholder; (2) in the case of an individual, such Non-U.S. Noteholder is present in the United States for 183 days or more in the taxable year of the sale, exchange, retirement or other disposition and certain other conditions are met; (3) such Non-U.S. Noteholder is subject to tax pursuant to the provisions of the United States tax law applicable to certain United States expatriates or nonresident aliens; or (4) at the time of such sale, exchange, retirement or other disposition, the debt securities constitute United States real property interests.

Information reporting requirements will generally apply to payments made to U.S. Shareholders or Noteholders with respect to, or to cash proceeds of a sale or exchange of, Shares or debt securities, unless the U.S. Shareholder or U.S. Noteholder is an exempt recipient such as a corporation. In addition, a 31% backup withholding tax will apply to such payments if the U.S. Shareholder or U.S. Noteholder fails to provide a taxpayer identification number or a certification of exempt status, or fails to report its interest income in full.

Non-U.S. Shareholders and Non-U.S. Noteholders generally will not be subject to information reporting or backup withholding on payments made to them with respect to, or to cash proceeds of a sale or exchange of, Shares or debt securities (including sales within the United States or conducted through certain United States-related financial intermediaries), provided that they comply with the certification requirements described above under “Federal Income Taxation of Non-U.S. Noteholders.”

Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the holder’s United States federal income tax liability provided the required information is furnished to the IRS.

We may sell the offered securities within or outside the United States (a) through agents, (b) through underwriters or dealers, (c) directly to one or more purchasers, or (d) through any combination of these methods.

Offered securities may be sold through agents designated by us. Unless otherwise indicated in the prospectus supplement, the agents will act on a best efforts basis to solicit purchases for the period of their appointment.

If underwriters are used in the sale, the offered securities will be acquired by the underwriters for their own account. The underwriters may resell the securities in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. The obligations of the underwriters to purchase the securities will be subject to certain conditions. Unless otherwise indicated in the prospectus supplement, the underwriters will be obligated to purchase all the securities of the series offered if any of the securities are purchased. Any offering price and any discounts or concessions allowed or re-allowed or paid to dealers may be changed from time to time. We may use underwriters with whom we have a material relationship. We will describe in the prospectus supplement naming the underwriter the nature of any such relationship.

We may also sell the offered securities pursuant to one or more standby agreements with one or more underwriters in connection with the call, redemption, conversion or exchange of a specified class or series of any of our securities. In a standby agreement, the underwriter or underwriters would agree either:



	•	to purchase from us up to the number of Shares that would be issuable upon conversion or exchange of all the specified class or series of our securities at an agreed price per Share; or



	•	to purchase from us up to a specified dollar amount of offered securities at an agreed price per offered security,

which price may be fixed or may be established by formula or other method and which may or may not relate to market prices of our Shares or any other security then outstanding.

The underwriter or underwriters would also agree, if applicable, to convert or exchange any securities of the class or series held or purchased by the underwriter or underwriters into or for our Shares or other securities. The underwriter or underwriters may assist in the solicitation of conversions or exchanges by holders of the class or series of securities.

If dealers are used in the sale of offered securities with respect to which this prospectus is delivered, we will sell the offered securities to the dealers as principals. The dealers may then resell the offered securities to the public at varying prices to be determined by the dealers at the time of resale. The names of the dealers and the terms of the transaction will be set forth in the applicable prospectus supplement.

Offered securities may also be sold directly by us. In this case, no underwriters, dealers or agents would be involved. We may sell offered securities upon the exercise of rights that may be issued to our securityholders.

Shares and convertible notes may be sold by any selling securityholder named in a prospectus supplement who acquires or acquired the securities from us in transactions that were not, or will not be, registered under the Securities Act. Sales of such securities by a selling securityholder may be effected from time to time in one or more of the following transactions:



	•	through brokers, acting as agents in transactions (which may involve block transactions), in special offerings, on any exchange where the securities are traded, or otherwise, at market prices obtainable at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices;



	•	block transactions in which the broker or dealer so engaged will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;



	•	to underwriters who will acquire the securities for their own account and resell them in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale (any public offering price and any discount or concessions allowed or reallowed or paid to dealers may be changed from time to time);



	•	ordinary brokerage transactions and transactions in which the broker solicits purchasers;



	•	directly or through brokers or agents in private sales at negotiated prices;



	•	to lenders pledged as collateral to secure loans, credit or other financing arrangements and any subsequent foreclosure and sale, if any, thereunder;



	•	through short sales, option exercises, puts, calls or other derivative transactions;



	•	an exchange distribution in accordance with the rules of that exchange or transactions in the over-the-counter market;



	•	the distribution of the securities by any selling securityholder to its partners, members or shareholders;



	•	by any other legally available means; or



	•	a combination of any of the above.

In addition, offers to purchase such securities may be solicited by agents designated by any selling securityholder from time to time. Such securities may also be offered and sold in private transactions or under Rule 144, Rule 144A or Regulation S under the Securities Act rather than pursuant to this prospectus.

We cannot assure you that any selling securityholder will sell any or all of its securities under this prospectus or that any selling securityholder will not transfer, devise or gift its securities by other means not described in this prospectus.

Sales may be made at prices and at terms then prevailing or at prices related to the then current market price or at negotiated prices and terms. In effecting sales, brokers or dealers may arrange for other brokers or dealers to participate.

In connection with a sale of such securities by any selling securityholder pursuant to this prospectus, the following information will, to the extent then required or known, be provided in the applicable prospectus supplement relating to such sale: the identity of the selling securityholder, the manner in which the selling securityholder acquired the securities from us, the amount of securities to be sold, the amount of securities of the class owned by such selling securityholder, the purchase price, the public offering price, if applicable, the name of any underwriter, broker, dealer or agent, and any applicable commissions, discounts or other items constituting compensation to any such underwriter, broker, dealer or agent with respect to the particular sale. In addition, any material relationship between a selling securityholder that is offering and selling securities and us within the past three years will be described in the applicable prospectus supplement or a document incorporated herein by reference.

Underwriters, brokers, dealers, agents, direct purchasers and selling securityholders that participate in the distribution of the offered securities may be underwriters as defined in the Securities Act, and any discounts or commissions they receive and any profit they make on the resale of the offered securities may be treated as underwriting discounts and commissions under the Securities Act. Any underwriters, dealers or agents will be identified and their compensation described in a prospectus supplement.

Underwriters, selling securityholders and any other person participating in the distribution may engage in overallotment, stabilizing transactions, syndicate covering transactions and penalty bids in accordance with the applicable provisions of the Exchange Act, including, without limitation, Regulation M under the Exchange Act, which may limit the timing of purchases and sales of any of the securities by the underwriters, selling securityholders and such other persons. Over-allotment involves syndicate sales in excess of the offering size, which creates a syndicate short position. Stabilizing transactions permit bids to purchase the offered securities so long as the stabilizing bids do not exceed a specified maximum. Syndicate covering transactions involve purchases of the offered securities in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the representative of the underwriters to reclaim a selling concession from a syndicate member when the offered securities originally sold by such syndicate member are purchased in a syndicate covering transaction to cover syndicate short positions. Such stabilizing transactions, syndicate covering transactions and penalty bids may cause the price of the offered securities to be higher than it would otherwise be in the absence of such transactions. These transactions may be effected on a national securities exchange and, if commenced, may be discontinued at any time.

We or any selling securityholder may enter into or have agreements with the underwriters, dealers, agents and selling securityholders to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments that the underwriters, dealers, agents or selling securityholders may be required to make. We may also enter into or have agreements for the benefit of securityholders who acquire or acquired offered securities from us in transactions that were not, or will not be, registered under the Securities Act, pursuant to which we agree to register their securities under applicable federal and state securities laws, and to pay some or all of the costs and expenses incidental to the registration, offering and sale of their securities.

Underwriters, brokers, dealers, agents and selling securityholders may engage in transactions with, or perform services for, us, our subsidiaries or selling securityholders in the ordinary course of their businesses.

Unless otherwise specified in the applicable prospectus supplement, each class or series of securities will be a new issue with no established trading market, other than the Shares, which are listed on the New York Stock Exchange. We may elect to list any class or series of securities on any exchange or quotation service, but we are not obligated to do so. Any qualified underwriters or agents to or through whom the offered securities are sold for public offering and sale may make a market in offered securities as permitted by Rule 103 of Regulation M, but such underwriters or agents will not be obligated to do so and may discontinue any market making at any time without notice. Furthermore, under Regulation M, any person engaged in the distribution of the securities may not simultaneously engage in market making activities with respect to the particular securities being distributed for particular periods prior to the commencement of the distribution. No assurances can be given as to the existence or liquidity of a trading market for any of the offered securities. All of the foregoing may affect the marketability of these securities and the ability of any person or entity to engage in market-making activities with respect to the securities.

Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland, will pass upon the validity of the issuance of Shares, preferred stock of the Corporation and preferred shares of the Trust. Sidley Austin

Brown & Wood, Chicago, Illinois, will pass upon the validity of the issuance of debt securities, warrants, depositary shares and Convertible Notes offered pursuant to this prospectus. Lawyers at Sidley Austin Brown & Wood participating in any such offering on behalf of such firm may own or hold options to purchase such numbers of our Shares or other securities as are set forth in the applicable prospectus supplement. Sidley Austin Brown & Wood may rely upon the opinion of Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland, as to certain matters of Maryland law. Any underwriters will be advised about issues relating to any offering by their own legal counsel.

The consolidated financial statements and schedules as of and for the three years ended December 31, 2000 incorporated by reference in this registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto, and are incorporated herein in reliance upon the authority of said firm as experts in giving said reports.

The following table sets forth the expenses in connection with the distribution of the securities covered by this Registration Statement. All of the amounts are estimated except for the registration fee. All of the expenses will be borne by the Corporation and the Trust except as otherwise indicated.

Item 15. Indemnification of Directors and Officers of the Corporation and the Trust.

The Corporation’s charter requires the Corporation to indemnify its directors and officers to the fullest extent required or permitted by law and to indemnify other employees and agents to such extent as may be authorized by the Board of Directors. The Declaration of Trust of the Trust obligates the Trust to indemnify its trustees, officers, employees and other agents to the fullest extent permitted by Maryland law for the indemnification of corporate directors, officers, agents or employees. The Maryland General Corporation Law (the “MGCL”) requires a corporation and permits a Maryland real estate investment trust (a “Maryland REIT”) (unless its charter or declaration provides otherwise, which the charter of the Corporation and the Declaration of Trust of the Trust do not) to indemnify a director, trustee or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he is made a party by reason of his service in that capacity. The MGCL permits a corporation or Maryland REIT to indemnify its present and former directors, trustees and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director, trustee or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) the director, trustee or officer actually received an improper personal benefit in money, property or services or (c) in the case of any criminal proceeding, the director, trustee or officer had reasonable cause to believe that the act or omission was unlawful. However, under the MGCL, a Maryland corporation or a Maryland REIT may not indemnify for an adverse judgment in a suit by or in the right of the corporation or the Maryland REIT or for a judgment of liability on the basis that personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses. In addition, the MGCL permits a corporation or a Maryland REIT to advance reasonable expenses to a director, trustee or officer upon the receipt by the corporation or the Maryland REIT of (a) a written affirmation by the director, trustee or officer of his good faith belief that he has met the standard of conduct necessary for indemnification by the corporation and (b) a written undertaking by or on his behalf to repay the amount paid or reimbursed by the corporation or the Maryland REIT if it shall ultimately be determined that the standard of conduct was not met.

The Corporation and the Trust have entered into indemnification agreements with their directors, trustees and executive officers providing for the maintenance of directors, trustees and officers liability insurance, subject to certain conditions, and the indemnification of and advancement of expenses to such directors, trustees and executive officers.

(a) Each of the undersigned Registrants hereby undertakes that insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of such Registrant pursuant to the foregoing provisions, or otherwise, such Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, each Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.


	(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:



	(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;



	(ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and


	(iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement;


	(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

	(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(c) The undersigned Registrants hereby further undertake that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrants’ annual reports pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing

of an employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.



	(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrants pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.



	(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(e) The undersigned Registrants further undertake to file an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act in accordance with the rules and regulations prescribed by the Commission under Section 305(b)(2) of the Act.

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Post-Effective Amendment No. 1 to Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of White Plains, State of New York, on this 24th day of August, 2001.

Each person whose signature to this Post-Effective Amendment No. 1 to Registration Statement appears below hereby appoints Barry S. Sternlicht, Ronald C. Brown and Kenneth Siegel, and each of them, as his or her attorneys-in-fact, with full power of substitution and resubstitution, to execute in the name and on behalf of such person, individually and in the capacity stated below, and to file, all further amendments to this Registration Statement, which amendments may make such further changes in and additions to this Registration Statement as such attorneys-in-fact may deem necessary or appropriate.

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 1 to Registration Statement has been signed by the following persons in the capacities and on the date indicated.

II-9 EX-4.7 3 p65494a1ex4-7.txt EX-4.7 1 Exhibit 4.7 INDENTURE BETWEEN STARWOOD HOTELS & RESORTS WORLDWIDE, INC., ISSUER, [THE GUARANTORS PARTY HERETO FROM TIME TO TIME, GUARANTORS,] AND ________________________________, TRUSTEE DATED AS OF _______________, 20__ DEBT SECURITIES 2 TABLE OF CONTENTS

3 TABLE OF CONTENTS (continued)

-ii- 4 TABLE OF CONTENTS (continued)

-iii- 5 TABLE OF CONTENTS (continued)

-iv- 6 TABLE OF CONTENTS (continued)

-v- 7 TABLE OF CONTENTS (continued)

-vi- 8 INDENTURE, dated as of ____________, 20__, between STARWOOD HOTELS & RESORTS WORLDWIDE, INC., a Maryland corporation (the "Issuer"), [the companies listed on the signature pages thereto that are subsidiaries of the Issuer (the "Guarantors")]* and ________________, a ________________________, as Trustee (the "Trustee"). RECITALS OF THE ISSUER The Issuer is authorized to borrow money for its corporate purposes and to issue debentures, notes or other evidences of indebtedness therefor; and for its corporate purposes, the Issuer has determined to make and issue its debentures, notes or other evidences of indebtedness to be issued in one or more series (the "Securities"), as hereinafter provided, up to such principal amount or amounts as may from time to time be authorized by or pursuant to the authority granted in one or more resolutions of the Board of Directors. All things necessary to make this Indenture a valid agreement of the Issuer, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: That, in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Securities by the holders thereof and of the sum of One Dollar to the Issuer duly paid by the Trustee at or before the delivery of these presents, and for other valuable considerations, the receipt whereof is hereby acknowledged, and in order to declare the terms and conditions upon which the Securities are to be issued, IT IS HEREBY COVENANTED, DECLARED AND AGREED, by and among the parties hereto, that all the Securities are to be executed, authenticated and delivered subject to the further covenants and conditions hereinafter set forth; and the Issuer, for itself and its successors, does hereby covenant and agree to and with the Trustee and its successors in said trust, for the benefit of those who shall hold the Securities, or any of them, 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 or the definitions of which in the Securities Act are referred to in the Trust Indenture Act or by Commission rule under the Trust Indenture Act (except as herein otherwise expressly provided or unless the context otherwise clearly requires) shall have the meanings assigned to such terms in said Trust Indenture Act, such rule thereunder or in said Securities Act as in force at the date of this Indenture. All accounting terms used and not expressly defined herein shall have the meanings assigned to such terms in accordance with generally accepted accounting principles, - ---------- * This language to be included if debt securities are guaranteed. 9 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 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. "AUTHENTICATING AGENT" means with respect to any series of Securities, an authenticating agent appointed by the Trustee with respect to that series of Securities pursuant to Section 7.14. "AUTHORIZED NEWSPAPER" means a newspaper in an official language of the country of publication customarily published at least once a day, and customarily published for at least five days in each calendar week, and of general circulation in such city or cities as may be provided elsewhere in this Indenture or specified as contemplated by Section 3.1 with respect to the Securities of any series the terms of which permit Unregistered Securities or Coupon Securities. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on a Business Day, in such city. "BANKRUPTCY LAW" see Section 6.1. "BOARD OF DIRECTORS" means either the Board of Directors of the Issuer or any committee of such Board duly authorized to act hereunder. "BOARD RESOLUTION" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Issuer to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "BUSINESS DAY" means with respect to any Security, a day which, in the city (or in any of the cities, if more than one) in which amounts are payable as specified in the form of such Security, is neither a legal holiday nor a day on which banking institutions, including the Trustee, are authorized or required by law or regulation or executive order to close. "CAPITAL STOCK" means any and all shares, interests, participations or other equivalents (however designated) of corporate stock. "CAPITALIZED LEASEBACK OBLIGATION" means the total net rental obligations of the Issuer or a Restricted Subsidiary under any lease entered into as part of a sale and leaseback transaction involving a Principal Property discounted to present value at the rate of 9% per annum. "COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, 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 at such time. "COMPONENT CURRENCY" see Section 3.12(i). -2- 10 "CONSOLIDATED NET TANGIBLE ASSETS" means the total of all assets appearing on a consolidated balance sheet of the Issuer and its Restricted Subsidiaries prepared in accordance with generally accepted accounting principles in the United States as of a date not more than 90 days prior to the date as of which Consolidated Net Tangible Assets are to be determined, but excluding: (i) the book amount of all segregated intangible assets; (ii) all depreciation, valuation and other reserves; (iii) current liabilities; (iv) any minority interest in the stock and surplus of Restricted Subsidiaries; (v) the investment of the Issuer and its Restricted Subsidiaries in any Subsidiary of the Issuer which is not a Restricted Subsidiary; (vi) deferred income and deferred liabilities; and (vii) other items deductible under generally accepted accounting principles. "CONVERSION DATE" see Section 3.12(e). "CONVERSION RATE" see Section 6.13. "CORPORATE TRUST OFFICE" means the principal office of the Trustee at which at any particular time its corporate trust business shall be administered, except that, with respect to presentation of Registered Securities for payment or for registration of transfer and exchange, presentation of Unregistered Securities for registration and the location of the Securities Register, such term shall mean such office or the agency of the Trustee designated for such purpose. "COUPON" means any interest coupon appertaining to any Security. "COUPON SECURITY" means any Security authenticated and delivered with one or more Coupons appertaining thereto. "CUSTODIAN" see Section 6.1. "DEPOSITARY" means with respect to any series of Securities for which the Issuer shall determine that such Securities will be issued as a Global Security, The Depository Trust Company, New York, New York, another clearing agency or any successor registered under the Exchange Act, or other applicable statute or regulation, which, in each case, shall be designated by the Issuer pursuant to either Section 2.4 or 3.1. "DOLLAR" means the coin or currency of the United States of America as at the time of payment is legal tender for the payment of public and private debts. -3- 11 "DOLLAR DETERMINATION AGENT" means the New York clearing house bank, if any, from time to time selected by the Issuer for purposes of Section 3.12. "DOLLAR EQUIVALENT OF THE CURRENCY UNIT" see Section 3.12(h). "DOLLAR EQUIVALENT OF THE FOREIGN CURRENCY" see Section 3.12(g). "EVENT OF DEFAULT" means any event or condition specified as such in Section 6.1 which shall have continued for the period of time, if any, therein designated. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended. "EXCHANGE RATE OFFICER'S CERTIFICATE" means a telex or a certificate setting forth (i) the applicable Official Currency Unit Exchange Rate and (ii) the Dollar or Foreign Currency amounts of principal, premium, if any, and interest, if any, respectively (on an aggregate basis and on the basis of a Security having a principal amount of 1,000 in the relevant currency unit), payable on the basis of such Official Currency Unit Exchange Rate, sent (in the case of a telex) or signed (in the case of a certificate) by the Treasurer or any Associate or Assistant Treasurer of the Issuer and delivered to the Trustee. "FAIR VALUE" when used with respect to property, means the fair value as determined in good faith by the Board of Directors. "FOREIGN CURRENCY" means a currency issued by the government of or adopted by the government as the legal currency of any country other than the United States. "FULLY REGISTERED SECURITY" means any Security registered as to principal and interest, if any. "FUNDED DEBT" as applied to any corporation means all indebtedness incurred, created, assumed or guaranteed by such corporation, or upon which it customarily pays interest charges, which matures, or is renewable by such corporation to a date, more than one year after the date as of which Funded Debt is being determined; provided, however, that the term "Funded Debt" shall not include (i) indebtedness incurred in the ordinary course of business representing borrowings, regardless of when payable, of such corporation from time to time against, but not in excess of the face amount of, its installment accounts receivable for the sale of appliances and equipment sold in the regular course of business or (ii) advances for construction and security deposits received by such corporation in the ordinary course of business. "GLOBAL SECURITY" means, with respect to any series of Securities, a Security executed by the Issuer and authenticated and delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction, all in accordance with this Indenture and pursuant to an Issuer Order, which (i) shall be registered in the name of the Depositary, or its nominee and (ii) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, all of the Outstanding Securities of such series or any portion thereof, in either case having the same terms, including, without limitation, the same issue date, date or dates on which principal is due, and interest rate or method of determining interest. -4- 12 "GOVERNMENT OBLIGATIONS" means, with respect to the Securities of any series, securities which are (i) direct obligations of the government which issued the currency in which the Securities of such series are denominated or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the government which issued the currency in which the Securities of such series are denominated the payment of which is unconditionally guaranteed by such government, and which, in either case, are full faith and credit obligations of such government and are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act) as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of any such Government Obligation held by such custodian for the account of the holder of such depository receipt; provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of the Government Obligation evidenced by such depository receipt. ["GUARANTEES" means the guarantees set forth in Section 16.1 hereof.]* ["GUARANTORS" means _____________________________]* "HOLDER" or "SECURITYHOLDER" means, with respect to a Registered Security, any person in whose name at the time a particular Registered Security is registered in the Securities Register; with respect to an Unregistered Security, the bearer of such Unregistered Security; and, with respect to a Coupon, the bearer thereof. "INDEBTEDNESS" means bonds, debentures, notes and other instruments representing obligations created or assumed by such Person for the repayment of money borrowed (other than unamortized debt discount or premium). All indebtedness secured by a lien upon property owned by such Person or any Subsidiary and upon which indebtedness such Person customarily pays interest, although such Person has not assumed or become liable for the payment of such indebtedness, shall for all purposes hereof be deemed to be indebtedness of such Person. All indebtedness for money borrowed incurred by other persons which is directly guaranteed as to payment of principal by such Person shall for all purposes hereof be deemed to be indebtedness of, but no other contingent obligation of any such Person in respect of indebtedness incurred by other Persons shall for any purpose be deemed indebtedness of such Person. "INDENTURE" means this instrument as originally executed and delivered or, if amended or supplemented as herein provided, as so amended or supplemented, and shall include the forms and terms of particular series of Securities established as contemplated hereunder, regardless of the currency or currency unit in which such Securities are denominated. "INTEREST" means, when used with respect to any non-interest bearing Security, interest payable after Maturity. - ---------- * This language to be included if debt securities are guaranteed. -5- 13 "INTEREST PAYMENT DATE" means the Stated Maturity of an installment of interest on the Securities of any series. "ISSUER" means Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation, and, subject to Article Eleven, its successors and assigns. "ISSUER ORDER" and "ISSUER REQUEST" mean a written order and a written request, respectively, signed in the name of the Issuer by the chairman or any vice chairman or the president or any vice president and by the treasurer or any associate or assistant treasurer or the secretary or any assistant secretary of the Issuer and delivered to the Trustee. "MARKET EXCHANGE RATE" see Section 3.12(i). "MATURITY", when used with respect to any Security, shall mean the date on which the principal of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "OFFICER" means the chairman, any vice chairman, the president, any vice president, the treasurer, any associate or assistant treasurer or the secretary or any assistant Secretary of the Issuer [or of any of the Guarantors, as the case may be]*. "OFFICERS' CERTIFICATE" means a certificate signed by the chairman or any vice chairman or the president or any vice president and by the treasurer or any associate or assistant treasurer or the secretary or any assistant secretary of the Issuer [or of any of the Guarantors, as the case may be,]* and delivered to the Trustee. Each such certificate shall include the statements provided for in Section 13.6 if and to the extent required thereby. "OFFICIAL CURRENCY UNIT EXCHANGE RATE" means, with respect to any payment to be made hereunder, the exchange rate between the relevant currency unit and the Dollar calculated by the agency specified pursuant to Section 3.1 for the Securities of the relevant series, on the second Business Day (in the city in which such agency has its principal office) immediately preceding the applicable payment date. "OPINION OF COUNSEL" means an opinion in writing signed by legal counsel who may be an employee of or counsel to the Issuer or who may be other counsel satisfactory to the Trustee. Each such opinion shall include the statements provided for in Section 13.6 if and to the extent required thereby. "ORIGINAL ISSUE DATE" of any Security (or portion thereof) means the earlier of (a) the date of such Security or (b) the date of any Security (or portion thereof) for which such Security was issued (directly or indirectly) on registration of transfer, exchange or substitution. "ORIGINAL ISSUE DISCOUNT SECURITY" means (i) any Security that provides for an amount less than the principal amount thereof to be due and payable upon a declaration of - ---------- * This language to be included if debt securities are guaranteed. -6- 14 acceleration of the maturity thereof pursuant to Section 6.1 and (ii) any other Security deemed an Original Issue Discount Security for United States Federal income tax purposes. "OUTSTANDING" (except as otherwise provided in Section 7.8), when used with reference to Securities, shall, subject to the provisions of Section 8.4, mean, as of any particular time, all Securities authenticated and delivered by the Trustee under this Indenture, except (a) Securities theretofore canceled by the Trustee or delivered to the Trustee for cancellation; (b) Securities, or portions thereof, for the payment or redemption of which moneys in the necessary amount shall have been deposited in trust with the Trustee or with any Paying Agent (other than the Issuer) or shall have been set aside, segregated and held in trust by the Issuer for the Holders of such Securities (if the Issuer shall act as its own Paying Agent); provided that, if such Securities, 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) Securities in substitution for which other Securities shall have been authenticated and delivered, or which shall have been paid, pursuant to the terms of Section 3.7 (except with respect to any such Security as to which proof satisfactory to the Trustee is presented that such Security is held by a person in whose hands such Security is a legal, valid and binding obligation of the Issuer). In determining whether the Holders of the requisite principal amount of Outstanding Securities of any or all series have given any request, demand, authorization, direction, notice, consent or waiver hereunder, the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding for such purposes shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon a declaration of acceleration of the maturity thereof pursuant to Section 6.1. "OVERDUE RATE" with respect to any series of Securities means the rate designated as such in or pursuant to the resolution of the Board of Directors of the Issuer or the supplemental indenture, as the case maybe, relating to such series as contemplated by Section 3.1. "PAYING AGENT" means any person authorized by the Issuer to pay the principal of, or premium, if any, or interest, if any, on, any Securities on behalf of the Issuer. "PERSON" means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "PLACE OF PAYMENT", when used with respect to the Securities of any series, means the place or places where the principal of, premium, if any, and interest, if any, on, the Securities of such series are payable as specified pursuant to Section 3.1. -7- 15 ["PLEDGE AGREEMENT" means the Pledge and Security Agreement, dated February 23, 1998, as amended modified or supplemented, by and between the Issuer, the Trust, certain direct and indirect subsidiaries of the Issuer and Bankers Trust Company, as Collateral Agent.]* ["PLEDGE TERMINATION EVENT" means the earliest to occur of (i) the termination of the Pledge Agreement or the release of all of the collateral thereunder in accordance with the terms thereof, (ii) the release by the lenders under the Senior Credit Agreement of the security interests and benefits afforded by the Pledge Agreement such that the Senior Credit Agreement is no longer secured by any of the collateral under the Pledge Agreement, (iii) the repayment in full of the obligations under the Senior Credit Agreement or (iv) the occurrence of a "Termination Date" (as such term is defined in the Senior Credit Agreement).]* "PREDECESSOR SECURITY" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.7 in lieu of a lost, destroyed or stolen Security shall be deemed to evidence the same debt as the lost, destroyed or stolen Security. "PRINCIPAL PROPERTY" means any single property owned by the Issuer or any Restricted Subsidiary having a gross book value in excess of 2% of Consolidated Net Tangible Assets, except any such property or portion thereof which the Board of Directors by resolution declares is not of material importance to the total business conducted by the Issuer and its Restricted Subsidiaries as an entirety. "REDEMPTION DATE", when used with respect to any Security to be redeemed, means that date fixed for such redemption by or pursuant to this Indenture. "REDEMPTION PRICE", when used with respect to any Security to be redeemed, means the price, in the Dollars or the Foreign Currency or currency unit in which such Security is denominated or which is otherwise provided for pursuant to this Indenture, at which it is to be redeemed pursuant to this Indenture. "REGISTERED HOLDER" means, with respect to a Registered Security, the Person in whose name such Security is registered in the Securities Register. "REGISTERED SECURITY" means any Security registered as to principal. "REQUIRED CURRENCY" see Section 13.10. "RESPONSIBLE OFFICER" when used with respect to the Trustee means any officer in the Corporate Trust Office of the Trustee and any other officer of the Trustee to whom any corporate trust matter is referred because of his knowledge of and familiarity with the particular subject. - ---------- * This language to be included if debt securities are guaranteed. -8- 16 "RESTRICTED SUBSIDIARY" means any Subsidiary other than an Unrestricted Subsidiary. "SALE AND LEASEBACK TRANSACTION" see Section 4.7. "SECURITY" or "SECURITIES" (except as otherwise provided in Section 7.8) has the meaning stated in the recitals of this Indenture and more particularly shall mean any Registered or Unregistered Securities authenticated and delivered under this Indenture. "SECURITIES ACT" means the Securities Act of 1933, as amended. "SECURITIES REGISTER" and "SECURITIES REGISTRAR" see Section 3.6. ["SENIOR CREDIT AGREEMENT" means the Credit Agreement, dated as of February 23, 1998, among the Issuer, Starwood Hotels & Resorts, a Maryland real estate investment trust, SLT Realty Limited Partnership, a Delaware limited partnership, Sheraton Holding Corporation, a Nevada corporation, certain additional borrowers, various lenders, Bankers Trust Company and The Chase Manhattan Bank, as administrative agents, and Lehman Commercial Paper Inc. and Bank of Montreal, as syndication agents, as such agreement has been or hereafter may be amended in accordance with its terms.]* ["SHERATON INDENTURE" means the Indenture, dated as of December 19, 1995, as amended, among Sheraton Holding Corporation, as issuer, Starwood Hotels & Resorts Worldwide, Inc., as guarantor, and The Bank of New York, as trustee.]* ["SIGNIFICANT SUBSIDIARY" means any subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture.]* "SPECIFIED AMOUNT" see Section 3.12(i). "STATED MATURITY", when used with respect to any Security or any installment of interest thereon, means the date specified in such Security or the Coupon, if any, representing such installment of interest, as the fixed date on which the principal of such Security or such installment of interest is due and payable. "SUBSIDIARY" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. "SUCCESSOR COMPANY" see Section 11.1(a). - ---------- * This language to be included if debt securities are guaranteed. -9- 17 "TRUSTEE" means the person identified as "Trustee" in the first paragraph of this Indenture and, subject to the provisions of Article Seven shall also include any successor trustee. If there shall be more than one Trustee at any one time, "Trustee" shall mean each such Trustee and shall apply to each such Trustee only with respect to those series of Securities with respect to which it is serving as Trustee. "TRUST INDENTURE ACT" (except as otherwise provided in Sections 10.1 and 10.2) means the Trust Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990, and as in force at the date as of which this Indenture was originally executed. "UNREGISTERED SECURITY" means any Security that is not registered as to principal. "UNRESTRICTED SUBSIDIARY" means: (a) any Subsidiary 50% or less of the voting stock of which is owned directly by the Issuer and/or one or more Restricted Subsidiaries; or (b) any Subsidiary designated as an Unrestricted Subsidiary by the Issuer's Board of Directors. "VALUATION DATE" see Section 3.12(e). "VICE PRESIDENT" 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". SECTION 1.2. OTHER DEFINED TERMS. Certain other terms are defined in Article Seven. ARTICLE II. SECURITY FORMS SECTION 2.1. FORMS GENERALLY. The Securities of each series, and the Coupons, if any, to be attached thereto, shall be in substantially the form as shall be established pursuant to Section 3.1 in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification or designation and such legends or endorsements placed thereon as the Issuer may deem appropriate and as are not inconsistent with the provisions of this Indenture or as may be required to comply with any law or with any rules or regulations made pursuant thereto or with any rules or regulations of any securities exchange on which any of the Securities may be listed, or as may, consistently herewith, be determined by the officers executing such Securities, and Coupons, if any, as evidenced by their execution of the Securities, and Coupons, if any. The definitive Securities and Coupons, if any, of each series shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers executing such Securities and Coupons, if any, as evidenced by their execution of such Securities and Coupons, if any, subject, with respect to the Securities of -10- 18 any series, to the rules of any securities exchange on which the Securities of such series are listed. SECTION 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The Trustee's Certificate of Authentication on all Securities shall be in substantially the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. ----------------------------------, as Trustee by -------------------------------- Authorized Officer SECTION 2.3. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION BY AN AUTHENTICATING AGENT. If at any time there shall be an Authenticating Agent appointed with respect to any series of Securities, then the Trustee's Certificate of Authentication by such Authenticating Agent on all Securities of such series shall be in substantially the following form: ---------------------------------, as Trustee by [NAME OF AUTHENTICATING AGENT], Authenticating Agent by -------------------------------- Authorized Officer SECTION 2.4. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY. (a) If the Issuer shall establish pursuant to Section 3.1 that the Securities of a particular series are to be issued in whole or in part in one or more Global Securities, then the Issuer shall execute and the Trustee shall, in accordance with Section 3.3 and the Issuer Order delivered to the Trustee thereunder, authenticate and deliver a Global Security or Securities which (i) shall represent, and shall be denominated in an amount equal to the aggregate principal amount of, the Outstanding Securities of such series to be represented by such Global Security or Securities, (ii) shall be registered in the name of the Depositary for such Global Security or Securities or its nominee, (iii) shall be delivered by the Trustee to the Depositary or pursuant to the Depositary's instruction and (iv) shall bear a legend substantially to the following effect: "Except as otherwise provided in Section 2.4 of the Indenture, this Security may be transferred, in whole but not in part, only to a nominee of the Depositary, or by a nominee of the Depositary to the Depositary, or to a successor Depositary or to a nominee of such successor Depositary." (b) Notwithstanding any other provision of this Section 2.4 or of Section 3.6, the Global Security of a series may be transferred, in whole but not in part and in the manner provided in Section 3.6, only to a nominee of the Depositary, for such series or by a nominee of the Depositary to the Depositary or to a successor Depositary for such series selected or approved by the Issuer or to a nominee of such successor Depositary. -11- 19 (c) If at any time the Depositary for a series of Securities notifies the Issuer that it is unwilling or unable to continue as Depositary for such series or if at any time the Depositary for such series shall no longer be registered or in good standing under the Exchange Act, or other applicable statute or regulation and a successor Depositary for such series is not appointed by the Issuer within 90 days after the Issuer receives such notice or becomes aware of such condition, as the case may be, this Section 2.4 shall no longer be applicable to the Securities of such series and the Issuer will execute, and the Trustee will, in accordance with Section 3.3 and an Issuer Order delivered to the Trustee, authenticate and deliver, Fully Registered Securities of such series, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. In addition, the Issuer may at any time determine that the Securities of any series shall no longer be represented by a Global Security and that the provisions of this Section 2.4 shall no longer apply to the Securities of such series. In such event the Issuer will execute and the Trustee, upon receipt of an Officers' Certificate evidencing such determination by the Issuer, will authenticate and deliver Fully Registered Securities of such series, in authorized denominations, and in an aggregate principal amount equal to the principal amount of the Global Security of such series in exchange for such Global Security. Upon the exchange of the Global Security for Fully Registered Securities issued in exchange for the Global Security pursuant to this Section 2.4(c), such (i) Global Security shall be canceled by the Trustee, and (ii) Fully Registered Securities shall be registered in such names and in such authorized denominations as the Depositary, pursuant to instructions from its direct or indirect participants or otherwise, shall instruct the Trustee. The Trustee shall deliver such Securities to the Persons in whose names such Securities are so registered. ARTICLE III. THE SECURITIES SECTION 3.1. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to the authority granted in a Board Resolution or established in one or more indentures supplemental hereto, prior to the issuance of Securities of any series: (a) the form of the Securities of any series and the Coupons, if any, appertaining thereto; (b) the title of the Securities of the series (which shall distinguish the Securities of the series from all other Securities); (c) any limit upon the aggregate principal amount of the Securities of the series that may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 2.4, 3.6, 3.7, 3.10 or 14.3); (d) the date or dates on which such Securities may be issued; -12- 20 (e) the date or dates, which may be serial, on which the principal of, and premium, if any, on, the Securities of such series shall be payable; (f) the rate or rates, or the method of determination thereof, at which the Securities of such series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and, in the case of Registered Securities, the record dates, if other than as set forth in Section 3.8, for the determination of Holders to whom interest is payable, and whether any special terms and conditions relating to the payment of additional amounts in respect of payments on the Securities of such series shall in the event of certain changes in the United States Federal income tax laws apply to Unregistered Securities of such series or to Registered Securities of such series; (g) the place or places where the principal of, and premium, if any, and interest, if any, on Securities of the series shall be payable (if other than as provided in Section 4.2); (h) the provisions, if any, establishing the price or prices at which, the period or periods within which and the terms and conditions upon which Securities of the series may be redeemed, in whole or in part, at the option of the Issuer, pursuant to any sinking fund or otherwise, and whether any special terms and conditions of redemption shall apply to Unregistered Securities of such series or to Registered Securities of such series; (i) the obligation, if any, of the Issuer to redeem, purchase or repay Securities of the series pursuant to the sinking fund or analogous provisions or at the option of a Holder thereof and the price or prices, in the currency or currency unit in which the Securities of such series are payable, at which and the period or periods within which and the terms and conditions upon which Securities of the series shall be redeemed, purchased or repaid, in whole or in part, pursuant to such obligation; (j) if other than denominations of 1,000 and any integral multiple thereof, in Dollars or the Foreign Currency or currency unit in which the Securities of such series are denominated, the denominations in which Securities of such series shall be issuable; (k) if other than the principal amount thereof, the portion of the principal amount of Securities of such series which shall be payable upon declaration of acceleration of the maturity thereof pursuant to Section 6.1 or provable in bankruptcy pursuant to Section 6.2; (l) whether payment of the principal of, premium, if any, and interest, if any, on the Securities of such series shall be with or without deduction for taxes, assessments or governmental charges, and with or without reimbursement of taxes, assessments or governmental charges paid by Holders; (m) any Events of Default with respect to the Securities of such series, if not set forth herein; (n) if other than the rate of interest stated in the title of the Securities of such series, the applicable Overdue Rate; -13- 21 (o) in case the Securities of such series do not bear interest, the applicable dates for the purpose of clause (a) of Section 5.1; (p) whether the Securities of such series are to be issued as Registered Securities (with or without Coupons) or Unregistered Securities or both, and, if Unregistered Securities or Coupon Securities are issued, whether Unregistered Securities or Coupon Securities of such series may be exchanged for Registered Securities or Fully Registered Securities of such series and whether Registered Securities or Fully Registered Securities of such series may be exchanged for Unregistered Securities of such series and the circumstances under which and the place or places where any such exchanges, if permitted, may be made; (q) the currency or currencies, or currency unit or currency units, whether in Dollars or a Foreign Currency or currency unit, in which the principal of, and premium, if any, and interest, if any, on the Securities of such series or any other amounts payable with respect thereto, including, without limitation, Coupons, are to be denominated, payable, redeemable or repurchaseable, as the case may be, and whether such principal, premium, if any, and interest, if any, payable otherwise than in Dollars may, at the option of the holders of any Security of such series, also be payable in Dollars; (r) if other than as set forth in Section 12.1, provisions for the satisfaction and discharge of the indebtedness represented by the Securities of such series; (s) whether the Securities of such series are issuable as a Global Security and, in such case, the identity of the Depositary for such series; (t) if the amount of payment of principal of, premium, if any, or interest on the Securities of such series may be determined with reference to an index, formula or other method based on a coin, currency, or currency unit other than that in which the Securities are stated to be payable or otherwise, the manner in which such amounts shall be determined; (u) any other terms of such series (which terms shall not be inconsistent with the provisions of this Indenture); and (v) any trustees, authenticating or paying agents, warrant agents, transfer agents or registrars with respect to the Securities of such series, and, if the Securities of such series are to be denominated and payable in any currency other than Dollars, the initial Dollar Determination Agent. All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the authority granted in such resolution of the Board of Directors or in any such indenture supplemental hereto. SECTION 3.2. FORM AND DENOMINATIONS. In the absence of any specification pursuant to Section 3.1 with respect to the Securities of any series, the Securities of such series shall be issuable as Fully Registered Securities in denominations of $1,000 and any integral multiple thereof, and shall be payable in Dollars. -14- 22 SECTION 3.3. AUTHENTICATION, DATING AND DELIVERY OF SECURITIES. At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Securities of any series, with appropriate Coupons, if any, attached thereto, executed by the Issuer to the Trustee for authentication. Except as otherwise provided in this Article Three, the Trustee shall thereupon authenticate and deliver, or cause to be authenticated and delivered, said Securities to or upon Issuer Order, without any further action by the Issuer. In authenticating such Securities and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, prior to the initial authentication of such Securities, and (subject to Section 7.1) shall be fully protected in relying upon: (a) a Board Resolution relating thereto and, if applicable, an appropriate record of any action taken pursuant to such Resolution, in each case certified by the Secretary or an Assistant Secretary of the Issuer; (b) an executed supplemental indenture, if any, relating thereto; (c) an Officers' Certificate which shall state that all conditions precedent provided for in this Indenture relating to the issuance of such Securities have been complied with, that no Event of Default with respect to any series of Securities has occurred and is continuing and that the issuance of such Securities does not constitute and will not result in (i) any Event of Default or any event or condition, which, upon the giving of notice or the lapse of time or both, would become an Event of Default or (ii) any default under the provisions of any other instrument or agreement by which the Issuer is bound; and (d) an Opinion of Counsel, which shall state: (i) that the form and the terms of such Securities and Coupons, if any, have been established by or pursuant to the authority granted in a Board Resolution delivered to the Trustee pursuant to subparagraph (a) above or by a supplemental indenture delivered to the Trustee pursuant to subparagraph (b) above as provided by Section 3.1 and in accordance with the provisions of this Indenture; (ii) that such Securities, when authenticated and delivered by the Trustee and issued by the Issuer in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute (together with the Coupons, if any appertaining thereto) valid and binding obligations of the Issuer enforceable in accordance with their terms, subject to bankruptcy, insolvency, organization and other laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles; (iii) that the Issuer has the corporate power to issue such Securities and Coupons, if any, and has duly taken all necessary corporate action with respect to such issuance; (iv) that the issuance of such Securities and Coupons, if any, will not contravene the charter or by-laws of the Issuer or result in any violation of any of the terms or provisions of any law or regulation or of any indenture, mortgage or other agreement known to such Counsel by which the Issuer or any of its Subsidiaries is bound; -15- 23 (v) that all laws and requirements in respect of the execution and delivery by the Issuer of the Securities and Coupons, if any, and the related supplemental indenture, if any, have been complied with and that authentication and delivery of such Securities and Coupons, if any, and the execution and delivery of the related supplemental indenture, if any, by the Trustee will not violate the terms of the Indenture; and (vi) such other matters as the Trustee may reasonably request. Notwithstanding the provisions of Section 3.1 and of this Section 3.3, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate or supplemental indenture otherwise required pursuant to Section 3.1 or the Issuer Order, Officers' Certificate and Opinion of Counsel required pursuant to this Section 3.3 at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the time of authentication upon original issuance of the first Security of such series to be issued; provided, however, that any subsequent request by the Issuer to the Trustee to authenticate Securities of such series shall constitute a representation and warranty by the Issuer that as of the date of such request the statements made in the Officers' Certificate delivered pursuant to Section 3.3(c) shall be true and correct on the date thereof as if made on and as of the date thereof. The Trustee shall have the right to decline to authenticate and deliver any Securities together with any Coupons appertaining thereto under this Section if the Trustee, being advised by counsel, determines that such action may not lawfully be taken by the Issuer or if the Trustee in good faith by its board of directors or board of trustees, executive committee, or a trust committee of directors or trustees and/or responsible officers shall determine that such action would expose the Trustee to personal liability to existing Holders. Each Registered Security shall be dated the date of its authentication. SECTION 3.4. EXECUTION OF SECURITIES AND COUPONS. The Securities and Coupons, if any, appertaining thereto shall be signed in the name of and on behalf of the Issuer by both (a) its chairman or any vice chairman or its president or any vice president and (b) by its treasurer or any associate or assistant treasurer or its secretary or any assistant secretary, under its corporate seal which may, but need not, be attested. Such signatures may be the manual or facsimile signatures of such officers. The seal of the Issuer may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced thereon. 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 Security or Coupon that has been duly authenticated and delivered by the Trustee. In case any officer of the Issuer who shall have signed any of the Securities or Coupons, if any, shall cease to be such officer before the Security or Coupons, if any, so signed shall be authenticated (in the case of the Securities) and delivered by or on behalf of the Trustee or disposed of by the Issuer, such Securities and Coupons, if any, appertaining thereto nevertheless may be authenticated (in the case of the Securities) and delivered or disposed of as though the person who signed such Securities or Coupons, if any, had not ceased to be such officer of the Issuer; and any Security or Coupon, if any, may be signed on behalf of the Issuer -16- 24 by such persons as, at the actual date of the execution of such Security or Coupon, if any, shall be the proper officers of the Issuer, although at the date of the execution and delivery of this Indenture any such person was not such an officer. The Trustee shall not authenticate or deliver any Coupon Security until any matured Coupons appertaining thereto have been detached and canceled, except as otherwise provided or permitted by this Indenture. SECTION 3.5. CERTIFICATE OF AUTHENTICATION. No Security or Coupon appertaining thereto shall be entitled to the benefits of this Indenture or be valid or obligatory for any purpose, unless there appears on such Security a certificate of authentication substantially in the form hereinbefore recited, executed by or on behalf of the Trustee by manual signature. Such certificate by or on behalf of the Trustee upon any Security executed by the Issuer shall be conclusive evidence that the Security so authenticated has been duly authenticated and delivered hereunder and that the Holder is entitled to the benefits of this Indenture. SECTION 3.6. REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. Subject to the conditions set forth below, Securities of any series may be exchanged for a like aggregate principal amount of Securities of the same series of other authorized denominations. Securities to be exchanged shall be surrendered together, in the case of Coupon Securities, with all unmatured Coupons and matured Coupons in default appertaining thereto, at the offices or agencies to be maintained by the Issuer for such purposes as provided in Section 4.2, and the Issuer shall execute and register and the Trustee or any Authenticating Agent shall authenticate and deliver in exchange therefor the Security or Securities which the Holder making the exchange shall be entitled to receive. The Issuer shall keep or cause to be kept, at one of said offices or agencies, a register for each series of Securities issued hereunder which may include Registered Securities (hereinafter collectively referred to as the "Securities Register") in which, subject to such reasonable regulations as it may prescribe, and subject also to the provisions of Section 2.4, the Issuer shall provide for the registration of Registered Securities of such series and shall register the transfer of Registered Securities of such series as in this Article Three provided. The Securities Register shall be in written form or in any other form capable of being converted into written form within a reasonable time. The Trustee and the Authenticating Agent are hereby appointed "Securities Registrars" for the purpose of registering Registered Securities and registering transfers of Registered Securities as herein provided. Subject to the provisions of Section 2.4, upon due presentment for registration of transfer of any Security of any series at any such office or agency, the Issuer shall execute and register and the Trustee or any Authenticating Agent shall authenticate and deliver in the name of the transferee or transferees a new Registered Security or Securities of the same series for an equal aggregate principal amount. Subject to the provisions of Section 2.4, at the option of the Holder thereof, Securities of any series, whether Registered Securities or Unregistered Securities, which by their terms are registrable as to principal only or as to principal and interest, may, to the extent and under the circumstances specified pursuant to Section 3.1, be exchanged for such Registered Securities with Coupons or Fully Registered Securities of such series, as may be issued by the terms thereof. Securities of any series, whether Registered Securities or Unregistered Securities, -17- 25 which by their terms provide for the issuance of Unregistered Securities, may not, except to the extent and under the circumstances specified pursuant to Section 3.1, be exchanged for Unregistered Securities of such series. Unregistered Securities of any series issued in exchange for Registered Securities of such series between the record date for such Registered Securities and the next Interest Payment Date will be issued without the Coupon relating to such Interest Payment Date, and Unregistered Securities surrendered in exchange for Registered Securities between such dates shall be surrendered without the Coupon relating to such Interest Payment Date. Upon presentation for registration of any Unregistered Security of any series which by its terms is registrable as to principal, at the office or agency of the Issuer to be maintained as provided in Section 4.2, such Security shall be registered as to principal in the name of the Holder thereof, and such registration shall be noted on such Security. Any Security so registered shall be transferable on the Securities Register of the Issuer upon presentation of such Security at such office or agency for similar notation thereon, but, to the extent permitted by law, such security, may be discharged from registration by being in a like manner transferred to bearer whereupon transferability by delivery shall be restored. To the extent permitted by law, Unregistered Securities shall continue to be subject to successive registrations and discharges from registration at the option of the Holders thereof. Unregistered Securities and Coupons shall be transferred by delivery. All Securities presented for registration of transfer or for exchange, redemption or payment shall (if so required by the Issuer or the Securities Registrar) be duly endorsed by, or be accompanied by, a written instrument or instruments of transfer in form satisfactory to the Issuer and the Securities Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing. Each Security issued upon registration of transfer or exchange of Securities pursuant to this Section 3.6 shall be the valid obligation of the Issuer, evidencing the same indebtedness and entitled to the same benefits under this Indenture as the Security or Securities surrendered upon registration of such transfer or exchange. No service charge shall be made to a Holder for any registration of transfer or exchange of Securities, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.10, 10.6 or 14.3 not involving any transfer. The Issuer shall not be required (a) to issue, exchange or register the transfer of any Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of such series and ending at the close of business on the day of such mailing, or (b) to exchange or register the transfer of any Securities selected, called or being called for redemption except, in the case of any Security to be redeemed in part, the portion thereof not to be so redeemed. None of the Issuer, the Trustee, any Paying Agent or Securities Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global -18- 26 Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interest. SECTION 3.7. MUTILATED, DEFACED, DESTROYED, LOST AND STOLEN SECURITIES OR COUPONS. In case any temporary or definitive Security shall become mutilated, defaced or be destroyed, lost or stolen, and in the absence of notice to the Issuer or the Trustee that such Security or Coupon has been acquired by a bona fide purchaser, the Issuer in the case of a mutilated Security or Coupon shall, and in the case of a lost, stolen or destroyed Security or Coupon may in its discretion, execute, and, upon an Issuer Request, the Trustee shall authenticate and deliver, a new Security with like Coupons, if any, as those attached to the mutilated, destroyed, lost or stolen Security (so that neither gain nor loss in interest shall result), of the same series, tenor and principal amount, and bearing a number, letter or other distinguishing symbol not contemporaneously outstanding, or a new Coupon, as appropriate, in exchange and substitution for the mutilated Security or Coupon, or in lieu of and in substitution for the Security or Coupon so destroyed, lost or stolen, or if any such Security or Coupon shall have matured or shall be about to mature, instead of issuing a substituted Security or Coupon, the Issuer may pay or authorize the payment of the same without surrender thereof (except in the case of a mutilated Security or Coupon); provided, however, that interest represented by Coupons shall be payable only upon presentation and surrender of those Coupons at an office or agency located outside of the United States, unless otherwise provided pursuant to Section 3.1. In every case the applicant for a substituted Security or Coupon shall furnish to the Issuer and to the Trustee such security or indemnity as may be required by them to save each of them harmless and, in every case of destruction, loss or theft, the applicant shall also furnish to the Issuer and to the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security or Coupon and of the ownership thereof. Upon the issuance of any substitute Security or Coupon under this Section 3.7, the Issuer 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 any Authenticating Agent) connected therewith. In case any Security or Coupon 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 Issuer may, instead of issuing a substitute Security or Coupon, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated or defaced Security or Coupon), if the applicant for such payment shall furnish to the Issuer and to the Trustee and any agent of the Issuer 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 Issuer and the Trustee and any agent of the Issuer or the Trustee evidence to their satisfaction of the destruction, loss or theft of such Security and of the ownership thereof. Every substitute Security or Coupon of any series issued pursuant to the provisions of this Section 3.7 by virtue of the fact that any such Security is destroyed, lost or stolen shall constitute an additional contractual obligation of the Issuer, whether or not the destroyed, lost or stolen Security or Coupon 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 Securities and Coupons of such series duly authenticated and delivered hereunder. All Securities and Coupons shall be held and -19- 27 owned upon the express condition that, to the extent permitted by law, the foregoing provisions of this Section 3.7 are exclusive with respect to the replacement or payment of mutilated, defaced or destroyed, lost or stolen Securities and Coupons 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 3.8. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. The Holder of any Fully Registered Securities at the close of business on any record date with respect to any Interest Payment Date shall be entitled to receive the interest, if any, payable on such Interest Payment Date notwithstanding the cancellation of such Securities upon any transfer or exchange subsequent to the record date and prior to such Interest Payment Date and, if provided for in the Board Resolution pursuant to Section 3.1, in the case of a Security issued between a record date and the initial Interest Payment Date relating to such record date, interest for the period beginning on the date of issue and ending on such initial Interest Payment Date shall be paid to the person to whom such Security shall have been originally issued. In the case of Coupon Securities, the Holder of any Coupon shall be entitled to receive the interest, if any, payable on such Interest Payment Date, upon surrender on such Interest Payment Date of the Coupon appertaining thereto in respect of such interest. Except as otherwise specified as contemplated by Section 3.1, for Fully Registered Securities of a particular series the term "record date" as used in this Section 3.8 with respect to any Interest Payment Date shall mean the close of business on the last day of the calendar month preceding such Interest Payment Date if such Interest Payment Date is the 15th day of a calendar month and shall mean the close of business on the 15th day of the calendar month preceding such Interest Payment Date if such Interest Payment Date is the first day of a calendar month, whether or not such day shall be a Business Day in The City of New York. At the option of the Issuer, payment of interest on any Fully Registered Security may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register. If and to the extent the Issuer shall default in the payment of the interest due on such Interest Payment Date in respect of any Fully Registered Securities such defaulted interest shall be paid by the Issuer, at its election in each case, as provided in clause (a) or (b) below: (a) The Issuer may make payment of any defaulted interest to the Holder of Fully Registered Securities at the close of business on a subsequent record date established by notice given by mail, first-class postage prepaid, by or on behalf of the Issuer to such Holder at his address as it appears on the Security Register not less than 15 days preceding such subsequent record date, such record date to be not less than 10 days preceding the date of payment of such defaulted interest. (b) The Issuer may make payment of any defaulted interest on the Fully Registered Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of such series may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer to the Trustee of the proposed payment pursuant to this clause, such manner of payment shall be deemed practicable by the Trustee. -20- 28 Any defaulted interest payable in respect of a Coupon Security of any series shall be payable pursuant to such procedures as may be satisfactory to the Trustee in such manner that there is no discrimination between the Holders of Fully Registered Securities and Coupon Securities of such series, and notice of the payment date therefor shall be given by the Trustee, in the name and at the expense of the Issuer, in the manner provided in Section 13.4. Subject to the foregoing provisions of this Section 3.8, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. SECTION 3.9. CANCELLATION OF SECURITIES; DESTRUCTION THEREOF. All Securities surrendered for payment, redemption, registration of transfer or exchange, or for credit against any payment in respect of a sinking or analogous fund, and all Coupons surrendered for payment or exchange, if surrendered to the Issuer or any Paying Agent or any Securities Registrar, shall be delivered to the Trustee for cancellation or, if surrendered to the Trustee, shall be canceled by it, and no Securities or Coupons shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Indenture. The Trustee shall destroy canceled Securities and Coupons held by it and deliver a certificate of destruction to the Issuer. If the Issuer shall acquire any of the Securities, such acquisition shall not operate as a redemption or satisfaction of the indebtedness represented by such Securities unless and until the same are delivered to the Trustee for cancellation. SECTION 3.10. TEMPORARY SECURITIES. Pending the preparation of definitive Securities for any series, the Issuer may execute and the Trustee shall authenticate and deliver temporary Securities for such series (printed, lithographed, typewritten or otherwise reproduced, in each case in form satisfactory to the Trustee). Temporary Securities of any series shall be issuable in any authorized denomination, and substantially in the form of the definitive Securities of such series in lieu of which they are issued but with such omissions, insertions and variations as may be appropriate for temporary securities all as may be determined by the Issuer with the concurrence of the Trustee. Temporary Securities may contain such reference to any provisions of this Indenture as may be appropriate. Every temporary Security shall be executed by the Issuer and be authenticated by the Trustee upon the same conditions and in substantially the same manner, and with like effect, as the definitive Securities. Temporary Securities may be issued as Registered Securities or Unregistered Securities, with or without one or more Coupons attached. Without unreasonable delay the Issuer shall execute and shall furnish definitive Securities of such series and thereupon temporary Securities of such series may be surrendered in exchange therefor without charge to a Holder at the Corporate Trust Office of the Trustee or, in the case of temporary Securities issued in respect of Unregistered Securities of any series, at the Corporate Trust Office of the Trustee located in a city specified elsewhere in this Indenture or pursuant to Section 3.1, and the Trustee shall authenticate and deliver in exchange for such temporary Securities an equal aggregate principal amount of definitive Securities of the same series with appropriate Coupons, if any, attached. Such exchange shall be made by the Issuer at its own expense and without any charge therefor to a Holder except that in case of any such exchange involving any registration of transfer the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto. Until so exchanged, the temporary Securities of any series shall in all respects be entitled to the -21- 29 same benefits under this Indenture as definitive Securities of such series authenticated and delivered hereunder. SECTION 3.11. COMPUTATION OF INTEREST. Except as otherwise specified as contemplated by Section 3.1 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. SECTION 3.12. CURRENCY AND MANNER OF PAYMENTS IN RESPECT OF SECURITIES. (a) With respect to Registered Securities of any series denominated in Dollars or Foreign Currency and with respect to Registered Securities of any series denominated in any currency unit with respect to which the Holders of Securities of such series have not made the election provided for in paragraph (b) below, the following payment provisions shall apply: (i) Except as provided in subparagraph (a)(ii) or in paragraph (e) below, payment of the principal of and premium, if any, on any Registered Security will be made at the Place of Payment by delivery of a check in the currency or currency unit in which the Security is payable on the payment date against surrender of such Registered Security, and any interest on any Fully Registered Security will be paid at the Place of Payment by mailing a check in the currency or currency unit in which such interest is payable to the Person entitled thereto at the address of such Person appearing on the Securities Register. (ii) Payment of the principal of, premium, if any, and (with respect to Fully Registered Securities only) interest on such Security may also, subject to applicable laws and regulations, be made at such other place or places as may be designated by the Issuer by any appropriate method. (b) With respect to Registered Securities of any series denominated in any Foreign Currency or currency unit, the following payment provisions shall apply, except as otherwise provided in paragraphs (e) and (f) below: (i) It may be provided pursuant to Section 3.1 with respect to the Securities of such series that Holders shall have the option to receive payments of principal of, premium, if any, and (with respect to Fully Registered Securities only) interest, if any, on such Securities in any of the currencies which may be designated for such election in such Securities by delivering to the Trustee a written election, to be in form and substance satisfactory to the Trustee, not later than the close of business on the record date immediately preceding the applicable payment date. Such election will remain in effect for such Holder until changed by the Holder by written notice to the Trustee (but any such change must be made not later than the close of business on the record date immediately preceding the next payment date to be effective for the payment to be made on such payment date and no such change may be made with respect to payments to be made on any Security of such series with respect to which notice of redemption has been given by the Issuer pursuant to Article Fourteen). Any Holder of any such Security who shall not have delivered any such election to the Trustee not later than the close of business on the applicable record date will be paid the amount due on the applicable payment date in the relevant currency unit as provided in paragraph (a) of this Section -22- 30 3.12. Payment of principal of and premium, if any, shall be made on the payment date against surrender of such Security. Payment of principal of, premium, if any, and (with respect to Fully Registered Securities only) interest, if any, shall be made at the Place of Payment by mailing at such location a check, in the applicable currency or currency unit, to the Person entitled thereto at the address of such Person appearing on the Securities Register. (ii) Payment of the principal of, premium, if any, and (with respect to Fully Registered Securities only) interest, if any, on such Security may also, subject to applicable laws and regulations, be made at such other place or places as may be designated by the Issuer by any appropriate method. (c) Payment of the principal of, and premium, if any, on any Unregistered Security and of interest on any Coupon Security will be made unless otherwise specified pursuant to Section 3.1 or Section 10.1(f) by a Paying Agent at such place or places outside the United States as may be designated by the Issuer pursuant to any applicable laws or regulations by any appropriate method in the currency or currency unit in which the Security is payable (except as provided in paragraph (e) below) on the payment date against surrender of the Unregistered Security, in the case of payment of principal and premium, if any, or the relevant Coupon, in the case of payment of interest, if any. Except as provided in paragraph (e) below, payment with respect to Unregistered Securities and Coupons will be made by check, subject to any limitations on the methods of effecting such payment as shall be specified in the terms of the Security established as provided in Section 3.1 and Section 10.1(f) and as shall be required under applicable laws and regulations. (d) Not later than the fourth Business Day after the record date for each payment date, the Trustee will deliver to the Issuer a written notice specifying, in the currency or currency unit in which each series of the Securities is payable, the respective aggregate amounts of principal of, premium, if any, and interest, if any, on the Securities to be made on such payment date, specifying the amounts so payable in respect of Fully Registered Securities, Registered Securities with Coupons and Unregistered Securities and in respect of the Registered Securities as to which the Holders of Securities denominated in any currency unit shall have elected to be paid in another currency as provided in paragraph (b) above. If the election referred to in paragraph (b) above has been provided for pursuant to Section 3.1 and if at least one Holder has made such election, then, not later than the eighth Business Day following each record date the Issuer will deliver to the Trustee and each Paying Agent an Exchange Rate Officer's Certificate in respect of the Dollar or Foreign Currency payments to be made on such payment date. The Dollar or Foreign Currency amount receivable by Holders of Registered Securities denominated in a currency unit who have elected payment in such currency as provided in paragraph (b) above shall be determined by the Issuer on the basis of the applicable Official Currency Unit Exchange Rate set forth in the applicable Exchange Rate Officer's Certificate. (e) If a Foreign Currency in which any of the Securities are denominated or payable ceases to be used both by the government of the country which issued such currency or adopted such currency as its legal currency and for the settlement of transactions by public institutions of or within the international banking community, or if any currency unit in which a Security is denominated or payable ceases to be used for the purposes for which it was -23- 31 established, then with respect to each date for the payment of principal of, or premium, if any, and interest, if any, on the applicable Securities denominated or payable in such Foreign Currency or such currency unit occurring after the last date on which such Foreign Currency or such currency unit was so used (the "Conversion Date"), the Dollar shall be the currency of payment for use on each such payment date. The Dollar amount to be paid by the Issuer to the Paying Agent and by the Paying Agent to the Holders of such Securities with respect to such payment date shall be the Dollar Equivalent of the Foreign Currency or, in the case of a currency unit, the Dollar Equivalent of the Currency Unit as determined by the Dollar Determination Agent as of the record date, if any, with respect to any Interest Payment Date or the fifteenth day before the Maturity of an installment of principal (the "Valuation Date"), in the manner provided in paragraph (g) or (h) below. (f) If the Holder of a Registered Security denominated in a currency unit elects payment in a specified Foreign Currency as provided for by paragraph (b) and such Foreign Currency ceases to be used both by the government of the country which issued such currency or adopted such currency as its legal currency and for the settlement of transactions by public institutions of or within the international banking community, such Holder shall receive payment in such currency unit, and if such currency unit ceases to be used for the purposes for which it was established, such Holder shall receive payment in Dollars. (g) The "Dollar Equivalent of the Foreign Currency" shall be determined by, and shall be set forth in a certificate delivered to the Issuer, the Trustee and each Paying Agent of, the Dollar Determination Agent as of each Valuation Date and shall be obtained by converting the specified Foreign Currency into Dollars at the Market Exchange Rate on the Valuation Date. (h) The "Dollar Equivalent of the Currency Unit" shall be determined by, and shall be set forth in a certificate delivered to the Issuer, the Trustee and each Paying Agent of, the Dollar Determination Agent as of each Valuation Date and shall be the sum obtained by adding together the results obtained by converting the Specified Amount of each Component Currency into Dollars at the Market Exchange Rate on the Valuation Date for such Component Currency. (i) For purposes of this Section 3.12, the following terms shall have the following meanings: A "Component Currency" shall mean any currency which, on the Conversion Date, was a component currency of the relevant currency unit. A "Specified Amount" of a Component Currency shall mean the number of units or fractions thereof which such Component Currency represented in the relevant currency unit, on the Conversion Date. If after the Conversion Date the official unit of any Component Currency is altered by way of combination or subdivision, the Specified Amount of such Component Currency shall be divided or multiplied in the same proportion. If after the Conversion Date two or more Component Currencies are consolidated into a single currency, the respective Specified Amounts of such Component Currencies shall be replaced by an amount in such single currency equal to the sum of the respective Specified Amounts of such consolidated Component Currencies expressed in such single currency, and such amount shall thereafter be a -24- 32 Specified Amount and such single currency shall thereafter be a Component Currency. If after the Conversion Date any Component Currency shall be divided into two or more currencies, the Specified Amount of such Component Currency shall be replaced by specified amounts of such two or more currencies, the sum of which, at the Market Exchange Rate of such two or more currencies on the date of such replacement, shall be equal to the Specified Amount of such former Component Currency divided by the number of currencies into which such Component Currency was divided, and such amounts shall thereafter be Specified Amounts and such currencies shall thereafter be Component Currencies. "Market Exchange Rate" shall mean for any currency the noon Dollar buying rate for that currency for cable transfers quoted in New York City on the Valuation Date as certified for customs purposes by the Federal Reserve Bank of New York. If such rates are not available for any reason with respect to one or more currencies for which an Exchange Rate is required, the Dollar Determination Agent shall use, in its sole discretion and without liability on its part, such quotation of the Federal Reserve Bank of New York as of the most recent available date, or quotations from one or more major banks in New York City or in the country of issue of the currency in question, or such other quotations as the Dollar Determination Agent shall deem appropriate. Unless otherwise specified by the Dollar Determination Agent, if there is more than one market for dealing in any currency by reason of foreign exchange regulations or otherwise, the market to be used in respect of such currency shall be that upon which a nonresident issuer of securities designated in such currency would purchase such currency in order to make payments in respect of such securities. All decisions and determinations of the Dollar Determination Agent regarding the Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the Currency Unit and the Market Exchange Rate shall be in its sole discretion and shall, in the absence of manifest error, be conclusive for all purposes and irrevocably binding upon the Issuer, the Trustee, any Paying Agent and all Holders of the Securities and Coupons denominated or payable in the relevant currency or currency units. In the event that a Foreign Currency ceases to be used both by the government of the country which issued such currency or adopted such currency as its legal currency and for the settlement of transactions by public institutions of or within the international banking community, the Issuer, after learning thereof, will immediately give notice thereof to the Trustee (and the Trustee will promptly thereafter give notice in the manner provided in Section 13.4 to the Holders) specifying the Conversion Date. In the event a currency unit in which Securities or Coupons are denominated or payable ceases to be used for the purposes for which it was established, the Issuer, after learning thereof, will immediately give notice thereof to the Trustee (and the Trustee will promptly thereafter give notice in the manner provided in Section 13.4 to the Holders) specifying the Conversion Date and the Specified Amount of each Component Currency on the Conversion Date. In the event of any subsequent change in any Component Currency as set forth in the definition of Specified Amount above, the Issuer, after learning thereof, will similarly give notice to the Trustee. The Trustee shall be fully justified and protected in relying and acting upon information received by it from the Issuer and the Dollar Determination Agent, if any, and shall not otherwise have any duty or obligation to determine such information independently. SECTION 3.13. COMPLIANCE WITH CERTAIN LAWS AND REGULATIONS. If any Unregistered Securities or Coupon Securities are to be issued in any series of Securities, the -25- 33 Issuer will use reasonable efforts to provide for arrangements and procedures designed pursuant to then applicable laws and regulations, if any, to ensure that such Unregistered Securities or Coupon Securities are sold or resold, exchanged, transferred and paid only in compliance with such laws and regulations and without adverse consequences to the Issuer. ARTICLE IV. COVENANTS OF THE ISSUER The Issuer covenants and agrees for the benefit of each series of Securities that on and after the date of execution of this Indenture and, except as otherwise provided, so long as any of the Securities of such series remain outstanding, as to which the Issuer remains an obligor: SECTION 4.1. PAYMENT OF SECURITIES. The Issuer will duly and punctually pay or cause to be paid (in the Dollars or the Foreign Currency or currency unit in which the Securities of such series and Coupons, if any, appertaining thereto are payable, except as otherwise specified as contemplated by Section 3.1 for the Securities of such series and except as provided in Sections 3.12(b), 3.12(e) and 3.12(f) of this Indenture) the principal of, the premium, if any, and interest, if any, on the Securities of such series at the place or places, at the respective times and in the manner provided in such Securities, in any Coupons appertaining thereto, and in this Indenture. Each installment of interest on the Registered Securities of any series may be paid by mailing checks for such interest payable to or upon the written order of the Holders of Registered Securities entitled thereto as they shall appear on the registry books of the Issuer. The interest on Coupon Securities shall be payable only upon presentation and surrender of the several Coupons for such interest installments as are evidenced thereby as they severally mature. The interest, if any, on any temporary Unregistered Security shall be paid, as to any installment of interest evidenced by a Coupon attached thereto, if any, only upon presentation and surrender of such Coupon, and, as to other installments of interest, if any, only upon presentation of such Security for notation thereon of the payment of such interest. SECTION 4.2. OFFICES OR AGENCY. So long as any of the Securities remain Outstanding, the Issuer will maintain in the Borough of Manhattan, The City of New York, New York, an office or agency where Registered Securities of such series may be presented or surrendered for payment, where Securities of such series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuer in respect of the Securities of such series and this Indenture may be served, which office or agency, unless otherwise set forth in, or pursuant to, a Board Resolution or supplemental indenture relating to the Securities of such series, shall initially be the principal corporate trust facility of the Trustee located in the Borough of Manhattan, The City of New York, New York, and, if the Trustee shall cease to maintain such corporate trust facility, such office or agency shall be the principal corporate trust office of the Authenticating Agent designated pursuant to Section 7.14 hereof. So long as any Coupon Securities or Unregistered Securities of any series remain Outstanding, the Issuer will (except as specified pursuant to Section 3.1 or Section 10.1(f)) maintain one or more offices or agencies outside the United States in such city or cities as may be specified elsewhere in this Indenture or as contemplated by Section 3.1, with respect to such series, where Coupons -26- 34 appertaining to Securities of such series or Unregistered Securities of such series may be surrendered or presented for payment, or surrendered for exchange pursuant to Section 3.6 and where notices and demands to or upon the Issuer in respect of Coupons appertaining to Securities of such series or the Unregistered Securities of such series or of this Indenture may be served. The Issuer will give prompt written notice to the Trustee of the location, and any change in the location, of any such office or agency. If at any time the Issuer shall fail to maintain such required office or agency or shall fail to furnish the Trustee with the address thereof, presentations, surrenders, notices and demands in respect of Registered Securities may be made or served at the Corporate Trust Office of the Trustee and the corporate trust office of any Authenticating Agent appointed hereunder, and presentations, surrenders, notices and demands in respect of Coupons appertaining to Securities of any series and Unregistered Securities may be made or served at the Corporate Trust Office of the Trustee in the other city or cities referred to above; and the Issuer hereby appoints the Trustee and any Authenticating Agent appointed hereunder its agents to receive all such presentations, surrenders, notices and demands. The Issuer agrees to appoint and continue to maintain the appointment of a Dollar Determination Agent, if necessary, to perform the functions set forth herein for the Dollar Determination Agent. The Issuer may also from time to time designate one or more other offices or agencies (in or outside The City of New York) where the Securities of such series may be presented or surrendered for any or all of such purposes, and may from time to time rescind such designation; provided, however, that no such designation or rescission shall in any manner relieve the Issuer of its obligation to maintain for such purposes an office or agency in the Borough of Manhattan, The City of New York, and, except as otherwise specified pursuant to Section 3.1 or Section 10.1(f), so long as any Unregistered Securities or Coupon Securities remain Outstanding, one or more offices or agencies outside the United States. SECTION 4.3. APPOINTMENT TO FILL A VACANCY IN OFFICE OF TRUSTEE. The Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in the manner provided in Section 7.10, a Trustee, so that there shall at all times be a Trustee with respect to each series of Securities hereunder. SECTION 4.4. PAYING AGENTS. Whenever the Issuer shall appoint a Paying Agent other than the Trustee with respect to the Securities of any series, 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, and the premium, if any, and interest, if any, on the Securities of such series (whether such sums have been paid to it by the Issuer or by any other obligor on the Securities of such series) in trust for the benefit of the Holders of the Securities of such series, and the Coupons, if any, appertaining thereto or of the Trustee; (b) that it will give the Trustee notice of any failure by the Issuer (or by any other obligor on the Securities of such series) to make any payment of the principal of, or the premium, if any, or interest, if any, on the Securities of such series when the same shall be due and payable; and -27- 35 (c) that at any time during the continuance of any such failure, upon the written request of the Trustee it will forthwith pay to the Trustee all sums so held in trust by such Paying Agent. If the Issuer shall act as its own Paying Agent with respect to the Securities of any series, it will, on or before each due date of the principal of, premium, if any, or interest, if any, on the Securities of such series and the Coupons, if any, appertaining thereto, set aside, segregate and hold in trust for the benefit of the Holders of the Securities of such series and the Coupons, if any, appertaining thereto a sum (in the currency or currency unit in which the Securities of such series are denominated, except as otherwise specified as contemplated by Section 3.1 for the Securities of such series and except as provided in Sections 3.12(b), 3.12(e) and 3.12(f) of this Indenture) sufficient to pay such principal, premium, if any, or interest, if any, so becoming due. The Issuer will promptly notify the Trustee of any failure to take such action. Whenever the Issuer shall have one or more Paying Agents with respect to the Securities of any series, it will, prior to the due date of the principal of, premium, if any, or interest, if any, on the Securities of such series and the Coupons, if any, appertaining thereto, deposit with a designated Paying Agent a sum (in the currency or currency unit described in the preceding paragraph) sufficient to pay the principal, premium, if any, or interest, if any, so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium, if any, or interest, if any, and (unless such Paying Agent is the Trustee) the Issuer will promptly notify the Trustee at its Corporate Trust Office of its failure so to act. Anything in this Section to the contrary notwithstanding, the Issuer may at any time, for the purpose of obtaining a satisfaction and discharge with respect to one or more or all series of Securities hereunder, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust for any such series by the Issuer or any Paying Agent hereunder, as required by this Section, such sums to be held by the Trustee upon the trusts herein contained. Anything in this Section to the contrary notwithstanding, the agreement to hold sums in trust as provided in this Section is subject to the provisions of Sections 12.4 and 12.5. SECTION 4.5. CORPORATE EXISTENCE. The Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, material rights (charter and statutory) and material franchises (other than as contemplated by Section 11.1); provided, however, that the Issuer shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation of such rights or franchises is no longer desirable in the conduct of the business of the Issuer. SECTION 4.6. RESTRICTIONS ON LIENS. So long as any of the Securities are outstanding, the Issuer shall not pledge, mortgage or hypothecate, or permit to exist, and shall not cause, suffer or permit any Restricted Subsidiary to pledge, mortgage or hypothecate, or permit to exist, except in favor of the Issuer or any Subsidiary, any mortgage, pledge or other lien upon, any Principal Property at any time owned by it, to secure any indebtedness, without making effective provisions whereby the Securities shall be equally and ratably secured with any and all such indebtedness and with any other indebtedness thereby; provided, however, that this restriction shall not apply to or prevent the creation or existence of: -28- 36 (a) mortgages or other liens on any such property acquired, constructed or improved by the Issuer or a Restricted Subsidiary to secure or provide for the payment of any part of the purchase price of such property or the cost of such construction or improvement or any mortgage or other lien on any such property existing at the time of acquisition thereof; (b) any mortgage or other lien on any property of another company existing at the time it is acquired by merger, consolidation or acquisition of substantially all of its stock or its assets; (c) pledges or deposits to secure payment of workers' compensation or insurance premiums, or relating to tenders, bids, contracts (except contracts for the payment of money) or leases; (d) pledges or liens in connection with tax assessments or other governmental charges, or as security required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or right; (e) pledges or liens to secure a stay of process in proceedings to enforce a contested liability, or required in connection with the institution of legal proceedings or in connection with any other order or decree in any such proceeding or in connection with any contest of any tax or other governmental charge, or deposits with a governmental agency entitling the Issuer or a Restricted Subsidiary to maintain self-insurance or to participate in other specified insurance arrangements; (f) mechanics', carriers', workmen's and other like liens; (g) encumbrances in favor of the U.S. Government to secure progress or advance payments; (h) mortgages, pledges or other liens securing any indebtedness incurred to finance the cost of property leased to the U.S. Government at a rental rate sufficient to pay the principal of and interest on such indebtedness; (i) mortgages or other liens securing indebtedness of a Restricted Subsidiary to the Issuer or to a Restricted Subsidiary; (j) mortgages, pledges or other liens affecting property securing indebtedness of a governmental authority issued to finance the cost of a pollution control program with respect to operations of the Issuer or a Restricted Subsidiary; (k) renewals, extensions and replacements of any permitted mortgage, lien, deposit or encumbrance, provided the amount secured is not increased; (l) mortgages or other liens on any such property existing on the date hereof; and (m) the creation of any other mortgage, pledge or other lien, if, after giving effect to the creation thereof, the total of (i) the aggregate principal amount of indebtedness of -29- 37 the Issuer and its Restricted Subsidiaries secured by all mortgages, pledges or other liens created under the provisions referred to in this clause (m), plus (ii) the aggregate amount of Capitalized Leaseback Obligations of the Issuer and its Restricted Subsidiaries under the entire unexpired terms of all leases entered into in connection with sale and leaseback transactions which would have been precluded by the provision for limitations on such transactions described above, but for the satisfaction of the condition referred to in clause (ii) of the description of such provision, will not exceed an amount equal to 15% of Consolidated Net Tangible Assets. The lease of any property and rental obligations thereunder (whether or not involving a Sale and Leaseback Transaction and whether or not capitalized) shall not be deemed to create a lien. The sale or other transfer of (a) timber or other natural resources in place for a period of time until, or in an amount such that, the purchaser will realize therefrom a specified amount of money (however determined) or a specified amount of such resources, or (b) any other interest in property of the character commonly referred to as a "production payment", shall not be deemed to create a lien. SECTION 4.7. SALE AND LEASEBACK TRANSACTIONS. The Issuer shall not, and shall not permit any Restricted Subsidiary to, after the date hereof, enter into any arrangement with any Person providing for the leasing by the Issuer or any Restricted Subsidiary of any Principal Property now owned or hereafter acquired which has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to such Person with the intention of taking back a lease of such Principal Property (a "Sale and Leaseback Transaction"), unless (i) the Issuer or such Restricted Subsidiary applies or causes to be applied an amount equal to the greater of the fair value (as determined by the Board of Directors) of such Principal Property and the net proceeds of such sale or transfer, within 120 days of receipt thereof, to the retirement or prepayment of the Securities or of Funded Debt of the Issuer or any Restricted Subsidiary ranking equal in right of payment with the Securities or to the acquisition, construction, development or improvement of properties, facilities or equipment used for operating purposes which are, or upon such acquisition, construction, development or improvement will be, a Principal Property or a part thereof, or (ii) at the time of entering into such transaction, such Principal Property could have been subjected to a mortgage-securing indebtedness in a principal amount equal to the Capitalized Leaseback Obligation with respect to such Principal Property under Section 4.6(m) without securing the Securities pursuant to Section 4.6. The foregoing restriction shall not apply to any Sale and Leaseback Transaction (i) between the Issuer and any Restricted Subsidiary or among Restricted Subsidiaries, (ii) which has a lease of less than three years in length, or (iii) entered into within 120 days after the later of the acquisition of such Principal Property or the completion of construction and commencement of full operation of such Principal Property. SECTION 4.8. COMPLIANCE CERTIFICATE. The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Issuer they would normally have knowledge of any Event of Default and whether or not the signers know of any Event of Default that occurred during such period. If they do, the certificate shall describe the Event of Default, its status and what action the Issuer is taking or proposes to take with respect thereto. The Issuer also shall comply with Trust Indenture Act Section 314(a)(4). -30- 38 SECTION 4.9. FURTHER INSTRUMENTS AND ACTS. The Issuer shall execute and deliver to the Trustee such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 4.10. [SECURITIES TO BE EQUALLY AND RATABLY SECURED UNDER PLEDGE AGREEMENT. (a) Until a Pledge Termination Event occurs, the Securities shall be entitled to the benefits of the Pledge Agreement as described and confirmed in the Notice of Pledge Agreement Entitlement, a form of which appears as Exhibit __ to this Indenture. (b) At or prior to the original issuance of any Securities, unless a Pledge Termination Event has occurred, the Issuer will have delivered an executed Notice of Pledge Agreement Entitlement to the collateral agent under the Pledge Agreement and will have obtained a confirmation of receipt and approval, a form of which appears as Exhibit __ to this Indenture. (c) Until a Pledge Termination Event occurs, the Issuer will do all things necessary to extend the benefits of the Pledge Agreement to the Securities as provided in the Notice of Pledge Agreement Entitlement, including without limitation, executing, filing, registering or recording any instruments, documents, confirmations or notices and complying with the reasonable requests of the collateral agent. (d) The Issuer shall comply with the requirements of Section 314(d) of the Trust Indenture Act to the extent applicable to the Securities and the Pledge Agreement. (e) Each Holder, by acceptance of a Security, and the Trustee acknowledge and agree that the benefits of the Pledge Agreement shall terminate upon a Pledge Termination Event, and that prior to a Pledge Termination Event, the collateral agent under the Pledge Agreement may release any part of the collateral under the Pledge Agreement without the consent of any Holder or the Trustee. (f) In the event that a Pledge Termination Event occurs as a result of a simultaneous refinancing of the Senior Credit Agreement and such refinanced Indebtedness is secured by a lien on any of the assets or properties of the Issuer or any Guarantor, the Securities shall be secured equally and ratably so long as, and only for so long as, such other indebtedness is so secured.]* SECTION 4.11. DESIGNATION OF SUBSIDIARIES. The Issuer may at any time designate a Restricted Subsidiary as an Unrestricted Subsidiary and may at any time rescind the designation of an Unrestricted Subsidiary, except that: (a) the Issuer shall not designate a Subsidiary as an Unrestricted Subsidiary if, upon the effectiveness of such designation, such Subsidiary would own any Capital Stock of, or hold any Indebtedness of, any Restricted Subsidiary and - ---------- * This language to be included if debt securities are guaranteed. -31- 39 (b) the Issuer shall not redesignate an Unrestricted Subsidiary as a Restricted Subsidiary unless (i) such Unrestricted Subsidiary has no outstanding liens on its properties that would be prohibited by Section 4.6 if created immediately after such Unrestricted Subsidiary was designated as a Restricted Subsidiary and (ii) such Unrestricted Subsidiary is not a party to any lease that would be prohibited by Section 4.7 if at the time such Unrestricted Subsidiary entered into such lease it was designated as a Restricted Subsidiary. ARTICLE V. SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE SECTION 5.1. ISSUER TO FURNISH TRUSTEE INFORMATION AS TO NAMES AND ADDRESSES OF SECURITYHOLDERS. The Issuer covenants and agrees that it will furnish or cause to be furnished to the Trustee for the Securities of each series a list in such form as the Trustee may reasonably require of the names and addresses of the Holders of the Registered Securities of each series: (a) semiannually and not more than 15 days after each record date for the payment of interest, if any, on such Securities of such series, as of such record date, and on dates to be determined pursuant to Section 3.1 for non-interest bearing Securities of such series in each year, and (b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Issuer of any such request, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders of the Registered Securities of such series, as of the respective record dates therefor (and on dates to be determined pursuant to Section 3.1 if the Securities of such series do not bear interest) as of a date not more than 15 days prior to the time such information is furnished and need not include information received after such date; provided that if and so long as the Trustee shall be the Securities Registrar for such series, such list shall not be required to be furnished. The Issuer shall also be required to furnish such information which is known to it concerning the Holders of Coupons and Unregistered Securities; provided, however, that the Issuer shall have no obligation to investigate any matter relating to any Holder of an Unregistered Security or any Holder of a Coupon. SECTION 5.2. PRESERVATION AND DISCLOSURE OF SECURITYHOLDERS 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 each series of Securities (1) contained in the most recent list furnished to it as provided in Section 5.1, (2) maintained by the Trustee in its capacity as Paying Agent for such series (if so acting) and of the Security Registrar for such series, and (3) filed with it within two preceding years pursuant to the provisions of paragraph (ii) of subsection (c) of Section 5.4. The Trustee for any series of the Securities may (1) destroy any list furnished to it as provided in Section 5.1 upon receipt of a new list so furnished, (2) destroy any information received by it as Paying Agent for such series (if so acting) hereunder upon delivery to itself as -32- 40 Trustee of a list containing the names and addresses of the Holders of Securities of such series obtained from such information since the delivery of the next previous list, if any, (3) destroy any list delivered to itself as Trustee which was compiled from information received by it as Paying Agent (if so acting) upon the receipt of a new list so delivered, and (4) destroy any information filed with it by Holders of Securities of such series for the purpose of receiving reports pursuant to the provisions of paragraph (ii) of subsection (c) of Section 5.4, but not until two years after such information has been filed with it. (b) In case three or more Holders of Securities (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 Security of such series 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 Securities of a particular series (in which case at least three of the applicants must all hold Securities of such series) or with Holders of all Securities with respect to their rights under this Indenture or under such Securities 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, as its 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 5.2; or (ii) inform such applicants as to the approximate number of Holders of Securities of such series or all Securities, 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 5.2, and as to the approximate cost of mailing to such Securityholders 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 Securities of such series or all Holders of Securities of all series for which it is Trustee, as the case may be, whose name and address appear in the information preserved at the time by the Trustee in accordance with the provisions of subsection (a) of this Section 5.2 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 Securities of such series or all Holders of Securities of all series for which it is Trustee, as the case may be, or would 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 an 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 -33- 41 Securityholders 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 Securities, by receiving and holding the same, agrees with the Issuer [, each of the Guarantors]* and the Trustee that neither the Issuer [nor any of the Guarantors]* nor the Trustee nor any Paying Agent shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders of Securities in accordance with the provisions of subsection (b) of this Section 5.2, 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 5.3. REPORTS BY THE ISSUER. The Issuer covenants: (a) to file with the Trustee for each series of Securities, within 15 days after the Issuer is required to file the same with the Commission, copies of the annual reports and of the information, documents, and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Issuer may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Issuer is not required to file information, documents, or reports pursuant to either of such Sections, then to file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents, and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national exchange as may be prescribed from time to time in such rules and regulations; (b) to file with the Trustee for each series of Securities 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 Issuer 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 Securities in the manner and to the extent provided in Section 5.4(c) and (d), within 30 days after the filing thereof with the Trustee for each series of Securities, such summaries of any information, documents and reports required to be filed by the Issuer 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. SECTION 5.4. REPORTS BY THE TRUSTEE. (a) On or before July 15 in each year following the date hereof, so long as any Securities are outstanding hereunder, the Trustee for each series of Securities shall transmit by mail as provided below to the Securityholders of such series, as hereinafter in this Section provided, a brief report dated as of the preceding May 15 with respect to any of the following events which may have occurred during the twelve months - ---------- * This language to be included if debt securities are guaranteed. -34- 42 preceding the date of such report (but if no such event has occurred within such period, no report need be transmitted): (i) any change to its eligibility under Section 7.9 and its qualifications under Section 7.8; (ii) the creation of or any material change to a relationship specified in Section 310(b)(1) through Section 310(b)(10) of the Trust Indenture Act; (iii) the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee (as such) which remain unpaid on the date of such report and for the reimbursement of which it claims or may claim a lien or charge, prior to that of the Securities of any series, on any property or funds held or collected by it as Trustee, except that the Trustee shall not be required (but may elect) to report such advances if such advances so remaining unpaid aggregate not more than 1/2 of 1% of the principal amount of the Securities of any series Outstanding on the date of such report; (iv) any change to the amount, interest rate, and maturity date of all other indebtedness owing by the Issuer (or by any other obligor on the Securities of any series) to the Trustee in its individual capacity on the date of such report, with a brief description of any property held as collateral security therefor, except any indebtedness based upon a creditor relationship arising in any manner described in Section 7.13(b)(2), (3), (4) or (6); (v) any change to the property and funds, if any, physically in the possession of the Trustee (as such) on the date of such report; (vi) any additional issue of Securities of any series for which it is Trustee which the Trustee has not previously reported; and (vii) any action taken by the Trustee in the performance of its duties under this Indenture which it has not previously reported and which in its opinion materially affects the Securities of any series, except action in respect of a default, notice of which has been or is to be withheld by it in accordance with the provisions of Section 6.11. (b) The Trustee for each series of Securities shall transmit to the Securityholders of such series, as provided in subsection (c) of this Section, a brief report with respect to the character and amount of any advances (and if the Trustee elects so to state, the circumstances surrounding the making thereof) made by the Trustee, as such, since the date of the last report transmitted pursuant to the provisions of subsection (a) of this Section (or if no such report has yet been so transmitted, since the date of this Indenture) for the reimbursement of which it claims or may claim a lien or charge prior to that of the Securities of any series on property or funds held or collected by it as Trustee and which it has not previously reported pursuant to this subsection (b), except that the Trustee shall not be required (but may elect) to report such advances if such advances remaining unpaid at any time aggregate 10% or less of the principal amount of Securities of such series Outstanding at such time, such report to be transmitted within 90 days after such time. -35- 43 (c) Reports pursuant to this Section shall be transmitted by mail: (i) to all registered Holders of Registered Securities, as the names and addresses of such Holders appear in the applicable Securities Register; (ii) to such Holders of Securities of any series as have, within two years preceding such transmission, filed their names and addresses with the Trustee for such series for that purpose; and (iii) except in the cases of reports pursuant to subsection (b) of this Section 5.4, to each Holder of a Security of any series whose name and address is preserved at the time by the Trustee for such series, as provided in subsection (a) of Section 5.2. (d) A copy of each such report shall, at the time of such transmission to Securityholders of any series, be furnished to the Issuer and be filed by the Trustee for such series with each stock exchange upon which the Securities of any series are listed and also with the Commission. The Issuer agrees to notify the Trustee for each series when and as the Securities of such series become admitted to trading on any national securities exchange. ARTICLE VI. DEFAULTS AND REMEDIES SECTION 6.1. EVENT OF DEFAULT DEFINED; ACCELERATION OF MATURITY; WAIVER OF DEFAULT. "Event of Default", with respect to the Securities of any series, wherever used herein, means each one 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), unless such event is either inapplicable to a particular series or is specifically deleted or modified in the applicable Board Resolution or in the supplemental indenture under which such series of Securities is issued, as the case may be, as contemplated by Section 3.1: (a) the Issuer defaults in any payment of the principal of or premium, if any, on such series when it becomes due and payable; (b) the Issuer defaults in the payment of any installment of interest upon any of the Securities of such series as and when the same becomes due and payable, and such default continues for a period of 30 days; (c) the Issuer defaults in the deposit of any sinking fund payment when and as due and payable by the terms of the Securities of such series; (d) the Issuer fails to comply with any of its covenants or agreements contained in such series of Securities or this Indenture (other than those referred to in (a) or (b) above) and such failure continues for 60 days after the notice specified below; -36- 44 (e) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Issuer, whether such Indebtedness or guarantee now exists, or is created after the date of this Indenture, which default results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness the maturity of which has been so accelerated, aggregates $100 million or more and such acceleration continues for 30 days after the notice specified below; (f) the Issuer [or, so long as there are any Guarantors, any Guarantor that constitutes a Significant Subsidiary of the Issuer]* pursuant to or within the meaning of any Bankruptcy Law: (i) commences a voluntary case; (ii) consents to the entry of an order for relief against it in an involuntary case; (iii) consents to the appointment of a Custodian of it or for any substantial part of its property; or (iv) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency; or (g) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Issuer [or, so long as there are any Guarantors, any Guarantor that constitutes a Significant Subsidiary of the Issuer]* or in an involuntary case; (ii) appoints a Custodian of the Issuer [or, so long as there are any Guarantors, any Guarantor that constitutes a Significant Subsidiary of the Issuer]* or for any substantial part of its property; (iii) orders the winding up or liquidation of the Issuer [or, so long as there are any Guarantors, any Guarantor that constitutes a Significant Subsidiary of the Issuer]*or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days; or (h) any other Event of Default established by or pursuant to a Board Resolution or one or more indentures supplemental hereto as applicable to the Securities of such series. - --------- * This language to be included if debt securities are guaranteed. -37- 45 The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body, unless such event is either inapplicable to a particular series or is specifically deleted or modified in the applicable Board Resolution or in the supplemental indenture under which such series of Securities is issued, as the case may be, as contemplated by Section 3.1. An Event of Default with respect to any particular series of Securities issued under this Indenture does not necessarily constitute an Event of Default with respect to any other series of Securities issued under this Indenture. The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. An Event of Default described under clause (d) or (e) above is not an Event of Default until the Trustee or the Holders of at least 25% in aggregate principal amount of the outstanding Securities notify the Issuer of the Event of Default and the Issuer does not cure such Event of Default within the time specified in clause (d) or (e), as the case may be, after receipt of such notice. Such notice must specify the Event of Default, demand that it be remedied and state that such notice is a "Notice of Default." If an Event of Default described in clause (a), (b), (c), (d) or (h) above (if the Event of Default under clause (d) or (h) is with respect to less than all series of Securities then Outstanding) occurs and is continuing, then and in each and every such case, unless the principal of all of the Securities of such series shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding hereunder (each such series voting as a separate class), by notice in writing to the Issuer (and to the Trustee if given by Securityholders), may declare the entire principal (or, if the Securities of such series are Original Issue Discount Securities, such portion of the principal as may be specified in the terms of such series) of all Securities of such series and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. If an Event of Default described in clause (d), (e), (f), (g) or (h) above (if the Event of Default under clause (d) or (h) is with respect to all series of Securities then Outstanding) occurs and is continuing, then and in each and every such case, unless the principal of all the Securities shall have already become due and payable, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the Securities then Outstanding hereunder (treated as one class), by notice in writing to the Issuer (and to the Trustee if given by Securityholders), may declare the entire principal (or, if any Securities are Original Issue Discount Securities, such portion of the principal as may be specified in the terms thereof) of all the Securities then Outstanding and the interest accrued thereon, if any, to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable. The foregoing provisions, however, are subject to the condition that, if, at any time after the principal (or, if the Securities are Original Issue Discount Securities, such portion -38- 46 of the principal as may be specified in the terms thereof) of the Securities of any series (or of all the Securities, as the case may be) 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 Issuer shall pay or shall deposit with the Trustee a sum sufficient to pay in the currency or currency unit in which the Securities of such series are payable (except as otherwise specified as contemplated by Section 3.1 for the Securities of such series and except as provided in Sections 3.12(b), 3.12(e) and 3.12(f) of this Indenture), all matured installments of interest, if any, upon all the Securities of such series (or upon all the Securities, as the case may be) and (in the currency or currency unit described above) the principal of (and premium, if any, on) any and all Securities of such series (or of all the Securities, as the case may be) which shall have become due otherwise than by acceleration (with interest upon such principal and premium, if any, and, to the extent that payment of such interest is enforceable under applicable law, on overdue installments of interest, at the Overdue Rate applicable to such series to the date of such payment or deposit) and in Dollars all amounts payable to the Trustee pursuant to the provisions of Section 7.6 and 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 made, by the Trustee except as a result of negligence or bad faith, and if any and all Events of Default under this Indenture, other than the nonpayment of the principal of and accrued interest on Securities of such series which shall have become due by acceleration, shall have been cured, waived or otherwise remedied as provided herein--then and in every such case the Holders of a majority in aggregate principal amount of the Securities of such series (each Series voting as a separate class) or of all the Securities (voting as a single class), as the case may be, then Outstanding, by written notice to the Issuer and to the Trustee, may waive all defaults with respect to that series (or with respect to all the Securities, as the case may be) 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. In case the Trustee shall have proceeded to enforce any right under this Indenture and such proceedings shall have been discontinued or abandoned because of such rescission or annulment or for any other reason or shall have been determined adversely to the Trustee, then and in every such case the Issuer and the Trustee shall be restored respectively to their several positions and rights hereunder, and all rights, remedies and powers of the Issuer and the Trustee shall continue as though no such proceedings had been taken. For all purposes under this Indenture, if a portion of the principal of any Original Issue Discount Securities shall have been accelerated and declared due and payable pursuant to the provisions hereof, then, from and after such declaration, unless such declaration has been rescinded and annulled, the principal amount of such Original Issue Discount Securities shall be deemed, for all purposes hereunder, to be such portion of the principal thereof as shall be due and payable as a result of such acceleration, and payment of such portion of the principal thereof as shall be due and payable as a result of such acceleration, together with interest, if any, thereon and all other amounts owing thereunder, shall constitute payment in full of such Original Issue Discount Securities. SECTION 6.2. COLLECTION OF INDEBTEDNESS BY TRUSTEE; TRUSTEE MAY PROVE DEBT. The Issuer covenants that (a) in case default shall be made in the payment of any installment of -39- 47 interest on any of the Securities of any series 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 or any premium, if any, on any Securities of any series when the same shall have become due and payable, whether upon Maturity of the Securities of such series or upon any redemption or by declaration or otherwise or (c) in case of default in the making or satisfaction of any sinking fund payment or analogous obligation when the same becomes due by the terms of the Securities of any series--then upon demand of the Trustee for such series, the Issuer will pay to the Trustee for the benefit of the Holder of any such Security (or Holders of any such series of Securities in the case of clause (c) above) and the Holders of any Coupons appertaining thereto the whole amount that then shall have become due and payable on any such Security (or Securities of any such series in the case of clause (c) above) and matured Coupons, if any, appertaining thereto for the principal, premium, if any, and interest, if any, with interest upon the overdue principal and premium, if any, and, so far as payment of the same is enforceable under applicable law, on overdue installments of interest, at the Overdue Rate applicable to any such Security (or Securities of any such series in the case of clause (c)); and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection and any further amounts payable to the Trustee pursuant to the provisions of Section 7.6. In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Trustee, 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 Issuer or other obligor upon such Securities (or Securities of any such series in the case of clause (c)) and Coupons and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Securities (or Securities of any such series in the case of clause (c)) and Coupons, wherever situated, the moneys adjudged or decreed to be payable. The Trustee for any series of the Securities shall be entitled and empowered, either in its own name as trustee of an express trust, or as attorney-in-fact for the Holders of any of the Securities of such series and for the Holders of any Coupons appertaining thereto or in both such capacities, to file such proof of debt, amendment of proof of debt, claim, petition or other document as may be necessary or advisable in order to have the claims of the Trustee and of the Holders of Securities of such series and the Holders of any Coupons appertaining thereto allowed in any equity receivership, insolvency, bankruptcy, liquidation, readjustment, reorganization or other similar proceedings, or any judicial proceedings, relative to the Issuer or any other obligor on the Securities of such series and any Coupons appertaining thereto or its creditors or its property. The Trustee for each series of the Securities is hereby irrevocably appointed (and the successive respective Holders of the Securities of such series and the Holders of any Coupons appertaining thereto, by taking and holding the same, shall be conclusively deemed to have so appointed the Trustee) the true and lawful attorney-in-fact of the respective Holders of the Securities of such series and the Holders of any Coupons appertaining thereto, with authority to make or file in the respective names of the Holders of the Securities of such series and the Holders of any Coupons appertaining thereto or on behalf of all the Holders of Securities of all series and the Holders of any Coupons appertaining thereto for which it is Trustee any proof of debt, amendment of proof of debt, claim, petition or other document in any -40- 48 such proceedings and to receive payment of any sums becoming distributable on account thereof, and to execute any other papers and documents and do and perform any and all acts and things for and on behalf of such Holders of the Securities of such series and the Holders of any Coupons appertaining thereto, as may be necessary or advisable in the opinion of the Trustee in order to have the respective claims of the Holders of the Securities of such series and the Holders of any Coupons appertaining thereto against the Issuer or any other obligor on the Securities of such series and any Coupons appertaining thereto and/or its property allowed in any such proceedings, and to receive payment of or on account of such claims in moneys or such other properties payable therefor and to distribute the same; provided, however, that nothing herein contained shall be deemed to authorize or empower the Trustee to consent to or accept or adopt, on behalf of any Holder of Securities of any series or any Holder of any Coupons appertaining thereto, any plan of reorganization, arrangement or readjustment of the Issuer or any other obligor on the Securities of any series and any Coupons appertaining thereto or, by other action of any character in any such proceeding, to waive or change in any way any right of any Holder of any Security of any series or any Holder of any Coupon appertaining thereto even though it may otherwise be entitled so to do under any present or future law, all such power or authorization being thereby expressly denied. All rights of action and of asserting claims under this Indenture, or under any of the Securities of any series or Coupons appertaining thereto, may be enforced by the Trustee for such series without the possession of any of the Securities of any series or Coupons appertaining thereto, or the production thereof on any trial or other proceedings relative thereto, and 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 for such series, each predecessor Trustee and their respective agents and attorneys, shall be for the ratable benefit of the holders of the Securities or Coupons in respect of which such action was taken. In any proceedings brought by the Trustee (and also any proceedings involving the interpretation of any provision of this Indenture to which the Trustee shall be party) the Trustee shall be held to represent all the Holders of the Securities in respect of which such action was taken, and it shall not be necessary to make any Holders of such Securities parties to any such proceedings. SECTION 6.3. APPLICATION OF PROCEEDS. Any moneys collected by the Trustee pursuant to this Article in respect of any series of the Securities, together with any other sums held by the Trustee (as such) hereunder (other than sums held in trust for the benefit of the Holders of particular Securities or Coupons), shall be applied in the following order at the date or dates fixed by the Trustee and, in case of the distribution of such moneys on account of principal or interest, upon presentation (except in respect of Subdivision First below) of the several Securities and any Coupons appertaining thereto in respect of which moneys have been collected and stamping (or otherwise noting) thereon the payment, or issuing Securities of such series in reduced principal amounts in exchange for the presented Securities of like series if only partially paid, or upon surrender thereof if fully paid: FIRST: To the payment of costs and expenses applicable to such series in respect of which moneys have been collected, including reasonable compensation to the Trustee and -41- 49 each predecessor Trustee and their respective agents and attorneys, and of all expenses and liabilities incurred, and all advances made, by the Trustee and each predecessor Trustee, except as a result of negligence or bad faith, and all other amounts due to the Trustee or any predecessor Trustee pursuant to Section 7.6; SECOND: In case the principal of the Securities of such series in respect of which moneys have been collected shall not have become and be then due and payable, to the payment of interest on the Securities of such series in default in the order of the maturity of the installments of such interest, with interest (to the extent that such interest has been collected by the Trustee), so far as it may be enforceable under applicable law, upon the overdue installments of interest at the Overdue Rate applicable to such series, such payments to be made ratably to the persons entitled thereto, without discrimination or preference; THIRD: In case the principal of the Securities of such series in respect of which moneys have been collected shall become and shall be then due and payable, to the payment of the whole amount then owing and unpaid upon all the Securities of such series for principal, premium, if any, and interest, if any, with interest upon the overdue principal, and (to the extent that such interest has been collected by the Trustee), so far as payment of the same is enforceable under applicable law, upon overdue installments of interest, if any, at the Overdue Rate applicable to such series; and, in case such moneys shall be insufficient to pay in full the whole amount so due and unpaid upon the Securities of such series, then to the payment of such principal, premium, if any, and interest, if any, without preference or priority, of principal and premium, if any, over interest, or of interest, if any, over principal and premium, if any, or of any installment of interest, if any, over any other installment of interest, if any, or of any Security of such series over any other Security of such series, or of any Coupon appertaining thereto over any other Coupon appertaining thereto, ratably to the aggregate of such principal premium, if any, and accrued and unpaid interest, if any; and FOURTH: To the payment of the remainder, if any, to the Issuer or any other person lawfully entitled thereto or as a court of competent jurisdiction may direct. SECTION 6.4. SUITS FOR ENFORCEMENT. In case an Event of Default with respect to Securities of any series has occurred, has not been waived and is continuing, the Trustee for such series 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. SECTION 6.5. RESTORATION OF RIGHTS ON ABANDONMENT OF PROCEEDINGS. In case the Trustee 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, then and in every such case the Issuer [, each of the Guarantors]* and the Trustee shall be restored respectively to their former positions and rights hereunder, and all - --------- * This language to be included if debt securities are guaranteed. -42- 50 rights, remedies and powers of the Issuer, [, each of the Guarantors]* the Trustee and the Securityholders shall continue as though no such proceedings had been taken. SECTION 6.6. LIMITATIONS ON SUITS BY SECURITYHOLDERS. No Holder of any Security of any series or Holder of any Coupon appertaining thereto 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 or 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 for such series written notice of default with respect to such series and of the continuance thereof, as hereinbefore provided, and unless also the Holders of not less than 25% in aggregate principal amount of the Securities of such series then Outstanding shall have made written request upon the Trustee for such series to institute such action or proceeding 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 pursuant to Section 6.9; it being understood and intended, and being expressly covenanted by the taker and Holder of every Security and by the taker and Holder of any Coupon appertaining thereto with every other taker and Holder of any Security and of any Coupon appertaining thereto and the Trustee for the Securities of each series that no one or more Holders of Securities of any series or of any Coupons appertaining thereto 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 Holder of Securities of such series or of any Coupons appertaining thereto, 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 Securities of such series or of any Coupons appertaining thereto. For the protection and enforcement of the provisions of this Section, each and every Holder of Securities of any series or of any Coupons appertaining thereto and the Trustee shall be entitled to such relief as can be given either at law or in equity. SECTION 6.7. UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO INSTITUTE CERTAIN SUITS. Nothing contained in this Indenture, in the Securities of any series or in any Coupon appertaining thereto shall affect or impair the obligation of the Issuer, which is unconditional and absolute, to pay the principal of, and premium, if any, and interest, if any, on the Securities of such series at the respective places, at the respective times, at the respective rates, in the respective amounts and in the coin, currency, or currency unit therein and herein prescribed, or affect the right of any Holder of a Security of any series or a Coupon to receive payment of the principal of (or premium, if any) or interest, if any, on any such Security or Coupon on or after the Maturity of such Security or the related Interest Payment Date, or affect or impair the right of action, which is also absolute and unconditional, of any Holder of any Security or Coupon, if any, to institute suit to enforce such payment at the respective due dates expressed in such Security or Coupon, if any, or upon redemption, by declaration, repayment or otherwise as herein provided without reference to, or the consent of, the Trustee or the Holder of any other Security or Coupon, if any, unless such Holder consents thereto. - --------- * This language to be included if debt securities are guaranteed. -43- 51 SECTION 6.8. POWERS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER OF EVENT OF DEFAULT. Except as provided in Section 6.6, no right or remedy herein conferred upon or reserved to the Trustee for any series of the Securities or to the Holder of any Security of such series or any Coupon appertaining thereto 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 any Security of any series or any Coupon appertaining thereto 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 6.6, every power and remedy given by this Indenture or by law to the Trustee for any series of the Securities or to the Holder of the Security of such series or any Coupon appertaining thereto may be exercised from time to time, and as often as shall be deemed expedient, by the Trustee or by the Holder of such Security or any Coupon appertaining thereto. SECTION 6.9. CONTROL BY THE HOLDERS OF SECURITIES. The Holders of a majority in aggregate principal amount of the Securities of each series affected (with each series voting as a separate class) 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 for such series, or exercising any trust or power conferred on the Trustee with respect to the Securities of such series by this Indenture; provided that such direction shall not be otherwise than in accordance with law and the provisions of this Indenture and provided further that (subject to the provisions of Section 7.1) the Trustee shall have the right to decline to follow any such direction if the Trustee, being advised by counsel, shall determine that the action or proceeding so directed may not lawfully be taken or if the Trustee in good faith by its board of directors, the executive committee or a trust committee of directors or responsible officers of 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 forbearances specified in or pursuant to such direction would be unduly prejudicial to the interests of Holders of the Securities of all series so affected not joining in the giving of said direction, it being understood that (subject to Section 7.1) the Trustee shall have no duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Holders. Nothing in this Indenture shall impair the right of the Trustee in its discretion to take any action deemed proper by the Trustee and which is not inconsistent with such direction or directions by Securityholders. SECTION 6.10. WAIVER OF PAST DEFAULTS. Prior to the declaration of the acceleration of the maturity of the Securities of any series as provided in Section 6.1, the Holders of a majority in aggregate principal amount of the Securities of such series at the time Outstanding may on behalf of the Holders of all the Securities of such series waive any past default or Event of Default described in clauses (d) and (h) of Section 6.1 which relates to less than all series of Securities then Outstanding, the Holders of a majority in aggregate principal -44- 52 amount of the Securities then Outstanding affected thereby (each series voting as a separate class) may waive any such default or Event of Default or, in the case of an event specified in clause (d) or (h) (if the Event of Default under clause (d) or (h) relates to all series of Securities then Outstanding), (e), (f) or (g) of Section 6.1, the Holders of a majority in aggregate principal amount of all the Securities then Outstanding (voting as one class) may waive any such default or Event of Default and its consequences, except a default in respect of a covenant or provision hereof which cannot be modified or amended without the consent of the Holder of each Security affected. In the case of any such waiver, the Issuer, [, each of the Guarantors]* the Trustee and the Holders of the Securities of such series shall be restored to their former positions and rights hereunder, respectively, 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 6.11. TRUSTEE TO GIVE NOTICE OF DEFAULT, BUT MAY WITHHOLD IN CERTAIN CIRCUMSTANCES. The Trustee shall transmit to the Securityholders of any series, as the names and addresses of such Holders appear on the registry books, and to such Holders of Securities of any series and of Coupons as have, within two years preceding such notice, filed their names and addresses with the Trustee for that purpose, notice by mail of all defaults known to the Trustee which have occurred with respect to such series, such notice to be transmitted within 90 days after the occurrence thereof, unless such defaults shall have been cured before the giving of such notice (the term "default" or "defaults" for the purposes of this Section being hereby defined to mean any event or condition which is, or with notice or lapse of time or both would become, an Event of Default); provided that, except in the case of default in the payment of the principal of or interest on any of the Securities of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors or trustees and/or responsible officers of the Trustee in good faith determines that the withholding of such notice is in the interests of the Securityholders of such series and of Coupons, if any, appertaining thereto. SECTION 6.12. RIGHT OF COURT TO REQUIRE FILING OF UNDERTAKING TO PAY COSTS. All parties to this Indenture agree, and each Holder of any Security and each Holder of any Coupon 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 the Securities of any series 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, 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 for the Securities of any series, to any suit instituted by any Securityholder or group of Securityholders of any series holding in the aggregate more than 10% in aggregate principal amount of the Securities of such series Outstanding or, in the case of any suit relating to or arising under clause (d) or (h) of Section 6.1 (if the suit relates to Securities of more than one but less than all series), 10% in aggregate - --------- * This language to be included if debt securities are guaranteed. -45- 53 principal amount of Securities Outstanding affected thereby or, in the case of any suit relating to or arising under clause (d), (h) (if the suit under clause (d) or (h) relates to all the Securities then Outstanding), (e), (f) or (g) of Section 6.1, 10% in aggregate principal amount of all Securities Outstanding or to any suit instituted by any Holder of Securities or Coupons for the enforcement of the payment of the principal of, premium, if any, or interest, if any, on any Security or Coupon on or after the due date expressed in such Security or Coupon. SECTION 6.13. JUDGMENT CURRENCY. If, for the purpose of obtaining a judgment in any court with respect to any obligation of the Issuer hereunder or under any Security or Coupon, it shall become necessary to convert into any other currency or currency unit any amount in the currency or currency unit due hereunder or under such Security or Coupon, then such conversion shall be made at the Conversion Rate as in effect on the date the Issuer shall make payment to any person in satisfaction of such judgment. If, pursuant to any such judgment, conversion shall be made on a date other than the date payment is made and there shall occur a change between such Conversion Rate and the Conversion Rate as in effect on the date of payment, the Issuer agrees to pay such additional amounts (if any) as may be necessary to ensure that the amount paid is the amount in such other currency or currency unit which, when converted at the Conversion Rate as in effect on the date of payment or distribution, is the amount then due hereunder or under such Security or Coupon. Any amount due from the Issuer under this Section 6.13 shall be due as a separate debt and is not to be affected by or merged into any judgment being obtained for any other sums due hereunder or in respect of any Security or Coupon. In no event, however, shall the Issuer be required to pay more in the currency or currency unit due hereunder or under such Security or Coupon at the Conversion Rate as in effect when payment is made than the amount of currency or currency unit stated to be due hereunder or under such Security or Coupon so that in any event the Issuer's obligations hereunder or under such Security or Coupon will be effectively maintained as obligations in such currency or currency unit. For purposes of this Section 6.13, "Conversion Rate" shall mean the spot rate at which in accordance with normal banking procedures the currency or currency unit into which an amount due hereunder or under any Security or Coupon is to be converted could be purchased with the currency or currency unit due hereunder or under any Security or Coupon from major banks located in New York, London, or any other principal market for such purchased currency or currency unit. ARTICLE VII. CONCERNING THE TRUSTEE SECTION 7.1. DUTIES AND RESPONSIBILITIES OF THE TRUSTEE; DURING DEFAULT; PRIOR TO DEFAULT. With respect to the Holders of any series of Securities issued hereunder, the Trustee, prior to the occurrence of an Event of Default with respect to the Securities of that series and after the curing or waiving of all Events of Default which may have occurred with respect to such series, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default with respect to the Securities of a series has occurred (which has not been cured or waived) the Trustee as to that series shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their -46- 54 exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs. No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that (a) prior to the occurrence of an Event of Default with respect to the Securities of such series and after the curing or waiving of all such Events of Default with respect to such series which may have occurred: (i) the duties and obligations of the Trustee with respect to the Securities of any series shall be determined solely by the express provisions of this Indenture, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any statements, certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such statements, certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture; (b) the Trustee shall not be liable for any error of judgment made in good faith by a responsible officer or responsible officers of the Trustee, unless it shall be proved that the Trustee was negligent in ascertaining the pertinent facts; (c) the Trustee shall not be liable for any determination, action or judgment of any Dollar Determination Agent or any other agent appointed by the Issuer pursuant to this Indenture; and (d) the Trustee for the Securities of any series shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of Securities of such series pursuant to Section 6.9 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture with respect to the Securities of such series. None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur personal financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there shall be reasonable ground for believing that the repayment of such funds or adequate indemnity against such liability is not reasonably assured to it. SECTION 7.2. CERTAIN RIGHTS OF THE TRUSTEE. Subject to Section 7.1: -47- 55 (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, Officers' Certificate, certificate of a Dollar Determination Agent or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon, security or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request, direction, order or demand of the Issuer mentioned herein shall be sufficiently evidenced by an Officers' Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a copy thereof certified by the Secretary or any Assistant Secretary of the Issuer; (c) the Trustee may consult with counsel and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in good faith and in accordance with such advice or Opinion of Counsel; (d) the Trustee for Securities of any series shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture at the request, order or direction of any of the Securityholders of such series pursuant to the provisions of this Indenture, unless such Securityholders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred therein or thereby; (e) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture; (f) prior to the occurrence of an Event of Default hereunder and after the curing or waiving of all Events of Default, the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, appraisal, bond, debenture, note, coupon, security or other paper or document unless requested in writing so to do by the Holders of not less than a majority in aggregate principal amount of the Securities of all series affected then Outstanding; provided that if the payment within a reasonable time to the Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Trustee, not reasonably assured to the Trustee by the security afforded to it by the terms of this Indenture, the Trustee may require reasonable indemnity against such expenses or liabilities as a condition to proceeding; the reasonable expenses of every such investigation shall be paid by the Issuer or, if paid by the Trustee or any predecessor Trustee, shall be repaid by the Issuer upon demand; and (g) 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 not regularly in its employ and the Trustee shall not be responsible for any misconduct or negligence on the part of any such agent or attorney appointed with due care by it hereunder. -48- 56 SECTION 7.3. TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITION OF SECURITIES OR APPLICATION OF PROCEEDS THEREOF. The recitals contained herein and in the Securities, except the certificates of authentication, shall be taken as the statements of the Issuer, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representation as to the validity or sufficiency of this Indenture or of the Securities or Coupons. The Trustee shall not be accountable for the use or application by the Issuer of any of the Securities or of the proceeds thereof. SECTION 7.4. TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS, ETC. The Trustee, any Paying Agent, any Securities Registrar or any agent of the Issuer or the Trustee, in its individual or any other capacity, may become the owner or pledgee of Securities or Coupons with the same rights it would have if it were not the Trustee or such agent and, subject to Sections 7.8 and 7.13, if operative, may otherwise deal with the Issuer and receive, collect, hold and retain collections from the Issuer with the same rights it would have if it were not the Trustee, Paying Agent, Securities Registrar or such agent. SECTION 7.5. MONEYS HELD BY TRUSTEE. Subject to the provisions of Section 4.4 hereof, all moneys in any currency or currency unit received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by mandatory provisions of law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Issuer. SECTION 7.6. COMPENSATION AND INDEMNIFICATION OF TRUSTEE AND ITS PRIOR CLAIM. The Issuer covenants and agrees to pay to the Trustee for the Securities of each series from time to time, and the Trustee shall be entitled to, reasonable compensation in Dollars (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) and the Issuer covenants and agrees to pay or reimburse the Trustee and each predecessor Trustee in Dollars for the Securities of each series upon its request for all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all agents and other persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or bad faith. The Issuer also covenants to indemnify in Dollars the Trustee and each predecessor Trustee for the Securities of each series for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and the performance of its duties hereunder, including the costs and expenses of defending itself against or investigating any claim of liability in the premises. The obligations of the Issuer under this Section to compensate and indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor Trustee for expenses, disbursements and advances shall constitute additional indebtedness hereunder and shall survive the satisfaction and discharge of this Indenture. Such additional indebtedness shall be a claim prior to that of the Securities upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Securities, and the Securities are hereby subordinated to such senior claim. -49- 57 SECTION 7.7. RIGHT OF TRUSTEE TO RELY ON OFFICERS' CERTIFICATE, ETC. Subject to Sections 7.1 and 7.2, whenever in the administration of the trusts of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or bad faith on the part of the Trustee, be deemed to be conclusively proved and established by an Officers' Certificate delivered to the Trustee, and such certificate, in the absence of negligence or bad faith on the part of the Trustee, shall be full warrant to the Trustee for any action taken, suffered or omitted by it under the provisions of this Indenture upon the faith thereof. SECTION 7.8. QUALIFICATION OF TRUSTEE; CONFLICTING INTERESTS. The Trustee for the Securities of any series issued hereunder shall be subject to the provisions of Section 310(b) of the Trust Indenture Act during the period of time provided for therein. In determining whether the Trustee has a conflicting interest as defined in Section 310(b) of the Trust Indenture Act with respect to the Securities of any series, there shall be excluded this Indenture with respect to Securities of any particular series of Securities other than that series. Nothing herein shall prevent the Trustee from filing with the Commission the application referred to in the second-to-last paragraph of Section 310(b) of the Trust Indenture Act. SECTION 7.9. PERSONS ELIGIBLE FOR APPOINTMENT AS TRUSTEE. There shall at all times be a Trustee for each series of Securities hereunder, which shall at all times be either: (a) a corporation organized and doing business under the laws of the United States of America or of any State or the District of Columbia which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by Federal, state or District of Columbia authority, or (b) a corporation or other Person organized and doing business under the laws of a foreign government that is permitted to act as Trustee pursuant to a rule, regulation or order of the Commission, authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by authority of such foreign government or a political subdivision thereof substantially equivalent to supervision or examination applicable to United States institutional trustees, in either case having a combined capital and surplus of at least $10,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then, for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee for the Securities of any series shall cease to be eligible in accordance with the provisions of this Section, the Trustee shall resign immediately in the manner and with the effect specified in Section 7.10. Neither the Issuer nor any person directly or indirectly controlling, controlled by or under common control with the Issuer shall serve as trustee for the Securities of any series issued hereunder. SECTION 7.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE. (a) The Trustee, or any trustee or trustees hereafter appointed, for the Securities of any series may at any time resign with respect to one or more or all series of Securities by giving written notice of resignation to the Issuer and by mailing notice thereof by first-class mail to Holders of -50- 58 the applicable series of Securities at their last addresses as they shall appear on the Security Register. Upon receiving such notice of resignation, the Issuer shall promptly appoint a successor trustee or trustees with respect to the applicable series by written instrument in duplicate, executed by authority of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee or trustees. If no successor trustee shall have been so appointed with respect to any series and have accepted appointment within 30 days after the mailing of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor trustee, or any Securityholder who has been a bona fide Holder of a Security or Securities of the applicable series for at least six months may, subject to the provisions of Section 6.12, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee. (b) In case at any time any of the following shall occur: (i) the Trustee for the Securities of any series shall fail to comply with the provisions of Section 7.8 with respect to any series of Securities after written request therefor by the Issuer or by any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months; (ii) the Trustee for the Securities of any series shall cease to be eligible in accordance with the provisions of Section 7.9 and shall fail to resign after written request therefor by the Issuer or by any Securityholder of such series; or (iii) the Trustee for the Securities of any series shall become incapable of acting with respect to any series of Securities, or shall be adjudged a bankrupt or insolvent, or a receiver or liquidator of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, the Issuer may remove the Trustee with respect to the applicable series of Securities and appoint a successor trustee for such series by written instrument, in duplicate, executed by order of the Board of Directors of the Issuer, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.12, any Securityholder who has been a bona fide Holder of a Security or Securities of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee with respect to such series. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee for such series. (c) The Holders of a majority in aggregate principal amount of the Securities of each series at the time Outstanding may at any time remove the Trustee with respect to the Securities of such series and appoint a successor trustee with respect to the Securities of such series by delivering to the Trustee so removed, to the successor trustee so appointed and to the Issuer the evidence provided for in Section 8.1 of the action in that regard taken by the Securityholders. -51- 59 (d) Any resignation or removal of the Trustee with respect to any series of the Securities and any appointment of a successor trustee with respect to such series pursuant to any of the provisions of this Section 7.10 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 7.11. SECTION 7.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any successor trustee appointed as provided in Section 7.10 shall execute, acknowledge and deliver to the Issuer and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee with respect to all or any applicable series of the Securities shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all rights, powers, duties and obligations with respect to such series of its predecessor hereunder, with like effect as if originally named as trustee for such series hereunder; but, nevertheless, on the written request of the Issuer, or of the successor trustee, upon payment of its charges then unpaid, the Trustee ceasing to act shall, subject to Section 4.4, pay over to the successor trustee all moneys at the time held by it hereunder and shall execute and deliver an instrument transferring to such successor trustee all such rights, powers, duties and obligations. Upon request of any such successor trustee, the Issuer shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a prior claim upon all property or funds held or collected by such trustee to secure any amounts then due it pursuant to the provisions of Section 7.6. If a successor trustee is appointed with respect to the Securities of one or more (but not all) series, the Issuer, the predecessor Trustee and each successor trustee with respect to the Securities of any applicable series shall execute and deliver an indenture supplemental hereto which shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the predecessor Trustee with respect to the Securities of any series as to which the predecessor Trustee is not retiring shall continue to be vested in the predecessor Trustee and shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees cotrustees of the same trust and that each such Trustee shall be trustee of a trust or trusts under separate indentures. No successor trustee with respect to any series of Securities shall accept appointment as provided in this Section 7.11 unless at the time of such acceptance such successor trustee shall be qualified under the provisions of Section 7.8 and eligible under the provisions of Section 7.9. Upon acceptance of appointment by any successor trustee as provided in this Section 7.11, the Issuer shall mail notice thereof by first-class mail to the Holders of Securities of any applicable series and to the Holders of Coupons, if any, appertaining thereto for which such successor trustee is acting as Trustee at their last addresses as they shall appear in the Security Register. If the acceptance of appointment is substantially contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with the notice called for by Section 7.10. If the Issuer fails to mail such notice within 10 days after -52- 60 acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Issuer. SECTION 7.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS OF TRUSTEE. Any corporation into which the Trustee for the Securities of any series may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to the corporate trust business of the Trustee, shall be the successor of the Trustee for such series hereunder; provided that such corporation shall be qualified under the provisions of Section 7.8 and eligible under the provisions of Section 7.9, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding. In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture any of the Securities of one or more series shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor Trustee and deliver such Securities so authenticated; and, in case at that time any of the Securities of any series shall not have been authenticated, any successor to the trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Securities of such series or in this Indenture provided that the certificate of the Trustee shall have; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or to authenticate Securities of any series in the name of any predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation. SECTION 7.13. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER. (a) Subject to the provisions of this Section, if the Trustee for the Securities of any series shall be or shall become a creditor, directly or indirectly, secured or unsecured, of the Issuer or any other obligor of the Securities of such series within three months prior to a default, as defined in subsection (c) of this Section, or subsequent to such a default, then, unless and until such default shall be cured, the Trustee shall set apart and hold in a special account for the benefit of the Trustee individually, the Holders of the Securities of such series, the Holders of the Coupons, if any, appertaining thereto and the holders of other indenture securities (as defined in this Section): (1) an amount equal to any and all reductions in the amount due and owing upon any claim as such creditor, in respect of principal or interest, effected after the beginning of such three-month period and valid as against the Issuer and its other creditors, except any such reduction resulting from the receipt or disposition of any property described in subsection (a)(2) of this Section or from the exercise of any right of setoff which the Trustee could have exercised if a petition in bankruptcy had been filed by or against the Issuer upon the date of such default; and (2) all property received by the Trustee in respect of any claim as such creditor, either as security therefor or in satisfaction or composition thereof, or otherwise, after the beginning of such three months' period, or an amount equal to the proceeds of any such property, -53- 61 if disposed of, subject, however, to the rights, if any, of the Issuer and its other creditors in such property or such proceeds. Nothing herein contained, however, shall affect the right of the Trustee: (A) to retain for its own account (i) payments made on account of any such claim by any person (other than the Issuer) who is liable thereon, (ii) the proceeds of the bona fide sale of any such claim by the Trustee to a third person and (iii) distributions made in cash, securities or other property in respect of claims filed against the Issuer in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable state law; (B) to realize, for its own account, upon any property held by it as security for any such claim, if such property was so held prior to the beginning of such three months' period; (C) to realize, for its own account, but only to the extent of the claim hereinafter mentioned, upon any property held by it as security for any such claim, if such claim was created after the beginning of such three months' period and such property was received as security therefor simultaneously with the creation thereof, and if the Trustee shall sustain the burden of proving that at the time such property was so received the Trustee had no reasonable cause to believe that a default as defined in subsection (c) of this Section would occur within three months; or (D) to receive payment on any claim referred to in paragraph (B) or (C), against the release of any property held as security for such claim as provided in such paragraph (B) or (C), as the case may be, to the extent of the fair value of such property. For the purposes of paragraphs (B), (C) and (D), property substituted after the beginning of such three months' period for property held as security at the time of such substitution shall, to the extent of the fair value of the property released, have the same status as the property released, and, to the extent that any claim referred to in any of such paragraphs is created in renewal of or in substitution for or for the purpose of repaying or refunding any preexisting claim of the Trustee as such creditor, such claim shall have the same status as such preexisting claim. If the Trustee for the Securities of any series shall be required to account, the funds and property held in such special account and the proceeds thereof shall be apportioned among the Trustee, the Holders of the Securities of such series, the Holders of the Coupons, if any, appertaining thereto and the holders of other indenture securities in such manner that the Trustee, such Holders and the holders of other indenture securities realize, as a result of payments from such special account and payments of dividends on claims filed against the Issuer in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable state law, the same percentage of their respective claims, figured before crediting to the claim of the Trustee anything on account of the receipt by it from the Issuer of the funds and property in such special account and before crediting to the respective claims of the Trustee, Holders of the Securities of such series, the Holders of the Coupons, if any, appertaining thereto and the holders of other indenture securities dividends on claims filed against the Issuer in bankruptcy or receivership or in proceedings for reorganization pursuant to -54- 62 the Federal Bankruptcy Code or applicable state law, but after crediting thereon receipts on account of the indebtedness represented by their respective claims from all sources other than from such dividends and from the funds and property so held in such special account. As used in this paragraph, with respect to any claim, the term "dividends" shall include any distribution with respect to such claim, in bankruptcy or receivership or in proceedings for reorganization pursuant to the Federal Bankruptcy Code or applicable State law, whether such distribution is made in cash, securities or other property, but shall not include any such distribution with respect to the secured portion, if any, of such claim. The court in which such bankruptcy, receivership or proceeding for reorganization is pending shall have jurisdiction (i) to apportion among the Trustee, the Holders of such Securities, the Holders of the Coupons, if any, appertaining thereto and the holders of other indenture securities, in accordance with the provisions of this paragraph, the funds and property held in such special account and the proceeds thereof or (ii) in lieu of such apportionment, in whole or in part, to give to the provisions of this paragraph due consideration in determining the fairness of the distributions to be made to the Trustee, the Holders of such Securities, the Holders of the Coupons, if any, appertaining thereto and the holders of other indenture securities with respect to their respective claims, in which event it shall not be necessary to liquidate or to appraise the value of any securities or other property held in such special account or as security for any such claim, to make a specific allocation of such distributions, as between the secured and unsecured portions of such claims, or otherwise to apply the provisions of this paragraph as a mathematical formula. Any Trustee who has resigned or been removed after the beginning of such three-month period shall be subject to the provisions of this subsection (a) as though such resignation or removal had not occurred. If any Trustee has resigned or been removed prior to the beginning of such three months' period, it shall be subject to the provisions of this subsection (a) if and only if the following conditions exist: (i) the receipt of property or reduction of claim which would have given rise to the obligation to account, if such Trustee had continued as trustee, occurred after the beginning of such three months' period; and (ii) such receipt of property or reduction of claim occurred within three months after such resignation or removal. (b) There shall be excluded from the operation of this Section a creditor relationship arising from: (1) the ownership or acquisition of securities issued under any indenture or any security or securities having a maturity of one year or more at the time of acquisition by the Trustee; (2) advances authorized by a receivership or bankruptcy court of competent jurisdiction or by this Indenture for the purpose of preserving any property which shall at any time be subject to the lien of this Indenture or of discharging tax liens or other prior liens or encumbrances thereon, if notice of such advance and of the circumstances surrounding the making thereof is given to the Holders of the applicable series of Securities and the Holders of -55- 63 the Coupons, if any, appertaining thereto, at the time and in the manner provided in this Indenture; (3) disbursements made in the ordinary course of business in the capacity of trustee under an indenture, transfer agent, registrar, custodian, paying agent, fiscal agent or depositary or other similar capacity; (4) an indebtedness created as a result of services rendered or premises rented or an indebtedness created as a result of goods or securities sold in a cash transaction as defined in subsection (c)(3) below; (5) the ownership of stock or of other securities of a corporation organized under the provisions of Section 25(a) of the Federal Reserve Act, as amended, which is directly or indirectly a creditor of the Issuer; or (6) the acquisition, ownership, acceptance or negotiation of any drafts, bills of exchange, acceptances or obligations which fall within the classification of self-liquidating paper as defined in subsection (c)(4) of this Section. (c) As used in this Section: (1) the term "default" shall mean any failure to make payment in full of the principal of or interest upon any of the Securities of the applicable series or upon the other indenture securities when and as such principal or interest becomes due and payable; (2) the term "other indenture securities" shall mean securities upon which the Issuer is an obligor (as defined in the Trust Indenture Act) outstanding under any other indenture (i) under which the Trustee is also trustee, (ii) which contains provisions substantially similar to the provisions of subsection (a) of this Section and (iii) under which a default exists at the time of the apportionment of the funds and property held in said special account; (3) the term "cash transaction" shall mean any transaction in which full payment for goods or securities sold is made within seven days after delivery of the goods or securities in currency or in checks or other orders drawn upon banks or bankers and payable upon demand; (4) the term "self-liquidating paper" shall mean any draft, bill of exchange, acceptance or obligation which is made, drawn, negotiated or incurred by the Issuer for the purpose of financing the purchase, processing, manufacture, shipment, storage or sale of goods, wares or merchandise and which is secured by documents evidencing title to, possession of or a lien upon the goods, wares or merchandise or the receivables or proceeds arising from the sale of the goods, wares or merchandise previously constituting the security; provided that the security is received by the Trustee simultaneously with the creation of the creditor relationship with the Issuer arising from the making, drawing, negotiating or incurring of the draft, bill of exchange, acceptance or obligation; and (5) the term "Issuer" shall mean any obligor upon the Securities. -56- 64 SECTION 7.14. AUTHENTICATING AGENT. So long as any Securities of a series remain outstanding, if the Trustee ceases to maintain a corporate trust facility in the Borough of Manhattan, The City of New York, New York, or otherwise upon an Issuer Request, there shall be an authenticating agent (the "Authenticating Agent") appointed, for such period as the Issuer shall elect, by the Trustee for such series of Securities to act as its agent on its behalf and subject to its direction in connection with the authentication and delivery of each series of Securities for which it is serving as Trustee. Securities of each such series authenticated by such Authenticating Agent shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by such Trustee. Wherever reference is made in this Indenture to the authentication and delivery of Securities of any series by the Trustee for such series or to the Trustee's Certificate of Authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee for such series except by way of original issuance by an Authenticating Agent for such series and a Certificate of Authentication executed on behalf of such Trustee by such Authenticating Agent. Such Authenticating Agent shall at all times be a corporation organized and doing business under the laws of the United States of America or of any State, authorized under such laws to exercise corporate trust powers, having a combined capital and surplus of at least $10,000,000 and subject to supervision or examination by Federal or state authority. If the Trustee does not maintain a corporate trust facility in the Borough of Manhattan, The City of New York, New York, the Authenticating Agent shall have its principal office and place of business in the Borough of Manhattan, The City of New York, New York. Any corporation into which any Authenticating Agent may be merged or converted, or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which any Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency business of any Authenticating Agent, shall continue to be the Authenticating Agent with respect to all series of Securities for which it served as Authenticating Agent without the execution or filing of any paper or any further act on the part of the Trustee for such series or such Authenticating Agent. Any Authenticating Agent may at any time, and, if it shall cease to be eligible, shall, resign by giving written notice of resignation to the applicable Trustee and to the Issuer. The Trustee for any series of Securities may at any time terminate the agency of any Authenticating Agent for such series by giving written notice of termination to such Authenticating Agent and to the Issuer. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section 7.14 with respect to one or more or all series of Securities, the Trustee for such series shall upon Issuer Request appoint a successor Authenticating Agent, and the Issuer shall provide notice of such appointment to all Holders of Securities of such series or any Coupons appertaining thereto in the manner and to the extent provided in Section 13.4. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all rights, powers, duties and responsibilities of its predecessor hereunder, with like effect as if originally named as Authenticating Agent herein. The Trustee for the Securities of such series agrees to pay to the Authenticating Agent for such series from time to time reasonable compensation for its services, and the Trustee shall be entitled to be reimbursed for such payment subject to the provisions of Section 7.6. The Authenticating Agent for the Securities of -57- 65 any series shall have no responsibility or liability for any action taken by it as such at the direction of the Trustee for such series. ARTICLE VIII. CONCERNING THE HOLDERS OF SECURITIES SECTION 8.1. ACTION BY HOLDERS. Whenever in this Indenture it is provided that the Holders of a specified percentage in aggregate principal amount of the Securities of any series may take any action (including the making of any demand or request, the giving of any notice, consent or waiver or the taking of any other action) the fact that at the time of taking any such action the Holders of such specified percentage have joined therein may be evidenced (a) by any instrument or any number of instruments of similar tenor executed by Holders in person or by agent or proxy appointed in writing, or (b) by the record of Holders voting in favor thereof at any meeting of such Holders duly called and held in accordance with the provisions of Article Nine, or (c) by a combination of such instrument or instruments and any such record of such a meeting of Holders. The Issuer may set a record date for purposes of determining the identity of Holders entitled to vote or consent to any action by vote or consent authorized or permitted under this Indenture, which record date shall be the later of 10 days prior to the first solicitation of such consent or the date of the most recent list of Holders furnished to the Trustee pursuant to Section 5.1 of this Indenture prior to such solicitation. If a record date is fixed, those persons who were Holders of Securities at such record date (or their duly designated proxies), and only those persons, shall be entitled to take such action by vote or consent or to revoke any vote or consent previously given, whether or not such persons continue to be Holders after such record date. No such vote or consent shall be valid or effective for more than 120 days after such record date. SECTION 8.2. PROOF OF EXECUTION OF INSTRUMENTS BY HOLDERS OF SECURITIES. Subject to Sections 7.1, 7.2 and 9.5, the execution of any instrument by a Holder of a Security or of any Coupon or his agent or proxy may be proved in the following manner: The fact and date of the execution by any such person of any instrument may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds that the person executing such instrument acknowledged to him the execution thereof or by any affidavit of a witness to such execution sworn to before any such notary or other such officer. Where such execution is by an officer of a corporation or association or a member of a partnership on behalf of such corporation, association or partnership, as the case may be, or by any other person acting in a representative capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The ownership of Registered Securities of any series shall be proved by the Securities Register for such series or by a certificate of the Securities Register for such series; the ownership of Unregistered Securities of any series and Coupons shall be proved by proof of possession reasonably satisfactory to the Trustee. The record of any Holders' meeting shall be proved in the manner provided in Section 9.6. -58- 66 SECTION 8.3. HOLDERS TO BE TREATED AS OWNERS. The Issuer, the Trustee and any agent of the Issuer or the Trustee may deem and treat the Person in whose name any Registered Security shall be registered upon the Security Register for such series as the absolute owner of such Security (notwithstanding any notation of ownership or other writing thereon) for the purpose of receiving payment of principal of, premium, if any, and (subject to Section 3.8), if such registered Security is a Fully Registered Security, interest, if any, on such Registered Security and for all other purposes whatsoever whether or not such Security be overdue, and neither the Issuer, the Trustee nor any agent of the Issuer or the Trustee shall be affected by notice to the contrary. The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the Holder of any Unregistered Security and the Holder of any Coupon, whether or not the Security to which such Coupon appertained be registered, as the absolute owner of such Security or Coupon for the purposes of receiving payment thereof or on account thereof and for all other purposes whatsoever whether or not such Security or Coupon be overdue, and neither the Issuer, the Trustee, any Paying Agent nor any Security Registrar shall be affected by notice to the contrary. All such payments so made to any Holder for the time being or upon his order shall be valid and, to the extent of the sum or sums so paid, effectual to satisfy and discharge the liability for moneys payable upon such Security or Coupon. SECTION 8.4. SECURITIES OWNED BY ISSUER DEEMED NOT OUTSTANDING. In determining whether the Holders of the requisite aggregate principal amount of Securities of any or all series have concurred in any direction, consent or waiver under this Indenture, Securities which are owned by the Issuer or any other obligor on the Securities 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 Issuer or any other obligor on the Securities 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, except that for the purpose of determining whether the Trustee shall be protected in relying on any such direction, consent or waiver only Securities which the Trustee knows are so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Issuer or any other obligor upon the Securities or any person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer or any other obligor on the Securities. In case of a dispute as to such right, the advice of counsel shall be full protection in respect of any decision made by the Trustee in accordance with such advice. Upon request of the Trustee, the Issuer shall furnish to the Trustee promptly an Officers' Certificate listing and identifying all Securities, if any, known by the Issuer to be owned or held by or for the account of any of the above-described persons; and, subject to Sections 7.1 and 7.2, the Trustee shall be entitled to accept such Officers' Certificate as conclusive evidence of the facts therein set forth and of the fact that all Securities not listed therein are Outstanding for the purpose of any such determination. SECTION 8.5. RIGHT OF REVOCATION OF ACTION TAKEN. At any time prior to (but not after) the evidencing to the Trustee, as provided in Section 8.1, of the taking of any action by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action, any Holder of a Security the number, letter or other distinguishing symbol of which is shown by the evidence to be included in the Securities the Holders of which have consented to such action may by filing -59- 67 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 Security. Except as aforesaid, any such action taken by the Holder of any Security shall be conclusive and binding upon such Holder and upon all future Holders and owners of such Security and any Coupon appertaining thereto and of any Securities and Coupons issued in exchange or substitution therefor, irrespective of whether or not any notation in regard thereto is made upon any such Security or Coupon or such other Security or Coupon. Any action taken by the Holders of the percentage in aggregate principal amount of the Securities of any or all series, as the case may be, specified in this Indenture in connection with such action shall be conclusively binding upon the Issuer, the Trustee and the Holders of all the Securities affected by such action. ARTICLE IX. HOLDERS' MEETINGS SECTION 9.1. PURPOSES OF MEETINGS. A meeting of Holders of Securities of any or all series may be called at any time and from time to time pursuant to the provisions of this Article Nine for any of the following purposes: (1) to give any notice to the Issuer or to the Trustee for the Securities of such series, to give any directions to the Trustee for such series, to consent to the waiving of any default hereunder and its consequences or to take any other action authorized to be taken by Holders pursuant to any of the provisions of Article Six; (2) to remove the Trustee for such series and nominate a successor trustee pursuant to the provisions of Article Seven; (3) to consent to the execution of an indenture or indentures supplemental hereto pursuant to the provisions of Section 10.2; or (4) to take any other action authorized to be taken by or on behalf of the Holders of any specified aggregate principal amount of the Securities of any one or more or all series, as the case may be, under any other provision of this Indenture or under applicable law. SECTION 9.2. CALL OF MEETINGS BY TRUSTEE. The Trustee for the Securities of any series may at any time call a meeting of Holders of Securities of such series to take any action specified in Section 9.1, to be held at such time and at such place in the Borough of Manhattan, The City of New York, or such other Place of Payment as the Trustee for such series shall determine. Notice of every meeting of the Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given to Holders of Securities of such series in the manner and to the extent provided in Section 13.4. Such notice shall be given not less than 20 nor more than 90 days prior to the date fixed for the meeting. SECTION 9.3. CALL OF MEETINGS BY ISSUER OR HOLDERS. In case at any time the Issuer, pursuant to a Board Resolution, or the Holders of at least 10% in aggregate principal amount of the Outstanding Securities of any or all series, as the case may be, shall have requested the Trustee for such series to call a meeting of Holders of Securities of any or all -60- 68 series, as the case may be, by written request setting forth in reasonable detail the action proposed to be taken at the meeting and the Trustee for such series shall not have given the notice of such meeting within 20 days after receipt of such request, then the Issuer or such Holders may determine the time and the place in the Borough of Manhattan or other Place of Payment for such meeting and may call such meeting to take any action authorized in Section 9.1, by giving notice thereof as provided in Section 9.2. SECTION 9.4. QUALIFICATIONS FOR VOTING. To be entitled to vote at any meeting of Holders a person shall be (a) a Holder of one or more Securities with respect to which such meeting is being held or (b) a person appointed by an instrument in writing as proxy by such Holder. The only persons who shall be entitled to be present or to speak at any meeting of Holders shall be the persons entitled to vote at such meeting and their counsel and any representatives of the Trustee for the Securities of the series with respect to which such meeting is being held and its counsel and any representatives of the Issuer and its counsel. SECTION 9.5. REGULATIONS. Notwithstanding any other provisions of this Indenture, the Trustee for the Securities of any series may make such reasonable regulations as it may deem advisable for any meeting of Holders of the Securities of such series, in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote and such other matters concerning the conduct of the meeting as it shall think fit. The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Issuer or by Holders of the Securities of such series as provided in Section 9.3, in which case the Issuer or the Holders calling the meeting as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by majority vote of the meeting. Subject to Section 8.4, at any meeting each Holder of Securities with respect to which such meeting is being held or proxy therefor shall be entitled to one vote for each 1,000 (in the currency or currency unit in which such Securities are denominated) principal amount (in the case of Original Issue Discount Securities, such principal amount to be determined as provided in the definition of "Outstanding") of Securities held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any such Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote other than by virtue of Securities of such series held by him or instruments in writing aforesaid duly designating him as the person to vote on behalf of other Holders of such series. At any meeting of Holders, the presence of persons holding or representing Securities with respect to which such meeting is being held in an aggregate principal amount sufficient to take action on the business for the transaction of which such meeting was called shall constitute a quorum, but, if less than a quorum is present, the persons holding or representing a majority in aggregate principal amount of such Securities represented at the meeting may adjourn such meeting with the same effect, for all intents and purposes, as though a quorum had been present. Any meeting of Holders of Securities with respect to which a meeting was duly called pursuant to the provisions of Section 9.2 or Section -61- 69 9.3 may be adjourned from time to time by a majority of such Holders present, whether or not constituting a quorum, and the meeting may be held as so adjourned without further notice. SECTION 9.6. VOTING. The vote upon any resolution submitted to any meeting of Holders of Securities with respect to which such meeting is being held shall be by written ballots on which shall be subscribed the signatures of such Holders or of their representatives by proxy and the serial number or numbers of the Securities held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in duplicate of all votes cast at the meeting. A record in duplicate of the proceedings of each meeting of Holders shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was mailed as provided in Section 9.2. The record shall show the serial numbers of the Securities voting in favor of or against any resolution. The record shall be signed and verified by the affidavits of the permanent chairman and the secretary of the meeting and one of the duplicates shall be delivered to the Issuer and the other to the Trustee to be preserved by the Trustee. Any record so signed and verified shall be conclusive evidence of the matters therein stated. SECTION 9.7. NO DELAY OF RIGHTS BY MEETING. Nothing in this Article Nine contained shall be deemed or construed to authorize or permit, by reason of any call of a meeting of Holders or any rights expressly or impliedly conferred hereunder to make such call, any hindrance or delay in the exercise of any right or rights conferred upon or reserved to the Trustee or to the Holders under any of the provisions of this Indenture or of the Securities of any series. ARTICLE X. SUPPLEMENTAL INDENTURES SECTION 10.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS. The Issuer, when authorized by a Board Resolution, [each of the Guarantors]* and the Trustee for the Securities of any or all series 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) for one or more of the following purposes: (a) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Securities of any or all series any property or assets; provided, however, that such conveyance, transfer, assignment, mortgage or pledge is consistent with the provisions of Section 4.6 hereof; (b) to evidence the succession of another corporation to the Issuer, or successive successions, and the assumption by the successor corporation of the covenants, agreements and obligations of the Issuer under this Indenture and the Securities; - ---------- * This language to be included if debt securities are guaranteed. -62- 70 (c) to add to the covenants of the Issuer such further covenants, restrictions, conditions or provisions as its Board of Directors and the Trustee shall consider to be for the protection of the Holders of any series of Securities and the Coupons, if any, appertaining thereto, or to surrender any right or power conferred upon the Issuer, and to make the occurrence, or the occurrence and continuance, of a default in any such additional covenants, restrictions, conditions or provisions an Event of Default permitting the enforcement of all or any of the several remedies provided in this Indenture as herein set forth; provided that in respect of any such additional covenant, restriction, condition or provision such supplemental indenture may provide for a particular period of grace after default (which period may be shorter or longer than that allowed in the case of other defaults) or may provide for an immediate enforcement upon such an Event of Default or may limit the remedies available to the Trustee upon such an Event of Default or may limit the right of the Holders of a majority in aggregate principal amount of the Securities of such series to waive such an Event of Default; (d) to add any additional Events of Default (and, if such Events of Default are to be applicable to less than all series of Securities, stating that such Events of Default are only applicable to specified series); (e) 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 Directors may deem necessary or desirable and which shall not materially and adversely affect the interests of the Holders of any Securities or the Coupons, if any, appertaining thereto; (f) to establish the form or terms of Securities of any series and the Coupons, if any, appertaining thereto as permitted by Section 3.1; (g) to permit payment in the United States of principal, premium or interest on Unregistered Securities or of interest on Coupon Securities; (h) to provide for the issuance of uncertificated Securities of one or more series in addition to or in place of certificated Securities; (i) to evidence and provide for the acceptance of appointment hereunder by a successor trustee with respect to the Securities of one or more series or to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 7.11; and (j) to change or eliminate any of the provisions of this Indenture; provided, however, that any such change or elimination may only be effected when no Outstanding Security of any series created prior to the execution of such supplemental indenture is entitled to the benefit of such provision. -63- 71 The Trustee with respect to any series of Securities affected by such supplemental indenture is hereby authorized to join with the Issuer [and each of the Guarantors]* 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 Securities at the time Outstanding, notwithstanding any of the provisions of Section 10.2. SECTION 10.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS. With the consent (evidenced as provided in Article Eight) of the Holders of not less than a majority in aggregate principal amount of the Securities at the time Outstanding of all series affected by such supplemental indenture (voting as one class), the Issuer, when authorized by a Board Resolution, [each of the Guarantors]* and the Trustee for the Securities of each such series 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 Securities of each such series; provided that no such supplemental indenture shall (a) change the Stated Maturity of any Security of such series, reduce the principal amount thereof, reduce the rate or change the time of payment of interest thereon, reduce any amount payable on redemption thereof, reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon an acceleration of the maturity thereof pursuant to Section 6.1 or the amount thereof provable in bankruptcy pursuant to Section 6.2, adversely impair or affect the right of repayment or repurchase, if any, at the option of the Holder, reduce the amount of, or postpone the date fixed for, any payment under any sinking fund or analogous provisions for any Security, or change any Place of Payment or the coin or currency or currency unit in which any Security or the interest thereon is payable or change or eliminate the right of a Securityholder to institute suit for the payment thereof, without the consent of the Holder of each Security of such series so affected, or (b) reduce the aforesaid percentage of Securities of such series, the consent of the Holders of which is required for any such supplemental indenture (or waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences), without the consent of the Holder of each Security so affected, or (c) modify any of the provisions of this Section 10.2 or Section 6.10, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby. Upon the request of the Issuer, accompanied by a Board Resolution, authorizing the execution of any such supplemental indenture and upon the filing with the Trustee with respect to any series of Securities affected by such supplemental indenture, of evidence of the - ---------- * This language to be included if debt securities are guaranteed. -64- 72 consent of Securityholders as aforesaid and other documents, if any, required by Section 8.1, the Trustee shall join with the Issuer [and each of the Guarantors]* in the execution of such supplemental indenture unless such supplemental indenture affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such supplemental indenture. It shall not be necessary for the consent of the Securityholders 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. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities and the Coupons, if any, appertaining thereto, or which modifies the rights of the Holders of Securities of such series or any Coupons appertaining thereto with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series or any Coupons appertaining thereto. For purposes of this Section 10.2, if the Securities of any series are issuable upon the exercise of warrants, each holder of an unexercised and unexpired warrant with respect to such series shall be deemed to be a Holder of Outstanding Securities of such series in the amount issuable upon the exercise of such warrant. For such purposes, the ownership of any such warrant shall be determined by the Issuer in a manner consistent with customary commercial practices. The Trustee for such series shall be entitled to rely on an Officers' Certificate as to the principal amount of Securities of such series in respect of which consents shall have been executed by holders of such warrants. SECTION 10.3. NOTICE OF SUPPLEMENTAL INDENTURE. Promptly after the execution by the Issuer [, each of the Guarantors]* and the Trustee of any supplemental indenture pursuant to the provisions of Section 10.2, the Issuer shall mail a notice thereof by first-class mail to the Holders of Securities of each series and of Coupons, if any, appertaining thereto affected thereby at their addresses as they shall appear on the registry books of the Issuer, setting forth in general terms the substance of such supplemental indenture. Any failure of the Issuer to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. SECTION 10.4. EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any supplemental indenture pursuant to the provisions of this Article Ten, this Indenture shall be and be deemed to be modified and amended in accordance therewith, but only with regard to the Securities of each series affected by such supplemental indenture, and the respective rights, limitations of rights, obligations, duties and immunities under this Indenture of the Trustee for the Securities of such series, the Issuer [, each of the Guarantors]* and the Holders of any Securities of such series or any Coupons appertaining thereto affected thereby shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and - ---------- * This language to be included if debt securities are guaranteed. -65- 73 amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes with regard to the Securities of such series and any Coupons appertaining thereto. SECTION 10.5. DOCUMENTS TO BE GIVEN TO TRUSTEE. The Trustee, subject to the provisions of Sections 7.1 and 7.2, may receive an Officers' Certificate and an Opinion of Counsel as conclusive evidence that any supplemental indenture executed pursuant to this Article complies with the applicable provisions of this Indenture. SECTION 10.6. NOTATION ON SECURITIES AND COUPONS IN RESPECT OF SUPPLEMENTAL INDENTURES. Securities of any series (including any Coupons appertaining thereto) affected by any supplemental indenture which are authenticated and delivered after the execution of such supplemental indenture pursuant to the provisions of this Article Ten may bear a notation in form approved by the Trustee for such series as to any matter provided for in such supplemental indenture. If the Issuer or the Trustee shall so determine, new Securities of any series and any Coupons appertaining thereto so modified as to conform, in the opinion of the Trustee and the Issuer, to any modification of this Indenture contained in any such supplemental indenture may be prepared by the Issuer, authenticated by the Trustee and delivered in exchange for the Securities of such series and any Coupons appertaining thereto then Outstanding. SECTION 10.7. ISSUANCE OF SECURITIES BY SUCCESSOR CORPORATION. In case the Issuer shall be consolidated with or merged into any other corporation or corporations, or shall convey or transfer all or substantially all its property as an entirety, the successor corporation formed by such consolidation or into which the Issuer shall have been merged or which shall have received a conveyance or transfer as aforesaid, upon causing to be executed and delivered the supplemental indenture referred to in Section 10.1(b), shall succeed to and be substituted for the Issuer with the same effect as if it had been named herein as the party of the first part and in all the Securities and the Coupons, if any, appertaining thereto as obligor, and thereupon and thereafter such successor corporation may cause to be executed, either in its own name or in the name of ITT Corporation, and delivered to the appropriate Trustee for authentication, any or all of the Securities and the Coupons, if any, appertaining thereto issuable hereunder; and, upon the order of such successor corporation in lieu of the Issuer, and subject to all the terms, conditions and restrictions in this Indenture prescribed, the Trustee for the Securities of the appropriate series shall authenticate and deliver any Securities of such series and the Coupons, if any, appertaining thereto which shall have been previously executed and delivered by the Issuer to the Trustee for authentication and any Securities and the Coupons, if any, appertaining thereto which such successor corporation shall thereafter, in accordance with the provisions of this Indenture, cause to be executed and delivered to the Trustee for such purpose. Such change in phraseology and form (but not in substance) may be made in such Securities and the Coupons, if any, appertaining thereto as may be appropriate in view of such consolidation or merger or conveyance or transfer. All such Securities and the Coupons, if any, appertaining thereto when issued by such successor corporation shall in all respects have the same legal rank as the Securities and the Coupons, if any, appertaining thereto theretofore or thereafter authenticated and delivered in accordance with the terms of this Indenture and issued, as though all of such Securities and Coupons, if any, appertaining thereto had been issued at the date of the execution hereof. -66- 74 ARTICLE XI. SUCCESSOR COMPANIES SECTION 11.1. MERGER AND CONSOLIDATION. The Issuer shall not consolidate with or merge with or into, or convey, transfer or lease its properties and assets as, or substantially as, an entirety to, any Person, unless: (a) the resulting, surviving or transferee Person (the "Successor Company") shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Issuer under all the Securities of each series and this Indenture; and (b) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing. The Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture. The predecessor Issuer in the case of a transfer or lease of its properties and assets as, or substantially as, an entirety shall be discharged from its obligations under the Securities and this Indenture. SECTION 11.2. OPINION OF COUNSEL TO BE GIVEN TO TRUSTEE. The Trustee, subject to the provisions of Section 7.1, may receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, conveyance, transfer or lease complies with the provisions of this Article Eleven. ARTICLE XII. SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS SECTION 12.1. SATISFACTION AND DISCHARGE OF SECURITIES OF ANY SERIES. Except as otherwise provided for the Securities of any series established pursuant to Section 3.1(r), the Issuer shall be deemed to have satisfied and discharged the entire indebtedness on all the Outstanding Securities of any particular series and the Coupons, if any, appertaining thereto, and the Trustee, at the expense of the Issuer and upon Issuer Request, shall execute proper instruments acknowledging satisfaction and discharge of such indebtedness, when (a) either: (i) all Outstanding Securities of such series theretofore authenticated and delivered and the Coupons, if any, appertaining thereto (other than (a) any Securities of such series or Coupons which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.7 and (b) Outstanding Securities of such series or Coupons for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or discharged from such trust, as provided in Sections 4.4, 12.4 and 12.5) have been delivered to the Trustee for cancellation; or -67- 75 (ii) with respect to all Outstanding Securities of such series and the Coupons, if any, appertaining thereto, described in (i) above not theretofore delivered to the Trustee for cancellation: (A) the Issuer has deposited or caused to be deposited with the Trustee as trust funds in trust an amount in the currency or currency unit in which the Securities of such series are denominated (except as otherwise specified pursuant to Section 3.1 for the Securities of such series and except as provided in Sections 3.12(b), 3.12(e) and 3.12(f) hereof) sufficient to pay and discharge the entire indebtedness on all such Outstanding Securities of such series for principal (and premium, if any) and interest to the Stated Maturity or any Redemption Date as contemplated by Section 12.3, as the case may be; or (B) the Issuer has deposited or caused to be deposited with the Trustee as obligations in trust such amount of Government Obligations as will, in a written opinion of independent public accountants delivered to the Trustee, together with the predetermined and certain income to accrue thereon (without consideration of any reinvestment thereof), be sufficient to pay and discharge when due the entire indebtedness on all such Outstanding Securities of such series and the Coupons, if any, appertaining thereto, for unpaid principal (and premium, if any) and interest to the Stated Maturity or any Redemption Date as contemplated by Section 12.3, as the case may be. (b) the Issuer has paid or caused to be paid all other sums payable with respect to the Outstanding Securities of such series and the Coupons, if any, appertaining thereto; (c) the Issuer has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to due satisfaction and discharge of the entire indebtedness on all Outstanding Securities of any such series and the Coupons, if any, appertaining thereto, have been complied with; and (d) if the Securities of such series and the Coupons, if any, appertaining thereto are not to become due and payable at their Stated Maturity within one year of the date of such deposit or are not to be called for redemption within one year of the date of such deposit under arrangements satisfactory to the Trustee as of the date of such deposit, then the Issuer shall have given, not later than the date of such deposit, notice of such deposit to the Holders of the Securities of such series and the Coupons, if any, appertaining thereto. Upon the satisfaction of the conditions set forth in this Section 12.1 with respect to all the Outstanding Securities of any series and the Coupons, if any, appertaining thereto, the terms and conditions of such series, including the terms and conditions with respect thereto set forth in this Indenture, shall no longer be binding upon, or applicable to, the Issuer, and the Holders of the Securities of such series shall look for payment only to the funds or obligations deposited with the Trustee pursuant to Section 12.1(a)(ii); provided, however, that the Issuer shall not be discharged from (a) any payment obligations in respect of Securities of such series which are deemed not to be Outstanding under clause (c) of the definition thereof and the Coupons, if any, appertaining thereto, if such obligations continue to be valid obligations of the -68- 76 Issuer under applicable law, (b) any obligations under Sections 7.6 and 7.10, and (c) any obligations under Section 3.6 or 3.7 (except that Securities of such series issued upon registration of transfer or exchange or Securities or Coupons, if any, appertaining thereto issued in lieu of mutilated, lost, destroyed or stolen Securities or Coupons shall not be obligations of the Issuer) and Section 5.1; and provided, further, that in the event a petition for relief under the Bankruptcy Reform Act of 1978 or a successor statute is filed with respect to the Issuer within 91 days after the deposit, the entire indebtedness on all Securities of such series and the Coupons, if any, appertaining thereto shall not be discharged, and in such event the Trustee shall return such deposited funds or obligations as it is then holding to the Issuer upon Issuer Request. Notwithstanding the satisfaction of the conditions set forth in this Section 12.1 with respect to all the Securities of any series not denominated in Dollars, upon the happening of any events specified in Section 3.12(e) the Issuer shall be obligated to make the payments in Dollars required by Section 3.12(e) to the extent that the Trustee is unable to convert any Foreign Currency or currency unit in its possession pursuant to Section 12.1(a)(ii) into the Dollar Equivalent of the Foreign Currency or the Dollar Equivalent of the Currency Unit, as the case may be. The Trustee shall return to the Issuer any nonconverted funds or securities in its possession after such payments have been made. SECTION 12.2. SATISFACTION AND DISCHARGE OF INDENTURE. Upon compliance by the Issuer with the provisions of Section 12.1 as to the satisfaction and discharge of each series of Securities issued hereunder and the Coupons, if any, appertaining thereto, and if the Issuer has paid or caused to be paid all other sums payable under this Indenture, this Indenture shall cease to be of any further effect (except as otherwise provided herein). Upon Issuer Request and receipt of an Opinion of Counsel and an Officers' Certificate (and at the expense of the Issuer), the Trustee shall execute proper instruments acknowledging satisfaction and discharge of this Indenture. Notwithstanding the satisfaction and discharge of this Indenture, any obligations of the Issuer under Sections 3.6, 3.7, 5.1, 7.6 and 7.10, any obligations of the Issuer under Section 3.12(d) to deliver an Exchange Rate Officer's Certificate and the obligations of the Trustee under Section 12.3 shall survive. SECTION 12.3. APPLICATION OF TRUST MONEY. All money and obligations deposited with the Trustee pursuant to Section 12.1 shall be held irrevocably in trust and shall be made under the terms of an escrow trust agreement in form and substance satisfactory to the Trustee. Such money and obligations shall be applied by the Trustee, in accordance with the provisions of the Securities, this Indenture and such escrow trust agreement, to the payment, either directly or through any Paying Agent (including the Issuer acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal of (and premium, if any) and interest, if any, on the Securities and the Coupons, if any, appertaining thereto for the payment of which such money and obligations have been deposited with the Trustee. If Securities of any series are to be redeemed prior to their Stated Maturity, whether pursuant to an optional redemption provision or in accordance with any mandatory sinking fund requirement, the Issuer shall make such arrangements as are satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Issuer. -69- 77 SECTION 12.4. REPAYMENT OF MONEYS HELD BY PAYING AGENT. In connection with the satisfaction and discharge of this Indenture with respect to Securities of any series and the Coupons, if any, appertaining thereto, all moneys with respect to such series then held by any Paying Agent for such series under the provisions of this Indenture with respect to such series of Securities shall, upon demand of the Issuer, be repaid to it or paid to the Trustee and thereupon such Paying Agent shall be released from all further liability with respect to such moneys. SECTION 12.5. RETURN OF MONEYS HELD BY TRUSTEE AND PAYING AGENT UNCLAIMED FOR TWO YEARS. Any moneys deposited with or paid to the Trustee for the Securities of any series and the Coupons, if any, appertaining thereto, or any Paying Agent for the payment of the principal of, premium, if any, or interest, if any, on Securities of any series and the Coupons, if any, appertaining thereto and which shall not be applied but shall remain unclaimed by the Holders of Securities of such series and the Coupons, if any, appertaining thereto for two years after the date upon which such payment shall have become due and payable, shall be repaid to the Issuer by the Trustee on demand, and the holder of any of such Securities or the Coupons, if any, appertaining thereto entitled to receive such payment shall thereafter look only to the Issuer [, or the Guarantors, as the case may be,]* for the payment thereof; provided, however, that the Trustee, before making any such repayment, shall at the expense of the Issuer cause to be published once a week for two successive weeks (in each case on any day of the week) in an Authorized Newspaper, a notice that said moneys have not been so applied and that after a date named therein any unclaimed balance of said moneys then remaining will be returned to the Issuer. ARTICLE XIII. MISCELLANEOUS PROVISIONS SECTION 13.1. INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS OF ISSUER [AND GUARANTORS]* EXEMPT FROM INDIVIDUAL LIABILITY. No recourse under or upon any obligation, covenant or agreement contained in this Indenture, or in any Security or Coupon, or because of any indebtedness evidenced thereby, shall be had against any incorporator, as such, or against any past, present or future stockholder, officer or director, [member, manager or partner,]* as such, of the Issuer [or any of the Guarantors]* or any successor to the Issuer [or any of the Guarantors, as the case may be,]* either directly, or through the Issuer [or any of the Guarantors]* or any successor [to the Issuer or any of the Guarantors, as the case may be]*, under any rule of law, statute or constitutional provision by the enforcement of any assessment or by any legal or equitable proceeding or otherwise, all such liability being expressly waived and released by the acceptance of the Securities or Coupons, by the Holders thereof and as part of the consideration for the issue of such Securities and Coupons, if any, appertaining thereto. - ---------- * This language to be included if debt securities are guaranteed. -70- 78 SECTION 13.2. PROVISIONS OF INDENTURE FOR THE SOLE BENEFIT OF PARTIES AND SECURITYHOLDERS. Nothing in this Indenture or in the Securities or the Coupons, expressed or implied, shall give or be construed to give to any person, other than the parties hereto and their successors, the Holders of the Securities and the Holders of the Coupons, 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, of the Holders of the Securities and of the Holders of the Coupons. SECTION 13.3. SUCCESSORS AND ASSIGNS OF ISSUER BOUND BY INDENTURE. All the covenants, stipulations, promises and agreements in this Indenture contained by or on behalf of the Issuer shall bind its successors and assigns, whether so expressed or not. SECTION 13.4. NOTICES TO HOLDERS; WAIVER. Where this Indenture provides for notice to Holders of any event, (a) if any of the Securities affected by such event are Fully Registered Securities, 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 Securities Register within the time prescribed and (b) if any of the Securities affected by such event are Unregistered Securities or Coupon Securities, 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 in the manner and to the extent provided in Section 5.4, and if published in an Authorized Newspaper or Newspapers in such city or cities as may be provided elsewhere in this Indenture or specified as contemplated by Section 3.1 on a Business Day at least twice, the first such publication to be not earlier than the earliest date and not later than the latest date prescribed for the giving of such notice. 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 on 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 to any particular Holder shall affect the sufficiency of such notice with respect to other Holders, and any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given. In the event of suspension of regular mail service or for any other reason it shall be impracticable to give such notice to Registered Holders by mail, then such a notification as shall be made to Registered Holders with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In case by reason of the suspension of publication of any Authorized Newspaper or by reason of any other cause it shall be impracticable to publish any notice to Holders of Unregistered Securities or of Coupons as provided above then said notification to Holders of Unregistered Securities or of Coupons as shall be given with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder. SECTION 13.5. ADDRESSES FOR NOTICES. Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee for the Securities of any series or by the Holders of Securities of any series or of any Coupons appertaining thereto on the Issuer may be given or served by registered mail addressed (until another address is filed by the Issuer with the Trustee) as follows: Starwood Hotels & Resorts Worldwide, Inc., Attention of the General Counsel, 1111 Westchester Avenue, White Plains, NY -71- 79 10604. [Any notice or demand which by any provision of this Indenture is required or permitted to be given or served by the Trustee for the Securities of any series or by the Holders of Securities of any series or of any Coupons appertaining thereto on any Guarantor may be given or served by registered mail addressed (until another address is filed by such Guarantor with the Trustee) as follows: Starwood Hotels & Resorts Worldwide, Inc., Attention of the General Counsel, 1111 Westchester Avenue, White Plains, NY 10604.]* Any notice, direction, request or demand by any Holder of Securities of any series to or upon the Trustee for such series or of any Coupons appertaining thereto shall be deemed to have been sufficiently given or made, for all purposes, if given or made at the Corporate Trust Office of such Trustee, and, in respect of Unregistered Securities or Coupons, at the Corporate Trust Office of the Trustee referred to in Section 4.2. Any notice or demand required or permitted under this Indenture shall be in the English language, except that any published notice may be in the official language of the country of publication. SECTION 13.6. OFFICERS' CERTIFICATES AND OPINIONS OF COUNSEL; STATEMENTS TO BE CONTAINED THEREIN. Upon any application or demand by the Issuer [or any of the Guarantors]* to the Trustee to take any action under any of the provisions of this Indenture, the Issuer [or such Guarantor, as the case may be,]* shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent (including any covenants compliance with which constitutes a condition precedent) 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 (including any covenants compliance with which constitutes a condition precedent) 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 (other than annual certificates provided pursuant to Section 4.8) shall include (a) a statement that the person making such certificate or opinion has read such covenant or condition, (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 an officer of the Issuer [or such Guarantor, as the case may be,]* 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 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 - ---------- * This language to be included if debt securities are guaranteed. -72- 80 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, information with respect to which is in the possession of the Issuer [or such Guarantor, as the case may be,]* upon the certificate, statement or opinion of or representations by an officer or officers of the Issuer [or such Guarantor, as the case may be,]* 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 Issuer [or such Guarantor, as the case may be,]* 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 Issuer [or such Guarantor, as the case may be,]* 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 the Trustee shall contain a statement that such firm is independent. SECTION 13.7. CROSS REFERENCES. All references herein to "Articles" and other subdivisions are to the corresponding Articles or other subdivisions of this Indenture, and the words "herein", "hereof", "hereby", "hereunder", "hereinbefore" and "hereinafter" and other words of similar import refer to this Indenture generally and not to any particular Article, Section or other subdivision hereof. SECTION 13.8. LEGAL HOLIDAYS. In any case where the date of maturity of principal, premium, if any, or interest, if any, on the Securities or Coupons or the date fixed for redemption or repayment of any Security shall not be a Business Day at any Place of Payment with respect to Securities of that series then (notwithstanding any other provisions of this Indenture or of the Security or Coupons) payment of such principal, premium, if any, or interest, if any, on the Securities and Coupons need not be made on such date at such Place of Payment but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the date of maturity or the date fixed for redemption or repayment, as the case may be, and no interest shall accrue for the period from and after such date. SECTION 13.9. MONEYS OF DIFFERENT CURRENCIES TO BE SEGREGATED. The Trustee shall segregate all moneys, funds and accounts held by the Trustee hereunder in one currency from any money, funds or accounts in any other currencies, notwithstanding any provision herein which would otherwise permit the Trustee to commingle such amounts. - ---------- * This language to be included if debt securities are guaranteed. -73- 81 SECTION 13.10. PAYMENT TO BE IN PROPER CURRENCY. Each reference in any Security, or in the Board Resolution relating thereto, to any currencies or currency units shall be of the essence. Subject to Section 3.12, the Issuer agrees, to the fullest extent that it may effectively do so under applicable law, that its obligation to make any payment of principal of (and premium, if any) and interest on any Security or any Coupon (i) shall not be discharged or satisfied by any tender by the Issuer, or recovery by the Trustee, either pursuant to any judgment (whether or not entered into in accordance with Section 6.13) or otherwise, in any currencies or currency units other than the currencies or currency units then due and payable (the "Required Currency"), except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. Except as permitted under Section 3.12, if any such tender or recovery is in a currency other than the Required Currency, the Trustee may take such actions as it considers appropriate to exchange such currency for the Required Currency. The costs and risks of any such exchange, including without limitation the risks of delay and exchange rate fluctuation, shall be borne by the Issuer, and the Issuer shall remain fully liable for any shortfall or delinquency in the full amount of Required Currency then due and payable, and in no circumstances shall the Trustee be liable therefor. The Issuer hereby waives any defense of payment based upon any such tender or recovery which is not in the Required Currency, or which, when exchanged for the Required Currency by the Trustee, is less than the full amount of Required Currency then due and payable. SECTION 13.11. 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 the duties imposed by any of Sections 310 to 317, inclusive, of the Trust Indenture Act through operation of Section 318(c) thereof, such imposed duties shall control. SECTION 13.12. NEW YORK LAW TO GOVERN. This Indenture and each Security shall be deemed to be a contract under the laws of the State of New York, and for all purposes shall be construed in accordance with the laws of said State, except as may otherwise be required by mandatory provisions of law. SECTION 13.13. 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 13.14. EFFECT OF HEADINGS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 13.15. SEPARABILITY CLAUSE. In case any provision of this Indenture or of the Securities or any Coupons appertaining thereto, if any, shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. -74- 82 ARTICLE XIV. REDEMPTION OF SECURITIES SECTION 14.1. APPLICABILITY OF ARTICLE. The provisions of this Article shall be applicable to the Securities of any series which are redeemable before their maturity or to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 3.1 for Securities of such series. SECTION 14.2. NOTICE OF REDEMPTION; SELECTION OF SECURITIES. In case the Issuer shall desire to exercise the right to redeem all or, as the case may be, any part of the Securities of any series (or all or part of the Unregistered Securities of such series or all or any part of the Registered Securities of such series, if the terms and conditions of redemption shall be different with respect to Unregistered Securities and Registered Securities of such series as specified in the terms of such Securities established pursuant to Section 3.1) in accordance with their terms, it shall fix a Redemption Date and shall provide notice of such redemption to the Trustee, in the case such Securities are to be redeemed as a whole, 45 days, and, in the case such Securities are to be redeemed in part, 60 days, prior to such Redemption Date, and at least 30 and not more than 60 days prior to such Redemption Date to the Holders of Securities of such series so to be redeemed as a whole or in part in the manner provided in Section 13.4. The notice provided in the manner herein specified shall be conclusively presumed to have been duly given, whether or not the Holder receives such notice. In any case, failure to give such notice or any defect in the notice to the Holder of any Security of a series designated for redemption as a whole or in part shall not affect the validity of the proceedings for the redemption of any other Security of such series. Each such notice of redemption shall specify the Redemption Date, the Redemption Price, the Place or Places of Payment, that the Securities of such series are being redeemed at the option of the Issuer pursuant to provisions contained in the terms of the Securities of such series or in a supplemental indenture establishing such series, if such be the case, together with a brief statement of the facts permitting such redemption, that payment will be made upon presentation and surrender of the applicable Securities, that, unless otherwise specified in such notice, Coupon Securities of any series, if any, surrendered for payment must be accompanied by all Coupons, if any, maturing subsequent to the date fixed for redemption, failing which the amount of any such missing Coupon or Coupons will be deducted from the sum due for payment, that any interest accrued to the Redemption Date will be paid as specified in said notice and that on and after said Redemption Date any interest thereon or on the portions thereof to be redeemed will cease to accrue. If less than all the Securities of any series are to be redeemed, the notice of redemption shall specify the numbers of the Securities of such series to be redeemed and, if only Unregistered Securities of any series are to be redeemed and if such Unregistered Securities may be exchanged for Registered Securities, the last date on which exchanges of Unregistered Securities for Registered Securities not subject to redemption may be made. In case any Security of any series is to be redeemed in part only, the notice of redemption shall state the portion of the principal amount thereof to be redeemed and shall state that on and after the Redemption Date, upon surrender of such Security and any Coupons appertaining thereto, a new Security or Securities of such series in principal amount equal to the unredeemed portion thereof and with appropriate Coupons will be issued or, in the case of Securities -75- 83 providing appropriate space for such notation, at the option of the Holders, the Trustee, in lieu of delivering a new Security or Securities as aforesaid, may make a notation on such Security of the payment of the redeemed portion thereof. On or before (but at least one Business Day in the City of New York before, in the case of payments made in a currency or currency unit other than Dollars) the Redemption Date with respect to the Securities of any series stated in the notice of redemption given as provided in this Section 14.2, the Issuer will deposit with the Trustee or with one or more Paying Agents an amount of money in the currency or currency unit in which the Securities of such series and any Coupons appertaining thereto are payable (except as otherwise specified as contemplated by Section 3.1 for the Securities of such series and except as provided in Sections 3.12(b), 3.12(e) and 3.12(f) of this Indenture) sufficient to redeem on such Redemption Date all the Securities or portions thereof so called for redemption at the applicable Redemption Price, together with accrued interest to such Redemption Date. If the Issuer is acting as its own Paying Agent, it will segregate such amount and hold it in trust as provided in Section 4.4. If fewer than all the Securities of a series are to be redeemed (except in the case of a redemption in whole of the Unregistered Securities, the Coupon Securities, the Registered Securities or the Fully Registered Securities of such series), the Issuer will give the Trustee written notice not less than 60 days prior to the Redemption Date as to the aggregate principal amount of Securities to be redeemed and the Trustee shall select, not more than 75 days prior to the Redemption Date and in such manner as in its sole discretion it shall deem appropriate and fair, the Securities of such series or portions thereof (in multiples of 1,000 in the currency or currency unit in which the Securities of such series are denominated, except as otherwise set forth in the applicable form of Security) to be redeemed. SECTION 14.3. PAYMENT OF SECURITIES CALLED FOR REDEMPTION. If notice of redemption has been given as above provided, the Securities or portions of Securities of the series specified in such notice shall become due and payable on the Redemption Date and at the place or places stated in such notice at the applicable Redemption Price, together with any interest accrued to such Redemption Date, and on and after said Redemption Date (unless the Issuer shall default in the payment of such Securities at the applicable Redemption Price, together with any interest accrued to said Redemption Date) any interest on the Securities or portions of Securities of any series so called for redemption shall cease to accrue. On presentation and surrender of such Securities and all Coupons, if any, appertaining thereto at a Place of Payment in such notice specified, such Securities and Coupons or the specified portions thereof shall be paid and redeemed by the Issuer at the applicable Redemption Price, together with any interest accrued thereon to the applicable Redemption Date, in the currency or currency unit in which the Securities of such series and the Coupons, if any, appertaining thereto are payable (except as otherwise specified as contemplated by Section 3.1 for the Securities of such series and except as provided in Sections 3.12(b), 3.12(e) and 3.12(f) of this Indenture). If any Coupon Security surrendered for redemption shall not be accompanied by all appurtenant Coupons maturing on or after the Redemption Date, such Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing Coupons or the surrender of such missing Coupon or Coupons may be waived by the Issuer and the Trustee, if there be furnished to them such security or indemnity as they may -76- 84 require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to any Paying Agent any such missing Coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided, however, that, unless otherwise provided pursuant to Section 3.1 or Section 10.1(f), interest represented by Coupons shall be payable only upon presentation and surrender of those Coupons at an office or agency located outside the United States. Upon presentation of any Security redeemed in part only and the Coupons, if any, appertaining thereto, the Issuer shall execute and the Trustee shall authenticate and deliver to or on the order of the Holder thereof, at the expense of the Issuer, a new Security or Securities of such series and the Coupons, if any, appertaining thereto, of authorized denominations, in principal amount equal to the unredeemed portion of the Securities so presented. SECTION 14.4. EXCLUSION OF CERTAIN SECURITIES FROM ELIGIBILITY FOR SELECTION FOR REDEMPTION. Securities shall be excluded from eligibility for selection for redemption if they are identified by registration or certificate number, in the case of Registered Securities or Fully Registered Securities, or by certificate number, in the case of Coupon Securities, in a written statement signed by an authorized officer of the Issuer and delivered to the Trustee at least 40 days prior to the last date on which notice of redemption may be given as being owned by, and not pledged or hypothecated by, either (a) the Issuer or (b) an entity specifically identified in such written statement directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer. In the case of Coupon Securities, the Issuer will provide evidence satisfactory to the Trustee of the ownership thereof. ARTICLE XV. SINKING FUNDS SECTION 15.1. APPLICABILITY OF ARTICLE. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 3.1 for Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is hereinafter referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of the Securities of any series is herein referred to as an "optional sinking fund payment". SECTION 15.2. SATISFACTION OF MANDATORY SINKING FUND PAYMENTS WITH SECURITIES. In lieu of making all or any part of any mandatory sinking fund payment with respect to any Securities of a series in cash, the Issuer may, at its option, at any time no more than 16 months and no less than 45 days prior to the date on which such sinking fund payment is due, deliver to the Trustee Outstanding Securities of such series (together with the unmatured Coupons, if any, appertaining thereto) theretofore purchased or otherwise acquired by the Issuer, except Securities of such series which have been redeemed or previously called for redemption through the application of mandatory or optional sinking fund payments pursuant to the terms of the Securities of such series or which have been acquired or redeemed out of the proceeds of sale -77- 85 of a Principal Property, pursuant to clause (i) of Section 4.7, accompanied by an Issuer Order instructing the Trustee to credit such obligations and stating that the Securities of such series were originally issued by the Issuer by way of bona fide sale or other negotiation for value; provided that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such mandatory sinking fund payment shall be reduced accordingly. SECTION 15.3. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60 days prior to each sinking fund payment date for any series of Securities, the Issuer will deliver to the Trustee a certificate signed by the Treasurer or any Associate or Assistant Treasurer of the Issuer specifying the amount of the next ensuing sinking fund payment for such series pursuant to the terms of such series, the portion thereof, if any, which is to be satisfied by payment of cash in the currency or currency unit in which the Securities of such series and the Coupons, if any, appertaining thereto are payable (except as otherwise specified as contemplated by Section 3.1 for the Securities of such series and except as provided in Sections 3.12(b), 3.12(e) and 3.12(f) of this Indenture) and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of such series pursuant to Section 15.2 and whether the Issuer intends to exercise its right to make a permitted optional sinking fund payment with respect to such series. Such certificate shall be irrevocable and upon its delivery the Issuer shall be obligated to make the cash payment or payments (in the currency or currency unit described above) therein referred to, if any, on or before the next succeeding sinking fund payment date. In the case of the failure of the Issuer to deliver such certificate (or to deliver the Securities and Coupons, if any, specified in such certificate within the time period specified in Section 15.2), the sinking fund payment due on the next succeeding sinking fund payment date for such series shall be paid entirely in cash (in the currency or currency unit described above) and shall be sufficient to redeem the principal amount of the Securities of such series subject to a mandatory sinking fund payment without the right to deliver or credit Securities as provided in Section 15.2 and without the right to make any optional sinking fund payment, if any, with respect to such series. Any sinking fund payment or payments (mandatory or optional) made in cash (in the currency or currency unit described above) plus any unused balance of any preceding sinking fund payments made with respect to the Securities of any particular series shall be applied by the Trustee (or by the Issuer if the Issuer is acting as its own Paying Agent) on the sinking fund payment date on which such payment is made (or, if such payment is made before a sinking fund payment date, on the sinking fund payment date following the date of such payment) to the redemption of Securities of such series at the Redemption Price specified in such Securities with respect to the sinking fund, together with accrued interest, if any, to the applicable Redemption Date. Any excess sinking fund moneys not so applied or allocated by the Trustee (or by the Issuer if the Issuer is acting as its own Paying Agent) to the redemption of Securities shall be added to the next sinking fund payment received by the Trustee (or, if the Issuer is acting as its own Paying Agent, segregated and held in trust as provided in Section 4.4) for such series and, together with such payment (or such amount so segregated), shall be applied in accordance with the provisions of this Section 15.3. Any and all sinking fund moneys with respect to the Securities of any particular series held by the Trustee (or, if the Issuer is acting as its own Paying Agent, segregated and held in trust as provided in Section 4.4) on the last sinking fund payment date with respect to Securities of such series and not held for the payment or redemption of -78- 86 particular Securities of such series shall be applied by the Trustee (or by the Issuer if the Issuer is acting as its own Paying Agent), together with other moneys, if necessary, to be deposited (or segregated) sufficient for the purpose, to the payment of the principal of the Securities of such series at Maturity. The Trustee shall not convert any currency or currency unit in which the Securities of such series are payable for the purposes of such sinking fund application unless specifically requested to do so by the Issuer, and any such conversion agreed to by the Trustee in response to such request shall be for the account and at the expense of the Issuer and shall not affect the Issuer's obligation to pay the Holders in the currency or currency unit to which such Holders may be entitled. The Trustee shall select or cause to be selected the Securities to be redeemed upon such sinking fund payment date in the manner specified in the last paragraph of Section 14.2, and the Issuer shall cause notice of the redemption thereof to be given in the manner provided in Section 14.2, except that the notice of redemption shall also state that the Securities are being redeemed by operation of the sinking fund and whether the sinking fund payment is mandatory or optional, or both, as the case may be. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Section 14.3. On or before (but at least one New York Business Day before, in the case of payments made in a currency or currency unit other than Dollars) each sinking fund payment date, the Issuer shall pay to the Trustee (or, if the Issuer is acting as its own Paying Agent, will segregate and hold in trust as provided in Section 4.4) in cash (in the currency or currency unit described in the first paragraph of this Section 15.3) a sum equal to the principal and any interest accrued to the Redemption Date for Securities or portions thereof to be redeemed on such sinking fund payment date pursuant to this Section. Neither the Trustee nor the Issuer shall redeem any Securities of a series with sinking fund moneys or mail any notice of redemption of Securities of such series by operation of the sinking fund for such series during the continuance of a default in payment of interest, if any, on any Securities of such series or of any Event of Default (other than an Event of Default occurring as a consequence of this paragraph) with respect to the Securities of such series, except that, if the notice of redemption shall have been provided in accordance with the provisions hereof, the Trustee (or the Issuer if the Issuer is acting as its own Paying Agent) shall redeem such Securities if cash (in the currency or currency unit described in the first paragraph of this Section 15.3) sufficient for the purpose shall be deposited with the Trustee (or segregated by the Issuer) for that purpose in accordance with the terms of this Article. Except as aforesaid, any moneys (in the currency or currency unit described in the first paragraph of this Section 15.3) in the sinking fund for such series at the time when any such default or Event of Default shall occur and any moneys (in the currency or currency unit described in the first paragraph of this Section 15.3) thereafter paid into such sinking fund shall, during the continuance of such default or Event of Default, be held as security for the payment of the Securities of such series and the Coupons, if any, appertaining thereto; provided, however, that, in case such Event of Default or default shall have been cured or waived as provided herein, such moneys (in the currency or currency unit described in the first paragraph of this Section 15.3) shall thereafter be applied on the next sinking fund payment date for the Securities of such series on which such moneys (in the currency or currency unit described in the first paragraph of this Section 15.3) may be applied pursuant to the provisions of this Section. -79- 87 ARTICLE XVI.* GUARANTEE SECTION 16.1. GUARANTEE. Subject to the provisions of this Article Sixteen, each Guarantor, jointly and severally, hereby unconditionally and irrevocably guarantees to each Holder and to the Trustee and its successors and assigns (a) the full and punctual payment of principal of, premium, if any, and interest on the Securities when due, whether at maturity, by acceleration, by redemption or otherwise, and all other monetary obligations of the Issuer under the Indenture and the Securities and (b) the full and punctual performance within the grace period set forth in Section 6.1(d) or (e) of the Indenture, if applicable, of all other obligations of the Issuer under the Indenture and the Securities (all the foregoing being hereinafter collectively called the "Obligations"). Each Guarantor further agrees that the Obligations may be extended or renewed, in whole or in part, without notice or further assent from any of the Guarantors, and that each Guarantor will remain bound under this Article Sixteen notwithstanding any extension or renewal of any Obligation. Each Guarantor hereby waives presentation to, demand of payment from and protest to the Issuer of any of the Obligations and also waives notice of protest for nonpayment. Each Guarantor hereby waives notice of any default under the Securities or the Obligations. The obligations of each Guarantor hereunder shall not be affected by (a) the failure of any Holder or the Trustee to assert any claim or demand or to enforce any right or remedy against the Issuer or any other person under the Indenture, the Securities or any other agreement or otherwise; (b) any extension or renewal of any thereof; (c) any rescission, waiver, amendment or modification of any of the terms or provisions of the Indenture, the Securities or any other agreement; (d) the release of any security held by any Holder or the Trustee for the Obligations or any of them; (e) the failure of any Holder or Trustee to exercise any right or remedy against any other guarantor of the Obligations; or (f) any change in the ownership of any of the Guarantors. Each Guarantor hereby further agrees that its respective Guarantee herein constitutes a guaranty of payment, performance and compliance when due, within applicable grace periods (and not a guarantee of collection), and waives any right to require that any resort be had by any Holder or the Trustee to any security held for payment of the Obligations. The obligations of the Guarantors hereunder shall not be subject to any reduction, limitation, impairment or termination for any reason, including any claim of waiver, release, surrender, alteration or compromise, and shall not be subject to any defense of setoff, counterclaim, recoupment or termination whatsoever or by reason of the invalidity, illegality or unenforceability of the obligations or otherwise. Without limiting the generality of the foregoing, the obligations of the Guarantors herein shall not be discharged or impaired or otherwise affected by the failure of any Holder or the Trustee to assert any claim or demand or to enforce any remedy under the Indenture, the Securities or any other agreement, by any waiver or modification of any thereof, by any default, failure or delay, willful or otherwise, in the performance of the Obligations, or by any other act or thing or omission or delay to do any other act or thing which may or might in any manner or to any extent vary the risk of any of the - ---------- * This Article to be included if debt securities are guaranteed. -80- 88 Guarantors or would otherwise operate as a discharge of any of the Guarantors as a matter of law or equity. Each Guarantor hereby further agrees that its respective Guarantee herein shall continue to be effective or be reinstated, as the case may be, if at any time payment, or any part thereof, of principal of or interest on any Obligation is rescinded or must otherwise be restored by any Holder or the Trustee upon the bankruptcy or reorganization of the Issuer or otherwise. In furtherance of the foregoing and not in limitation of any other right which any Holder or the Trustee has at law or in equity against any of the Guarantors by virtue thereof, upon the failure of the Issuer to pay the principal of or interest on any Obligation when and as the same shall become due, whether at maturity, by acceleration, by redemption or otherwise, or to perform or comply with any other Obligation, each Guarantor hereby promises to and will, upon receipt of written demand by the Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the Trustee an amount equal to the sum of (i) the unpaid principal amount of such Obligations, (ii) accrued and unpaid interest on such Obligations (but only to the extent not prohibited by law) and (iii) all other monetary Obligations of the Issuer to the Holders and the Trustee. Each Guarantor hereby agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any Obligations guaranteed hereby until payment in full of all Obligations. Each Guarantor hereby further agrees that, as between such Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article Six for the purposes of such Guarantor's Guarantee herein, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such Obligations as provided in Article Six, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantor for the purposes of this Section. No stockholder, officer, director, member, partner, employee, incorporator or organizer, past, present or future, of any Guarantor, as such, shall have any personal liability under this Guarantee by reason of his, her or its status as such stockholder, officer, director, member, partner, employee, incorporator or organizer. Each Guarantor that makes a payment or distribution under its Guarantee shall be entitled to a contribution from each other Guarantor in an amount pro rata, based on the net assets of each Guarantor, determined in accordance with generally accepted accounting principles. SECTION 16.2. LIMITATION OF GUARANTORS' LIABILITY. Each Guarantor, and by its acceptance hereof each Holder, hereby confirms that it is the intention of all such parties that the Guarantee by such Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law. To effectuate the foregoing intention, the Holders and such Guarantor hereby irrevocably agree that the Obligations of such Guarantor under this Article Sixteen shall be limited to the maximum amount as will, after -81- 89 giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the Obligations of such other Guarantor under this Article Sixteen , result in the Obligations of such Guarantor under its Guarantee not constituting a fraudulent transfer or conveyance under applicable federal or state law. SECTION 16.3. RELEASES. (a) In the event that the indebtedness on all Outstanding Securities shall have been deemed satisfied pursuant to Section 12.1 hereof, each Guarantor shall thereby become released from and relieved of its respective Guarantee and all its other obligations hereunder and all provisions of this Indenture referencing or relating to any Guarantor, the Guarantees and such other obligations shall be of no further force or effect, and upon request of any Guarantor, the Trustee shall execute and deliver to such Guarantor a satisfaction and discharge with respect to its respective Guarantee and such other obligations and the Trustee shall execute any other documents reasonably required to evidence the release of the Guarantor from its respective Guarantee and such other obligations. (b) In the event any of the Guarantors, other than Sheraton Holding Corporation and The Sheraton Corporation, ceases to be a guarantor under the Senior Credit Agreement, such entity shall also cease to be a Guarantor, whether or not an Event of Default is then outstanding, and shall be deemed released from all obligations under this Article Sixteen without any further action required on the part of the Trustee or any Holder. (c) Each of Sheraton Holding Corporation and The Sheraton Corporation shall cease to be a Guarantor, and shall be deemed released from all obligations under this Article Sixteen without any further action required on the part of the Trustee or any Holder, upon the earlier of (i) the date on which the Issuer ceases to be a guarantor under the Sheraton Indenture and (ii) the later of (A) the date on which such Guarantor ceases to be a guarantor under the Senior Credit Agreement and (B) the date on which the indebtedness on all Outstanding Securities (as defined in the Sheraton Indenture) shall have been deemed satisfied pursuant to Section 12.1 of the Sheraton Indenture. SECTION 16.4. SUCCESSORS AND ASSIGNS. Except as provided in Section 16.2, this Article Sixteen shall be binding upon each of the Guarantors and their respective successors and assigns and shall inure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Securities shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture. SECTION 16.5. NO WAIVER, ETC. Neither a failure nor a delay on the part of either the Trustee or the Holders in exercising any right, power or privilege under this Article Sixteen shall operate as a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise of any right, power or privilege. The rights, remedies and benefits of the Trustee and the Holders herein expressly specified are cumulative and not exclusive of any other rights, remedies or benefits which either may have under this Article Sixteen at law, in equity, by statute or otherwise. -82- 90 SECTION 16.6. ADDITIONAL GUARANTORS. The Issuer shall cause each Subsidiary of the Issuer that becomes a guarantor under the Senior Credit Agreement after the date of the Indenture, to execute and deliver to the Trustee, promptly upon any such addition, formation or acquisition (a) a supplemental indenture in form and substance satisfactory to the Trustee which subjects such Subsidiary to the provisions of this Indenture as a Guarantor, and (b) an Opinion of Counsel to the effect that such supplemental indenture has been duly authorized and executed by such Subsidiary and constitutes the legal, valid, binding and enforceable obligation of such Subsidiary (subject to such customary exceptions concerning fraudulent conveyance laws, creditors' rights and equitable principles as may be acceptable to the Trustee in its discretion). -83- 91 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. STARWOOD HOTELS AND RESORTS WORLDWIDE, INC., as Issuer, by ------------------------------ Vice President , as Trustee, -------------------------------- by ------------------------------ Authorized Officer -84- EX-4.10 4 p65494a1ex4-10.txt EX-4.10 1 Exhibit 4.10 INDENTURE AMONG STARWOOD HOTELS & RESORTS WORLDWIDE, INC., AS ISSUER, THE GUARANTORS PARTY HERETO FROM TIME TO TIME, AS GUARANTORS, AND ___________________________, AS TRUSTEE DATED AS OF _____________, 200_ $ _________________ [ZERO COUPON] CONVERTIBLE [SENIOR] NOTES 2

3 Section 3.14. Repayment to the Issuer.......................................................................32 Section 3.15. Redemption or Repurchase Upon Trust Assumption Event..........................................33 ARTICLE 4 COVENANTS Section 4.01. Payment of Securities.........................................................................36 Section 4.02. Financial Information; SEC Reports............................................................37 Section 4.03. Corporate Existence...........................................................................37 Section 4.04. Restrictions on Liens.........................................................................37 Section 4.05. Sale and Leaseback Transaction................................................................39 Section 4.06. Compliance Certificate........................................................................39 Section 4.07. Further Instruments and Acts..................................................................39 Section 4.08. Calculation of Original Issue Discount........................................................39 Section 4.09. Securities To Be Equally and Ratably Secured Under Pledge Agreement...........................39 Section 4.10. Designation of Subsidiaries...................................................................40 ARTICLE 5 SUCCESSOR COMPANIES Section 5.01. Merger and Consolidation......................................................................41 ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01. Events of Default.............................................................................41 Section 6.02. Acceleration..................................................................................43 Section 6.03. Other Remedies................................................................................44 Section 6.04. Waiver of Past Defaults.......................................................................44 Section 6.05. Control by Majority...........................................................................44 Section 6.06. Limitation on Suits...........................................................................44 Section 6.07. Rights of Holders to Receive Payment..........................................................45 Section 6.08. Collection Suit by Trustee....................................................................45 Section 6.09. Trustee May File Proofs of Claim..............................................................45 Section 6.10. Priorities....................................................................................45 Section 6.11. Undertaking for Costs.........................................................................46 Section 6.12. Waiver of Stay or Extension Laws..............................................................46 ARTICLE 7 TRUSTEE Section 7.01. Duties of Trustee.............................................................................46 Section 7.02. Rights of Trustee.............................................................................47 Section 7.03. Individual Rights of Trustee..................................................................48 Section 7.04. Trustee's Disclaimer..........................................................................48 ii

4 Section 7.05. Notice of Defaults............................................................................48 Section 7.06. Reports by Trustee to Holder..................................................................49 Section 7.07. Compensation and Indemnity....................................................................49 Section 7.08. Replacement of Trustee........................................................................50 Section 7.09. Successor Trustee by Merger...................................................................50 Section 7.10. Eligibility; Disqualification.................................................................51 Section 7.11. Preferential Collection of Claims Against Issuer..............................................51 ARTICLE 8 DISCHARGE OF INDENTURE Section 8.01. Discharge of Liability on Securities..........................................................51 Section 8.02. Application of Trust Money....................................................................52 Section 8.03. Repayment to Issuer...........................................................................52 ARTICLE 9 AMENDMENTS Section 9.01. Without Consent of Holders....................................................................52 Section 9.02. With Consent of Holders.......................................................................52 Section 9.03. Compliance with Trust Indenture Act...........................................................53 Section 9.04. Revocation and Effect of Consents and Waivers.................................................53 Section 9.05. Notation on or Exchange of Securities.........................................................54 Section 9.06. Trustee To Sign Amendments....................................................................54 Section 9.07. Waiver of Certain Conditions..................................................................54 ARTICLE 10 SPECIAL TAX EVENT CONVERSION Section 10.01. Optional Conversion to Semi-annual Coupon Note Upon Tax Event................................55 Section 10.02. Paying Agent To Hold Money in Trust..........................................................56 Section 10.03. Securityholder Lists.........................................................................56 Section 10.04. Payment of Interest; Interest Rights Preserved...............................................56 ARTICLE 11 CONVERSION Section 11.01. Conversion Privilege.........................................................................57 Section 11.02. Conversion Procedure.........................................................................60 Section 11.03. Fractional Shares............................................................................61 Section 11.04. Taxes on Conversion..........................................................................61 Section 11.05. Issuer to Provide Stock......................................................................62 Section 11.06. Adjustment for Change In Capital Stock.......................................................62 Section 11.07. Adjustment for Rights Issue..................................................................63 Section 11.08. Adjustment for Other Distributions...........................................................63 Section 11.09. When Adjustment May Be Deferred..............................................................64 Section 11.10. When No Adjustment Required..................................................................65 iii

5 Section 11.11. Notice of Adjustment.........................................................................65 Section 11.12. Voluntary Increase...........................................................................65 Section 11.13. Notice of Certain Transactions...............................................................65 Section 11.14. Reorganization of Issuer; Special Distributions..............................................66 Section 11.15. Issuer Determination Final...................................................................67 Section 11.16. Trustee's Adjustment Disclaimer..............................................................67 Section 11.17. Simultaneous Adjustments.....................................................................67 Section 11.18. Successive Adjustments.......................................................................67 Section 11.19. Rights Issued in Respect of Shares Issued Upon Conversion....................................67 Section 11.20. Restriction on Shares Issued Upon Conversion.................................................67 Section 11.21. Conversion Adjustments Upon Share Separation.................................................69 ARTICLE 12 SECURITY GUARANTEE Section 12.01. Guarantee....................................................................................70 Section 12.02. Limitation on Guarantor Liability............................................................71 Section 12.03. Delivery of Guarantee........................................................................71 Section 12.04. Guarantors May Consolidate, etc. on Certain Terms............................................72 Section 12.05. Release......................................................................................72 ARTICLE 13 MISCELLANEOUS Section 13.01. Trust Indenture Act Controls.................................................................73 Section 13.02. Notices......................................................................................73 Section 13.03. Communication by Holders with Other Holders..................................................74 Section 13.04. Certificate and Opinion as to Conditions Precedent...........................................74 Section 13.05. Statements Required in Certificate or Opinion................................................74 Section 13.06. When Securities Disregarded..................................................................75 Section 13.07. Rules by Trustee, Paying Agent and Registrar.................................................75 Section 13.08. Legal Holidays...............................................................................75 Section 13.09. Governing Law................................................................................75 Section 13.10. No Recourse Against Others...................................................................75 Section 13.11. Successors...................................................................................75 Section 13.12. Multiple Originals...........................................................................75 Section 13.13. Table of Contents; Headings.................................................................76 Section 13.14. Severability.................................................................................76 EXHIBIT A: FORM OF SECURITY...................................................................................A-1 iv

6 INDENTURE, dated as of __________, 20__, among STARWOOD HOTELS & RESORTS WORLDWIDE, INC., a Maryland corporation (the "Issuer" or the "Company"), the parties listed on the signature pages hereto that are subsidiaries of the Issuer (the "Guarantors") and ____________________, a ____________________, as trustee (the "Trustee"). Each party agrees as follows for the benefit of the other parties and for the equal and ratable benefit of the Holders of the Issuer's [Zero Coupon] Convertible [Senior] Notes due _______ (the "Securities"): ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions. "Accreted Conversion Price" means with respect to a Security with $1,000 of Principal Amount at Maturity, as of the date of determination, the quotient of (i) the sum of the Issue Price plus Original Issue Discount accrued to such date (or, if the Issuer has exercised its option to convert the Securities to semi-annual coupon notes following the occurrence of a Tax Event, the Restated Principal Amount) divided by (ii) the Conversion Rate in effect on such date. "Affiliate" of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "Agent Members" has the meaning specified in Section 2.11. "Average Quoted Price" has the meaning specified in Section 11.01. "Bankruptcy Law" has the meaning specified in Section 6.01. "Bid Solicitation Agent" means a bid solicitation agent appointed by the Issuer to act in such capacity pursuant to the paragraph entitled "Contingent Interest" of the Securities, which initially shall be the Trustee. "Board of Directors" means the Board of Directors of the Issuer or any committee thereof duly authorized to act on behalf of the Board of Directors of the Issuer. "Business Day" means each day which is not a Legal Holiday. "Capitalized Lease-Back Obligation" means the total net rental obligations of the Issuer or a Restricted Subsidiary under any lease entered into as part of a Sale and Lease-Back Transaction involving a Principal Property discounted to present value at the rate of 9% per annum. 1 7 "Capital Stock" of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) equity of such Person, including any preferred stock, but excluding any debt securities convertible into such equity. "Change in Control" has the meaning specified in Section 3.08. "Change in Control Notice" has the meaning specified in Section 3.08. "Change in Control Notice Date" has the meaning specified in Section 3.08. "Change in Control Purchase Date" has the meaning specified in Section 3.08. "Change in Control Purchase Notice" has the meaning specified in Section 3.08. "Change in Control Purchase Price" has the meaning specified in Section 3.08. "Class B Shares" means Class B Shares, $.01 par value per share, of the Trust as such shares exist on the date of this Indenture or any other shares of Capital Stock of the Trust into which the Class B Shares shall be reclassified or changed. "Clearstream" has the meaning specified in Section 2.01. "Closing Date" means the date of this Indenture. "Code" means the Internal Revenue Code of 1986, as amended. "Company" means Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation, until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall instead mean such successor Person. "Consolidated Net Tangible Assets" means the total of all assets appearing on a consolidated balance sheet of the Issuer and its Restricted Subsidiaries prepared in accordance with accounting principles generally accepted in the United States as of a date not more than 90 days prior to the date as of which Consolidated Net Tangible Assets are to be determined, but excluding (i) the book amount of all segregated intangible assets, (ii) all depreciation, valuation and other reserves, (iii) current liabilities, (iv) any minority interest in the stock and surplus of Restricted Subsidiaries, (v) investments in subsidiaries which are not Restricted Subsidiaries, (vi) deferred income and deferred liabilities, and (vii) other items deductible under generally accepted accounting principles. "Contingent Debt Regulations" has the meaning specified in Section 2.16. "Contingent Interest" has the meaning specified in the paragraph entitled "Contingent Interest" of the Securities. 2 8 "Conversion Agent" means the Trustee or such other office or agency designated by the Issuer where Securities may be presented for conversion. "Conversion Date" has the meaning specified in Section 11.02. "Conversion Percentage" means, prior to ________, 20__, ___%, from ________, 20__ through ________, 20__, ___%, and on each ________ thereafter the Conversion Percentage shall decline by __% through and including ________, 20__, and thereafter the Conversion Percentage shall be ___%. "Conversion Rate" has the meaning specified in Section 11.01. "Corporate Trust Office" means the office of the Trustee specified in Section 13.02. "Corporation Shares" means shares of common stock, $.01 par value per share, of the Issuer as such shares exist on the date of this Indenture or any other shares of Capital Stock of the Issuer into which the Corporation Shares shall be reclassified or changed. "Custodian" has the meaning specified in Section 6.01. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Defaulted Interest" has the meaning specified in Section 10.04. "Definitive Securities" has the meaning specified in Section 2.01. "Depositary" means, with respect to the Securities issuable in whole or in part in global form, the Person specified pursuant to Section 2.01 hereof as the initial Depositary with respect to the Securities, until a successor shall have been appointed and become such pursuant to the applicable provisions of this Indenture, and thereafter "Depositary" shall instead mean or include such successor. "Dollar" means a dollar or other equivalent unit in such coin or currency of the United States as at the time shall be legal tender for the payment of public and private debt. "Euroclear" has the meaning specified in Section 2.01. "Event of Default" has the meaning specified in Section 6.01. "Ex-Dividend Time" has the meaning specified in Section 11.01. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Excluded Person" has the meaning specified in Section 3.08. "Extraordinary Cash Dividend" has the meaning specified in Section 11.08. 3 9 "Funded Debt" as applied to any corporation means all indebtedness incurred, created, assumed or guaranteed by such corporation, or upon which it customarily pays interest charges, which matures, or is renewable by such corporation to a date, more than one year after the date as of which Funded Debt is being determined; provided, however, that the term "Funded Debt" shall not include (i) indebtedness incurred in the ordinary course of business representing borrowings, regardless of when payable, of such corporation from time to time against, but not in excess of the face amount of, its installment accounts receivable for the sale of appliances and equipment sold in the regular course of business or (ii) advances for construction and security deposits received by such corporation in the ordinary course of business. "GAAP" means generally accepted accounting principles in the United States of America as in effect from time to time, including those principles set forth in (i) the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants, (ii) statements and pronouncements of the Financial Accounting Standards Board, (iii) such other statements by such other entity as approved by a significant segment of the accounting profession and (iv) the rules and regulations of the SEC governing the inclusion of financial statements (including pro forma financial statements) in periodic reports required to be filed pursuant to Section 13 of the Exchange Act, including opinions and pronouncements in staff accounting bulletins and similar written statements from the accounting staff of the SEC. All computations based on GAAP contained in this Indenture shall be computed in conformity with GAAP. "Global Security" has the meaning specified in Section 2.01. "Guarantors" means the parties listed on the signature pages hereto that are subsidiaries of the Issuer. "Holder" or "Securityholder" means the Person in whose name a Security is registered on the Registrar's books. "Indebtedness" means bonds, debentures, notes and other instruments representing obligations created or assumed by such Person for the repayment of money borrowed (other than unamortized debt discount or premium). All indebtedness secured by a lien upon property owned by such Person or any Subsidiary and upon which indebtedness such Person customarily pays interest, although such Person has not assumed or become liable for the payment of such indebtedness, shall for all purposes hereof be deemed to be indebtedness of such Person. All indebtedness for money borrowed incurred by other persons which is directly guaranteed as to payment of principal by such Person shall for all purposes hereof be deemed to be indebtedness of, but no other contingent obligation of any such Person in respect of indebtedness incurred by other Persons shall for any purpose be deemed indebtedness of such Person. "Indenture" means this Indenture as amended or supplemented from time to time and includes the terms of Securities established as contemplated by Section 2.01. "Initial Purchaser" means ___________________. "Interest Payment Date" has the meaning specified in Section 10.01. 4 10 "Issue Date" means the date the Securities are originally issued or deemed issued as set forth on the face of the Security under this Indenture. "Issue Price" of any Security means, in connection with the original issuance of such Security, the issue price as set forth on the face of the Security. "Issuer" means the party named as such in this Indenture until a successor replaces it and, thereafter, instead means the successor and, for purposes of any provision contained herein and required by the Trust Indenture Act, each other obligor on the indenture securities. "Issuer's Notice" has the meaning specified in Section 3.07. "Issuer's Notice Date" has the meaning specified in Section 3.07. "Legal Holiday" has the meaning specified in Section 13.08. "Market Price" has the meaning specified in Section 3.07. "Maturity", when used with respect to any Security, means the date on which the principal, Restated Principal Amount, Purchase Price or Change in Control Purchase Price of such Security becomes due and payable as therein or herein provided, whether at the Stated Maturity, on a Redemption Date, Purchase Date or Change in Control Purchase Date, or by declaration of acceleration or otherwise. "Non-Global Purchasers" has the meaning specified in Section 2.01. "Notice of Default" has the meaning specified in Section 6.01. "Offering Memorandum" means the offering memorandum relating to the Securities dated _________, 200_. "Officer" means the Chairman of the Board, the Chief Executive Officer, the Chief Financial Officer, the President, any Vice President, the Treasurer, an Assistant or Deputy Treasurer or the Secretary or an Assistant Secretary of the Issuer. "Officers' Certificate" means a certificate signed by two Officers. "Opinion of Counsel" means a written opinion from legal counsel. The counsel may be an employee of or counsel to the Issuer or the Trustee. "Option Exercise Date" has the meaning specified in Section 10.01. "Original Issue Discount" of any Security means the difference between the Issue Price and the Principal Amount at Maturity of the Security as set forth on the face of the Security, which shall accrue as set forth in the form of Security. "Paying Agent" has the meaning specified in Section 2.06. 5 11 "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Pledge Agreement" means the Pledge and Security Agreement, dated February 23, 1998, as amended modified or supplemented, by and between the Issuer, the Trust, certain direct and indirect subsidiaries of the Issuer and Bankers Trust Company, as Collateral Agent. "Pledge Termination Event" means the earliest to occur of (i) the termination of the Pledge Agreement or the release of all of the collateral thereunder in accordance with the terms thereof, (ii) the release by the lenders under the Senior Credit Facility of the security interests and benefits afforded by the Pledge Agreement such that the Senior Credit Facility is no longer secured by any of the collateral under the Pledge Agreement, (iii) the repayment in full of the obligations under the Senior Credit Facility or (iv) the occurrence of a "Termination Date" (as such term is defined in the Senior Credit Facility). "Principal Amount at Maturity" of any Security means the Principal Amount at Maturity as set forth on the face of the Security. "Principal Property" means any single property owned by the Issuer or any Restricted Subsidiary having a gross book value in excess of 2% of Consolidated Net Tangible Assets, except any such property or portion thereof which the Board of Directors by resolution declares is not of material importance to the total business conducted by the Issuer and its Restricted Subsidiaries as an entirety. "protected purchaser" has the meaning specified in Section 2.08. "Purchase Agreement" means the Purchase Agreement dated _______, 20__, among the Issuer, the Trust and the Initial Purchaser. "Purchase Date" has the meaning specified in Section 3.07. "Purchase Notice" has the meaning specified in Section 3.07. "Purchase Price" has the meaning specified in Section 3.07. "QIBs" has the meaning specified in Section 2.01. "Rating Event" has the meaning specified in Section 11.21. "Redemption Date" shall mean the date specified for redemption of the Securities in accordance with the terms of the Securities and Article 3 hereof. "Redemption Price" has the meaning specified in the Securities. "Registrar" has the meaning specified in Section 2.06. 6 12 "Registration Rights Agreement" means the Registration Rights Agreement dated , 200 , among the Issuer, the Guarantors and the Initial Purchaser. "Regular Record Date" has the meaning specified in Section 10.01. "Regulation S" has the meaning specified in Section 2.01. "Restated Principal Amount" has the meaning specified in Section 10.01. "Restricted Security" has the meaning specified in Section 2.15. "Restricted Securities Legend" means the legend labeled as such and that is set forth in Exhibit A hereto. "Restricted Subsidiary" means any subsidiary other than an Unrestricted Subsidiary. "Rights" has the meaning specified in Section 11.19. "Rights Agreement" has the meaning specified in Section 11.19. "Rule 144A" has the meaning specified in Section 2.01. "Sale and Lease-Back Transaction" has the meaning specified in Section 4.05. "Sale Price" has the meaning specified in Section 3.08. "SEC" means the Securities and Exchange Commission. "Securities" has the meaning specified in the second paragraph of this Indenture. "Securities Act" means the Securities Act of 1933, as amended. "Securities Custodian" means the custodian with respect to a Global Security (as appointed by the Depositary) or any successor thereto, who shall initially be the Trustee. "Senior Credit Facility" means the Credit Agreement, dated as of February 23, 1998, among the Issuer, the Trust, the Realty Partnership and Chess Acquisition Corp. (and Sheraton Holding Corp., as its successor by merger), certain additional borrowers, various lenders and Lehman Commercial Paper Inc. and Bank of Montreal, as syndication agents, and Bankers Trust Company and The Chase Manhattan Bank, as administrative agents, as such agreement has been or hereafter may be amended in accordance with its terms. "Share" means an attached unit consisting of one Corporation Share and one Class B Share; provided that upon the occurrence of a Share Separation, the term "Share" shall mean a Corporation Share; provided further that upon the occurrence of a Trust Assumption Event, the term "Share" shall mean a Class B Share. "Share Separation" has the meaning specified in Section 11.21. 7 13 "Shelf Registration" shall have the meaning set forth in the Registration Rights Agreement. "Significant Subsidiary" means any subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture. "Special Record Date" has the meaning specified in Section 10.04. "Stated Maturity," when used with respect to any Security, means the date specified in such Security as the fixed date on which an amount equal to the Principal Amount at Maturity of such Security is due and payable or, if the Securities have been converted into semi-annual coupon notes, the date specified in such Security as the fixed date on which the Restated Principal Amount thereof or any installment of interest thereon is due and payable. "Subsidiary" of any Person means any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of Capital Stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. "Successor Company" has the meaning specified in Section 5.01. "Tax Event" means that the Issuer shall have received an opinion from independent tax counsel experienced in such matters to the effect that, on or after ________, 20__, as a result of (a) any issuance or announcement of an amendment to, or change in, or an amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein or (b) any amendment to, or change in, an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority, in each case which amendment or change is enacted, promulgated, issued or announced or which interpretation is issued or announced or which action is taken, on or after ________, 20__, there is more than an insubstantial risk that interest (including Original Issue Discount and Contingent Interest, if any) payable on the Securities either (i) would not be deductible on a current accrual basis or (ii) would not be deductible under any other method, in either case in whole or in part, by the Issuer (by reason of deferral, disallowance, or otherwise) for United States Federal income tax purposes. "Tax Event Date" has the meaning specified in Section 10.01. "trading day" has the meaning specified in Section 11.01. "Time of Determination" has the meaning specified in Section 11.01. "Trust" means Starwood Hotels & Resorts, a Maryland real estate investment trust and a Subsidiary of the Issuer. 8 14 "Trust Assumption Event" has the meaning specified in Section 11.21. "Trust Assumption Event Notice" has the meaning specified in Section 3.14(d). "Trust Assumption Event Notice Date" has the meaning specified in Section 3.14(d). "Trust Assumption Event Purchase Date" has the meaning specified in Section 3.14(b). "Trust Assumption Event Purchase Price" has the meaning specified in Section 3.14(b). "Trust Assumption Event Redemption Date" has the meaning specified in Section 3.14(a). "Trust Assumption Event Redemption Price" has the meaning specified in the paragraph entitled "Redemption at Option of Issuer" of the Securities. "Trustee" means the party named as such in this Indenture until a successor replaces it and, thereafter, instead means the successor. "Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-77bb) in effect on the Closing Date. "Trust Officer" means any Vice President, Assistant Vice President or any other officer or assistant officer of the Trustee assigned by the Trustee to administer its corporate trust matters. "Uniform Commercial Code" means the New York Uniform Commercial Code as in effect from time to time. "United States National Securities Exchange" means the Nasdaq National Market System, the New York Stock Exchange or the American Stock Exchange, or any successor securities exchange thereto. "Unrestricted Subsidiary" mean (i) any subsidiary 50% or less of the voting stock of which is owned directly by the Issuer and/or one or more Restricted Subsidiaries or (ii) any Subsidiary designated as an Unrestricted Subsidiary by the Board of Directors. SECTION 1.02. Incorporation by Reference of Trust Indenture Act. This Indenture is subject to the mandatory provisions of the Trust Indenture Act, which are incorporated by reference in and made a part of this Indenture. The following Trust Indenture Act terms have the following meanings: "indenture securities" means the Securities. "indenture security holder" means a Holder or Securityholder. 9 15 "indenture to be qualified" means this Indenture. "indenture trustee" or "institutional trustee" means the Trustee. "obligor" on the indenture securities means the Issuer and any other obligor on the indenture securities. All other terms used in this Indenture that are defined by the Trust Indenture Act, defined by Trust Indenture Act reference to another statute or defined by SEC rule have the meanings assigned to them by such definitions. SECTION 1.03. Rules of Construction. Unless the context otherwise requires: (1) a term has the meaning assigned to it; (2) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; (3) "or" is not exclusive; (4) "including" means including without limitation; (5) words in the singular include the plural and words in the plural include the singular; and (6) Section references are to Sections of this Indenture unless the context otherwise requires; and (7) the principal amount of any non-interest bearing or other discount security at any date shall be the principal amount thereof that would be shown on a balance sheet of the issuer dated such date prepared in accordance with GAAP. ARTICLE 2 THE SECURITIES SECTION 2.01. Form of Securities. The Securities and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A which is hereby incorporated in and expressly made a part of this Indenture. The Securities offered and sold (i) in reliance on Regulation S under the Securities Act ("Regulation S") or (ii) to "qualified institutional buyers" as defined in Rule 144A ("QIBs") in reliance on Rule 144A under the Securities Act ("Rule 144A"), each as provided in the Purchase Agreement, shall be issued in the form of one or more permanent global securities in definitive, fully registered form without interest coupons with the Global Securities Legend and Restricted Securities Legend set forth in Exhibit A hereto (a "Global Security"). Any Global 10 16 Security shall be deposited on behalf of the purchasers of the Securities represented thereby with the Trustee, as custodian for the Depositary, and registered in the name of the Depositary or a nominee of the Depositary for the accounts of participants in the Depositary (and, in the case of Securities held in accordance with Regulation S, registered with the Depositary for the accounts of designated agents holding on behalf of the Euroclear Bank S.A./N.V., as operator of the Euroclear System ("Euroclear") or Clearstream Banking, societe anonyme ("Clearstream")), duly executed by the Issuer and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of a Global Security may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee as hereinafter provided. Except as provided in Section 2.10 and 2.13, owners of beneficial interests in Global Securities will not be entitled to receive physical delivery of Securities in definitive form. Transferees of Securities who are not QIBs and did not purchase Securities sold in reliance on Regulation S under the Securities Act (referred to herein as the "Non-Global Purchasers") will receive certificated Securities in definitive form bearing the Restricted Securities Legend set forth in Exhibit A hereto ("Definitive Securities"). Definitive Securities will bear the Restricted Securities Legend set forth on Exhibit A unless removed in accordance with Section 2.13(b). SECTION 2.02. Title and Terms. The aggregate Principal Amount at Maturity of Securities which may be authenticated and delivered under this Indenture is limited to $_______________ (subject to increase to $_______________ in the event the Initial Purchaser exercises the over-allotment option under the Purchase Agreement), except for replacement Securities authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Securities pursuant to Section 2.08. Except as provided for in the Securities, there shall be no periodic payments of interest on the Securities. The calculation of the accrual of Original Issue Discount in the period during which each Security remains outstanding shall be on a semiannual bond equivalent basis using a 360-day year composed of twelve 30-day months, and such accrual shall commence on the Issue Date of the Securities. In the event of the maturity, conversion, purchase by the Issuer at the option of a Holder or redemption of a Security, Original Issue Discount, if any, shall cease to accrue on such Security, under the terms and subject to the conditions of this Indenture. The Issue Price and Original Issue Discount accrued on the Securities shall be payable at (i) the office or agency of the Issuer in The City of New York maintained for such purpose, which initially shall be the principal corporate trust office of the Trustee in The City of New York, (ii) the Corporate Trust Office and (iii) at any other office or agency maintained by the Issuer for such purpose; provided, however, that at the option of the Issuer payments may be made by wire transfer or by check mailed to the address of the Person entitled thereto as such address shall appear in the security register. The Securities shall not have the benefit of a sinking fund. The Securities shall be general senior obligations of the Issuer secured on an equal and ratable basis as provided in Section 4.11. 11 17 SECTION 2.03. Denominations. The Securities shall be issuable only in registered form without coupons and in denominations of $1,000 Principal Amount at Maturity and any integral multiple of $1,000 above that amount. SECTION 2.04. Forms Generally. The Securities may have such letters, notations, numbers or other marks of identification and such legends or endorsements placed thereon as may be required by law, securities exchange rule, the Code and regulations thereunder, agreements to which the Issuer is subject, if any, or usage (provided that any such notation legend or endorsement is in a form acceptable to the Issuer). Each Security shall be dated the date of its authentication. The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the Officers executing such Securities, as evidenced by their execution thereof. SECTION 2.05. Execution, Authentication and Delivery. One or more Officers of the Issuer shall sign the Securities on behalf of the Issuer by manual or facsimile signature. The Issuer's seal, if any, may, but need not, be impressed, affixed, imprinted or reproduced on the Securities and, if it is, then it may be in facsimile form. If an Officer of the Issuer whose signature is on a Security no longer holds that office at the time the Trustee authenticates the Security, the Security shall be valid nevertheless. A Security shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Security. The signature shall be conclusive evidence that the Security has been authenticated under this Indenture. The Trustee may appoint an authenticating agent reasonably acceptable to the Issuer to authenticate the Securities. Any such appointment shall be evidenced by an instrument signed by a Trust Officer, a copy of which shall be furnished to the Issuer. Unless limited by the terms of such appointment, an authenticating agent may authenticate Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as any Registrar, Paying Agent or agent for service of notices and demands. SECTION 2.06. Registrar and Paying Agent. The Issuer shall maintain an office or agency where Securities may be presented for registration of transfer or for exchange (the "Registrar") and an office or agency where Securities may be presented for payment (the "Paying Agent"). The Registrar shall keep a register of the Securities and of their transfer and exchange. The Issuer may have one or more co-registrars and one or more additional paying agents. The term "Paying Agent" includes any additional paying agent, and the term "Registrar" includes any co-registrars. The Issuer initially appoints the Trustee as (i) Registrar and Paying Agent in connection with the Securities and (ii) the Securities Custodian with respect to the Global Securities. The Issuer shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the terms of the Trust Indenture Act. The agency agreement shall implement the provisions of this Indenture that relate 12 18 to such agent. The Issuer shall notify the Trustee of the name and address of any such agent. If the Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07. The Issuer or any of its domestically organized Subsidiaries may act as Paying Agent or Registrar. The Issuer may remove any Registrar or Paying Agent upon written notice to such Registrar or Paying Agent and to the Trustee; provided, however, that no such removal shall become effective until (1) acceptance of an appointment by a successor as evidenced by an appropriate agreement entered into by the Issuer and such successor Registrar or Paying Agent, as the case may be, and delivered to the Trustee or (2) notification to the Trustee that the Trustee shall serve as Registrar or Paying Agent until the appointment of a successor in accordance with clause (1) above. The Registrar or Paying Agent may resign at any time upon written notice; provided, however, that the Trustee may resign as Paying Agent or Registrar only if the Trustee also resigns as Trustee in accordance with Section 7.08. SECTION 2.07. Transfer and Exchange. The Securities shall be issued in registered form and shall be transferable only upon the surrender of a Security for registration of transfer and in compliance with this Indenture. When a Security is presented to the Registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of Section 8-401(a)(1) of the Uniform Commercial Code are met. When Securities are presented to the Registrar with a request to exchange them for Securities of other denominations and of a like aggregate Principal Amount at Maturity and tenor, the Registrar shall make the exchange as requested if the same requirements are met. To permit registration of transfers and exchanges, the Issuer shall execute and the Trustee shall authenticate Securities at the Registrar's request. The Issuer may require payment of a sum sufficient to pay all taxes, assessments or other governmental charges in connection with any such transfer or exchange pursuant to this Section. The Issuer shall not be required to make and the Registrar need not register transfers or exchanges of Securities selected for redemption (except, in the case of Securities to be redeemed in part, the portion thereof not to be redeemed) or any Securities for a period of 15 days before a selection of Securities to be redeemed. Prior to the due presentation for registration of transfer of any Security, the Issuer, the Trustee, the Paying Agent and the Registrar may deem and treat the Person in whose name a Security is registered as the absolute owner of such Security for the purpose of receiving any payment on such Security (including interest, if the Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event and Contingent Interest and Defaulted Interest, if any) and for all other purposes whatsoever, whether or not such Security is overdue, and none of the Issuer, the Trustee, the Paying Agent or the Registrar shall be affected by notice to the contrary. Any Holder of a Global Security shall, by acceptance of such Global Security, agree that transfers of a beneficial interest in such Global Security may be effected only through a book-entry system maintained by (i) the Holder of such Global Security (or its agent) or (ii) any Holder of a beneficial interest in such Global Security, and that ownership of a beneficial interest in such Global Security shall be required to be reflected in a book-entry. 13 19 All Securities issued upon any transfer or exchange pursuant to the terms of this Indenture will evidence the same debt and will be entitled to the same benefits under this Indenture as the Securities surrendered upon such transfer or exchange. SECTION 2.08. Replacement Securities. If a mutilated Security is surrendered to the Registrar or if the Holder of a Security claims that the Security has been lost, destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall authenticate a replacement Security if the requirements of Section 8-405 of the Uniform Commercial Code are met, such that the Holder (i) satisfies the Issuer or the Trustee within a reasonable time after such Holder has notice of such loss, destruction or wrongful taking, and the Registrar does not register a transfer prior to receiving such notification, (ii) requests the Issuer or the Trustee to issue a new replacement Security, prior to the Security being acquired by a protected purchaser as defined in Section 8-303 of the Uniform Commercial Code (a "protected purchaser") and (iii) satisfies any other reasonable requirements of the Trustee. If required by the Trustee or the Issuer, such Holder shall furnish an indemnity bond sufficient in the judgment of the Trustee to protect the Issuer, the Trustee, the Paying Agent and the Registrar from any loss that any of them may suffer if a Security is replaced. The Issuer and the Trustee may charge the Holder for the costs and expenses they incur in replacing a Security. In the event any such mutilated, lost, destroyed or wrongfully taken Security has become or is about to become due and payable or has been called for redemption in full, the Issuer in its discretion may pay such Security instead of issuing a new Security in replacement thereof. Every replacement Security is an additional obligation of the Issuer. The provisions of this Section 2.08 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, lost, destroyed or wrongfully taken Securities. SECTION 2.09. Outstanding Securities. Securities outstanding at any time are all Securities authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding. Subject to Section 13.06, a Security does not cease to be outstanding because the Issuer or an Affiliate of the Issuer holds the Security. If a Security is replaced pursuant to Section 2.08, the Security so replaced ceases to be outstanding unless and until the Trustee and the Issuer receive proof satisfactory to them that the replaced Security is held by a protected purchaser. If the Paying Agent segregates and holds in trust, in accordance with this Indenture, at Maturity, money or securities sufficient to pay all amounts payable on that date with respect to the Securities (or portions thereof) to be redeemed, purchased or repurchased or maturing, as the case may be, then on and after that date, such Securities (or portions thereof) shall cease to be outstanding and Original Issue Discount (or interest, if the Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event) on them or Contingent Interest and Defaulted Interest, if any, shall cease to accrue. 14 20 SECTION 2.10. Temporary Securities; Exchange of Global Security for Definitive Securities. (a) In the event that Definitive Securities are to be issued under the terms of this Indenture, until such Definitive Securities are ready for delivery, the Issuer may prepare and the Trustee shall authenticate temporary Securities. Temporary Securities shall be substantially in the form of Definitive Securities but may have variations that the Issuer considers appropriate for temporary Securities. Without unreasonable delay, the Issuer shall prepare and the Trustee shall authenticate Definitive Securities and deliver them in exchange for temporary Securities upon surrender of such temporary Securities at the office or agency of the Issuer, without charge to the Holder. (b) Except for transfers made in accordance with Section 2.13(a), a Global Security deposited with the Depositary or with the Trustee as custodian for the Depositary pursuant to Section 2.11 shall be transferred to the beneficial owners thereof in the form of certificated Securities in definitive form only if such transfer complies with Section 2.13 and (i) the Depositary notifies the Issuer that it is unwilling or unable to continue as Depositary for such Global Security or if at any time such Depositary ceases to be a "clearing agency" registered under the Exchange Act and a successor Depositary is not appointed by the Issuer within 90 days of such notice, or (ii) the Issuer so elects. (c) Any Global Security or interest thereon that is transferable to the beneficial owners thereof in the form of certificated Securities in definitive form shall, if held by the Depository, be surrendered by the Depositary to the Trustee, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Security, an equal aggregate principal amount of Securities of authorized denominations in the form of certificated Securities in definitive form. Any portion of a Global Security transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $1,000 and any integral multiple thereof and registered in such names as the Depositary shall direct. Any Securities in the form of certificated Securities in definitive form delivered in exchange for an interest in the Global Security shall, except as otherwise provided by Section 2.13(b), bear the Restricted Securities Legend set forth in Exhibit A hereto. (d) Prior to any transfer pursuant to Section 2.10(b), the registered holder of a Global Security may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a holder is entitled to take under this Indenture or the Securities. The Issuer will make available to the Trustee a reasonable supply of certificated Securities in definitive form. SECTION 2.11. Book-entry Provisions for Global Securities. This Section 2.11 shall apply only to a Global Security deposited with or on behalf of the Depositary. The Issuer shall execute and the Trustee shall, in accordance with this Section 2.11 and the written order of the Issuer, authenticate and deliver initially one or more Global Securities that (i) shall be registered in the name of Cede & Co. or other nominee of such 15 21 Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary's instructions or held by the Trustee as custodian for the Depositary pursuant to a FAST Balance Certificate Agreement between the Depositary and the Trustee. Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this Indenture with respect to any Global Security held on their behalf by the Depositary or by the Trustee as the custodian of the Depositary or under such Global Security, and the Depositary may be treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as the absolute owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the Trustee or any agent of the Issuer or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of the rights of a holder of a beneficial interest in any Global Security. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "Management Regulations and Instructions to Participants" of Clearstream shall be applicable to interests in any Global Securities that are held by participants through Euroclear or Clearstream. The Trustee shall have no obligation to notify holders of any such procedures or to monitor or enforce compliance with the same. SECTION 2.12. Cancellation. The Issuer at any time may deliver Securities to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Securities surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Securities surrendered for registration of transfer, exchange, payment, purchase, repurchase, redemption, conversion (pursuant to Article 11 hereof) or cancellation and deliver canceled Securities to the Issuer pursuant to written direction by an Officer of the Issuer. In the absence of any such direction, the Trustee may treat canceled Securities in accordance with its document retention policies. The Issuer may not issue new Securities to replace Securities they have redeemed, paid in full or delivered to the Trustee for cancellation. The Trustee shall not authenticate Securities in place of canceled Securities other than pursuant to the terms of this Indenture. SECTION 2.13. Special Transfer Provisions. (a) Notwithstanding any provision to the contrary herein, so long as a Global Security remains outstanding and is held by or on behalf of the Depositary, transfers of a Global Security, in whole or in part, or of any beneficial interest therein, shall only be made in accordance with Sections 2.10 and 2.11 and this Section 2.13(a); provided, however, that beneficial interests in a Global Security may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the Global Security in accordance with the transfer restrictions set forth under the heading "Notice to Investors" in the Offering Memorandum and, if applicable, in Exhibit ___. Except for transfers or exchanges made in accordance with paragraphs (1) through (4) of this Section 2.13(a) and Section 2.10, transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not in part, to nominees of the Depositary or to a successor of the Depositary or such successor's nominee. 16 22 (1) Global Security to Definitive Security. If an owner of a beneficial interest in a Global Security deposited with the Depositary or with the Trustee as custodian for the Depositary wishes at any time to transfer its interest in such Global Security to a Person who is required to take delivery thereof in the form of a Definitive Security, such owner may, subject to the rules and procedures of Euroclear or Clearstream, if applicable, and the Depositary, cause the exchange of such interest for one or more Definitive Securities of any authorized denomination or denominations and of the same aggregate principal amount. Upon receipt by the Registrar of (A) instructions from Euroclear or Clearstream, if applicable, and the Depositary directing the Trustee to authenticate and deliver one or more Definitive Securities of the same aggregate principal amount as the beneficial interest in the Global Security to be exchanged, such instructions to contain the name or names of the designated transferee or transferees, the authorized denomination or denominations of the Definitive Securities to be so issued and appropriate delivery instructions, (B) a certificate substantially in the form of Exhibit ___ attached hereto given by the owner of such beneficial interest, (C) a certificate substantially in the form of Exhibit ___ attached hereto given by the person acquiring the Definitive Securities for which such interest is being exchanged, to the effect set forth therein, and (D) such other certifications or other information and, in the case of transfers pursuant to Rule 144 under the Securities Act, legal opinions as the Issuer 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, then Euroclear or Clearstream, if applicable, or the Registrar, as the case may be, will instruct the Depositary to reduce or cause to be reduced such Global Security by the aggregate principal amount of the beneficial interest therein to be exchanged and to debit or cause to be debited from the account of the Person making such transfer the beneficial interest in the Global Security that is being transferred, and concurrently with such reduction and debit the Issuer shall execute, and the Trustee shall authenticate and deliver, one or more Definitive Securities of the same aggregate principal amount in accordance with the instructions referred to above. (2) Definitive Security to Definitive Security. If a holder of a Definitive Security wishes at any time to transfer such Definitive Security (or portion thereof) to a Person who is required to take delivery thereof in the form of a Definitive Security, such holder may, subject to the restrictions on transfer set forth herein and in such Definitive Security, cause the transfer of such Definitive Security (or any portion thereof in a principal amount equal to an authorized denomination) to such transferee. Upon receipt by the Registrar of (A) such Definitive Security, duly endorsed as provided herein, (B) instructions from such holder directing the Trustee to authenticate and deliver one or more Definitive Securities of the same aggregate principal amount as the Definitive Security (or portion thereof) to be transferred, such instruction to contain the name or names of the designated transferee or transferees, the authorized denomination or denominations of the Definitive Securities to be so issued and appropriate delivery instructions, (C) a certificate from the holder of the Definitive Security to be transferred in substantially the form of Exhibit ___ attached hereto, (D) a certificate substantially in the form of Exhibit ___ attached hereto given by the person acquiring the Definitive Securities (or portion thereof), to the effect set forth therein, and (E) such other certifications or other information and, in the case of transfers pursuant to Rule 144 under the Securities 17 23 Act, legal opinions as the Issuer 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, then the Registrar, shall cancel or cause to be canceled such Definitive Security and concurrently therewith, the Issuer shall execute, and the Trustee shall authenticate and deliver, one or more Definitive Securities in the appropriate aggregate principal amount, in accordance with the instructions referred to above and, if only a portion of a Definitive Security is transferred as aforesaid, concurrently therewith the Issuer shall execute and the Trustee shall authenticate and deliver to the transferor a Definitive Security in a principal amount equal to the principal amount which has not been transferred. A holder of a Definitive Security may at any time exchange such Definitive Security for one or more Definitive Securities of other authorized denominations and in the same aggregate principal amount and registered in the same name by delivering such Definitive Security, duly endorsed as provided herein, to the Trustee together with instructions directing the Trustee to authenticate and deliver one or more Definitive Securities in the same aggregate principal amount and registered in the same name as the Definitive Security to be exchanged, and the Registrar thereupon shall cancel or caused to be canceled such Definitive Security and concurrently therewith the Issuer shall execute and Trustee shall authenticate and deliver, one or more Definitive Securities in the same aggregate principal amount and registered in the same name as the Definitive Security being exchanged. (3) Definitive Security to Global Security. If a holder of a Definitive Security wishes at any time to transfer such Definitive Security (or portion thereof) to a Person who is not required to take delivery thereof in the form of a Definitive Security, such holder shall, subject to the restrictions on transfer set forth herein and in such Definitive Security and the rules of the Depositary and Euroclear and Clearstream, as applicable, cause the exchange of such Definitive Security for a beneficial interest in the Global Security. Upon receipt by the Registrar of (A) such Definitive Security, duly endorsed as provided herein, (B) instructions from such holder directing the Trustee to increase the aggregate principal amount of the Global Security deposited with the Depository or with the Trustee as custodian for the Depository by the same aggregate Principal Amount at Maturity as the Definitive Security to be exchanged, such instructions to contain the name or names of a member of, or participant in, the Depository that is designated as the transferee, the account of such member or participant and other appropriate delivery instructions, (C) the assignment form on the back of the Definitive Security completed in full (certifying in effect that such transfer complies with Rule 144A or Regulation S under the Securities Act or is otherwise being made to a Person who is not required to take delivery of the Securities in the form of a Definitive Security) and (D) such other certifications or other information and, in the case of transfers pursuant to Rule 144 under the Securities Act, legal opinions as the Issuer may reasonably require to confirm that such transfer is being made pursuant to an exemption from, or in transaction not subject to, the registration requirements of the Securities Act, then the Trustee shall cancel or cause to be canceled such Definitive Security and concurrently therewith shall increase the aggregate principal amount of the Global Security by the same aggregate principal amount as the Definitive Security canceled. 18 24 (4) Other Exchanges. In the event that a Global Security is exchanged for Securities in definitive registered form pursuant to Section 2.10 prior to the effectiveness of a Shelf Registration contemplated by and in accordance with the terms of the Registration Rights Agreement with respect to such Securities, such Securities may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of clauses (2) and (3) above (including the certification requirements intended to ensure that such transfers comply with Rule 144A or Regulation S under the Securities Act, as the case may be) and such other procedures as may from time to time be adopted by the Issuer. (b) Except in connection with a Shelf Registration contemplated by and in accordance with the terms of the Registration Rights Agreement, if Securities are issued upon the registration of transfer, exchange or replacement of Securities bearing a Restricted Securities Legend, or if a request is made to remove such a Restrictive Securities Legend on Securities, the Securities so issued shall bear the Restricted Securities Legend, or a Restricted Securities Legend shall not be removed, as the case may be, unless there is delivered to the Issuer such satisfactory evidence, which, in the case of a transfer made pursuant to Rule 144 under the Securities Act, may include an opinion of counsel, as may be reasonably required by the Issuer, that neither the legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities Act or that such Securities are not "restricted" within the meaning of Rule 144 under the Securities Act. Upon provision to the Issuer of such satisfactory evidence, the Trustee, at the written direction of the Issuer, shall authenticate and deliver Securities that do not bear the legend. The Issuer shall not otherwise be entitled to require the delivery of a legal opinion in connection with any transfer or exchange of Securities. (c) Neither the Trustee nor any Agent shall have any responsibility for any actions taken or not taken by the Depositary. (d) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Securities (including any transfers between or among Depositary's participants or beneficial owners of interests in any Global Security) other than to require delivery of such certificates and other documentation as is expressly required by, and to do so if and when expressly required by, the terms of this Indenture and to examine the same to determine substantial compliance as to form with the express requirements hereof. SECTION 2.14. CUSIP Numbers. The Issuer in issuing the Securities may use "CUSIP" numbers (if then generally in use) and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities and any such redemption shall not be affected by any defect in or omission of such numbers. 19 25 SECTION 2.15. Legend on Restricted Securities. During the period beginning on ________, 20__ (or such later date on which any Securities may be originally issued pursuant to the Initial Purchaser's exercise of the over-allotment option under the Purchase Agreement) and ending on the date two years from such date, any Security (including any Security issued in exchange therefor or in lieu thereof), shall be deemed a "Restricted Security" and shall be subject to the restrictions on transfer provided in the legends set forth on the face of the form of Security in Exhibit A; provided, however, that the term "Restricted Security" shall not include any Securities as to which restrictions have been terminated in accordance with the terms of this Indenture, including, without limitation, Section 2.13(b). All Securities shall bear the applicable legends set forth on the face of the form of Security in Exhibit A. Except as provided in Section 2.13, the Trustee shall not issue any unlegended Security until it has received an Officers' Certificate from the Issuer directing it to do so. SECTION 2.16. Tax Treatment of Securities. The Issuer agrees, and by acceptance of a beneficial interest in the Securities, each beneficial holder of the Securities will be deemed to have agreed, for United States federal income tax purposes (1) to treat the Securities as indebtedness that is subject to Treas. Reg. Sec. 1.1275-4 (the "Contingent Debt Regulations") and, for purposes of the Contingent Debt Regulations, to treat, without limitation, the amount of cash and the fair market value of any Shares beneficially received by a beneficial holder upon any conversion of the Securities as a contingent payment and (2) to be bound by the Issuer's determination of the "comparable yield" and "projected payment schedule," within the meaning of the Contingent Debt Regulations, with respect to the Securities. For purposes of the foregoing, the Issuer's determination of the "comparable yield" is ___% per annum and the Issuer's determination of the "projected payment schedule" is as set forth in Exhibit ___ attached hereto. A Holder of Securities may also obtain the comparable yield and projected payment schedule by submitting a written request to the Issuer at the following address: Starwood Hotels & Resorts Worldwide, Inc., 1111 Westchester Avenue, White Plains, New York, 10604, Attention: General Counsel. ARTICLE 3 REDEMPTION SECTION 3.01. Notices to Trustee. Subject to Section 3.14, prior to ________, 20__, Securities shall not be redeemable. Beginning on ________, 20__, the Issuer, at its option, may elect to redeem Securities in accordance with the provisions thereof and of this Indenture. If the Issuer elects to redeem Securities, it shall notify the Trustee in writing of the date of redemption (the "Redemption Date"), the Principal Amount at Maturity of Securities to be redeemed and the Redemption Price. The Issuer shall give each notice to the Trustee provided for in this Section at least 30 days but not more than 60 days before the Redemption Date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers' Certificate from the Issuer to the effect that such redemption will comply with the conditions herein. If fewer than all the Securities are to be redeemed, the record date relating to such redemption shall be selected by the Issuer and given to the Trustee, which record date shall be not fewer than 15 days after the date 20 26 of notice to the Trustee. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than all the Securities held in definitive form are to be redeemed, the Trustee shall select the Securities to be redeemed on a pro rata basis in accordance with the Principal Amounts at Maturity. The Trustee shall make the selection at least 30 days but not more than 60 days before the Redemption Date from outstanding Securities not previously called for redemption. Securities and portions thereof that the Trustee selects shall be in Principal Amounts at Maturity of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall promptly notify the Issuer of the Securities or portions thereof to be redeemed. If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed shall be treated by the Trustee as outstanding for the purpose of such selection. SECTION 3.03. Notice of Redemption. At least 30 days but not more than 60 days before a Redemption Date of Securities, the Issuer shall mail a notice of redemption by first-class mail to each Holder of Securities to be redeemed at such Holder's registered address. The notice shall identify the Securities to be redeemed and shall state: (1) the Redemption Date; (2) the Redemption Price and the Conversion Rate; (3) the name and address of the Paying Agent and Conversion Agent; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption Price; (5) that Securities called for redemption may be converted at any time before the close of business on the Business Day immediately preceding the Redemption Date; (6) that Holders who want to convert Securities must satisfy the requirements set forth therein and in this Indenture; (7) if fewer than all the outstanding Securities are to be redeemed, the certificate numbers and Principal Amounts at Maturity of the particular Securities to be redeemed; (8) that, unless the Issuer defaults in making payment of such Redemption Price or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, Original Issue Discount on Securities (or portions thereof) called for 21 27 redemption, or interest (including Contingent Interest and Defaulted Interest), if any, will cease to accrue on and after the Redemption Date; (9) the CUSIP number, if any, printed on the Securities being redeemed; (10) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities; and (11) the election of the Issuer (which, subject to the provisions of Article 11 hereof, shall be irrevocable) to deliver Shares or to pay cash in lieu of delivery of such Shares with respect to any Securities that may be converted after the mailing of such notice and prior to the Redemption Date. At the Issuer's request, the Trustee shall give the notice of redemption in the Issuer's name and at the Issuer's expense. In such event, the Issuer shall provide the Trustee with the information required by this Section. SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed to the Holders, Securities called for redemption become due and payable on the Redemption Date and at the Redemption Price stated in the notice except for Securities which are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Securities shall be paid at the Redemption Price stated in the notice. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. SECTION 3.05. Deposit of Redemption Price. Prior to 11:00 a.m. (New York City time) on the Redemption Date, the Issuer shall deposit with the Paying Agent (or, if the Issuer or a Subsidiary of the Issuer is the Paying Agent, shall segregate and hold in trust) money sufficient to pay the Redemption Price of all Securities to be redeemed on that date other than Securities or portions of Securities called for redemption that have been delivered by the Issuer to the Trustee for cancellation or have been converted. The Paying Agent shall as promptly as practicable return to the Issuer any money, not required for that purpose because of conversion of Securities pursuant to Article 11. If such money is then held by the Issuer in trust and is not required for such purpose it shall be discharged from such trust. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 3.06. Securities Redeemed in Part. Upon surrender of a Security that is redeemed in part, the Issuer shall execute and the Trustee shall authenticate for the Holder (at the Issuer's expense) a new Security equal in Principal Amount at Maturity to the unredeemed portion of the Security surrendered. SECTION 3.07. Purchase of Securities at Option of the Holder. (a) General. The Securities shall be purchased by the Issuer pursuant to the terms thereof as of ______, 20__, ______, 20__, ______, 20__, ______, 20__, and ______, 20__, (each, a "Purchase Date"), at the purchase price of $______ per $1,000 of Principal Amount at 22 28 Maturity as of ______, 20__, $______ per $1,000 of Principal Amount at Maturity as of ______, 20__, $______ per $1,000 of Principal Amount at Maturity as of ______, 20__, $______ per $1,000 of Principal Amount at Maturity as of ______, 20__ and $______ per $1,000 of Principal Amount at Maturity as of ______, 20__ (each, a "Purchase Price", as applicable) at the option of the Holder thereof, upon: (1) delivery to the Paying Agent by the Holder of a written notice of purchase (a "Purchase Notice"), substantially in the form of Exhibit ___ hereto, at any time from the opening of business on the date that is at least 20 Business Days prior to a Purchase Date until the close of business on the third Business Day prior to the Purchase Date stating: (A) the certificate number of the Security which the Holder will deliver to be purchased, (B) the portion of the Principal Amount at Maturity of the Security which the Holder will deliver to be purchased, which portion must be in a Principal Amount at Maturity of $1,000 or integral multiples thereof, (C) that such Security shall be purchased as of the Purchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture, and (D) in the event the Issuer elects, pursuant to Section 3.07(b), to pay the Purchase Price to be paid as of such Purchase Date, in whole or in part, in Shares, but such portion of the Purchase Price shall ultimately be payable to such Holder entirely in cash because any of the conditions to payment of the Purchase Price in Shares is not satisfied prior to the close of business on such Purchase Date, as set forth in Section 3.07(d), whether such Holder elects (i) to withdraw such Purchase Notice as to some or all of the Securities to which such Purchase Notice relates (stating the Principal Amount at Maturity and certificate numbers of the Securities as to which such withdrawal shall relate), or (ii) to receive cash in respect of the entire Purchase Price for all Securities (or portions thereof) to which such Purchase Notice relates; and (2) delivery of such Security to the Paying Agent for cancellation prior to, on or after the Purchase Date (together with all necessary endorsements) at the offices of the Paying Agent, such delivery being a condition to receipt by the Holder of the Purchase Price therefor; provided, however, that such Purchase Price shall be so paid pursuant to this Section 3.07 only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Purchase Notice. If a Holder, in such Holder's Purchase Notice, fails to indicate such Holder's choice with respect to the election set forth in clause (D) of Section 3.07(a)(1), such Holder shall be deemed to have elected to receive cash in respect of the Purchase Price for all Securities subject to such Purchase Notice in the circumstances set forth in such clause (D). The Issuer shall purchase from the Holder thereof, pursuant to this Section 3.07, a portion of a Security if the Principal Amount at Maturity of such portion is $1,000 or an integral 23 29 multiple of $1,000 if so requested by the Holder. Provisions of this Indenture that apply to the purchase of all of a Security also apply to the purchase of such portion of such Security. Any purchase by the Issuer contemplated pursuant to the provisions of this Section 3.07 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Purchase Date and the time of delivery of the Security. Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Purchase Notice contemplated by this Section 3.07(a) shall have the right to withdraw such Purchase Notice at any time prior to the close of business on the Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.09. The Paying Agent shall promptly notify the Issuer of the receipt by it of any Purchase Notice or written notice of withdrawal thereof. (b) Issuer's Right to Elect Manner of Payment of Purchase Price. The Securities to be purchased pursuant to Section 3.07(a) may be paid for, at the election of the Issuer, in cash or in Shares valued at the Market Price, or in any combination of cash and Shares, subject to the conditions set forth in Sections 3.07(c) and (d). The Issuer shall designate, in the Issuer's Notice delivered pursuant to Section 3.07(e), whether the Issuer will purchase the Securities for cash or Shares, or, if a combination thereof, the percentages of the Purchase Price of Securities in respect of which it will pay in cash or Shares; provided that the Issuer shall pay cash for fractional Shares. For purposes of determining the existence of potential fractional Shares, all Securities subject to purchase by the Issuer held by a Holder shall be considered together (no matter how many separate certificates are to be presented). Each Holder whose Securities are purchased pursuant to this Section 3.07 shall receive the same percentage of cash or Shares in payment of the Purchase Price for such Securities, except (i) as provided in Section 3.07(d) with regard to the payment of cash in lieu of fractional Shares and (ii) in the event that the Issuer is unable to purchase the Securities of a Holder or Holders for Shares because any necessary qualifications or registrations of the Shares under applicable state or foreign securities laws cannot be obtained, the Issuer may purchase the Securities of such Holder or Holders for cash. The Issuer may not change its election with respect to the consideration (or components or percentages of components thereof) to be paid once the Issuer has given the Issuer's Notice to Securityholders except pursuant to this Section 3.07(b) or pursuant to Section 3.07(d) in the event of a failure to satisfy, prior to the close of business on the Purchase Date, any condition to the payment of the Purchase Price, in whole or in part, in Shares. If the Issuer elects to pay all or part of the Purchase Price in Shares, the portion of accrued Original Issue Discount (or interest if the Issuer has exercised its option to convert the Securities into semi-annual coupon notes following the occurrence of a Tax Event) attributable to the period from the Issue Date (or, if the Issuer has exercised the option to convert the Securities into semi-annual coupon notes following the occurrence of a Tax Event, the later of (x) the date of such exercise, and (y) the date on which interest was last paid) through the Purchase Date and with respect to the surrendered Security and (except as provided in the Security) accrued Contingent Interest and Defaulted Interest, if any, with respect to the 24 30 surrendered Security shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through the delivery of the Shares (together with cash payment, if any, in lieu of fractional Shares) and cash, if any, in exchange for the Security being purchased pursuant to the terms hereof; and such cash and the fair market value of such Shares (together with any such cash payment in lieu of fractional Shares) shall be treated as delivered pro rata, to the extent thereof, first in exchange for Original Issue Discount (or interest, if the Issuer has exercised its option to convert the Securities into semi-annual coupon notes following the occurrence of a Tax Event) accrued through the Purchase Date and accrued Contingent Interest and Defaulted Interest, if any, and the balance, if any, of such cash and the fair market value of such Shares (and any such cash payment) shall be treated as delivered in exchange for the Issue Price of the Security being purchased pursuant to the provisions hereof. (c) Purchase with Cash. On each Purchase Date, at the option of the Issuer, the Purchase Price of Securities in respect of which a Purchase Notice pursuant to Section 3.07(a) has been given, or a specified percentage thereof, may be paid by the Issuer with cash equal to the aggregate Purchase Price of such Securities. (d) Payment by Issuance of Shares. On each Purchase Date, at the option of the Issuer, the Purchase Price of Securities in respect of which a Purchase Notice pursuant to Section 3.07(a) has been given, or a specified percentage thereof, may be paid by the Issuer by the issuance of a number of Shares equal to the quotient obtained by dividing (i) the amount of cash to which the Securityholders would have been entitled had the Issuer elected to pay all or such specified percentage, as the case may be, of the Purchase Price of such Securities in cash by (ii) the Market Price of a Share, subject to the next succeeding paragraph. The Issuer may not issue a fractional Share in payment of the Purchase Price. Instead the Issuer shall pay cash for the current market value of the fractional Share. The current market value of a fraction of a Share shall be determined, to the nearest 1/1,000th of a Share, by multiplying the Market Price by such fraction and rounding the product to the nearest whole cent. It is understood that if a Holder elects to have more than one Security purchased, the number of Shares shall be based on the aggregate amount of Securities to be purchased. The Issuer's right to exercise its election to purchase the Securities pursuant to Section 3.07 through the issuance of Shares shall be conditioned upon: (i) the Issuer's not having given its Issuer's Notice of an election to pay entirely in cash and its giving of a timely Issuer's Notice of election to purchase all or a specified percentage of the Securities with Shares as provided herein; (ii) the listing of the Shares to be issued in respect of the payment of the Purchase Price on the principal United States National Securities Exchange on which the Shares are then listed or quoted; (iii) the registration of the Shares to be issued in respect of the payment of the Purchase Price under the Securities Act and the Exchange Act, if required; and (iv) any necessary qualification or registration under applicable state securities laws or the availability of an exemption from such qualification and registration. 25 31 The Issuer may pay the Purchase Price (or any portion thereof) in Shares only if the information necessary to calculate the Market Price is published in a daily newspaper of national circulation. If the foregoing conditions are not satisfied with respect to a Holder or Holders prior to the close of business on the Purchase Date and the Issuer has elected to purchase the Securities pursuant to this Section 3.07 through the issuance of Shares, the Issuer shall pay the entire Purchase Price of the Securities of such Holder or Holders in cash. The "Market Price" means the average of the Sale Prices of the Shares for the five day trading period ending on the third trading day prior to the applicable Purchase Date, Change in Control Purchase Date or Conversion Date, as the case may be, appropriately adjusted to take into account the occurrence, during the period commencing on the first of such trading days during such five trading day period and ending on such Purchase Date, Change in Control Purchase Date or Conversion Date, as the case may be, of any event described in Section 11.06, 11.07 or 11.08; subject, however, to the conditions set forth in Sections 11.09 and 11.10. The "Sale Price" of the Shares on any date means the closing per Share sale price (or, if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices) on such date as reported in the composite transactions for the principal United States National Securities Exchange on which the Shares are then listed or quoted. (e) Notice. The Issuer's notice of whether it intends to pay the Purchase Price with cash or Shares or any combination thereof shall be sent to the Holders (and to beneficial owners as required by applicable law) in the manner provided herein (the "Issuer's Notice"). The Issuer's Notice shall be sent to Holders (and to beneficial owners as required by applicable law) not less than 20 Business Days prior to such Purchase Date (the "Issuer's Notice Date"). The Issuer's Notice shall state the manner of payment and shall contain the following information: In the event the Issuer has elected to pay the Purchase Price (or a specified percentage thereof) with Shares, the Issuer's Notice shall: (1) state that each Holder will receive Shares in respect of the specified percentage of the Purchase Price of the Securities held by such Holder (except any cash amount to be paid in lieu of fractional Shares); (2) state that the total number of Shares to be issued to Holders will be equal to the quotient obtained by dividing (i) the amount of cash to which the Securityholders would have been entitled had the Issuer elected to pay all or such specified percentage, as the case may be, of the Purchase Price of such Securities in cash by (ii) the Market Price of a Share; (3) set forth the method of calculating the Market Price of a Share; and (4) state that because the Market Price of a Share will be determined prior to the Purchase Date, Holders will bear the market risk with respect to the value of a Share to be received from the date such Market Price is determined to the Purchase Date. 26 32 In any case, each Issuer's Notice shall include a form of Purchase Notice to be completed by a Securityholder and shall state: (i) the Purchase Price and the Conversion Rate applicable on the Issuer's Notice Date; (ii) the name and address of the Paying Agent and the Conversion Agent; (iii) that Securities as to which a Purchase Notice has been given may be converted pursuant to Article 11 hereof only if the applicable Purchase Notice has been withdrawn in accordance with the terms of this Indenture; (iv) that Securities must be surrendered to the Paying Agent for cancellation to collect payment; (v) that the Purchase Price for any security as to which a Purchase Notice has been given and not withdrawn will be paid promptly following the later of the Purchase Date and the time of surrender of such Security as described in (iv); (vi) the procedures the Holder must follow to exercise rights under Section 3.08 and a brief description of those rights; (vii) briefly, the conversion rights of the Securities; (viii) the procedures for withdrawing a Purchase Notice (including, without limitation, for a conditional withdrawal pursuant to the terms of Section 3.07(a)(1)(D) or Section 3.09); (ix) that, unless the Issuer defaults in making payment of such Purchase Price, Original Issue Discount on Securities covered by any Purchase Notice, or interest (including Contingent Interest or Defaulted Interest), if any, will cease to accrue on and after the Purchase Date; and (x) the CUSIP number of the Securities, if applicable. At the Issuer's request, the Trustee shall give such Issuer's Notice in the name of the Issuer and at the Issuer's expense; provided, however, that, in all cases, the text of such Issuer's Notice shall be prepared by the Issuer. (f) Covenants of the Issuer and the Trust. All Shares delivered upon purchase of the Securities shall be newly issued Shares, shall be duly authorized, validly issued, fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim. The Issuer and the Trust (except in the event of a Share Separation Event) shall use their best efforts to list or cause to have quoted any Shares to be issued to purchase Securities on each United States National Securities Exchange or automated over-the-counter trading market in the United States on which the Shares are then listed or quoted. 27 33 (g) Procedure upon Purchase. The Issuer shall deposit cash (in respect of a cash purchase under Section 3.07(c) or for fractional interests, as applicable) or Shares, or a combination thereof, as applicable, at the time and in the manner as provided in Section 3.10, sufficient to pay the aggregate Purchase Price of all Securities to be purchased pursuant to this Section 3.07. As soon as practicable after the Purchase Date, the Issuer shall deliver to each Holder entitled to receive Shares through its stock transfer agent, a certificate for the number of Shares issuable in payment of the Purchase Price. The Person in whose name the certificate for Shares is registered shall be treated as a holder of record of Shares on the Business Day following the Purchase Date. Subject to Section 3.07(d), no payment or adjustment will be made for dividends on any Shares delivered in payment of the Purchase Price the record date for which occurred on or prior to the Purchase Date. (h) Taxes. If a Holder of a Security is paid in Shares, the Issuer shall pay any documentary, stamp or similar issue or transfer tax due on such issue of Shares. However, the Holder shall pay any such tax which is due because the Holder requests the Shares to be issued in a name other than the Holder's name. The Paying Agent may refuse to deliver the certificates representing the Shares being issued in a name other than the Holder's name until the Paying Agent receives a sum that the Issuer deems to be sufficient to pay any tax which will be due because the Shares are to be issued in a name other than the Holder's name. Nothing herein shall preclude any income tax withholding required by law or regulations. SECTION 3.08. Repurchase of Securities at Option of the Holder upon Change in Control. (a) General. If on or prior to _________, 20__ there shall have occurred a Change in Control, Securities shall be purchased by the Issuer, at a purchase price specified in the Securities (the "Change in Control Purchase Price"), as of a date that is not later than 35 Business Days after the occurrence of the Change in Control (the "Change in Control Purchase Date"), at the option of the Holder thereof, upon: (1) delivery to the Paying Agent by the Holder of a written notice of purchase (a "Change in Control Purchase Notice"), substantially in the form of Exhibit __ hereto, at any time until the close of business on the third Business Day prior to the Change in Control Purchase Date stating: (A) the certificate number of the Security which the Holder will deliver to be purchased, (B) the portion of the Principal Amount at Maturity of the Security which the Holder will deliver to be purchased, which portion must be in a Principal Amount at Maturity of $1,000 or integral multiples thereof, and (C) that such Security shall be purchased as of the Change in Control Purchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture, and (2) delivery of such Security to the Paying Agent for cancellation prior to, on or after the Change in Control Purchase Date (together with all necessary endorsements) at 28 34 the offices of the Paying Agent, such delivery being a condition to receipt by the Holder of the Change in Control Purchase Price therefor; provided, however, that such Change in Control Purchase Price shall be so paid pursuant to this Section 3.08 only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Change in Control Purchase Notice. The Issuer shall purchase from the Holder thereof, pursuant to this Section 3.08, a portion of a Security if the Principal Amount at Maturity of such portion is $1,000 or an integral multiple of $1,000 if so requested by the Holder. Provisions of this Indenture that apply to the purchase of all of a Security also apply to the purchase of such portion of such Security. Any purchase by the Issuer contemplated pursuant to the provisions of this Section 3.08 shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Change in Control Purchase Date and the time of delivery of the Security. Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Change in Control Purchase Notice contemplated by this Section 3.08(a) shall have the right to withdraw such Change in Control Purchase Notice at any time prior to the close of business on the Change in Control Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.09. The Paying Agent shall promptly notify the Issuer of the receipt by it of any Change in Control Purchase Notice or written notice of withdrawal thereof. A "Change in Control" shall be deemed to have occurred at such time as any of the following events shall occur: (i) any Person, including its Affiliates and associates, other than the Issuer, its Subsidiaries or its or their employee benefit plans, or an Excluded Person, files a Schedule TO (or any schedule, form or report under the Exchange Act) disclosing that such Person has become the direct or indirect beneficial owner of 50% or more of the voting power of the Shares or other Capital Stock into which the Shares are reclassified or changed; or (ii) there shall be consummated any Share exchange, consolidation or merger of the Issuer pursuant to which the Shares will be converted into cash, securities or other property, in each case other than a Share exchange, consolidation or merger of the Issuer in which the holders of the Shares immediately prior to the Share exchange, consolidation or merger of the Issuer have, directly or indirectly, at least a majority of the total voting power in the aggregate of all classes of Capital Stock of the continuing or surviving corporation immediately after the Share exchange, consolidation or merger. An "Excluded Person" is Barry S. Sternlicht or any of his Affiliates in which he beneficially owns more voting securities than any other Person. (b) Purchase with Cash. On each Change in Control Purchase Date, the Change in Control Purchase Price of Securities in respect of which a Change in Control Purchase Notice 29 35 pursuant to Section 3.08(a) has been given shall be paid by the Issuer with cash equal to the aggregate Change in Control Purchase Price of such Securities. (c) Notice of Change in Control. Within 15 Business Days after the occurrence of a Change in Control, the Issuer shall mail notice of the Change in Control (the "Change in Control Notice") by first-class mail to the Trustee and to each Holder (and to beneficial owners as required by applicable law). The Change in Control Notice shall be sent to Holders (and to beneficial owners as required by applicable law) not less than 35 Business Days prior to such Change in Control Purchase Date (the "Change in Control Notice Date"). The notice shall include a form of Change in Control Purchase Notice to be completed by the Securityholder and shall state: (1) briefly, the events causing a Change in Control and the date of such Change in Control; (2) the date by which the Change in Control Purchase Notice pursuant to this Section 3.08 must be given; (3) the Change in Control Purchase Date; (4) the Change in Control Purchase Price; (5) the name and address of the Paying Agent and the Conversion Agent; (6) the Conversion Rate applicable on the Change in Control Notice Date and any adjustments to the Conversion Rate; (7) that Securities as to which a Change in Control Purchase Notice has been given may be converted pursuant to Article 11 hereof only if the Change in Control Purchase Notice has been withdrawn in accordance with the terms of this Indenture; and (8) briefly, the procedures the Holder must follow to exercise rights under this Section 3.08. At the Issuer's request, the Trustee shall give such Change in Control Notice in the name of the Issuer and at the Issuer's expense; provided, however, that, in all cases, the text of such Change in Control Notice shall be prepared by the Issuer. (d) Procedure upon Purchase. The Issuer shall deposit cash at the time and in the manner as provided in Section 3.10, sufficient to pay the aggregate Change in Control Purchase Price of all Securities to be purchased pursuant to this Section 3.08. SECTION 3.09. Effect of Purchase Notice or Change in Control Purchase Notice. Upon receipt by the Paying Agent of the Purchase Notice or Change in Control Purchase Notice specified in Section 3.07(a) or Section 3.08(a) or 3.14(b), as applicable, the Holder of the Security in respect of which such Purchase Notice or Change in Control Purchase Notice, as the case may be, was given shall (unless such Purchase Notice or Change in Control Purchase Notice is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive solely 30 36 the Purchase Price or Change in Control Purchase Price, as the case may be, with respect to such Security. Such Purchase Price or Change in Control Purchase Price shall be paid to such Holder, subject to receipts of funds and/or securities by the Paying Agent, promptly following the later of (x) the Purchase Date, the Change in Control Purchase Date or the Trust Assumption Event Purchase Date, as the case may be, with respect to such Security (provided the conditions in Section 3.07(a) or Section 3.08(a) or 3.14(b), as applicable, have been satisfied) and (y) the time of delivery of such Security to the Paying Agent by the Holder thereof in the manner required by Section 3.07(a) or Section 3.08(a) or Section 3.14(e), as applicable. Securities in respect of which a Purchase Notice or Change in Control Purchase Notice, as the case may be, has been given by the Holder thereof may not be converted pursuant to Article 11 hereof on or after the date of the delivery of such Purchase Notice or Change in Control Purchase Notice, as the case may be, unless such Purchase Notice or Change in Control Purchase Notice, as the case may be, has first been validly withdrawn as specified in the following two paragraphs. A Purchase Notice or Change in Control Purchase Notice, as the case may be, may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent in accordance with the Purchase Notice or Change in Control Purchase Notice, as the case may be, at any time prior to the close of business on the Purchase Date or the Change in Control Purchase Date, as the case may be, specifying: (1) the certificate number of the Security in respect of which such notice of withdrawal is being submitted, (2) the Principal Amount at Maturity of the Security with respect to which such notice of withdrawal is being submitted, and (3) the Principal Amount at Maturity, if any, of such Security which remains subject to the original Purchase Notice or Change in Control Purchase Notice, as the case may be, and which has been or will be delivered for purchase or repurchase by the Issuer. A written notice of withdrawal of a Purchase Notice or Change in Control Purchase Notice may be in the form set forth in the preceding paragraph or may be in the form of (i) a conditional withdrawal contained in a Purchase Notice pursuant to the terms of Section 3.07(a)(1)(D) or (ii) a conditional withdrawal containing the information set forth in Section 3.07(a)(1)(D) and the preceding paragraph and contained in a written notice of withdrawal delivered to the Paying Agent as set forth in the preceding paragraph. There shall be no purchase of any Securities pursuant to Section 3.07 or 3.08 (other than through the issuance of Shares in payment of the Purchase Price), including cash in lieu of fractional shares if there has occurred (prior to, on or after, as the case may be, the giving, by the Holders of such Securities, of the required Purchase Notice or Change in Control Purchase Notice, as the case may be) and is continuing an Event of Default (other than a default in the payment of the Purchase Price or Change in Control Purchase Price, as the case may be, with respect to such Securities) and the Paying Agent shall promptly return to the respective Holders thereof any Securities (x) with respect to which a Purchase Notice or Change in Control Purchase Notice, as the case may be, has been withdrawn in compliance with this Indenture, or (y) held by it during the continuance of an Event of Default (other than a default in the payment 31 37 of the Purchase Price or Change in Control Purchase Price, as the case may be, with respect to such Securities) in which case, upon such return, the Purchase Notice or Change in Control Purchase Notice with respect thereto shall be deemed to have been withdrawn. SECTION 3.10. Deposit of Purchase Price or Change in Control Purchase Price. Prior to 11:00 a.m. (local time in The City of New York) on the Business Day following the Purchase Date or the Change in Control Purchase Date, as the case may be, the Issuer shall deposit with the Trustee or with the Paying Agent (or, if the Issuer or a Subsidiary of the Issuer is the Paying Agent, shall segregate and hold in trust) an amount of money (in immediately available funds if deposited on such Business Day) sufficient to pay the cash portion of the aggregate Purchase Price or Change in Control Purchase Price, as the case may be, of all the Securities or portions thereof which are to be purchased as of the Purchase Date or Change in Control Purchase Date, as the case may be, and shall instruct its stock transfer agent to deliver the number of Shares issuable in payment of the remaining portion of the aggregate Purchase Price. The Issuer shall promptly notify the Trustee in writing of the amount of any deposits of cash or deliveries of Shares made pursuant to this Section. SECTION 3.11. Securities Purchased or Repurchased in Part. Any Security which is to be purchased or repurchased only in part shall be surrendered at the office of the Paying Agent (with, if the Issuer or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Issuer and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Issuer shall execute and the Trustee shall authenticate and deliver to the Holder of such Security, without service charge, a new Security or Securities, of any authorized denomination as requested by such Holder in aggregate Principal Amount at Maturity equal to, and in exchange for, the portion of the Principal Amount at Maturity of the Security so surrendered which is not purchased. SECTION 3.12. Covenant to Comply With Securities Laws Upon Purchase or Repurchase of Securities. In connection with any offer to purchase or repurchase or purchase or repurchase of Securities under Section 3.07 or 3.08 hereof (provided that such offer or purchase or repurchase constitutes an "issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein, includes any successor provision thereto) under the Exchange Act at the time of such offer or purchase), the Issuer shall (i) comply with Rule 13e-4 and Rule 14e-1 under the Exchange Act, (ii) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, and (iii) otherwise comply with all Federal and state securities laws so as to permit the rights and obligations under Sections 3.07 and 3.08 to be exercised in the time and in the manner specified in Sections 3.07 and 3.08. SECTION 3.13. Repayment to the Issuer. The Trustee and the Paying Agent shall return to the Issuer any cash that remains unclaimed, together with interest or dividends, if any, thereon, held by them for the payment of the Purchase Price or Change in Control Purchase Price, as the case may be; provided, however, that to the extent that the aggregate amount of cash deposited by the Issuer pursuant to Section 3.10 exceeds the cash portion of the aggregate Purchase Price or Change in Control Purchase Price, as the case may be, of the Securities or portions thereof which the Issuer is obligated to purchase as of the Purchase Date or Change in Control Purchase Date, as the case may be, then on the Business Day following the Purchase 32 38 Date or Change in Control Purchase Date, as the case may be, the Trustee shall return any such excess to the Issuer. SECTION 3.14. Redemption or Repurchase Upon Trust Assumption Event. (a) By the Issuer or the Trust. If there shall have occurred a Trust Assumption Event, the Issuer or the Trust, at either the Issuer's or the Trust's option, may elect to redeem Securities in accordance with the provisions thereof and of this Indenture. If either the Issuer or the Trust elect to redeem Securities, it shall notify the Trustee in writing of the date of redemption (the "Trust Assumption Event Redemption Date"), which date shall be a date not later than 60 days after the effective date of the Trust Assumption Event, the Principal Amount at Maturity of Securities to be redeemed and the Trust Assumption Event Redemption Price. The Issuer or the Trust shall give notice to the Trustee provided for in this Section at least 30 days but not more than 60 days before the Trust Assumption Event Redemption Date unless the Trustee consents to a shorter period. Such notice shall be accompanied by an Officers' Certificate from the Issuer or the Trust to the effect that such redemption will comply with the conditions herein. If fewer than all the Securities are to be redeemed, the record date relating to such redemption shall be selected by the Issuer or the Trust and given to the Trustee, which record date shall be not fewer than 15 days after the date of notice to the Trustee. Any such notice may be canceled at any time prior to notice of such redemption being mailed to any Holder and shall thereby be void and of no effect. If fewer than all the Securities held in definitive form are to be redeemed, the Trustee shall select the Securities to be redeemed on a pro rata basis in accordance with the Principal Amounts at Maturity. The Trustee shall make the selection at least 30 days but no more than 60 days before the Trust Assumption Event Redemption Date from outstanding Securities not previously called for redemption. Securities and portions thereof that the Trustee selects shall be in Principal Amounts at Maturity of $1,000 or integral multiples of $1,000. Provisions of this Indenture that apply to Securities called for redemption also apply to portions of Securities called for redemption. The Trustee shall promptly notify the Issuer or the Trust of the Securities or portions thereof to be redeemed. If any Security selected for partial redemption is converted in part before termination of the conversion right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far as may be) to be the portion selected for redemption. Securities which have been converted during a selection of Securities to be redeemed shall be treated by the Trustee as outstanding for the purpose of such selection. At least 30 days but not more than 60 days before a Trust Assumption Event Redemption Date, the Issuer or the Trust shall mail a notice of redemption by first-class mail to each Holder of Securities to be redeemed at such Holder's registered address. The notice shall identify the Securities to be redeemed and shall state: (1) the Trust Assumption Event Redemption Date; (2) the Trust Assumption Event Redemption Price; 33 39 (3) the name and address of the Paying Agent; (4) that Securities called for redemption must be surrendered to the Paying Agent to collect the Trust Assumption Event Redemption Price; (5) that Holders who want to convert Securities must satisfy the requirements set forth therein and in this Indenture; (6) if fewer than all the outstanding Securities are to be redeemed, the certificate numbers and Principal Amounts at Maturity of the particular Securities to be redeemed; (7) that, unless the Issuer or Trust defaults in making payment of such Trust Assumption Event Redemption Price or the Paying Agent is prohibited from making such payment pursuant to the terms of this Indenture, Original Issue Discount on Securities (or portions thereof) called for redemption, or interest (including Contingent Interest and Defaulted Interest), if any, will cease to accrue on and after the Trust Assumption Event Redemption Date; (8) the CUSIP number, if any, printed on the Securities being redeemed; and (9) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Securities. At the Issuer's or the Trust's request, the Trustee shall give the notice of redemption in the Issuer's or the Trust's name and at the Issuer's or Trust's expense. In such event, the Issuer or the Trust shall provide the Trustee with the information required by this Section. Once notice of redemption is mailed, Securities called for redemption become due and payable on the Trust Assumption Event Redemption Date and at the Trust Assumption Event Redemption Price stated in the notice except for Securities which are converted in accordance with the terms of this Indenture. Upon surrender to the Paying Agent, such Securities shall be paid at the Trust Assumption Event Redemption Price stated in the notice. Failure to give notice or any defect in the notice to any Holder shall not affect the validity of the notice to any other Holder. (b) By the Holder. If there shall have occurred a Trust Assumption Event, Securities shall be purchased by the Trust at a purchase price specified in the Securities (the "Trust Assumption Event Purchase Price"), as of a date that is not later than 60 days after the date of the Trust Assumption Event (the "Trust Assumption Event Purchase Date"), at the option of Holder upon: (1) delivery to the Trustee by Holder of a Purchase Notice, substantially in the form of Exhibit ___ hereto, at any time until the close of business on the third Business Day prior to the Trust Assumption Event Purchase Date stating: (A) the certificate number of the Security which the Holder will deliver to be purchased, 34 40 (B) the portion of the Principal Amount at Maturity of the Security which the Holder will deliver to be purchased, which portion must be in a Principal Amount at Maturity of $1,000 or integral multiples thereof, and (C) that such Security shall be purchased as of the Trust Assumption Event Purchase Date pursuant to the terms and conditions specified in the Securities and in this Indenture, and (2) delivery of such Security to the Paying Agent for cancellation prior to, on or after the Trust Assumption Event Purchase Date (together with all necessary endorsements) at the offices of the Paying Agent, such delivery being a condition to receipt by the Holder of the Trust Assumption Event Purchase Price therefor; provided, however, that such Trust Assumption Event Purchase Price shall be so paid pursuant to this Section 3.14(b) only if the Security so delivered to the Paying Agent shall conform in all respects to the description thereof in the related Purchase Notice. The Trust shall purchase from the Holder thereof, pursuant to this Section 3.14(b), a portion of a Security if the Principal Amount at Maturity of such portion is $1,000 or an integral multiple of $1,000 if so requested by the Holder. Provisions of this Indenture that apply to the purchase of all of a Security also apply to the purchase of such portion of such Security. Any purchase by the Trust contemplated pursuant to the provisions of this Section 3.14(b) shall be consummated by the delivery of the consideration to be received by the Holder promptly following the later of the Trust Assumption Event Purchase Date and the time of delivery of the Security. Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the Purchase Notice contemplated by this Section 3.14(b) shall have the right to withdraw such Purchase Notice at any time prior to the close of business on the Trust Assumption Event Purchase Date by delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.09. The Paying Agent shall promptly notify the Trust of the receipt by it of any Purchase Notice or written notice of withdrawal thereof. (c) Purchase with Cash. On each Trust Assumption Event Redemption Date and Trust Assumption Event Purchase Date, the Trust Assumption Event Purchase Price of Securities in respect of which a notice of redemption pursuant to Section 3.14(a) or a Purchase Notice pursuant to Section 3.14(b) has been given, shall be paid by the Issuer or the Trust, as the case may be, with cash equal to the aggregate Trust Assumption Event Purchase Price of such Securities. (d) Notice of Trust Assumption Event. Within 15 days after the occurrence of a Trust Assumption Event, the Issuer or the Trust shall mail notice of the Trust Assumption Event (the "Trust Assumption Event Notice") by first-class mail to the Trustee and to each Holder (and to beneficial owners as required by applicable law). The Trust Assumption Event Notice shall be sent to Holders (and to beneficial owners as required by applicable law) not less than 35 days prior to such Trust Assumption Event Redemption Date or Trust Assumption Event Purchase 35 41 Date (the "Trust Assumption Event Notice Date"). The notice shall include a form of Purchase Notice to be completed by the Securityholder and shall state: (1) briefly, the events causing a Trust Assumption Event and the date of such Trust Assumption Event; (2) the date by which the Purchase Notice pursuant to this Section 3.14 must be given; (3) the Trust Assumption Event Redemption Date or Trust Assumption Event Purchase Date; (4) the Trust Assumption Event Purchase Price; (5) the name and address of the Paying Agent and the Conversion Agent; (6) the Conversion Rate applicable on the Trust Assumption Event Notice Date and any adjustments to the Conversion Rate; (7) that Securities as to which a Purchase Notice has been given may be converted pursuant to Article 11 hereof only if the Purchase Notice has been withdrawn in accordance with the terms of this Indenture; and (8) briefly, the procedures the Holder must follow to exercise rights under this Section 3.14(b). At the Issuer's or the Trust's request, the Trustee shall give such Trust Assumption Event Notice in the name of the Issuer or the Trust and at the Issuer's or the Trust's expense; provided, however, that, in all cases, the text of such Purchase Notice shall be prepared by the Issuer or the Trust. (e) Procedure upon Purchase. The Issuer or the Trust shall deposit cash at the time and in the manner as provided in Section 3.10, sufficient to pay the aggregate Trust Assumption Event Purchase Price of all Securities to be purchased pursuant to this Section 3.14. ARTICLE 4 COVENANTS SECTION 4.01. Payment of Securities. The Issuer shall promptly make all payments in respect of the Securities on the dates and in the manner provided in the Securities and in this Indenture. Such payments shall be considered made on the date due if on such date the Trustee or the Paying Agent holds, in accordance with this Indenture, money sufficient to make all payments with respect of the Securities then due and the Trustee or the Paying Agent, as the case may be, is not prohibited from paying such money to the Securityholders on that date pursuant to the terms of this Indenture. 36 42 SECTION 4.02. Financial Information; SEC Reports. At any time the Issuer is not subject to either Section 13 or 15(d) of the Exchange Act, the Issuer shall at the request of any Holder (or holders of Shares issued upon conversion of the Securities) provide to such Holder (or holders of such Shares) and any prospective purchaser designated by such Holders (or holders of such Shares), as the case may be, such information, if any, required by Rule 144A(d)(4) under the Securities Act. Further, the Issuer shall file with the Trustee, within 15 days after it files the same with the SEC, copies of its annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the SEC may by rules and regulations prescribe) which the Issuer is required to file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Issuer's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). The Issuer also shall comply with any other provisions of Trust Indenture Act Section 314(a). SECTION 4.03. Corporate Existence. The Issuer shall do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, material rights (charter and statutory) and material franchises (other than as contemplated by Section 5.01); provided, however, that the Issuer shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation of such rights or franchises is no longer desirable in the conduct of the business of the Issuer. SECTION 4.04. Restrictions on Liens. So long as any of the Securities are outstanding, the Issuer shall not pledge, mortgage or hypothecate, or permit to exist, and shall not cause, suffer or permit any Restricted Subsidiary to pledge, mortgage or hypothecate, or permit to exist, except in favor of the Issuer or any Subsidiary, any mortgage, pledge or other lien upon, any Principal Property at any time owned by it, to secure any indebtedness, without making effective provisions whereby the Securities shall be equally and ratably secured with any and all such indebtedness and with any other indebtedness thereby; provided, however, that this restriction shall not apply to or prevent the creation or existence of: (a) mortgages or other liens on any such property acquired, constructed or improved by the Issuer or a Restricted Subsidiary to secure or provide for the payment of any part of the purchase price of such property or the cost of such construction or improvement or any mortgage or other lien on any such property existing at the time of acquisition thereof; (b) any mortgage or other lien on any property of another company existing at the time it is acquired by merger, consolidation or acquisition of substantially all of its stock or its assets; (c) pledges or deposits to secure payment of workers' compensation or insurance premiums, or relating to tenders, bids, contracts (except contracts for the payment of money) or leases; 37 43 (d) pledges or liens in connection with tax assessments or other governmental charges, or as security required by law or governmental regulation as a condition to the transaction of any business or the exercise of any privilege or right; (e) pledges or liens to secure a stay of process in proceedings to enforce a contested liability, or required in connection with the institution of legal proceedings or in connection with any other order or decree in any such proceeding or in connection with any contest of any tax or other governmental charge, or deposits with a governmental agency entitling the Issuer or a Restricted Subsidiary to maintain self-insurance or to participate in other specified insurance arrangements; (f) mechanics', carriers', workmen's and other like liens; (g) encumbrances in favor of the U.S. Government to secure progress or advance payments; (h) mortgages, pledges or other liens securing any indebtedness incurred to finance the cost of property leased to the U.S. Government at a rental rate sufficient to pay the principal of and interest on such indebtedness; (i) mortgages or other liens securing indebtedness of a Restricted Subsidiary to the Issuer or to a Restricted Subsidiary; (j) mortgages, pledges or other liens affecting property securing indebtedness of a governmental authority issued to finance the cost of a pollution control program with respect to operations of the Issuer or a Restricted Subsidiary; (k) renewals, extensions and replacements of any permitted mortgage, lien, deposit or encumbrance, provided the amount secured is not increased; (l) mortgages or other liens on any such property existing on the date hereof; and (m) the creation of any other mortgage, pledge or other lien, if, after giving effect to the creation thereof, the total of (i) the aggregate principal amount of indebtedness of the Issuer and its Restricted Subsidiaries secured by all mortgages, pledges or other liens created under the provisions referred to in this clause (m), plus (ii) the aggregate amount of Capitalized Lease-Back Obligations of the Issuer and its Restricted Subsidiaries under the entire unexpired terms of all leases entered into in connection with sale and lease-back transactions which would have been precluded by the provision for limitations on such transactions described above, but for the satisfaction of the condition referred to in clause (ii) of the description of such provision, will not exceed an amount equal to 15% of Consolidated Net Tangible Assets. The lease of any property and rental obligations thereunder (whether or not involving a Sale and Lease-Back Transaction and whether or not capitalized) shall not be deemed to create a lien. The sale or other transfer of (a) timber of other natural resources in place for a period of time until, or in an amount such that, the purchaser will realize therefrom a specified amount of money (however determined) or a specified amount of such resources, or (b) any other interest in 38 44 property of the character commonly referred to as a "production payment", shall not be deemed to create a lien. SECTION 4.05. Sale and Leaseback Transaction. The Issuer shall not, and shall not permit any Restricted Subsidiary to, after the date hereof, enter into any arrangement with any Person providing for the leasing by the Issuer or any Restricted Subsidiary of any Principal Property now owned or hereafter acquired which has been or is to be sold or transferred by the Issuer or such Restricted Subsidiary to such Person with the intention of taking back a lease of such Principal Property (a "Sale and Leaseback Transaction"), unless (i) the Issuer or such Restricted Subsidiary applies or causes to be applied an amount equal to the greater of the fair value (as determined by the Board of Directors) of such Principal Property and the net proceeds of such sale or transfer, within 120 days of receipt thereof, to the retirement or prepayment of the Securities or of Funded Debt of the Issuer or any Restricted Subsidiary ranking equal in right of payment with the Securities or to the acquisition, construction, development or improvement of properties, facilities or equipment used for operating purposes which are, or upon such acquisition, construction, development or improvement will be, a Principal Property or a part thereof, or (ii) at the time of entering into such transaction, such Principal Property could have been subjected to a mortgage-securing indebtedness in a principal amount equal to the Capitalized Lease-Back Obligation with respect to such Principal Property under Section 4.04(m) without securing the Securities pursuant to Section 4.04. The foregoing restriction shall not apply to any Sale and Leaseback Transaction (i) between the Issuer and any Restricted Subsidiary or among Restricted Subsidiaries, (ii) which has a lease of less than three years in length, or (iii) entered into within 120 days after the later of the acquisition of such Principal Property or the completion of construction and commencement of full operation of such Principal Property. SECTION 4.06. Compliance Certificate. The Issuer shall deliver to the Trustee within 120 days after the end of each fiscal year of the Issuer an Officers' Certificate stating that in the course of the performance by the signers of their duties as Officers of the Issuer they would normally have knowledge of any Default and whether or not the signers know of any Default that occurred during such period. If they do, the certificate shall describe the Default, its status and what action the Issuer is taking or proposes to take with respect thereto. The Issuer also shall comply with Trust Indenture Act Section 314(a)(4). SECTION 4.07. Further Instruments and Acts. The Issuer shall execute and deliver to the Trustee such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. SECTION 4.08. Calculation of Original Issue Discount. The Issuer shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount of Original Issue Discount (including daily rates and accrual periods) accrued on the outstanding Securities as of the end of such year and (ii) such other specific information relating to such Original Issue Discount as the Issuer believes is then relevant under the Code. SECTION 4.09. Securities To Be Equally and Ratably Secured Under Pledge Agreement. (a) Until a Pledge Termination Event occurs, the Securities shall be entitled to the benefits of the Pledge Agreement as described and confirmed in the Notice of Pledge Agreement Entitlement, a form of which appears as Exhibit __ to this Indenture. 39 45 (b) At or prior to the original issuance of any Securities, unless a Pledge Termination Event has occurred, the Issuer will have delivered an executed Notice of Pledge Agreement Entitlement to the collateral agent under the Pledge Agreement and will have obtained a confirmation of receipt and approval, a form of which appears as Exhibit __ to this Indenture. (c) Until a Pledge Termination Event occurs, the Issuer will do all things necessary to extend the benefits of the Pledge Agreement to the Securities as provided in the Notice of Pledge Agreement Entitlement, including without limitation, executing, filing, registering or recording any instruments, documents, confirmations or notices and complying with the reasonable requests of the collateral agent. (d) The Issuer shall comply with the requirements of Section 314(d) of the Trust Indenture Act of 1939, as amended, to the extent applicable to the Securities and the Pledge Agreement. (e) Each Holder, by acceptance of a Security, and the Trustee acknowledge and agree that the benefits of the Pledge Agreement shall terminate upon a Pledge Termination Event, and that prior to a Pledge Termination Event, the collateral agent under the Pledge Agreement may release any part of the collateral under the Pledge Agreement without the consent of any Holder or the Trustee. (f) In the event that a Pledge Termination Event occurs as a result of a simultaneous refinancing of the Senior Credit Facility and such refinanced Indebtedness is secured by a lien on any of the assets or properties of the Issuer or any Guarantor, the Securities shall be secured equally and ratably so long as, and only for so long as, such other indebtedness is so secured. SECTION 4.10. Designation of Subsidiaries. The Issuer may at any time designate a Restricted Subsidiary as an Unrestricted Subsidiary and may at any time rescind the designation of an Unrestricted Subsidiary, except that: (a) the Issuer shall not designate a subsidiary as an Unrestricted Subsidiary if, upon the effectiveness of such designation, such subsidiary would own any Capital Stock of, or hold any Indebtedness of, any Restricted Subsidiary and (b) the Issuer shall not redesignate an Unrestricted Subsidiary as a Restricted Subsidiary unless (i) such Unrestricted Subsidiary has no outstanding liens on its properties that would be prohibited by Section 4.04 if created immediately after such Unrestricted Subsidiary was designated as a Restricted Subsidiary and (ii) such Unrestricted Subsidiary is not a party to any lease that would be prohibited by Section 4.05 if at the time such Unrestricted Subsidiary entered into such lease it was designated as a Restricted Subsidiary. 40 46 ARTICLE 5 SUCCESSOR COMPANIES SECTION 5.01. Merger and Consolidation. Except as otherwise contemplated by Section 11.21, the Issuer shall not consolidate with or merge with or into, or convey, transfer or lease its properties and assets as, or substantially as, an entirety to, any Person, unless: (i) the resulting, surviving or transferee Person (the "Successor Company") shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Issuer under the Securities and this Indenture; and (ii) immediately after giving effect to such transaction, no Default shall have occurred and be continuing. The Successor Company shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture. The predecessor Issuer in the case of a transfer or lease of its properties and assets as, or substantially as, an entirety shall be discharged from its obligations under the Securities and this Indenture, other than, in the event the predecessor Issuer is not the Successor Company, the predecessor Issuer's obligation to deliver Shares (or other property) upon conversion of the Securities in accordance with Article 11. ARTICLE 6 DEFAULTS AND REMEDIES SECTION 6.01. Events of Default. An "Event of Default" with respect to any series of a Security, occurs if: (1) the Issuer defaults in any payment of the Principal Amount at Maturity (or, if the Securities have been converted to semi-annual coupon notes following a Tax Event, the Restated Principal Amount), or premium, if any, Redemption Price, Purchase Price, Change in Control Purchase Price or Trust Assumption Event Purchase Price on such series when it becomes due and payable; (2) the Issuer defaults in the payment of interest (if the Issuer has exercised its option following a Tax Event to convert such series of Securities into semi-annual coupon notes) or Contingent Interest or liquidated damages on such series of Securities when such interest or Contingent Interest, if any, or liquidated damages becomes due and payable, and such default continues for a period of 30 days; (3) the Issuer fails to comply with any of its covenants or agreements contained in such series of Securities or this Indenture (other than those referred to in (1) or (2) above) and such failure continues for 60 days after the notice specified below; 41 47 (4) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Issuer, whether such Indebtedness or guarantee now exists, or is created after the date of this Indenture, which default results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of such Indebtedness, together with the principal amount of any other such Indebtedness the maturity of which has been so accelerated, aggregates $100 million or more and such acceleration continues for 30 days after the notice specified below; (5) the Issuer or, so long as there are any Guarantors, any Guarantor that constitutes a Significant Subsidiary of the Issuer pursuant to or within the meaning of any Bankruptcy Law: (A) commences a voluntary case; (B) consents to the entry of an order for relief against it in an involuntary case; (C) consents to the appointment of a Custodian of it or for any substantial part of its property; or (D) makes a general assignment for the benefit of its creditors or takes any comparable action under any foreign laws relating to insolvency; or (6) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (A) is for relief against the Issuer or, so long as there are any Guarantors, any Guarantor that constitutes a Significant Subsidiary of the Issuer or in an involuntary case; (B) appoints a Custodian of the Issuer or, so long as there are any Guarantors, any Guarantor that constitutes a Significant Subsidiary of the Issuer or for any substantial part of its property; or (C) orders the winding up or liquidation of the Issuer or, so long as there are any Guarantors, any Guarantor that constitutes a Significant Subsidiary of the Issuer or any similar relief is granted under any foreign laws and the order or decree remains unstayed and in effect for 60 days. The foregoing shall constitute Events of Default whatever the reason for any such Event of Default and whether it is voluntary or involuntary or is 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. An Event of Default with respect to any particular series of Securities issued under this Indenture does not necessarily constitute an Event of Default with respect to any other series of Securities issued under this Indenture. 42 48 The term "Bankruptcy Law" means Title 11, United States Code, or any similar Federal or state law for the relief of debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator, custodian or similar official under any Bankruptcy Law. A Default under clause (3) or (4) above is not an Event of Default until the Trustee or the Holders of at least 25% in Principal Amount at Maturity of the outstanding Securities notify the Issuer of the Default and the Issuer does not cure such Default within the time specified in clause (3) or (4), as the case may be, after receipt of such notice. Such notice must specify the Default, demand that it be remedied and state that such notice is a "Notice of Default." SECTION 6.02. Acceleration. If an Event of Default with respect to any series of Securities at the time outstanding (other than an Event of Default specified in Section 6.01(5) or (6) with respect to the Issuer) occurs and is continuing, the Trustee or the Holders of at least 25% in Principal Amount at Maturity of such outstanding series of Securities, by notice to the Issuer, may declare the Issue Price (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, the Restated Principal Amount) of and accrued Original Issue Discount (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, accrued but unpaid interest) and accrued Contingent Interest to the date of declaration on all such series of Securities to be immediately due and payable. Upon such a declaration, such Issue Price (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, the Restated Principal Amount) and Original Issue Discount (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, accrued but unpaid interest) and accrued Contingent Interest shall be due and payable immediately. If an Event of Default specified in Section 6.01(5) or (6) occurs, the Issue Price (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, the Restated Principal Amount) of and accrued Original Issue Discount (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, accrued but unpaid interest) and accrued Contingent Interest to the occurrence of such event on all such series of Securities shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder. The Holders of a majority in Principal Amount at Maturity of any series of Securities by notice to the Trustee may rescind an acceleration of such series and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default have been cured or waived with respect to such series except nonpayment of the Issue Price (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, the Restated Principal Amount) or Original Issue Discount (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, accrued but unpaid interest) or accrued Contingent Interest that has become due solely because of acceleration. No such rescission shall affect any subsequent Default or impair any right consequent thereto. SECTION 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of the Issue Price (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, the Restated Principal Amount) of or accrued Original 43 49 Issue Discount (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, accrued but unpaid interest) or accrued Contingent Interest on such series of Securities or to enforce the performance of any provision of such series of Securities or this Indenture. The Trustee may institute and maintain a suit or legal proceeding even if it does not possess any of such series of Securities or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Securityholder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative. SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in Principal Amount at Maturity of any series of Securities by notice to the Trustee may waive an existing Default of such series and its consequences except (i) a Default in the payment of the Issue Price (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, the Restated Principal Amount) of, accrued Original Issue Discount (or, if such series of Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event, accrued but unpaid interest) on or accrued Contingent Interest, or liquidated damages with respect to such series of Securities, (ii) a Default arising from the failure to purchase or repurchase any series of Securities when required pursuant to the terms of this Indenture, or (iii) a Default in respect of a provision that under Section 9.02 cannot be amended without the consent of each Securityholder affected. When a Default is waived, it is deemed cured, but no such waiver shall extend to any subsequent or other Default or impair any consequent right. SECTION 6.05. Control by Majority. The Holders of a majority in Principal Amount at Maturity of any outstanding series of Securities may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to Section 7.01, that the Trustee determines is unduly prejudicial to the rights of any other Holder or that would subject the Trustee to personal liability, unless the Trustee is offered indemnity reasonably satisfactory to it. SECTION 6.06. Limitation on Suits. Except as provided in Section 6.07, no Holder of any series of Securities may pursue any remedy with respect to this Indenture or such series of Securities unless: (1) the Holder previously gave the Trustee written notice stating that an Event of Default is continuing; (2) the Holders of at least 25%, in Principal Amount at Maturity of such outstanding series of Securities make a written request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to the Trustee reasonable security or indemnity satisfactory to the Trustee against any loss, liability or expense; 44 50 (4) the Trustee does not comply with the request within 60 days after receipt of the request and the offer of security or indemnity; and (5) the Holders of a majority in Principal Amount at Maturity of such outstanding series of Securities do not give the Trustee a direction inconsistent with the request during such 60-day period. A Securityholder may not use this Indenture to prejudice the rights of another Securityholder or to obtain a preference or priority over another Securityholder. SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of any series of Securities to receive payment of the Issue Price (or, if such series of Securities have been converted into semi-annual coupon notes, the Restated Principal Amount) of, and liquidated damages and accrued Original Issue Discount (or, if such series of Securities have been converted into semi-annual coupon notes, accrued but unpaid interest) and accrued Contingent Interest on, such series of Securities held by such Holder, on or after their Maturity, or to bring suit for the enforcement of any such payment on or after their Maturity or the right to convert such series of Securities as provided herein, shall not be impaired or affected without the consent of such Holder. SECTION 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Issuer for the whole amount then due and owing (together with interest on any unpaid interest (including Contingent Interest to the extent lawful) and the amounts provided for in Section 7.07. SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee and the Securityholders allowed in any judicial proceedings relative to any Issuer or any of its Subsidiaries, their creditors or their property and, unless prohibited by law or applicable regulations, may vote on behalf of the Holders in any election of a trustee in bankruptcy or other Person performing similar functions, and any Custodian in any such judicial proceeding is hereby authorized by each Holder to make payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and its counsel, and any other amounts due the Trustee under Section 7.07. SECTION 6.10. Priorities. If the Trustee collects any money or property pursuant to this Article 6, it shall pay out the money or property in the following order: FIRST: to the Trustee for amounts due under Section 7.07; SECOND: to Securityholders for amounts due and unpaid on any series of Securities for the Issue Price and accrued Original Issue Discount (or, if such series of Securities have been converted to semi-annual coupon notes following a Tax Event, the Restated Principal Amount and accrued interest) and accrued Contingent Interest, ratably, without preference or priority of any kind, according to the amounts due and payable on such series of Securities for 45 51 the Issue Price and accrued Original Issue Discount (or, if such series of Securities have been converted to semi-annual coupon notes following a Tax Event, the Restated Principal Amount and accrued interest) and accrued Contingent Interest; and THIRD: to the Issuer. The Trustee may fix a record date and payment date for any payment to Securityholders pursuant to this Section. At least 15 days before such record date, the Trustee shall mail to each Securityholder and the Issuer a notice that states the record date, the payment date and amount to be paid. SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing, by any party litigant in the suit, of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit by Holders of more than 10% in Principal Amount at Maturity of any series of Securities. SECTION 6.12. Waiver of Stay or Extension Laws. The Issuer (to the extent it may lawfully do so) shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law, wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE 7 TRUSTEE SECTION 7.01. Duties of Trustee. (a) If an Event of Default with respect to any series of Securities has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in its exercise thereof as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (1) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and 46 52 (2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of mathematical calculations or other facts stated therein). (c) The Trustee may not be relieved from liability for its own grossly negligent action, its own grossly negligent failure to act or its own willful misconduct, except that: (1) this paragraph does not limit the effect of paragraph (b) of this Section; (2) the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer unless it is proved that the Trustee was grossly negligent in ascertaining the pertinent facts; and (3) 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 6.05. (d) Every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section. (e) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Issuer. (f) Money held in trust by the Trustee need not be segregated from funds except to the extent required by law. (g) No provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers. (h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section and to the provisions of the Trust Indenture Act. SECTION 7.02. Rights of Trustee. (a) The Trustee may conclusively 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 the Officers' Certificate or Opinion of Counsel. (c) The Trustee may act through agents or attorneys and shall not be responsible for the misconduct or negligence of any agent or attorney appointed with due care. 47 53 (d) 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; provided, however, that the Trustee's conduct does not constitute willful misconduct or gross negligence. (e) The Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Securities shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel. (f) The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond, debenture, note or other paper or document. (g) The Trustee shall not be deemed to have notice of any Default or Event of Default with respect to any series of Securities, except Events of Default under Section 6.01(1) or (2), unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture. (h) The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other Person employed to act hereunder. SECTION 7.03. Individual Rights of Trustee. The Trustee in its commercial banking or any other capacity may become the owner or pledgee of Securities and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Trustee. Any Paying Agent, Registrar or co-paying agent may do the same with like rights. However, the Trustee must comply with Sections 7.10 and 7.11. SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Securities, it shall not be accountable for the Issuer's use of the proceeds from the Securities, and it shall not be responsible for any statement in this Indenture, in the Securities, or in any document executed in connection with the sale of the Securities, other than those set forth in the Trustee's certificate of authentication. SECTION 7.05. Notice of Defaults. If a Default with respect to any series of Securities occurs and is continuing and if it is actually known to a Trust Officer of the Trustee, the Trustee shall mail to each Securityholder of such series of Securities notice of the Default within 90 days after it occurs. Except in the case of a Default in payment of the Issue Price (or, if such series of Securities have been converted into semi-annual coupon notes, the Restated Principal Amount) of or accrued Original Issue Discount (or, if such series of Securities have been converted into semi-annual coupon notes, accrued interest) or any accrued Contingent Interest (including payments pursuant to the mandatory purchase or repurchase provisions of such series of Security, if any), the Trustee may withhold the notice if and so long as a 48 54 committee of its Trust Officers in good faith determines that withholding the notice is in the interests of Securityholders. SECTION 7.06. Reports by Trustee to Holder. As promptly as practicable after each _______ beginning with the _______ following the Closing Date, and in any event prior to _______ in each year, the Trustee shall mail to each Securityholder a brief report dated as of such _______ that complies with Section 313(a) of the Trust Indenture Act. The Trustee shall also comply with Section 313(b) of the Trust Indenture Act. A copy of each report at the time of its mailing to Securityholders shall be filed with the SEC and each stock exchange (if any) on which the Securities are listed. The Issuer agrees to notify promptly the Trustee whenever any series of Securities becomes listed on any stock exchange and of any delisting thereof. SECTION 7.07. Compensation and Indemnity. The Issuer shall pay to the Trustee from time to time such compensation for its services as the Issuer and the Trustee shall from time to time agree in writing. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall reimburse the Trustee upon request for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services. Such expenses shall include the reasonable compensation and expenses, disbursements and advances of the Trustee's agents, counsel, accountants and experts. The Issuer shall indemnify the Trustee against any and all loss, liability or expense (including reasonable attorneys' fees) incurred by or in connection with the administration of this trust and the performance of its duties hereunder. The Trustee shall notify the Issuer of any claim for which it may seek indemnity promptly upon obtaining actual knowledge thereof, provided, however, that any failure so to notify the Issuer shall not relieve the Issuer of its indemnity obligations hereunder. The Issuer need not reimburse any expense or indemnify against any loss, liability or expense incurred by an indemnified party through such party's own willful misconduct, gross negligence or bad faith. To secure the Issuer's payment obligations in this Section, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee other than money or property held in trust to make any payment on particular Securities. The Issuer's payment obligations pursuant to this Section shall survive the satisfaction or discharge of this Indenture, any rejection or termination of this Indenture under any bankruptcy law or the resignation or removal of the Trustee. When the Trustee incurs expenses after the occurrence of a Default specified in Section 6.01(5) or (6), the expenses are intended to constitute expenses of administration under the Bankruptcy Law. SECTION 7.08. Replacement of Trustee. The Trustee may resign at any time with respect to the Securities by so notifying the Issuer. The Holders of a majority in Principal Amount at Maturity of any series of Securities may remove the Trustee with respect to such series of Securities and may appoint a successor Trustee. The Issuer shall remove the Trustee if: (1) the Trustee fails to comply with Section 7.10; (2) the Trustee is adjudged bankrupt or insolvent; 49 55 (3) a receiver or other public officer takes charge of the Trustee or its property; or (4) the Trustee otherwise becomes incapable of acting. If the Trustee resigns, is removed by the Issuer or by the Holders of a majority in Principal Amount at Maturity of any series of Securities with respect to such series of Securities and such Holders do not reasonably promptly appoint a successor Trustee or if a vacancy exists in the office of Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Issuer shall promptly appoint a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Issuer. 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. The successor Trustee shall mail a notice of its succession to Securityholders. 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 7.07. If a successor Trustee does not take office within 30 days after the retiring Trustee resigns or is removed, the retiring Trustee or the Holders of 10% in Principal Amount at Maturity of such series of Securities that removed such Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee fails to comply with Section 7.10, any Securityholder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. Notwithstanding the replacement of the Trustee pursuant to this Section 7.08, the Issuer's obligations under Section 7.07 shall continue for the benefit of the retiring Trustee. SECTION 7.09. 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 or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Trustee. As promptly as practicable thereafter, the Trustee shall notify the Issuer of such succession. In case at the time such successor or successors by merger, conversion or consolidation to the Trustee shall succeed to the trusts created by this Indenture any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Securities so authenticated; and if at that time any of the Securities shall not have been authenticated, any such successor to the Trustee may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Securities or in this Indenture provided that the certificate of the Trustee shall have. SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all times satisfy the requirements of Trust Indenture Act Section 310(a). The Trustee shall have a combined capital and surplus of at least $100,000,000 as set forth in its most recent published 50 56 annual report of condition. The Trustee shall comply with Trust Indenture Act Section 310(b); provided, however, that there shall be excluded from the operation of Trust Indenture Act Section 310(b)(1) any indenture or indentures under which other securities or certificates of interest or participation in other securities of the Issuer are outstanding if the requirements for such exclusion set forth in Trust Indenture Act Section 310(b)(1) are met. SECTION 7.11. Preferential Collection of Claims Against Issuer. The Trustee shall comply with Trust Indenture Act Section 311(a), excluding any creditor relationship listed in Trust Indenture Act Section 311(b). A Trustee who has resigned or has been removed shall be subject to Trust Indenture Act Section 311(a) to the extent indicated. ARTICLE 8 DISCHARGE OF INDENTURE SECTION 8.01. Discharge of Liability on Securities. This Indenture shall cease to be of further effect, and the Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (a) either (1) all Securities theretofore authenticated and delivered (other than (A) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 2.08 and (B) Securities for whose payment money has theretofore been deposited with the Trustee in trust or segregated and held in trust by the Issuer and thereafter repaid to the Issuer or otherwise discharged from such trust as provided in Section 10.02) have been delivered to the Trustee for cancellation; or (2) all such Securities not theretofore delivered to the Trustee for cancellation have become due and payable, whether at Stated Maturity or upon any Redemption Date, Change in Control Purchase Date, Purchase Date or Conversion Date, and the Issuer has deposited or caused to be deposited with the Trustee, the Paying Agent or the Conversion Agent, as applicable, as trust funds in trust for the purpose an amount of money or securities sufficient to pay and discharge the entire Indebtedness evidenced by such Securities not theretofore delivered to the Trustee for cancellation; and (b) the Issuer has paid or caused to be paid all other sums payable hereunder by the Issuer. Notwithstanding clauses (a) and (b) above, the Issuer's obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 7.07, 7.08, 10.2 and, if money or securities shall have been deposited with the Trustee pursuant to subclause (2) of clause (a) of this Section 8.01, shall survive until the Securities have been paid in full. Thereafter, the Issuer's obligations in Section 7.07 shall survive. Notwithstanding clauses (a) and (b) above, the Issuer's and each Holder's obligations under Section 2.16 shall survive the satisfaction and discharge of the Indenture. SECTION 8.02. Application of Trust Money. The Trustee shall hold in trust all money deposited with it pursuant to Section 8.01. It shall apply the deposited money through the 51 57 Paying Agent and in accordance with this Indenture to the payment to the Persons entitled thereto. SECTION 8.03. Repayment to Issuer. Subject to any applicable abandoned property law, the Trustee and the Paying Agent shall pay to the Issuer upon written request any money or securities held by them that remains unclaimed for two years, and, thereafter, Securityholders entitled to the money or securities must look to the Issuer for payment as general creditors. ARTICLE 9 AMENDMENTS SECTION 9.01. Without Consent of Holders. The Issuer and the Trustee may amend this Indenture with respect to any series of Securities without notice to or consent of any Securityholder of such series of Securities: (1) to add to the covenants of the Issuer for the benefit of the Holders of such series of Securities or to surrender any right or power herein conferred upon the Issuer with respect to such series of Securities; (2) to provide for the assumption of the Issuer's obligations to Holders of such series of Securities in the case of a merger, consolidation, conveyance, transfer or lease pursuant to Article 5; (3) to comply with any requirements of the SEC in connection with the registration of such series of Securities under the Securities Act and qualifying, or maintaining the qualification of, this Indenture under the Trust Indenture Act; provided that such modification or amendment does not, in the good faith opinion of the Board of Directors and the Trustee, adversely affect the interests of the Securityholders of such series of Securities in any material respect; or (4) to cure any ambiguity or correct or supplement any defective provision contained in this Indenture; provided that such modification or amendment does not, in the good faith opinion of the Board of Directors and the Trustee, adversely affect the interests of the Securityholders of such series of Securities in any material respect. SECTION 9.02. With Consent of Holders. The Issuer and the Trustee may amend this Indenture with respect to any series of Securities without notice to any Securityholder of such series of Securities but either (i) with the written consent of the Securityholders of at least a majority in Principal Amount at Maturity of such series of Securities then outstanding or (ii) by the adoption of a resolution at a meeting of Securityholders that is approved by at least a majority in Principal Amount at Maturity of such series of Securities then outstanding represented at such meeting. However, without the consent of each Securityholder affected, an amendment may not: (1) change the Stated Maturity of any series of Securities; 52 58 (2) reduce the Principal Amount at Maturity, Restated Principal Amount, Issue Price, Redemption Price or Purchase Price (including Change in Control Purchase Price and Trust Assumption Event Purchase Price) on any series of Securities; (3) make any series of Security payable in money or securities other than that stated in such Security; (4) alter the manner of calculation or rate of accrual of Original Issue Discount or interest (including Contingent Interest) on any series of Securities or extend the time of payment of any interest of any such amount; (5) except as otherwise permitted or contemplated by Article 5 or 11, (i) adversely affect the right to require the Issuer to repurchase or purchase the Securities or (ii) adversely affect the right of any Securityholder to convert any series of Securities; (6) reduce the percentage in aggregate Principal Amount at Maturity of any series of Securities outstanding the consent of whose Holders is required to modify or amend this Indenture, or the consent of whose Holders is required to waive any past Default; or (7) impair the right to institute suit for the enforcement of any payment with respect to, or conversion of, any series of Securities. It shall not be necessary for the consent of the Holders of a series of Securities under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such consent approves the substance thereof. After an amendment under this Section becomes effective, the Issuer shall mail to all affected Securityholders a notice briefly describing such amendment. The failure to give such notice to all such Securityholders, or any defect therein, shall not impair or affect the validity of an amendment under this Section. SECTION 9.03. Compliance with Trust Indenture Act. Every amendment to this Indenture or the Securities shall comply with the Trust Indenture Act as then in effect. SECTION 9.04. Revocation and Effect of Consents and Waivers. A consent to an amendment or a waiver by a Holder of any series of Securities, shall bind the Holder and every subsequent Holder of such series of Securities or portion of such series of Securities, that evidences the same debt as the consenting Holder's Security even if notation of the consent or waiver is not made on such Security. However, any such Holder or subsequent Holder may revoke the consent or waiver as to such Holder's Security, or portion of such Security, if the Trustee receives the notice of revocation before the date the amendment or waiver becomes effective. After an amendment or waiver becomes effective, it shall bind every Securityholder of such series of Security. An amendment or waiver becomes effective once both (i) the requisite number of consents have been received by the Issuer or the Trustee and (ii) such amendment or waiver has been executed by the Issuer and the Trustee. The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Securityholders of any series of Securities entitled to give their consent or take any other action described above or required or permitted to be taken pursuant to this Indenture. If a record date is fixed, then notwithstanding the immediately preceding paragraph, those 53 59 Persons who were Securityholders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to give such consent or to revoke any consent previously given or to take any such action, whether or not such Persons continue to be Holders after such record date. No such consent shall be valid or effective for more than 120 days after such record date. SECTION 9.05. Notation on or Exchange of Securities. If an amendment changes the terms of any series of Securities, the Trustee may require the Holder of such Security to deliver it to the Trustee. The Trustee may place an appropriate notation on the Security regarding the changed terms and return it to the Holder. Alternatively, if the Issuer or the Trustee so determines, the Issuer in exchange for such Security shall issue and the Trustee shall authenticate a Security that reflects the changed terms. Failure to make the appropriate notation or to issue a new Security shall not affect the validity of such amendment. SECTION 9.06. Trustee to Sign Amendments. The Trustee shall sign any amendment authorized pursuant to this Article 9 if the amendment does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may but need not sign it. In signing such amendment the Trustee shall be entitled to receive indemnity satisfactory to it and to receive, and (subject to Section 7.01) shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that such amendment is authorized or permitted by this Indenture and that such amendment is the legal, valid and binding obligation of the Issuer, enforceable against it in accordance with its terms, subject to customary exceptions, and complies with the provisions hereof (including Section 9.03). SECTION 9.07. Waiver of Certain Conditions. The Issuer may in any particular instance, be excused from failing to comply with any term, provision or condition set forth in Section 4.02, 4.04 or 4.05, if before the time for such compliance the Holders of at least a majority in Principal Amount at Maturity of the outstanding Securities shall, by act of such Holders, either waive such compliance in such instance or generally waive compliance with such term, provision or condition but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Issuer, and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. The Issuer may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive compliance with any covenant or condition hereunder. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to waive any such compliance, whether or not such Holders remain Holders after such record date; provided that unless the Holders of at least a majority in Principal Amount at Maturity of the outstanding Securities affected shall have waived such compliance prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be canceled and of no further effect. 54 60 ARTICLE 10 SPECIAL TAX EVENT CONVERSION SECTION 10.01. Optional Conversion to Semi-annual Coupon Note Upon Tax Event. From and after (i) the date (the "Tax Event Date") of the occurrence of a Tax Event and (ii) the date the Issuer exercises its option set forth in this Section 10.01, whichever is later (the "Option Exercise Date"), at the option of the Issuer, interest in lieu of future Original Issue Discount shall accrue at the rate of ___% per annum on a restated principal amount per $1,000 original Principal Amount at Maturity with respect to the Securities (the "Restated Principal Amount") equal to the Issue Price plus Original Issue Discount accrued to the Option Exercise Date of the Securities, and shall be payable semi-annually on ________ and ________ of each year (each an "Interest Payment Date") to Holders of the Securities, of record at the close of business on May 1 and November 1 (each a "Regular Record Date") immediately preceding such Interest Payment Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months and will accrue from the most recent date on which interest has been paid or, if no interest has been paid, from the Option Exercise Date. Within 15 days of its exercise of the option set forth in this Section 10.01, the Issuer shall deliver a written notice of the Option Exercise Date by facsimile and first-class mail to the Trustee and by first-class mail to the Holders of any series of Securities for which the Issuer has exercised its option. From and after the Option Exercise Date, (i) the Issuer shall be obligated to pay at Stated Maturity, in lieu of the Principal Amount at Maturity of any series of Securities for which the Issue Price has exercised its option, the applicable Restated Principal Amount thereof and (ii) "Issue Price and accrued Original Issue Discount," "Issue Price plus Original Issue Discount" or similar words, as used herein, shall mean the applicable Restated Principal Amount plus accrued and unpaid interest (including Contingent Interest) with respect to any such series of Securities. Securities authenticated and delivered after the Option Exercise Date may, and shall if required by the Trustee, bear a notation in a form approved by the Trustee as to the conversion of such Securities to semi-annual coupon notes. In the event the Issuer exercises its option pursuant to this Section 10.01 to have interest in lieu of Original Issue Discount accrue on any series of Securities following a Tax Event, the Holder of such series of Securities shall be entitled on conversion into Shares to receive the same number of Shares such Holder would have received if the Issuer had not exercised such option. If the Issuer exercises such option, Securities surrendered for conversion during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date (except Securities to be redeemed purchased or repurchased on a date within such period) must be accompanied by payment of an amount equal to the interest (including Contingent Interest) thereon that the registered Holder is entitled to receive. Except where Securities surrendered for conversion must be accompanied by payment as described above, no interest on converted Securities shall be payable by the Issuer on any Interest Payment Date subsequent to the date of conversion. SECTION 10.02. Paying Agent To Hold Money in Trust. Prior to 11:00 a.m. (New York City time) on the Interest Payment Date, the Issuer shall deposit with the Paying Agent (or if the Issuer or a Subsidiary of the Issuer is acting as Paying Agent, segregate and hold in trust for the benefit of the Persons entitled thereto) a sum sufficient to pay interest (including 55 61 Contingent Interest, if any) when due. The Issuer shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Securityholders or the Trustee all money held by the Paying Agent for the payment of principal or interest on the Securities and shall notify the Trustee of any default by the Issuer in making any such payment. If the Issuer or a Subsidiary of the Issuer acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Issuer at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent. Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee. SECTION 10.03. Securityholder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Securityholders. If the Trustee is not the Registrar, the Issuer shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at least five Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Securityholders. SECTION 10.04. Payment of Interest; Interest Rights Preserved. (a) Interest (including Contingent Interest) on any series of Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Issuer maintained for such purpose. Each installment of interest on any Security shall be paid in same-day funds by transfer to an account maintained by the Holder located inside the United States, provided that with respect to any Holder, such Holder shall have furnished to the Paying Agent all required wire payment instructions no later than the related Regular Record Date, or if no such instructions have been furnished, by check payable to such Holder. In the case of a Global Security, interest payable on any Interest Payment Date will be paid to the Depositary, with respect to that portion of such Global Security held for its account by Cede & Co. for the purpose of permitting such party to credit the interest received by it in respect of such Global Security to the accounts of the beneficial owners thereof. (b) Except as otherwise specified with respect to any series of Securities, any interest (including Contingent Interest) on any Security that is payable, but is not punctually paid or duly provided for, within 30 days following any Interest Payment Date (herein called "Defaulted Interest", which term shall include any accrued and unpaid interest that has accrued on such defaulted amount in accordance with the paragraph of the Securities captioned "Interest"), shall forthwith cease to be payable to the registered Holder thereof on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Issuer, at its election in each case, as provided in clause (1) or (2) below: (1) The Issuer may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities are registered at the close of business on a date (the "Special Record Date") for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Issuer shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each series of Security and the date of the proposed payment (which shall not be less than 20 days after such notice is 56 62 received by the Trustee), and at the same time the Issuer 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 on or prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Issuer of such Special Record Date and, in the name and at the expense of the Issuer, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of such series of Securities at his address as it appears on the list of Securityholders maintained pursuant to this Indenture 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 shall be paid to the Persons in whose names such Securities are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2). (2) The Issuer may make payment of any Defaulted Interest on any series of Securities in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Issuer 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, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest (including Contingent Interest) accrued and unpaid, and to accrue, which were carried by such other Security. ARTICLE 11 CONVERSION SECTION 11.01. Conversion Privilege. Except as otherwise provided in this Article 11, a Holder of a Security may convert such Security into Shares at any time on or after ________, 20__ and before the close of business on ________, 20__ if one of the following conditions is satisfied: (a) the Sale Price per Share for at least 20 trading days in the period of 30 consecutive trading days ending on the last trading day of the calendar quarter preceding the calendar quarter in which the conversion occurs is more than the Conversion Percentage of the Accreted Conversion Price on such 30th day; (b) the Security has been called for redemption by the Issuer pursuant to Section 3.01; 57 63 (c) the respective credit ratings assigned to the Securities by both Moody's Investor Service, Inc. and Standard & Poor's Rating Group have been reduced below ba3 and BB, respectively, or the respective credit ratings assigned to the Securities are suspended or withdrawn or neither rating agency is rating the Securities; or (d) (i) a distribution of Capital Stock referred to in Section 11.07 occurs, (ii) a distribution referred to in Section 11.08 occurs or (iii) a Share Separation occurs. In the event the Issuer is a party to a consolidation, merger or binding share exchange pursuant to which the Shares would be converted into cash, securities or other property, a Holder of a Security may convert such Security at any time from and after the date which is 15 days prior to the date the Issuer announces the anticipated effective date of the transaction until 15 days after the actual effective date of such transaction. In the case of the foregoing clauses (d)(i), (ii) and (iii), the Issuer must notify the Holders of Security at least 20 days prior to the Ex-Dividend Date for such distribution. Once the Issuer has given such notice, Holders may surrender their Notes for conversion at any time thereafter until the earlier of the close of business on the Business Day prior to the Ex-Dividend Date or the Issuer's announcement that such distribution will not take place. If the Security is called for redemption, the Holder may convert it at any time before the close of business on the second Business Day immediately preceding the Redemption Date. A Security in respect of which a Holder has delivered a Purchase Notice or Change in Control Purchase Notice exercising the option of such Holder to require the Issuer to purchase such Security may be converted only if such Purchase Notice or Change in Control Purchase Notice is withdrawn in accordance with the terms of the Indenture. After ________, 20__, the Holders' right to convert Securities into Shares is subject to the Issuer's right to elect to instead pay such Holder the amount of cash set forth in the next succeeding sentence, in lieu of delivering such Shares; provided, however, that if an Event of Default (other than a default in a cash payment upon conversion of the Securities) shall have occurred and be continuing, the Issuer shall deliver Shares (and cash in lieu of fractional Shares) in accordance with this Article 11, whether or not the Issuer has delivered a notice pursuant to Section 3.03 or 11.02 to the effect that the Securities would be paid in cash. The amount of cash to be paid pursuant to Section 11.02 for each $1,000 of Principal Amount of a Security upon conversion shall be equal to the Market Price of Shares multiplied by the Conversion Rate in effect on such Conversion Date. Subject to the next preceding paragraph, the Issuer shall deliver through the Conversion Agent to Holders surrendering Securities as soon as practicable after the Conversion Date Shares issuable upon conversion of such Securities. The number of Shares issuable upon conversion of a Security per $1,000 of Principal Amount at Maturity thereof (the "Conversion Rate") shall be that set forth in the Securities, subject to adjustment as herein set forth. 58 64 A Holder may convert a portion of the Principal Amount at Maturity of a Security if the portion is $1,000 or an integral multiple of $1,000. Provisions of this Indenture that apply to conversion of all of a Security also apply to conversion of a portion of a Security. "Average Quoted Price" means the average of the Sale Prices of the Shares for the shorter of: (i) 30 consecutive trading days ending on the last full trading day prior to the Time of Determination with respect to the rights, warrants or options or distribution in respect of which the Average Quoted Price is being calculated, or (ii) the period (x) commencing on the date next succeeding the first public announcement of (a) the future issuance of rights, warrants or options or (b) the future distribution, in each case, in respect of which the Average Quoted Price is being calculated and (y) proceeding through the last full trading day prior to the Time of Determination with respect to the rights, warrants or options or distribution in respect of which the Average Quoted Price is being calculated (excluding days within such period, if any, which are not trading days), or (iii) the period, if any, (x) commencing on the later of (a) the date of this Indenture and (b) the date next succeeding the Ex-Dividend Time with respect to the next preceding issuance of rights, warrants or options or distribution, in each case, for which an adjustment is required by the provisions of Section 11.06(4), 11.07 or 11.08 and (y) proceeding through the last full trading day prior to the Time of Determination with respect to the rights, warrants or options or distribution in respect of which the Average Quoted Price is being calculated (excluding days within such period, if any, which are not trading days). In the event that the Ex-Dividend Time (or in the case of a subdivision, combination or reclassification, the effective date with respect thereto), with respect to a dividend, subdivision, combination or reclassification to which Section 11.06(1), (2), (3) or (5) applies, occurs during the period applicable for calculating "Average Quoted Price" pursuant to the definition in the preceding sentence, "Average Quoted Price" shall be calculated for such period in a manner determined by the Board of Directors to reflect the impact of such dividend, subdivision, combination or reclassification on the Sale Price of the Shares during such period. "Time of Determination" means the time and date of the earlier of (i) the determination of stockholders entitled to receive rights, warrants or options or a distribution, in each case, to which Section 11.07 or 11.08 applies and (ii) the time ("Ex-Dividend Time") immediately prior to the commencement of "ex-dividend" trading for such rights, warrants or options or distribution on the New York Stock Exchange or such other national or regional exchange or market on which the Shares are then listed or quoted. The term "trading day" means a day during which trading in securities generally occurs on the New York Stock Exchange or, if the applicable security is not listed on the New York Stock Exchange, on the Nasdaq National Market System, or if the applicable security is not quoted on the Nasdaq National Market System, on the principal other national or regional 59 65 securities exchange on which the applicable security is then listed or, if the applicable security is not listed on a national or regional securities exchange, on the principal other market on which the applicable security is then traded. SECTION 11.02. Conversion Procedure. To convert a Security a Holder must satisfy the requirements set forth herein and in the Securities. The date on which the Holder satisfies all those requirements is the conversion date (the "Conversion Date"). Except as otherwise provided below, the Issuer shall deliver to the Holder through the Conversion Agent as soon as practicable after the Conversion Date a certificate for the number of Shares issuable upon the conversion and cash in lieu of any fractional Share determined pursuant to Section 11.03. Within two Business Days following the Conversion Date, the Issuer shall deliver to the Holder, through the Conversion Agent, written notice of whether such Security shall be converted into Shares or paid in cash, unless the Issuer shall have delivered such notice previously pursuant to Section 3.03. If the Issuer shall have notified the Holder that all of such Security shall be converted into Shares, the Issuer shall deliver to the Holder through the Conversion Agent no later than the fifth Business Day following the Conversion Date a certificate for the number of Shares issuable upon the conversion and cash in lieu of any fractional share determined pursuant to Section 11.03. Except as provided in the proviso to the fifth paragraph of Section 11.01, if the Issuer shall have notified the Holder that all or a portion of such Security shall be paid in cash, the Issuer shall deliver to the Holder surrendering such Security the amount of cash payable with respect to such Security no later than the tenth Business Day following such Conversion Date, together with a certificate for the number of Shares issuable upon the conversion and cash in lieu of any fractional share determined pursuant to Section 11.03. Except as provided in the proviso to the fifth paragraph of Section 11.01, the Issuer may not change its election with respect to the consideration to be delivered upon conversion of a Security once the Issuer has notified the Holder in accordance with this paragraph. If Shares are delivered as consideration, then the Person in whose name the certificate representing the Shares issuable upon conversion is registered shall be treated as a stockholder of record on and after the Conversion Date; provided, however, that no surrender of a Security on any date when the stock transfer books of the Issuer shall be closed shall be effective to constitute the Person or Persons entitled to receive the Shares upon such conversion as the record holder or holders of such Shares on such date, but such surrender shall be effective to constitute the Person or Persons entitled to receive such Shares as the record holder or holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open; such conversion shall be at the Conversion Rate in effect on the date that such Security shall have been surrendered for conversion, as if the stock transfer books of the Issuer had not been closed. Upon conversion of a Security, such Person shall no longer be a Holder of such Security and such Security shall be cancelled and no longer Outstanding. No payment or adjustment will be made for dividends on, or other distributions with respect to, any Shares except as provided in this Article 11. On conversion of a Security, that portion of accrued Original Issue Discount (or interest, if the Issuer has exercised its option provided for in Section 10.01) attributable to the period from the Issue Date (or, if the Issuer has exercised the option provided for in Section 10.01, the later of (x) the date of such exercise and (y) the date on which interest was last paid) through the Conversion Date with respect to the converted Security and accrued Contingent Interest and accrued Defaulted Interest with respect to the converted Security shall not be cancelled, extinguished or forfeited, but rather shall be 60 66 deemed to be paid in full to the Holder thereof through delivery of the Shares (together with the cash payment, if any, in lieu of fractional Shares) in exchange for the Security being converted pursuant to the provisions hereof; and the fair market value of such Shares (together with any such cash payment in lieu of fractional Shares) shall be treated as delivered pro rata, to the extent thereof, first in exchange for Original Issue Discount (or interest, if the Issuer has exercised its option provided for in Section 10.01) and Contingent Interest accrued through the Conversion Date, and the balance, if any, of the fair market value of such Shares shall be treated as delivered in exchange for the Issue Price of the Security being converted pursuant to the provisions hereof. If the Holder converts more than one Security at the same time, the number of Shares issuable or the amount of cash paid upon the conversion shall be based on the total Principal Amount at Maturity of the Securities converted. If the last day on which a Security may be converted is a Legal Holiday in a place where the Conversion Agent is located, the Security may be surrendered to such Conversion Agent on the next succeeding day that is not a Legal Holiday. Upon surrender of a Security that is converted in part, the Issuer shall execute, and the Trustee shall authenticate and deliver to the Holder, a new Security in an authorized denomination equal in Principal Amount at Maturity to the unconverted portion of the Security surrendered. SECTION 11.03. Fractional Shares. The Issuer will not issue a fractional Share upon conversion of a Security. Instead, the Issuer will deliver cash for the current market value of the fractional Share. The current market value of a fractional Share shall be determined, to the nearest 1/1,000th of a Share, by multiplying the last reported sale price (determined as set forth in the definition of Market Price) on the last trading day prior to the Conversion Date by the fractional amount and rounding the product to the nearest whole cent. If the Holder converts more than one Security at the same time, the amount of cash paid for the current market value of the fractional Share upon the conversion shall be based on the total Principal Amount at Maturity of the Securities converted. SECTION 11.04. Taxes on Conversion. If a Holder converts a Security, the Issuer shall pay any documentary, stamp or similar issue or transfer tax due on the issue of Shares upon the conversion. However, the Holder shall pay any such tax which is due because the Holder requests the shares to be issued in a name other than the Holder's name. The Conversion Agent may refuse to deliver the certificates representing the Shares being issued in a name other than the Holder's name until the Conversion Agent receives a sum that the Issuer deems to be sufficient to pay any tax which will be due because the Shares are to be issued in a name other than the Holder's name. Nothing herein shall preclude any tax withholding required by law or regulations. SECTION 11.05. Issuer to Provide Stock. The Issuer and the Trust shall, prior to issuance of any Securities under this Article 11, and from time to time as may be necessary, reserve out of their authorized but unissued or treasury shares a sufficient number of Shares to permit the conversion of the Securities. 61 67 All Shares delivered upon conversion of the Securities shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable, and shall be free from preemptive rights and free of any lien or adverse claim. The Issuer and the Trust shall endeavor promptly to comply with all federal and state securities laws regulating the offer and delivery of Shares upon conversion of Securities, if any, including the addition of any and all restrictive legends that are required to appear on the face of the Shares, and shall list or cause to have quoted such Shares on each United States National Securities Exchange or in the automated over-the-counter market in the United States on which the Shares are then listed or quoted. SECTION 11.06. Adjustment for Change In Capital Stock. Subject to Section 11.21(d), if, after the Issue Date of the Securities, the Issuer or the Trust: (1) pays a dividend or makes a distribution on its Shares (or any component of the Shares) payable in Shares; (2) subdivides its outstanding Shares (or any component of the Shares) into a greater number of shares; (3) combines its outstanding Shares into a smaller number of shares; (4) pays a dividend or makes a distribution on its Shares payable in shares of its Capital Stock (other than Shares or rights, warrants or options for its Capital Stock); or (5) issues by reclassification of its Shares (or any component of the Shares) any shares of its Capital Stock (other than rights, warrants or options for its Capital Stock), then the Conversion Rate in effect immediately prior to such action shall be adjusted so that the Holder of a Security thereafter converted may receive the number of Shares and/or Capital Stock of the Issuer which such Holder would have owned immediately following such action if such Holder had converted the Security into Shares immediately prior to such action. The adjustment shall become effective immediately after the record date in the case of a dividend or distribution and immediately after the effective date in the case of a subdivision, combination or reclassification. If after an adjustment a Holder of a Security upon conversion of such Security may receive shares of two or more classes of Capital Stock, the Conversion Rate shall thereafter be subject to adjustment upon the occurrence of an action taken with respect to any such class of Capital Stock as is contemplated by this Article 11 with respect to the Shares, on terms comparable to those applicable to Shares in this Article 11. SECTION 11.07. Adjustment for Rights Issue. Subject to Section 11.21(d), if after the Issue Date of the Securities, the Issuer distributes any rights, warrants or options to all holders of Shares entitling them, for a period expiring within 60 days after the record date for such distribution, to subscribe for or purchase Shares at a price per share less than the Market 62 68 Price as of the Time of Determination, the Conversion Rate shall be adjusted, subject to the provisions of the last paragraph of this Section 11.07, in accordance with the formula R x (O + N) R' =------------------- O + (N x P)/M) where: R' = the adjusted Conversion Rate. R = the current Conversion Rate. O = the number of Shares outstanding on the record date for the distribution to which this Section 11.07 is being applied. N = the number of additional Shares offered pursuant to the distribution. P = the exercise price per share of such rights, warrants or options. (1) M = the Average Quoted Price. The Board of Directors shall determine fair market values for the purposes of this Section 11.07. The adjustment shall become effective immediately after the record date for the determination of shareholders entitled to receive the rights, warrants or options to which this Section 11.07 applies. If all the Shares subject to such rights, warrants or options have not been issued when such rights, warrants or options expire, then the Conversion Rate shall promptly be readjusted to the Conversion Rate which would then be in effect had the adjustment upon the issuance of such rights, warrants or options been made on the basis of the actual number of Shares issued upon the exercise of such rights, warrants or options. No adjustment shall be made under this Section 11.07 if the application of the formula stated above in this Section 11.07 would result in a value of R' that is equal to or less than the value of R. SECTION 11.08. Adjustment for Other Distributions. Subject to Section 11.21(d), if, after the Issue Date of the Securities, the Issuer distributes to all holders of Shares any of its assets or debt securities or any rights, warrants or options to purchase securities of the Issuer (including securities or cash, but excluding (x) distributions of Capital Stock referred to in Section 11.06 and distributions of rights, warrants or options referred to in Section 11.07 and (y) cash dividends or other cash distributions that are paid out of current net earnings or earnings retained in the business as shown on the books of the Issuer unless such cash dividends or other cash distributions are Extraordinary Cash Dividends), the Conversion Rate shall be adjusted, subject to the provisions of the last paragraph of this Section 11.08, in accordance with the formula: 63 69 R x M R' =-------- M - F where: R' = the adjusted Conversion Rate. R = the current Conversion Rate. M = the Average Quoted Price. F = the fair market value (on the record date for the distribution to which this Section 11.08 applies) of the assets or securities or rights, warrants or options to be distributed in respect of each Share in the distribution to which this Section 11.08 is being applied (including, in the case of cash dividends or other cash distributions giving rise to an adjustment, all such cash distributed concurrently). The Board of Directors shall determine fair market values for the purposes of this Section 11.08. The adjustment shall become effective immediately after the record date for the determination of shareholders entitled to receive the distribution to which this Section 11.08 applies. For purposes of this Section 11.08, the term "Extraordinary Cash Dividend" shall mean any cash dividend with respect to the Shares the amount of which exceeds on a per share basis 15% of the Sale Price of the Shares (20% from and after a Trust Assumption Event pursuant to Section 11.21) on the last trading day preceding the date of declaration by the Board of Directors of the cash dividend with respect to which this provision is being applied, then such cash dividend, shall be deemed to be an Extraordinary Cash Dividend and for purposes of applying the formula set forth above in this Section 11.08, the value of "F" shall be equal to the aggregate amount of such cash dividend. In making the determinations required above, the amount of cash dividends paid on a per Share basis shall be appropriately adjusted to reflect the occurrence during such period of any event described in Section 11.06. In the event that, with respect to any distribution to which this Section 11.08 would otherwise apply, the difference "M-F" as defined in the above formula is less than $1.00 or "F" is equal to or greater than "M", then the adjustment provided by this Section 11.08 shall not be made and in lieu thereof the provisions of Section 11.14 shall apply to such distribution. SECTION 11.09. When Adjustment May Be Deferred. No adjustment in the Conversion Rate need be made unless the adjustment would require an increase or decrease of at least 1% in the Conversion Rate. Any adjustments that are not made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article 11 shall be made to the nearest cent or to the nearest 1/1,000th of a share, as the case may be. 64 70 SECTION 11.10. When No Adjustment Required. No adjustment need be made for a transaction referred to in Section 11.06, 11.07, 11.08 or 11.14 if Securityholders are to participate in the transaction on a basis and with notice that the Board of Directors determines to be fair and appropriate in light of the basis and notice on which holders of Shares participate in the transaction. Such participation by Securityholders may include participation upon conversion provided that an adjustment shall be made at such time as the Securityholders are no longer entitled to participate. No adjustment need be made for rights to purchase Shares pursuant to an Issuer plan for reinvestment of dividends or interest. No adjustment need be made for a change in the par value or no par value of the Shares. To the extent the Securities become convertible pursuant to this Article 11 into cash, no adjustment need be made thereafter as to the cash. Interest (including Contingent Interest) will not accrue on the cash. SECTION 11.11. Notice of Adjustment. Whenever the Conversion Rate is adjusted, the Issuer shall promptly mail to Securityholders by first-class mail a notice of the adjustment. The Issuer shall file with the Trustee and the Conversion Agent such notice and a certificate from the Issuer's independent public accountants briefly stating the facts requiring the adjustment and the manner of computing it. The certificate shall be conclusive evidence that the adjustment is correct. Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to any such certificate except to exhibit the same to any Holder desiring inspection thereof. SECTION 11.12. Voluntary Increase. The Issuer from time to time may increase the Conversion Rate by any amount for any period of time. Whenever the Conversion Rate is increased, the Issuer shall mail to Securityholders by first-class mail and file with the Trustee and the Conversion Agent a notice of the increase. The Issuer shall mail the notice at least 15 days before the date the increased Conversion Rate takes effect. The notice shall state the increased Conversion Rate and the period it will be in effect. A voluntary increase of the Conversion Rate does not change or adjust the Conversion Rate otherwise in effect for purposes of Section 11.06, 11.07 or 11.08. SECTION 11.13. Notice of Certain Transactions. If: (1) the Issuer takes any action that would require an adjustment in the Conversion Rate pursuant to Section 11.06, 11.07 or 11.08 (unless no adjustment is to occur pursuant to Section 11.10); (2) there is a liquidation or dissolution of the Issuer; or (3) a Share Separation occurs; 65 71 then the Issuer shall mail to Securityholders by first-class mail and file with the Trustee and the Conversion Agent a notice stating the proposed record date for a dividend or distribution or the proposed effective date of a subdivision, combination, reclassification, consolidation, merger, binding share exchange, transfer, liquidation or dissolution. The Issuer shall file and mail the notice at least 20 days before such date. Failure to file or mail the notice or any defect in it shall not affect the validity of the transaction. SECTION 11.14. Reorganization of Issuer; Special Distributions. Subject to Section 11.21(d), if the Issuer is a party to a transaction subject to Section 5.01 (other than a transaction in which the Issuer is the Successor Company) or a binding share exchange which reclassifies or changes its outstanding Shares, the Person obligated to deliver securities, cash or other assets upon conversion of Securities shall enter into a supplemental indenture. If the issuer of securities deliverable upon conversion of Securities is an Affiliate of the Successor Company, that issuer shall join in the supplemental indenture. The supplemental indenture shall provide that the Holder of a Security may convert it into the kind and amount of securities, cash or other assets which such Holder would have received immediately after the consolidation, merger, binding share exchange, conveyance, transfer or lease if such Holder had converted the Security into Shares immediately before the effective date of the transaction, assuming (to the extent applicable) that such Holder (i) was not a constituent Person or an Affiliate of a constituent Person to such transaction; (ii) made no election with respect thereto; and (iii) was treated alike with the plurality of non-electing Holders. The supplemental indenture shall include provisions for adjustments which shall be as nearly equivalent as may be practical to the provisions for adjustments included in this Article 11. The Successor Company shall mail to Securityholders a notice briefly describing the supplemental indenture. In the event of a transaction subject to the last sentence of Section 5.01 in which the predecessor Issuer is not the Successor Company, the Securities shall remain convertible into Shares in accordance with this Article 11. If this Section 11.14 applies, neither Section 11.06 nor Section 11.07 applies. If the Issuer makes a distribution to all holders of Shares of any of its assets, or debt securities or any rights, warrants or options to purchase securities of the Issuer that, but for the provisions of the last paragraph of Section 11.08, would otherwise result in an adjustment in the Conversion Rate pursuant to the provisions of Section 11.08, then, from and after the record date for determining the holders of Shares entitled to receive the distribution, a Holder of a Security that converts such Security in accordance with the provisions of this Indenture shall upon such conversion be entitled to receive, in addition to the Shares into which the Security is convertible, the kind and amount of securities, cash or other assets comprising the distribution that such Holder would have received if such Holder had converted the Security into Shares immediately prior to the record date for determining the holders of Shares entitled to receive the distribution. 66 72 SECTION 11.15. Issuer Determination Final. Any determination that the Issuer or the Board of Directors must make pursuant to Section 11.03, 11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17 is conclusive in the absence of manifest error. SECTION 11.16. Trustee's Adjustment Disclaimer. The Trustee has no duty to determine when an adjustment under this Article 11 should be made, how it should be made or what it should be. The Trustee has no duty to determine whether a supplemental indenture under Section 11.14 need be entered into or whether any provisions of any supplemental indenture are correct. The Trustee shall not be accountable for and makes no representation as to the validity or value of any securities or assets issued upon conversion of Securities. The Trustee shall not be responsible for the Issuer's failure to comply with this Article 11. Each Conversion Agent shall have the same protection under this Section 11.16 as the Trustee. SECTION 11.17. Simultaneous Adjustments. In the event that this Article 11 requires adjustments to the Conversion Rate under more than one of Sections 11.06(4), 11.07 or 11.08, and the record dates for the distributions giving rise to such adjustments shall occur on the same date, then such adjustments shall be made by applying, first, the provisions of Section 11.06, second, the provisions of Section 11.08 and, third, the provisions of Section 11.07. SECTION 11.18. Successive Adjustments. After an adjustment to the Conversion Rate under this Article 11, any subsequent event requiring an adjustment under this Article 11 shall cause an adjustment to the Conversion Rate as so adjusted. SECTION 11.19. Rights Issued in Respect of Shares Issued Upon Conversion. Each Share issued upon conversion of Securities pursuant to this Article 11 shall be entitled to receive the appropriate number of common stock or preferred stock purchase rights, as the case may be (the "Rights"), if any, and the certificates representing the Shares issued upon such conversion shall bear such legends, if any, in each case as may be provided by the terms of any rights agreement adopted by the Issuer, as the same may be amended from time to time (in each case, a "Rights Agreement"). Provided that such Rights Agreement requires that each Share issued upon conversion of Securities at any time prior to the distribution of separate certificates representing the Rights be entitled to receive such Rights, then, notwithstanding anything else to the contrary in this Article 11, there shall not be any adjustment to the Conversion Rate as a result of the issuance of Rights, the distribution of separate certificates representing the Rights, the exercise or redemption of such Rights in accordance with any such Rights Agreement, or the termination or invalidation of such Rights. SECTION 11.20. Restriction on Shares Issued Upon Conversion. Shares to be issued upon conversion of Securities prior to the effectiveness of a Shelf Registration shall be physically delivered in certificated form to the holders converting such Securities and the certificate representing such Shares shall bear a legend substantially to the following effect: "THE SECURITY EVIDENCED HEREBY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR 67 73 OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER, (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED, TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE." unless removed in accordance with Section 11.20(b). (a) If (i) Shares to be issued upon conversion of a Security prior to the effectiveness of a Shelf Registration are to be registered in a name other than that of the holder of such Security or (ii) Shares represented by a certificate bearing the above legend are transferred subsequently by such holder, then, unless the Shelf Registration has become effective and such shares are being transferred pursuant to the Shelf Registration, the holder must deliver to the transfer agent for the Shares a certificate in substantially the form of Exhibit __ as to compliance with the restrictions on transfer applicable to such Shares and neither the transfer agent nor the registrar for the Shares shall be required to register any transfer of such Shares not so accompanied by a properly completed certificate. (b) Except in connection with a Shelf Registration, if certificates representing Shares are issued upon the registration of transfer, exchange or replacement of any other certificate representing Shares bearing the above legend, or if a request is made to remove such legend from certificates representing Shares, the certificates so issued shall bear the above legend, or the above legend shall not be removed, as the case may be, unless there is delivered to the Issuer such satisfactory evidence, which, in the case of a transfer made pursuant to Rule 144 under the Securities Act, may include an opinion of counsel, as may be reasonably required by 68 74 the Issuer, that neither the legend nor the restrictions on transfer set forth therein are required to ensure that transfers thereof comply with the provisions of Rule 144A, Rule 144 or Regulation S under the Securities Act or that such Shares are securities that are not "restricted" within the meaning of Rule 144 under the Securities Act. Upon provision to the Issuer of such reasonably satisfactory evidence, the Issuer shall cause the transfer agent for the Shares to countersign and deliver certificates representing Shares that do not bear the legend. SECTION 11.21. Conversion Adjustments Upon Share Separation. (a) Notwithstanding anything to the contrary contained in this Article 11, but subject to Section 11.21(b), in the event of a transaction as a result of which the Corporation Shares trade on a United States National Securities Exchange separately from the Class B Shares, whether or not the Class B Shares continue to trade on any United States National Securities Exchange (a "Share Separation"), the Securities shall not be convertible into Shares, but shall instead be convertible solely into Corporation Shares. Upon the occurrence of a Share Separation, the Conversion Rate of the Securities shall be adjusted and shall equal the Conversion Rate in effect on the Business Day immediately prior to the effective date of the Share Separation multiplied by a percentage equal to one hundred percent minus the Trust Percentage. The "Trust Percentage" shall mean a fraction, the numerator of which shall equal the aggregate value of all Class B Shares outstanding immediately after the Share Separation and the denominator of which shall equal the sum of (i) the aggregate value of all such Class B Shares and (ii) the aggregate value of all the Corporation Shares outstanding immediately after the Share Separation. The aggregate value of the Corporation Shares and the Class B Shares shall be based on the average closing prices on the applicable principal trading market of the Corporation Shares of the Class B Shares, as the case may be, over the first five consecutive trading days after the effective date of the Share Separation; provided that if the Class B Shares are not then traded on a United States National Securities Exchange, the aggregate value of the Class B Shares shall be determined in the good faith of the Board of Directors based upon the valuation opinion of a nationally recognized investment bank. (b) In the event ( a "Trust Assumption Event") that (i) a Share Separation occurs, (ii) the Trust Percentage, as determined pursuant to Section 11.21(a), is greater than 50% and (iii) a Rating Event occurs, then the Trust shall expressly assume, by a supplemental indenture, executed and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of the Issuer under the Securities and this Indenture and the Securities shall be convertible solely into Class B Shares. Upon the occurrence of a Trust Assumption Event and the execution of such supplemental indenture, the Trust shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture, and the predecessor Issuer shall be discharged from all of its obligations under the Securities and this Indenture. Upon the occurrence of a Trust Assumption Event, the Conversion Rate of the Securities shall be adjusted and shall equal the Conversion Rate in effect on the Business Day immediately prior to the effective date of the Share Separation multiplied by the Trust Percentage, as determined pursuant to Section 11.21(a). A "Rating Event" means that after the first public announcement by the Issuer of a Share Separation and before the effective date of such Share Separation, either Moody's Investor Service, Inc. or Standard & Poor's Rating Group (or, in either case, if such Person ceases to rate the Securities for reasons outside the control of the Issuer, any other "nationally recognized statistical rating agency organization" (within the meaning of Rule 15c3- 69 75 1(c)(2)(vi)(F) under the Exchange Act) selected by the Issuer as a replacement agency) rates the long-term senior debt of the Issuer below the rating of the Securities in effect immediately prior to such public announcement. (c) In the event that a Share Separation occurs, Holders of Securities shall not be entitled to convert their Securities into Shares for the period beginning on the record date for such Share Separation and ending on the first Business Day succeeding the first five consecutive trading days after the effective date of such Share Separation. (d) In the event that a transaction constituting a Share Separation or a Trust Assumption Event occurs that would require an adjustment of the Conversion Rate pursuant to the provisions of this Article 11, the Conversion Rate shall not be adjusted other than as described in Sections 11.21(a) and (b), as the case may be. ARTICLE 12 SECURITY GUARANTEE SECTION 12.01. Guarantee. (a) Subject to this Article 12, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Securities or the obligations of the Issuer hereunder or thereunder, that: (a) the Issue Price of and accrued Original Issue Discount (or interest, if the Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event) and Contingent Interest and Defaulted Interest, if any, on the Securities will be promptly paid in full when due, whether at maturity, by acceleration, redemption, purchase or otherwise, and interest on the overdue principal of and interest (including Contingent Interest) on the Securities, if any, if lawful, and all other obligations of the Issuer to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Securities or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. (b) The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Securities or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Securities with respect to any provisions hereof or thereof, the recovery of any judgment against the Issuer, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Issuer, any right to require a proceeding first against the 70 76 Issuer, protest, notice and all demands whatsoever and covenant that its guarantee shall not be discharged except by complete performance of the obligations contained in the Securities and this Indenture. (c) If any Holder or the Trustee is required by any court or otherwise to return to the Issuer, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Issuer or the Guarantors, any amount paid by either to the Trustee or such Holder, the guarantee of the Guarantors, to the extent theretofore discharged, shall be reinstated in full force and effect. (d) Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders of Securities in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders of Securities, respectively, and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of its guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by such Guarantor for the purpose of its guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. SECTION 12.02. Limitation on Guarantor Liability. Each Guarantor, and by its acceptance of Securities, each Holder, hereby confirms that it is the intention of all such parties that the guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to such guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 12, result in the obligations of such Guarantor under its guarantee not constituting a fraudulent transfer or conveyance. SECTION 12.03. Delivery of Guarantee. (a) To evidence its guarantee set forth in Section 12.01, each Guarantor hereby agrees that the Securities shall bear a notation stating that such Securities are guaranteed by the Guarantors in accordance with this Article 12 and may be released upon the terms and conditions set forth in this Indenture. 71 77 (b) Each Guarantor hereby agrees that its guarantee set forth in Section 12.01 shall remain in full force and effect notwithstanding any failure to endorse on each Security a notation of such guarantee. (c) If an officer of a Guarantor whose signature is on this Indenture no longer holds that office at the time the Trustee authenticates the Security, such guarantee shall be valid nevertheless. (d) The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the guarantees set forth in this Indenture on behalf of the Guarantors. (e) In the event that the Issuer creates or acquires any new Subsidiaries subsequent to the date of this Indenture and such Subsidiaries become guarantors under the Senior Credit Facility, then the Issuer shall cause such Subsidiaries to become Guarantors under this Indenture and to execute a supplemental indenture to this Indenture. SECTION 12.04. Guarantors May Consolidate, etc. on Certain Terms. (a) Except as otherwise provided in Section 12.05, no Guarantor may consolidate with or merge with or into (unless such Guarantor is the surviving Person) another Person whether or not affiliated with such Guarantor unless: (i) subject to Section 12.05 hereof, the Person formed by or surviving any such consolidation or merger unconditionally assumes all the obligations of such Guarantor, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Securities and the Indenture on the terms set forth herein or therein; and (ii) immediately after giving effect to such transaction, no Default or Event of Default exists. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor and such predecessor Guarantor shall be discharged from its obligations under the Securities and this Indenture. (b) Except as set forth in Articles 4 and 5 hereof, and notwithstanding clause (a) above, nothing contained in this Indenture or in any of the Securities shall prevent any consolidation or merger of a Guarantor with or into the Issuer or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Issuer or another Guarantor. SECTION 12.05. Release. 72 78 (a) To the extent that a Guarantor is released as a guarantor under the Senior Credit Facility or the Senior Credit Facility is refinanced without such Guarantor being a guarantor under the new credit facility or in the event the Senior Credit Facility is otherwise terminated, then such Guarantor (in the event of a termination of the Senior Credit Facility, all Guarantors) will be released and relieved of any obligations under its guarantee to the same extent that such Guarantor was released and relieved of any obligations under the Senior Credit Facility. Upon delivery by the Issuer to the Trustee of an Officers' Certificate to the effect that such release has occurred in accordance with the provisions of this Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its guarantee. (b) Any Guarantor not released from its obligations under its guarantee shall remain liable for the full amount of the Principal Amount at Maturity (or, if such Securities have been converted to semi-annual coupon notes following the occurrence of a Tax Event, Restated Principal Amount) and Original Issue Discount (or interest, if the Securities have been converted into semi-annual coupon notes following the occurrence of a Tax Event) and Contingent Interest and Defaulted Interest, if any, on the Securities and for the other obligations of any Guarantor under this Indenture as provided in this Article 12. ARTICLE 13 MISCELLANEOUS SECTION 13.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with another provision which is required to be included in this Indenture by the Trust Indenture Act, the required provision shall control. SECTION 13.02. Notices. Any notice or communication shall be in writing and delivered in person or mailed by first-class mail (registered or certified, return receipt requested), telecopier or overnight air courier guaranteeing next day delivery, addressed as follows: If to the Issuer: Starwood Hotels & Resorts Worldwide, Inc. 1111 Westchester Avenue White Plains, New York 10604 Telecopy No.: (914) 640-8260 Attention: General Counsel 73 79 If to the Trustee: For payment, registration of transfer and exchange of the Securities: The Issuer or the Trustee by notice to the other may designate additional or different addresses for subsequent notices or communications. Notices to the Trustee shall be effective only upon receipt. Any notice or communication mailed to a Securityholder shall be mailed to the Securityholder at the Securityholder's address as it appears on the registration books of the Registrar and shall be sufficiently given if so mailed within the time prescribed. Failure to mail a notice or communication to a Securityholder or any defect in it shall not affect its sufficiency with respect to other Securityholders. If a notice or communication is given in the manner provided above, it is duly given, whether or not the addressee receives it. SECTION 13.03. Communication by Holders with Other Holders. Securityholders may communicate pursuant to Trust Indenture Act Section 312(b) with other Securityholders with respect to their rights under this Indenture or the Securities. The Issuer, the Trustee, the Registrar and anyone else shall have the protection of Trust Indenture Act Section 312(c). SECTION 13.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Issuer to the Trustee to take or refrain from taking any action under this Indenture, the Issuer shall furnish to the Trustee: (1) an Officers' Certificate of the Issuer in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of the signers, all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with; and (2) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee stating that, in the opinion of such counsel, all such conditions precedent have been complied with. Section 13.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a covenant or condition provided for in this Indenture shall include: (1) a statement that the individual making such certificate or opinion has read such covenant or condition; 74 80 (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether or not, in the opinion of such individual, such covenant or condition has been complied with. SECTION 13.06. When Securities Disregarded. In determining whether the Holders of the required Principal Amount at Maturity of Securities have concurred in any direction, waiver or consent, Securities owned by the Issuer, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Issuer, shall be disregarded and deemed not to be outstanding, except that, for the purpose of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Securities which the Trustee knows are so owned shall be so disregarded. Subject to the foregoing, only Securities outstanding at the time shall be considered in any such determination. SECTION 13.07. Rules by Trustee, Paying Agent and Registrar. The Trustee may make reasonable rules for action by or a meeting of Securityholders. The Registrar and the Paying Agent may make reasonable rules for their functions. SECTION 13.08. Legal Holidays. A "Legal Holiday" is a Saturday, Sunday or other day on which banking institutions in the State of New York are authorized or required by law to close. If a payment date is a Legal Holiday, payment shall be made on the next succeeding day that is not a Legal Holiday, and no interest shall accrue for the intervening period. If a regular record date is a Legal Holiday, the record date shall not be affected. SECTION 13.09. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. SECTION 13.10. No Recourse Against Others. A director, officer, employee or stockholder, as such, of the Issuer shall not have any liability for any obligations of the Issuer under the Securities or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a Security, each Securityholder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issuance of the Securities. SECTION 13.11. Successors. All agreements of the Issuer in this Indenture and the Securities shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. SECTION 13.12. Multiple Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. One signed copy of the Indenture is enough to prove this Indenture. 75 81 SECTION 13.13. Table of Contents; Headings. The table of contents, cross-reference sheet and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not intended to be considered a part hereof and shall not modify or restrict any of the terms or provisions hereof. SECTION 13.14. Severability. If any provision in this Indenture is deemed unenforceable, it shall not affect the validity or enforceability of any other provision set forth herein, or of the Indenture as a whole. [Rest of page intentionally left blank] 76 82 IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed as of the date first written above. STARWOOD HOTELS & RESORTS WORLDWIDE, INC. By: ------------------------------------ Name: Title: , as Trustee ------------------------- By: ------------------------------------ Name: Title: 77 83 EXHIBIT A [FORM OF FACE OF SECURITY] FOR PURPOSES OF SECTION 1272, 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS BEING ISSUED WITH ORIGINAL ISSUE DISCOUNT; FOR EACH $1,000 PRINCIPAL AMOUNT OF THIS SECURITY, THE ISSUE PRICE IS $_____. THE AMOUNT OF ORIGINAL ISSUE DISCOUNT IS $_____, THE ISSUE DATE IS _______, 20__ AND THE YIELD TO MATURITY IS ___% PER ANNUM. IN ADDITION, THIS SECURITY IS SUBJECT TO REGULATIONS GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS. UNDER SUCH REGULATIONS, THE COMPARABLE YIELD OF THIS SECURITY IS ___%, AND THE PROJECTED PAYMENT SCHEDULE IS ATTACHED AS EXHIBIT __ TO THE INDENTURE. A HOLDER OF SECURITIES MAY ALSO OBTAIN THE PROJECTED PAYMENT SCHEDULE BY SUBMITTING A WRITTEN REQUEST TO THE ISSUER AT THE FOLLOWING ADDRESS: STARWOOD HOTELS & RESORTS WORLDWIDE, INC., 1111 WESTCHESTER AVENUE, WHITE PLAINS, NEW YORK 10604, ATTENTION: GENERAL COUNSEL. THE ISSUER AGREES, AND BY ACCEPTANCE OF A BENEFICIAL INTEREST IN THE SECURITY, EACH BENEFICIAL OWNER OF ALL OR ANY PORTION OF THE SECURITY EVIDENCED HEREBY WILL BE DEEMED TO HAVE AGREED, FOR UNITED STATES FEDERAL INCOME TAX PURPOSES (1) TO TREAT THE SECURITY AS INDEBTEDNESS THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE "CONTINGENT DEBT REGULATIONS") AND, FOR PURPOSES OF THE CONTINGENT DEBT REGULATIONS, TO TREAT, WITHOUT LIMITATION, THE AMOUNT OF CASH AND THE FAIR MARKET VALUE OF ANY SHARES BENEFICIALLY RECEIVED UPON A CONVERSION OF THE SECURITY AS A CONTINGENT PAYMENT AND (2) TO BE BOUND BY THE ISSUER'S DETERMINATION OF THE "COMPARABLE YIELD" AND "PROJECTED PAYMENT SCHEDULE", WITHIN THE MEANING OF THE CONTINGENT DEBT REGULATIONS, WITH RESPECT TO THE SECURITY. [INCLUDE IF SECURITY IS A RESTRICTED SECURITY - THE SECURITY EVIDENCED HEREBY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (1)(a) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED A-1 84 IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A UNDER THE SECURITIES ACT, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT, OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE ISSUER SO REQUESTS), (2) TO THE ISSUER, (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED, TO NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTIONS WITH REGARD TO THE NOTES EXCEPT AS PERMITTED UNDER THE SECURITIES ACT.] THE HOLDER OF THIS SECURITY IS SUBJECT TO, AND ENTITLED TO THE BENEFITS OF, A REGISTRATION RIGHTS AGREEMENT, DATED AS OF _______, 20__, ENTERED INTO BY THE ISSUER FOR THE BENEFIT OF CERTAIN HOLDERS FROM TIME TO TIME OF SECURITIES.] [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL IN AS MUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] A-2 85 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. [ZERO COUPON] CONVERTIBLE [SENIOR] NOTE DUE 20__ CUSIP No. ____________ Issue Date: _______, 20__ Issue Price: $_______ (for each $1,000 Principal Amount at Maturity) $___________ Principal Amount at Maturity Original Issue Discount: $_______ (for each $1,000 Principal Amount at Maturity) Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (herein called the "Issuer" or the "Company", which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to _____________, or its registered assigns, the Principal Amount at Maturity set forth above [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- (which amount may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian for the Depositary, in accordance with the rules and procedures of the Depositary)] on _______, 20__. This Security shall not bear periodic interest except as specified on the other side of this Security. Original Issue Discount will accrue as specified on the other side of this Security. This Security is convertible as specified on the other side of this Security. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly executed. STARWOOD RESORTS & HOTELS WORLDWIDE, INC. By:_______________________________ Name:__________________________ Title:_________________________ A-3 86 TRUSTEE'S CERTIFICATE OF AUTHENTICATION __________________, as Trustee, certifies that this is the Security referred to in the Indenture. By:_________________________________ Authorized Signatory Date of authentication: A-4 87 [FORM OF REVERSE SIDE OF SECURITY] This Security is one of a duly authorized issue of Notes of the Issuer designated as its [Zero Coupon] Convertible [Senior] Notes due 20__, limited in aggregate Principal Amount at Maturity to $_____________ (subject to increase by up to $_____________ in the event the Initial Purchaser exercises the over-allotment option granted to it in the Purchase Agreement) (herein called the "Securities"), issued and to be issued under an Indenture, dated as of _______, 20__ (herein called the "Indenture"), among the Issuer, the guarantors party thereto and ______________, as Trustee (herein called the "Trustee", which term includes any successor trustee under the Indenture), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Issuer, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. Interest - This Security shall not bear periodic interest, except as specified herein. If the Principal Amount at Maturity (or, if such Securities have been converted to semi-annual coupon notes following the occurrence of a Tax Event, Restated Principal Amount) hereof or any portion of such Principal Amount at Maturity (or, if such Securities have been converted to semi-annual coupon notes following the occurrence of a Tax Event, Restated Principal Amount) is not paid when due (whether upon acceleration pursuant to Section 6.02 of the Indenture, upon the date set for payment of the Redemption Price, upon the date set for payment of a Purchase Price or Change in Control Purchase Price or upon the Stated Maturity of this Security) or if interest (including Contingent Interest, if any) due hereon or any portion of such interest is not paid when due in accordance with the paragraph entitled "Contingent Interest" hereof, then in each such case the overdue amount shall bear interest at the rate of ___% per annum, compounded semiannually (to the extent that the payment of such interest shall be legally enforceable), which interest shall accrue from the date such overdue amount was due to the date payment of such amount, including interest thereon, has been made or duly provided for. All such interest shall be payable on demand. The accrual of such interest on overdue amounts shall be in lieu of, and not in addition to, the continued accrual of Original Issue Discount. Original Issue Discount (the difference between the Issue Price and the Principal Amount at Maturity of the Security), in the period during which a Security remains outstanding, shall accrue at ___% per annum, on a semi-annual bond equivalent basis using a 360-day year composed of twelve 30-day months, from the Issue Date of this Security. Original Issue Discount shall cease to accrue on the earlier of (a) the date on which the Principal Amount hereof or any portion of such Principal Amount becomes due and payable and (b) any Redemption Date, Conversion Date, Change in Control Purchase Date, Purchase Date or other date on which such Original Issue Discount (or, if such Securities have been converted to semi-annual coupon notes following the occurrence of a Tax Event, interest thereon) shall cease to accrue in accordance with Section 2.09 of the Indenture. Method of Payment - Holders must surrender Securities to the Paying Agent to collect all payments in respect of the Securities, except for liquidated damages payable pursuant to the Registration Rights Agreement and, if such Securities have been converted to semi-annual coupon notes following the occurrence of a Tax Event, interest thereon and Contingent Interest. The Issuer will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts. A-5 88 Contingent Interest - Subject to the accrual and record date provisions specified in this paragraph, the Issuer shall pay contingent interest ("Contingent Interest") to the Holders during any six-month period (a "Contingent Interest Period") from ________ to ________ and from ________ to ________, commencing after ________, 20__, if the average Security Market Price for the five trading days ending on the second trading day immediately preceding the relevant six-month period with respect to such Contingent Interest Period equals 120% or more of the sum of the Issue Price of a Security and Original Issue Discount accrued thereon to the trading day immediately preceding the first day of the relevant Contingent Interest Period. The amount of Contingent Interest payable per Security in respect of any Contingent Interest Period shall equal the greater of (x) a per annum rate equal to ___% of the Issuer's then current per annum borrowing rate for senior non-convertible fixed rate indebtedness with a maturity date comparable to the Securities, estimated in good faith by the Board of Directors, multiplied by the sum of the Issue Price of a Security and Original Issue Discount accrued thereon to the trading day immediately preceding the first day of the relevant Contingent Interest Period and (ii) a per annum rate of ___% multiplied by the average Security Market Price for the five trading days ending on the second trading day immediately preceding the relevant Contingent Interest Period. Contingent Interest shall be computed on the basis of a 360-day year comprised of twelve 30-day months. Contingent Interest, if any, will accrue and be payable to Holders as of the 15th day preceding the last day of the relevant Contingent Interest Period. Such payments shall be paid on the last day of the relevant Contingent Interest Period. Original Issue Discount will continue to accrue at ___ % per annum whether or not Contingent Interest is paid. "Security Market Price" means, as of any date of determination, the average of the secondary market bid quotations per Security obtained by the Bid Solicitation Agent for $10 million Principal Amount at Maturity at approximately 4:00 p.m. (New York City time) on such determination date from two recognized securities dealers in The City of New York (none of which shall be an Affiliate of the Issuer) selected by the Issuer; provided, however, if (a) at least two such bids are not obtained by the Bid Solicitation Agent or (b) in the Issuer's reasonable judgment, the bid quotations are not indicative of the secondary market value of the Securities as of such determination date, then the Market Price of the Securities for such determination date shall equal (i) the Conversion Rate in effect as of such determination date multiplied by (ii) the average Sale Price for the five trading days ending on such determination date, appropriately adjusted to take into account the occurrence, during the period commencing on the first of such trading days during such five trading day period and ending on such determination date, of any event described in Section 11.06, 11.07, 11.08 or 11.21 (subject to the conditions set forth in Sections 11.09 and 11.10) of the Indenture. Upon determination that Holders will be entitled to receive Contingent Interest which may become payable during a Contingent Interest Period, on or prior to the first day of such Contingent Interest Period, the Issuer shall issue a press release and publish such information on its web site at www.starwoodhotels.com or such other website as the Issuer may from time to time maintain. A-6 89 Redemption at the Option of the Issuer - No sinking fund is provided for the Securities. The Securities are redeemable as a whole, or from time to time in part, at any time at the option of the Issuer at a Redemption Price equal to the Issue Price plus the accrued Original Issue Discount to the Redemption Date as set forth in the next paragraph, provided that the Securities are not redeemable prior to ________, 20__ at the option of the Issuer. The table below shows redemption prices (each a "Redemption Price") of a Security per $1,000 Principal Amount at Maturity on the dates shown below and at Stated Maturity, which prices equal the Issue Price plus accrued Original Issue Discount calculated to each such date. The Redemption Price of a Security redeemed between such dates shall include an additional amount reflecting the additional Original Issue Discount accrued since the next preceding date in the table.
ACCRUED ORIGINAL REDEMPTION ISSUE ISSUE DISCOUNT PRICE DATE PRICE(1) AT ___%(2) (1) + (2) ---------------------------------------------------------------- ________, 20__ $ $ $ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ ________, 20__ At Stated $ $ $ Maturity
In addition, if there shall have occurred a Trust Assumption Event, the Issuer or the Trust, at either the Issuer's or the Trust's option, may elect to redeem Securities for a period of 60 days following the effective date of such Trust Assumption Event for cash at a redemption price (the "Trust Assumption Event Redemption Price") equal to the Issue Price of the Securities plus accrued Original Issue Discount through the Trust Assumption Event Redemption Date. If converted to a semi-annual coupon note following the occurrence of a Tax Event, this Security will be redeemable at the option of the Issuer at the Restated Principal Amount plus accrued and unpaid interest (including Contingent Interest) from the later of the date of such conversion and the date on which interest was last paid through the Redemption Date or the Trust Assumption Event Redemption Date, as the case may be; but in no event will this Security A-7 90 be redeemable before ________, 20__ at the option of the Issuer, unless a Trust Assumption Event shall have occurred. In addition to the Redemption Price or Trust Assumption Event Redemption Price payable with respect to all Securities or portions thereof to be redeemed as of a Redemption Date or Trust Assumption Event Redemption Date, as the case may be, the Holders of such Securities (or portions thereof) shall be entitled to receive accrued and unpaid Contingent Interest and Defaulted Interest, if any, with respect thereto, which Contingent Interest and Defaulted Interest shall be paid in cash on the Redemption Date or Trust Assumption Event Redemption Date, as the case may be. Purchase By the Issuer at the Option of the Holder - Subject to the terms and conditions of the Indenture, the Issuer shall become obligated to purchase, at the option of the Holder, the Securities held by such Holder on the following Purchase Dates and at the following Purchase Prices per $1,000 Principal Amount at Maturity, upon delivery of a Purchase Notice containing the information set forth in the Indenture, at any time from the opening of business on the date that is 20 Business Days prior to such Purchase Date until the close of business on the third Business Day prior to such Purchase Date and upon delivery of the Securities to the Paying Agent by the Holder as set forth in the Indenture.
Purchase Date Purchase Price ------------- -------------- ~~________, 20__ $ ________, 20__ $ ________, 20__ $ ________, 20__ $ ________, 20__ $~~
The Purchase Price (equal to the Issue Price plus accrued Original Issue Discount to the Purchase Date) may be paid, at the option of the Issuer, in cash or by the issuance and delivery of Shares of the Issuer valued at the Market Price, or in any combination of cash and Shares. If prior to a Purchase Date this Security has been converted to a semi-annual coupon note following the occurrence of a Tax Event, the Purchase Price will be equal to the applicable Restated Principal Amount plus accrued and unpaid interest from the later of the date of such conversion and the date on which interest was last paid to the Purchase Date. At the option of the Holder and subject to the terms and conditions of the Indenture, the Issuer shall become obligated to repurchase the Securities if a Change in Control occurs at any time on or prior to ________, 20__ for a Change in Control Purchase Price equal to the Issue Price plus accrued Original Issue Discount to the Change in Control Purchase Date, which Change in Control Purchase Price shall be paid in cash. If prior to a Change in Control Purchase Date this Security has been converted to a semi-annual coupon note following the occurrence of a Tax Event, the Change in Control Purchase Price shall be equal to the Restated Principal A-8 91 Amount plus accrued and unpaid interest from the later of the date of such conversion and the date on which interest was last paid to the Change in Control Purchase Date. At the option of the Holder and subject to the terms and conditions of the Indenture, the Trust shall become obligated to repurchase the Securities if a Trust Assumption Event occurs for a Trust Assumption Event Purchase Price equal to the Issue Price plus accrued Original Issue Discount to the Trust Assumption Event Purchase Date, which Trust Assumption Event Purchase Price shall be paid in cash. If prior to a Trust Assumption Event Purchase Date this Security has been converted to a semi-annual coupon note following the occurrence of a Tax Event, the Trust Assumption Event Purchase Price shall be equal to the Restated Principal Amount plus accrued and unpaid interest from the later of the date of such conversion and the date on which interest was last paid to the Trust Assumption Event Purchase Date. In addition to the Purchase Price, Change in Control Purchase Price or Trust Assumption Event Purchase Price, as the case may be, payable with respect to all Securities or portions thereof to be purchased as of the Purchase Date, the Change in Control Purchase Date or Trust Assumption Event Purchase Date, as the case may be, the Holders of such Securities (or portions thereof) shall be entitled to receive accrued and unpaid Contingent Interest and Defaulted Interest, if any, with respect thereto, which Contingent Interest and Defaulted Interest shall be paid in cash promptly following the later of the Purchase Date, the Change in Control Purchase Date or Trust Assumption Event Purchase Date, as the case may be, and the time of delivery of such Securities to the Paying Agent pursuant to the Indenture. Holders have the right to withdraw any Purchase Notice or Change in Control Purchase Notice, as the case may be, by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture. If cash and/or securities sufficient to pay the Purchase Price or cash sufficient to pay the Change in Control Purchase Price or cash sufficient to pay the Trust Assumption Event Purchase Price, as the case may be, of, together with any accrued and unpaid Contingent Interest with respect to, all Securities or portions thereof to be purchased as of the Purchase Date, the Change in Control Purchase Date or the Trust Assumption Event Purchase Date, as the case may be, are deposited with the Paying Agent on the Business Day following the Purchase Date, the Change in Control Purchase Date or Trust Assumption Event Purchase Date, as the case may be, Original Issue Discount or, if the Securities have been converted to semi-annual coupon notes following the occurrence of a Tax Event, interest, and Contingent Interest, will cease to accrue on such Securities (or portions thereof) immediately after such Purchase Date, Change in Control Purchase Date or Trust Assumption Event Purchase Date, as the case may be, and the Holder thereof shall have no other rights as such (other than the right to receive the Purchase Price, Change in Control Purchase Price or the Trust Assumption Event Purchase Price, as the case may be, and accrued and unpaid Contingent Interest, if any, upon surrender of such Security). If the Issuer elects to pay all or part of the Purchase Price in Shares, the portion of accrued Original Issue Discount (or interest if the Issuer has exercised the option to convert the Securities into semi-annual coupon notes as provided for herein) attributable to the period from the Issue Date (or, if the Issuer has exercised its option to convert the Securities into semi-annual coupon notes, the later of (x) the date of such exercise, and (y) the date on which interest was last A-9 92 paid) through the Purchase Date with respect to the surrendered Security and (except as provided below) accrued Contingent Interest and Defaulted Interest with respect to the surrendered Security shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through the delivery of the Shares (together with cash payment, if any, in lieu of fractional Shares) and cash, if any, in exchange for the Security being purchased pursuant to the terms hereof; and such cash, if any, and the fair market value of such Shares (together with any such cash payment in lieu of fractional Shares) shall be treated as delivered pro rata, to the extent thereof, first in exchange for Original Issue Discount (or interest, if the Issuer has exercised its option to convert the Securities into semi-annual coupon notes) accrued through the Purchase Date and accrued Contingent Interest and Defaulted Interest, and the balance, if any, of such cash and the fair market value of such Shares (and any such cash payment) shall be treated as delivered in exchange for the Issue Price of the Security being purchased pursuant to the provisions hereof. Ranking - The Securities shall be general senior obligations of the Issuer. The Securities are secured on an equal and ratable basis under the Pledge Agreement pursuant to Section 4.09 of the Indenture. The security under the Pledge Agreement may be released as provided in the Indenture. Guarantee - The Securities are guaranteed by the Guarantors in accordance with Article 12 of the Indenture. The guarantees may be released upon the terms and conditions set forth in the Indenture. Conversion - A Holder of a Security may convert it into Shares in accordance with the terms and conditions set forth in Article 11 of the Indenture. After ________, 20__, a Holder's right to convert Securities into Shares is subject to the Issuer's right to elect to instead pay such Holder the amount of cash set forth in the next succeeding sentence in lieu of delivering all or part of such Shares; provided, however, that if such payment of cash is not permitted pursuant to the provisions of the Indenture, the Issuer shall deliver Shares (and cash in lieu of fractional Shares) in accordance with Article 11 of the Indenture, whether or not the Issuer has delivered a notice pursuant to Section 11.02 of the Indenture to the effect that the Securities will be paid in cash. The amount of cash to be paid for each $1,000 Principal Amount of a Security shall be equal to the Market Price of a Share multiplied by the Conversion Rate in effect on such Conversion Date. If the Issuer shall elect to make such payment wholly in Shares, then such Shares shall be delivered through the Conversion Agent to Holders surrendering Securities no later than the fifth Business Day following the Conversion Date. If, however, the Issuer shall elect to make any portion of such payment in cash, then the payment, including any delivery of Shares, shall be made to Holders surrendering Securities no later than the tenth Business Day following the Conversion Date. The Issuer shall not pay cash in lieu of delivering all or part of such Shares upon the conversion of any Security pursuant to the terms of Article 11 of the Indenture (other than cash in lieu of fractional shares) if there has occurred (prior to, on or after, as the case may be, the Conversion Date or the date on which the Issuer delivers its notice of whether each Security shall be converted into Shares or cash) and is continuing an Event of Default (other than a default in such payment on such Securities). A-10 93 The initial Conversion Rate is ________ Shares per $1,000 Principal Amount at Maturity, subject to adjustment in certain events described in the Indenture. The Issuer will deliver cash or a check in lieu of any fractional Share. In the event the Issuer exercises its option pursuant to Section 10.01 of the Indenture to have interest in lieu of Original Issue Discount accrue on the Security following a Tax Event, the Holder will be entitled on conversion into Shares to receive the same number of Shares such Holder would have received if the Issuer had not exercised such option. If the Issuer exercises such option, Securities surrendered for conversion during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date (except Securities to be redeemed on a date within such period) must be accompanied by payment of an amount equal to the interest (including Contingent Interest) thereon that the registered Holder is entitled to receive. Except where Securities surrendered for conversion must be accompanied by payment as described above, no interest on converted Securities shall be payable by the Issuer on any Interest Payment Date subsequent to the date of conversion. Securities surrendered for conversion during the period from the close of business on any date on which Contingent Interest accrues to the opening of business on the date on which such Contingent Interest is payable (except Securities with respect to which the Issuer has mailed a notice of redemption) must be accompanied by payment of an amount equal to the Contingent Interest and Defaulted Interest with respect thereto that the registered Holder is to receive. Except where Securities surrendered for conversion must be accompanied by payment as described above, no Contingent Interest or Defaulted Interest on converted Securities will accrue after the date of conversion. To convert a Security, a Holder must (1) complete and manually sign the conversion notice below (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion Agent, (2) surrender the Security to the Conversion Agent for cancellation, (3) furnish appropriate endorsements and transfer documents if required by the Conversion Agent, the Issuer or the Trustee and (4) pay all funds required, if any, relating to interest (including Contingent Interest) on the Security to be converted for which you are not entitled and pay any transfer or similar tax, if required. A Holder may convert a portion of a Security if the Principal Amount at Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment or adjustment will be made for dividends on, or other distributions with respect to, any Shares except as provided in the Indenture. On conversion of a Security, that portion of accrued Original Issue Discount (or interest, if the Issuer has exercised its option provided for below in "Tax Event") attributable to the period from the Issue Date (or, if the Issuer has exercised the option referred to below in "Tax Event", the later of (x) the date of such exercise and (y) the date on which interest was last paid) through the Conversion Date with respect to the converted Security and (except as provided below) accrued Contingent Interest and accrued Defaulted Interest with respect to the converted Security shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through the delivery of the Shares (together with the cash payment, if any, in lieu of fractional Shares) in exchange for the Security being converted pursuant to the terms hereof; and the fair market value of such Shares (together with any such A-11 94 cash payment in lieu of fractional Shares) shall be treated as delivered pro rata, to the extent thereof, first in exchange for Original Issue Discount (or interest, if the Issuer has exercised its option provided for below in "Tax Event") and accrued Contingent Interest accrued through the Conversion Date and Defaulted Interest, and the balance, if any, of the fair market value of such Shares shall be treated as delivered in exchange for the Issue Price of the Security being converted pursuant to the provisions hereof. The Conversion Rate will be adjusted as provided in the Indenture. If the Issuer is a party to a consolidation, merger or binding share exchange or a transfer of its assets as, or substantially as, an entirety, or upon certain distributions described in the Indenture, the right to convert a Security into Shares may be changed into a right to convert it into securities, cash or other assets of the Issuer or another Person. In the event of a Share Separation, the Securities shall not be convertible in Shares, but shall instead be convertible solely into Corporation Shares except upon a Trust Assumption Event. Upon the occurrence of a Share Separation, the Conversion Rate of the Securities shall be adjusted in accordance with the terms of the Indenture. In addition, Holders of Securities shall not be entitled to convert their Securities into Shares for the period beginning on the record date for such Share Separation and ending on the first Business Day succeeding the first five consecutive trading days after the effective date of such Share Separation. Tax Event - From and after (1) the date (the "Tax Event Date") of the occurrence of a Tax Event and (2) the date the Issuer exercises such option, whichever is later (the "Option Exercise Date"), at the option of the Issuer, interest in lieu of future Original Issue Discount shall accrue at the rate of ___% per annum on a principal amount per Security (the "Restated Principal Amount") equal to the Issue Price plus Original Issue Discount accrued to the Option Exercise Date and shall be payable semi-annually on _________ and _________ of each year (each an "Interest Payment Date") to holders of record at the close of business on _________ or _________ (each a "Regular Record Date") immediately preceding such Interest Payment Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months and will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the Option Exercise Date. Interest (including Contingent Interest) on any Security that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security is registered at the close of business on the Regular Record Date for such interest at the office or agency of the Issuer maintained for such purpose. Each installment of interest on any Security shall be paid in same-day funds by transfer to an account maintained by the payee located inside the United States, provided that with respect to any Holder, such Holder shall have furnished to the Paying Agent all required wire payment instructions no later than the related Regular Record Date, or if no such instructions have been furnished, by check payable to such Holder. From and after the Option Exercise Date, Contingent Interest provided for in the paragraph entitled "Contingent Interest" hereof shall cease to accrue on this Security. A-12 95 Except as otherwise specified with respect to the Securities, any Defaulted Interest on any Security shall forthwith cease to be payable to the registered Holder thereof on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Issuer as provided for in Section 10.04(b) of the Indenture. [INCLUDE IF SECURITY IS A GLOBAL SECURITY -- In the event of a deposit or withdrawal of an interest in this Security, including an exchange, transfer, repurchase or conversion of this Security in part only, the Trustee, as custodian of the Depositary, shall make an adjustment on its records to reflect such deposit or withdrawal in accordance with the rules and procedures of the Depositary.] [INCLUDE IF SECURITY IS A RESTRICTED SECURITY -- Subject to certain limitations in the Indenture, at any time when the Issuer is not subject to Section 13 or 15(d) of the United States Securities Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted Security, the Issuer shall promptly furnish or cause to be furnished Rule 144A Information (as defined below) to such Holder of Restricted Securities, or to a prospective purchaser of any such security designated by any such Holder, to the extent required to permit compliance by any such Holder with Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). "Rule 144A Information" shall be such information as is specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).] If an Event of Default shall occur and be continuing, the Issue Price plus the Original Issue Discount or, if the Securities have been converted to semi-annual coupon notes following the occurrence of a Tax Event, the Restated Principal Amount plus interest, accrued on all the Securities and accrued Contingent Interest, if any, may be declared due and payable in the manner and with the effect provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and of this Security and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Securities under the Indenture and this Security at any time by the Issuer and the Trustee with the consent of the Holders of not less than a majority in aggregate Principal Amount at Maturity of the outstanding Securities. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate Principal Amount at Maturity of the outstanding Securities, on behalf of the Holders of all the Securities, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities, the Holders of not less than 25% in Principal Amount at Maturity of the outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity, and A-13 96 the Trustee shall not have received from the Holders of a majority in Principal Amount at Maturity of outstanding Securities a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment hereon on or after the respective due dates expressed herein. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Issuer, which is absolute and unconditional, to pay the Principal Amount at Maturity, Restated Principal Amount, Purchase Price or Change in Control Purchase Price of, accrued Original Issue Discount or interest (including Contingent Interest), if any, on, and liquidated damages on this Security at the times, place and rate, and in the coin or currency, prescribed in the Indenture. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the security register, upon surrender of this Security for registration of transfer at the office or agency of the Issuer established pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Issuer and the Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities, of authorized denominations and for the same aggregate Principal Amount at Maturity, will be issued to the designated transferee or transferees. The Securities are issuable only in registered form without coupons in denominations of $1,000 Principal Amount at Maturity and any integral multiple of $1,000 above that amount. As provided in the Indenture and subject to certain limitations therein set forth, Securities are exchangeable for a like aggregate Principal Amount at Maturity of Securities of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Issuer may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Issuer, the Trustee nor any such agent shall be affected by notice to the contrary. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. A-14 97 ASSIGNMENT FORM If you want to assign this Security, fill in the form below and have your signature guaranteed: I or we assign and transfer this Security to: ______________________________________________________________________________ ______________________________________________________________________________ ______________________________________________________________________________ (Print or type name, address and zip code and social security or tax ID number of assignee) and irrevocably appoint _____________________________________ agent to transfer this Security on the books of the Issuer. The agent may substitute another to act for him. Date:________________________ Signed:_______________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee:________________________________ In connection with any transfer of this Security occurring prior to the date of the declaration by the SEC of the effectiveness of a registration statement under the Securities Act of 1933, as amended (the "Securities Act"), covering resales of this Security (which effectiveness shall not have been suspended or terminated at the date of the transfer), I or we are assigning and transferring this Security: [Check One] (1) [ ] to the Issuer or a subsidiary of the Issuer; or (2) [ ] pursuant to and in compliance with Rule 144A under the Securities Act; or (3) [ ] outside the United States to a "foreign person" in compliance with Rule 904 of Regulation S under the Securities Act; or (4) [ ] pursuant to the exemption from registration provided by Rule 144 under the Securities Act; or (5) [ ] pursuant to an effective registration statement under the Securities Act; or (6) [ ] pursuant to another available exemption from the registration requirements of the Securities Act. Unless one of the boxes is checked, the Trustee will refuse to register any of the Securities evidenced by this certificate in the name of any Person other than the registered A-15 98 Holder thereof, provided that if box (3), (4) or (6) is checked, the Issuer may require, prior to registering any such transfer of the Securities, in its sole discretion, such legal opinions, certifications (including an investment letter in the case of box (3)) and other information as the Issuer may reasonably request 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 none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Security in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 3.09 of the Indenture shall have been satisfied. Date:_________________________ Signed:________________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee:________________________________ TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED The undersigned represents and warrants that it is purchasing this Security for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a "qualified institutional buyer" within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Issuer as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned's foregoing representations in order to claim the exemption from registration provided by Rule 144A. Date:_________________________ Signed:________________________ NOTICE: To be executed by an executive officer. A-16 99 FORM OF CONVERSION NOTICE If you want to convert this Security into Shares of the Issuer, check the box: [ ] To convert only part of this Security, state the Principal Amount at Maturity to be converted (which must be $1,000 or an integral multiple of $1,000): $_________________________________ If you want the stock certificate made out in another person's name, fill in the form below: ________________________________________________________________________________ (Insert other person's social security or tax ID no.) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type other person's name, address and zip code) Date:_________________________ Signed:________________________ (Sign exactly as your name appears on the other side of this Security) Signature Guarantee:________________________________ A-17 EX-5.1 5 p65494a1ex5-1.txt EX-5.1 1 Exhibit 5.1 SIDLEY AUSTIN BROWN & WOOD A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS DALLAS BANK ONE PLAZA BEIJING 10 S. DEARBORN STREET LOS ANGELES CHICAGO, ILLINOIS 60603 HONG KONG TELEPHONE 312 853 7000 NEW YORK FACSIMILE 312 853 7036 LONDON www.sidley.com SAN FRANCISCO SHANGHAI FOUNDED 1866 SEATTLE SINGAPORE WASHINGTON, D.C. TOKYO August 24, 2001 Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts 1111 Westchester Avenue White Plains, New York 10604 Re: Registration Statement on Form S-3 of Starwood Hotels & Resorts Worldwide, Inc. and Starwood Hotels & Resorts Ladies and Gentlemen: We are counsel to Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (the "Corporation"), and Starwood Hotels & Resorts, a Maryland real estate investment trust (the "Trust" and, together with the Corporation, the "Company"), and have represented the Company with respect to the Registration Statement on Form S-3, as amended (as so amended, the "Registration Statement"), filed by the Company with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "Securities Act"), relating to the registration of securities (the "Securities") of the Corporation and the Trust with an aggregate offering price of $3,000,000,000 (or equivalent amounts in one or more other currencies based on the applicable exchange rate at the respective times of sale), consisting of (i) shares of common stock, $.01 par value per share, of the Corporation (the "Corporation Shares") and Class B shares of beneficial interest, $.01 par value per share, of the Trust (the "Trust Shares"), which are attached and traded as units consisting of one Corporation Share and one Trust Share (the "Shares"); (ii) shares of preferred stock, $.01 par value per share, of the Corporation (the "Corporation Preferred Shares") and preferred shares of beneficial interest, $.01 par value per share, of the Trust (the "Trust Preferred Shares" and, together with the Corporation Preferred Shares, the "Preferred Shares"), which may, but are not required to, be attached and traded as units with preferred stock or shares of the other entity, and which may be represented by depositary shares ("Depositary Shares"); (iii) secured or unsecured debt securities of the Corporation and/or the Trust consisting of notes, debentures and other evidences of indebtedness (the "Debt Securities"); (iv) (A) warrants to purchase Corporation Shares and warrants to purchase Trust Shares that are attached and traded as units consisting of one warrant to purchase Corporation Shares and one warrant to purchase a like number of Trust Shares, (B) warrants to purchase Corporation Preferred Shares and/or Trust Preferred Shares, and (C) warrants to purchase Debt Securities (collectively, the "Warrants"); and (v) convertible notes of SIDLEY AUSTIN BROWN & WOOD IS AN ILLINOIS GENERAL PARTNERSHIP 2 SIDLEY AUSTIN BROWN & WOOD CHICAGO Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 2 the Corporation and the Trust that may be issued to underwriters to facilitate an underwritten public offering of equity securities of the Corporation and the Trust (the "Convertible Notes"). Unless otherwise specified in the applicable Prospectus Supplement, the Debt Securities will be issued under an indenture between the Corporation and/or the Trust and a trustee to be named (the "Debt Trustee"), substantially in the form of one of the indentures filed as an exhibit to the Registration Statement (any such indenture, as amended or supplemented from time to time, the "Debt Indenture"). Whenever the Company elects to have Preferred Shares be represented by Depositary Shares, such Preferred Shares underlying the Depositary Shares will be deposited under a deposit agreement (each, a "Deposit Agreement") with a bank or trust company identified therein, as preferred stock depositary (the "Preferred Stock Depositary"), substantially in the form filed prior to the issuance of any Depositary Shares in an amendment to the Registration Statement or incorporated by reference therein pursuant to a Current Report on Form 8-K of the Company. Each series of Warrants will be issued under a Warrant Agreement (each, a "Warrant Agreement") with a bank or trust company identified therein, as warrant agent (the "Warrant Agent"), substantially in the form filed prior to the issuance of any Warrants in an amendment to the Registration Statement or incorporated by reference therein pursuant to a Current Report on Form 8-K of the Company. Each series of Convertible Notes will be issued under an indenture among the Corporation, the Trust and a trustee to be named (the "Convertible Note Trustee"), substantially in the form filed prior to the issuance of any Convertible Notes in an amendment to the Registration Statement or incorporated by reference as an exhibit to the Registration Statement (such indenture, as amended or supplemented from time to time, the "Convertible Note Indenture"). In rendering the opinions expressed below, we have examined and relied upon a copy of the Registration Statement. We have also examined originals, or copies of originals certified to our satisfaction, of such agreements, documents, certificates and other statements of governmental officials and other instruments, and have examined such questions of law and have satisfied ourselves as to such matters of fact, as we have considered relevant and necessary as a basis for this opinion. We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of all natural persons and the conformity with the original documents of any copies thereof submitted to us for our examination. 3 SIDLEY AUSTIN BROWN & WOOD CHICAGO Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 3 Based on the foregoing and subject to the qualifications and limitations set forth below, it is our opinion that: 1. Each series of Debt Securities will be legally issued and valid and binding obligations of the Corporation or the Trust, as the case may be (except to the extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law), when (i) the Registration Statement, as finally amended (including any necessary post-effective amendments), shall have become effective under the Securities Act and the Debt Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended, and the Debt Indenture shall have been duly authorized, executed and delivered by the Corporation or the Trust, as applicable, and duly executed and delivered by the Debt Trustee; (ii) a Prospectus Supplement with respect to such series of Debt Securities shall have been filed with the Commission in compliance with the Securities Act and the rules and regulations thereunder; (iii) the Corporation's Board of Directors or a duly authorized committee thereof, or the Trust's Board of Trustees or a duly authorized committee thereof, as the case may be, shall have duly adopted final resolutions authorizing the issuance and sale of such series of Debt Securities as contemplated by the Registration Statement and the Debt Indenture; and (iv) such series of Debt Securities shall have been duly executed by the Corporation or the Trust, as the case may be, authenticated by the Debt Trustee as provided in the Debt Indenture and the final authorizing resolutions and duly delivered to the purchasers thereof against payment of the agreed consideration therefor, as provided in the Registration Statement and any Prospectus Supplement relating thereto. 2. Each issue of Depositary Shares will be validly issued and will entitle the holders of depositary receipts evidencing such Depositary Shares to the rights specified in the Deposit Agreement relating to such Depositary Shares (except to the extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law), when (i) the Registration Statement, as finally amended (including any necessary post-effective amendments), shall have become effective under the Securities Act; (ii) a Prospectus Supplement with respect to the Depositary Shares and the series of Preferred Shares underlying such Depositary Shares shall have been filed with the Commission in compliance with the Securities Act and the rules and regulations thereunder; (iii) the Deposit Agreement relating to such Depositary Shares shall have been duly authorized, executed and delivered by the Corporation or the Trust, as applicable, and duly executed and delivered by the Preferred Stock Depositary; (iv) the Corporation's Board of Directors or a duly authorized committee thereof or the Trust's Board of Trustees or a duly authorized committee thereof, as the case may be, shall have duly adopted final resolutions in conformity with the charter of the Corporation or 4 SIDLEY AUSTIN BROWN & WOOD CHICAGO Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 4 the Declaration of Trust of the Trust, as the case may be, establishing the terms and conditions of the series of Preferred Shares underlying the Depositary Shares and authorizing the sale of such series of Preferred Shares as contemplated by the Registration Statement and any Prospectus Supplement relating thereto; (v) appropriate articles supplementary with respect to the series of Preferred Shares underlying the Depositary Shares shall have been filed with, and accepted for record by, the State Department of Assessments and Taxation of Maryland; (vi) certificates representing such series of Preferred Shares shall have been duly executed, countersigned and registered and duly delivered to the purchasers thereof against payment of the agreed consideration therefor (which consideration shall be not less than $.01 per share); and (vii) the depositary receipts evidencing Depositary Shares shall have been duly executed and delivered by the Preferred Stock Depositary in the manner set forth in the Deposit Agreement. 3. Each issue of Warrants will be legally issued and valid and binding obligations of the Corporation or the Trust, as the case may be (except to the extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law), when (i) the Registration Statement, as finally amended (including any necessary post-effective amendments), shall have become effective under the Securities Act; (ii) a Prospectus Supplement with respect to such issue of Warrants shall have been filed with the Commission in compliance with the Securities Act and the rules and regulations thereunder; (iii) the Warrant Agreement relating to such issue of Warrants shall have been duly authorized, executed and delivered by the Corporation or the Trust, as applicable, and duly executed and delivered by the Warrant Agent; (iv) the Corporation's Board of Directors or a duly authorized committee thereof or the Trust's Board of Trustees or a duly authorized committee thereof, as the case may be, shall have duly adopted final resolutions in conformity with the charter of the Corporation or the Declaration of Trust of the Trust, as the case may be, setting forth the terms of such issue of Warrants and authorizing the issuance and sale of the Warrants as contemplated by the Registration Statement and any Prospectus Supplement relating thereto; and (v) the Warrants shall have been duly executed, authenticated by the Warrant Agent(s) and registered and duly delivered to the purchasers thereof against payment of the agreed consideration therefor, as provided in the Registration Statement and any Prospectus Supplement relating thereto and the final authorizing resolutions and the Warrant Agreement(s) applicable thereto. 4. Each series of Convertible Notes will be legally issued and valid and binding obligations of the Corporation and the Trust (except to the extent enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or other similar laws affecting the enforcement of creditors' rights generally and by the effect of general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law) when (i) the Registration Statement, as finally amended (including any 5 SIDLEY AUSTIN BROWN & WOOD CHICAGO Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 5 necessary post-effective amendments), shall have become effective under the Securities Act and the Convertible Note Indenture shall have been qualified under the Trust Indenture Act of 1939, as amended, and the Convertible Note Indenture shall have been duly authorized, executed and delivered by the Corporation and the Trust and duly executed and delivered by the Convertible Note Trustee; (ii) a Prospectus Supplement with respect to such Convertible Notes and the Shares issuable upon conversion of the Convertible Notes shall have been filed with the Commission in compliance with the Securities Act and the rules and regulations thereunder; (iii) each of the Corporation's Board of Directors or a duly authorized committee thereof and the Trust's Board of Trustees or a duly authorized committee thereof shall have duly adopted final resolutions in conformity with the charter of the Corporation or the Declaration of Trust of the Trust, as the case may be, authorizing the issuance and sale of the Convertible Notes as contemplated by the Registration Statement and any Prospectus Supplement relating thereto; and (iv) such series of Convertible Notes shall have been duly executed by the Corporation and the Trust and authenticated by the Convertible Note Trustee as provided in the Convertible Note Indenture and the final authorizing resolutions and shall have been duly delivered to the purchasers thereof against payment of the agreed consideration therefor as provided in the Registration Statement and any Prospectus Supplement relating thereto. For the purposes of this opinion letter, we have assumed that, at the time of the issuance, sale and delivery of each series of Debt Securities, each issue of Warrants, each issue of Depositary Shares or each series of Convertible Notes, as the case may be: (i) the authorization thereof by the Corporation or the Trust, as applicable, will not have been modified or rescinded, and there will not have occurred any change in law affecting the validity, legally binding character or enforceability thereof; (ii) in the case of the issue of Debt Securities, the form of Debt Indenture will not have been modified or amended; (iii) in the case of the issue of Warrants, the terms and conditions of such Warrants and the related Warrant Agreement will be as expressly contemplated by the Registration Statement; (iv) in the case of the issue of Depositary Shares, the terms and conditions of the Depositary Shares and underlying series of Preferred Shares and the related Depositary Agreement will be as expressly contemplated by the Registration Statement; and (v) the charter of the Corporation, as currently in effect, and the Declaration of Trust of the Trust, as currently in effect, will not have been modified or amended and will be in full force and effect. We do not find it necessary for the purposes of this opinion letter to cover, and accordingly we express no opinion as to, the application of the securities or blue sky laws of the various states to the sale of the Securities. Except as expressly stated in the second following sentence, this opinion letter is limited to the laws of the State of New York and the Securities Act. For the purposes of this opinion letter, we have assumed that the Debt Indenture, each Warrant Agreement, each Deposit Agreement and the Convertible Note Indenture will be governed by the laws of the State of New York. Insofar as the opinions expressed above relate to matters governed by the laws of the State of Maryland, we have not made an independent 6 SIDLEY AUSTIN BROWN & WOOD CHICAGO Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 6 examination of such laws, but have relied exclusively as to such laws, subject to the exceptions, qualifications and limitations therein expressed, upon the opinion letter of Ballard Spahr Andrews & Ingersoll, LLP of Baltimore, Maryland, a copy of which has been separately provided to you and is being separately filed as an Exhibit to the Registration Statement. We hereby consent to the filing of this opinion letter as an Exhibit to the Registration Statement and to all references to our firm included in or made a part of the Registration Statement. Very truly yours, /s/ Sidley Austin Brown & Wood EX-5.2 6 p65494a1ex5-2.txt EX-5.2 1 Exhibit 5.2 Camden, NJ Denver, CO Philadelphia, PA Salt Lake City, UT Voorhees, NJ Washington, DC LAW OFFICES BALLARD SPAHR ANDREWS & INGERSOLL, LLP 300 East Lombard Street Baltimore, MD 21202 410-528-5600 FAX: 410-528-5650 LAWYERS@BALLARDSPAHR.COM File Number 883237 August 24, 2001 Starwood Hotels & Resorts Worldwide, Inc. 1111 Westchester Avenue White Plains, New York 10604 Starwood Hotels & Resorts 1111 Westchester Avenue White Plains, New York 10604 Re: Registration Statement on Form S-3 Ladies and Gentlemen: We have served as Maryland counsel to Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (the "Company"), and to Starwood Hotels & Resorts, a Maryland real estate investment trust (the "Trust"), in connection with certain matters of Maryland law arising out of the registration of the following securities, having an aggregate initial offering price of up to $3,000,000,000 (collectively, the "Securities"): (a) Common Stock, $0.01 par value per share, of the Company ("Common Stock"), including the Preferred Stock Purchase Rights attached thereto, and Class B Shares of Beneficial Interest, $0.01 par value per share, of the Trust ("Class B Shares"), which are attached and trade together as a unit (each such unit, a "Share"); (b) Preferred Stock, $0.0l par value per share, of the Company ("Preferred Stock"), which may be attached to Preferred Shares of Beneficial Interest, $0.01 par value per share, of the Trust ("Preferred Shares"); (c) depositary shares ("Depositary Shares"); (d) debt securities ("Debt Securities"); (e) warrants to purchase Shares, Preferred Stock or Debt Securities ("Warrants") and (f) convertible notes ("Convertible Notes"), all covered by the above-referenced Registration Statement, and any amendments thereto (the "Registration Statement"), filed by the Company and the Trust with the Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "1933 Act"). In connection with our representation of the Company and the Trust, and as a basis for the opinion hereinafter set forth, we have examined originals, or copies certified or otherwise identified to our satisfaction, of the following documents (hereinafter collectively referred to as the "Documents"): 2 Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 2 1. The Registration Statement and the related form of prospectus included therein in the form in which it was transmitted to the Commission under the 1933 Act; 2. The charter of the Company (the "Charter"), certified as of a recent date by the State Department of Assessments and Taxation of Maryland (the "SDAT"); 3. The Bylaws of the Company (the "Corporate Bylaws"), certified as of a recent date by an officer of the Company; 4. The Declaration of Trust of the Trust (the "Declaration of Trust"), certified as of a recent date by the SDAT; 5. The Bylaws of the Trust (the "Trust Bylaws"), certified as of a recent date by an officer of the Trust; 6. The Amended and Restated Intercompany Agreement, dated as of January 6, 1999, as amended from time to time (the "Intercompany Agreement"); 7. Resolutions adopted by the Board of Directors of the Company (the "Board of Directors"), or a duly authorized committee thereof, relating to the registration of the Securities on Form S-3, certified as of a recent date by an officer of the Company; 8. Resolutions adopted by the Board of Trustees of the Trust (the "Board of Trustees"), or a duly authorized committee thereof, relating to the registration of the Securities on Form S-3, certified as of a recent date by an officer of the Trust; 9. A certificate of the SDAT as to the good standing of the Company, dated as of a recent date; 10. A certificate of the SDAT as to the good standing of the Trust, dated as of a recent date; 11. A certificate executed by an officer of the Company, dated as of a recent date; 12. A certificate executed by an officer of the Trust, dated as of a recent date; and 13. Such other documents and matters as we have deemed necessary or appropriate to express the opinion set forth below, subject to the assumptions, limitations and qualifications stated herein. In expressing the opinion set forth below, we have assumed the following: 3 Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 3 1. Each individual executing any of the Documents, whether on behalf of such individual or any other person, is legally competent to do so. 2. Each individual executing any of the Documents on behalf of a party (other than the Company or the Trust) is duly authorized to do so. 3. Each of the parties (other than the Company or the Trust) executing any of the Documents has duly and validly executed and delivered each of the Documents to which such party is a signatory, and such party's obligations set forth therein are legal, valid and binding. 4. Any Documents submitted to us as originals are authentic. The form and content of the Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this opinion from the form and content of such Documents as executed and delivered. Any Documents submitted to us as certified or photostatic copies conform to the original documents. All signatures on all such Documents are genuine. All public records reviewed or relied upon by us or on our behalf are true and complete. All representations, warranties, statements and information contained in the Documents are true and complete. There has been no oral or written modification of or amendment to any of the Documents, and there has been no waiver of any provision of any of the Documents, by action or omission of the parties or otherwise. 5. The issuance and terms of the Securities to be issued by the Company from time to time will be approved by the Board of Directors, or a duly authorized committee thereof, in accordance with Maryland law (with such approval referred to herein as the "Corporate Proceedings"). 6. The issuance and terms of the Securities to be issued by the Trust from time to time will be approved by the Board of Trustees, or a duly authorized committee thereof, in accordance with Maryland law (with such approval referred to herein as the "Trust Proceedings"). 7. None of the terms of any of the Securities, or any agreements related thereto, to be established subsequent to the date hereof, nor the issuance and delivery of any such Securities, nor the compliance by the Company or the Trust with the terms of any such Securities or agreements, will violate any applicable law or will conflict with, or result in a breach or violation of, the Charter, the Corporate Bylaws, the Declaration of Trust, the Trust Bylaws or the Intercompany Agreement. 8. The form of certificates or other instruments or documents representing the Securities will conform in all respects to the requirements of Maryland law. 4 Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 4 Based upon the foregoing, and subject to the assumptions, limitations and qualifications stated herein, it is our opinion that: 1. The Company is a corporation duly incorporated and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT. 2. The Trust is a real estate investment trust duly formed and existing under and by virtue of the laws of the State of Maryland and is in good standing with the SDAT. 3. Upon completion of all Corporate Proceedings relating to the Common Stock and the due execution, countersignature and delivery of certificates representing the Common Stock, the Common Stock will be (assuming that, upon issuance, the total number of shares of Common Stock issued and outstanding will not exceed the total number of shares of Common Stock that the Company is then authorized to issue under the Charter) duly authorized and, when and if delivered against payment therefor in accordance with the Corporate Proceedings, will be validly issued, fully paid and nonassessable. 4. Upon completion of all Trust Proceedings relating to the Class B Shares and the due execution, countersignature and delivery of certificates evidencing the Class B Shares, the Class B Shares will be (assuming that, upon issuance, the total number of Class B Shares of Beneficial Interest issued and outstanding will not exceed the total number of Class B Shares of Beneficial Interest that the Trust is then authorized to issue under the Declaration of Trust) duly authorized and, when and if delivered against payment therefor in accordance with the Trust Proceedings, will be validly issued, fully paid and nonassessable. 5. Upon (a) designation by the Board of Directors of one or more classes or series of Preferred Stock to distinguish each such class or series from other then outstanding classes or series of Preferred Stock, (b) setting by the Board of Directors of the number of shares of Preferred Stock to be included in each such class or series, (c) establishment by the Board of Directors of the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of each such class or series of Preferred Stock, (d) filing with, and acceptance for record by, the SDAT of appropriate articles supplementary for each such class or series of Preferred Stock, (e) completion of all Corporate Proceedings relating to such Preferred Stock and (f) the due execution, countersignature and delivery of certificates representing such Preferred Stock, such Preferred Stock will be (assuming that, upon issuance, the total number of shares of Preferred Stock issued and outstanding will not exceed the total number of shares of Preferred Stock, and the number of shares of Preferred Stock of the same class or series issued and outstanding will not exceed the total number of shares of Preferred Stock of such class or series, that the Company is then authorized to issue under the Charter) duly authorized and, when and if delivered against payment therefor in accordance with the Corporate Proceedings, will be validly issued, fully paid and nonassessable. 5 Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 5 6. Upon (a) designation by the Board of Trustees of one or more classes or series of Preferred Shares to distinguish each such class or series from other then outstanding classes or series of Preferred Shares, (b) setting by the Board of Trustees of the number of Preferred Shares to be included in each such class or series, (c) establishment by the Board of Trustees of the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications and terms and conditions of redemption of each such class or series of Preferred Shares, (d) filing with, and acceptance for record by, the SDAT of appropriate articles supplementary for each such class or series of Preferred Shares, (e) completion of all Trust Proceedings relating to such Preferred Shares and (f) the due execution, countersignature and delivery of certificates evidencing such Preferred Shares, such Preferred Shares will be (assuming that, upon issuance, the total number of Preferred Shares issued and outstanding will not exceed the total number of Preferred Shares, and the number of Preferred Shares of the same class or series issued and outstanding will not exceed the total number of Preferred Shares of such class or series, that the Trust is then authorized to issue under the Declaration of Trust) duly authorized and, when and if delivered against payment therefor in accordance with the Trust Proceedings, will be validly issued, fully paid and nonassessable. 7. Upon (a) due authorization by the Board of Directors of the issuance, execution and delivery by the Company of Debt Securities, (b) the establishment of the terms, conditions and provisions of such Debt Securities and any related agreements (including any indenture or indentures pertaining thereto) by the Board of Directors or a duly authorized officer of the Company, acting on behalf of the Company, and (c) completion of all Corporate Proceedings relating to the execution, delivery and performance of such Debt Securities and any related agreements (including any indenture or indentures pertaining thereto) by the Company, the issuance of the Debt Securities by the Company will have been duly authorized by all necessary corporate action on the part of the Company. 8. Upon (a) due authorization by the Board of Directors of the issuance, execution and delivery by the Company of Depositary Shares, Warrants or Convertible Notes, (b) the establishment of the terms, conditions and provisions of such Depositary Shares, Warrants or Convertible Notes and any related agreements (including any indenture or indentures and any deposit agreement pertaining thereto) by the Board of Directors or a duly authorized officer of the Company, acting on behalf of the Company, and (c) completion of all Corporate Proceedings relating to the execution, delivery and performance of such Depositary Shares, Warrants or Convertible Notes and any related agreements (including any indenture or indentures or deposit agreement pertaining thereto) by the Company (and assuming that upon authorization of the Depositary Shares, Warrants or Convertible Notes, the total number of shares of the class or classes of stock underlying such Depositary Shares, Warrants or Convertible Notes (the "Underlying Stock"), together with the Company's then outstanding shares of the same class or classes as the Underlying Stock, will not exceed the total number of shares of such class or classes that the Company is then authorized to issue under the Charter), the issuance of the Depositary Shares, Warrants or Convertible Notes by the Company will have been duly authorized by all necessary corporate action on the part of the Company. 6 Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 6 9. Upon (a) due authorization by the Board of Trustees of the issuance, execution and delivery by the Trust of Depositary Shares, Warrants or Convertible Notes, (b) the establishment of the terms, conditions and provisions of such Depositary Shares, Warrants or Convertible Notes and any related agreements (including any indenture or indentures and any deposit agreement pertaining thereto) by the Board of Trustees or a duly authorized officer of the Trust, acting on behalf of the Trust, and (c) completion of all Trust Proceedings relating to the execution, delivery and performance of the governing documents of such Depositary Shares, Warrants or Convertible Notes and any related agreements (including any indenture or indentures or deposit agreement pertaining thereto) by the Trust (and assuming that upon authorization of the Depositary Shares, Warrants or Convertible Notes, the total number of shares of the class or classes of shares of beneficial interest underlying such Depositary Shares, Warrants or Convertible Notes (the "Underlying Shares"), together with the Trust's then outstanding shares of the same class or classes as the Underlying Shares, will not exceed the total number of shares of such class or classes that the Trust is then authorized to issue under the Declaration of Trust), the issuance of the Depositary Shares, Warrants or Convertible Notes by the Trust will have been duly authorized by all necessary trust action on the part of the Trust. The foregoing opinion is limited to the substantive laws of the State of Maryland and we do not express any opinion herein concerning any other law. We express no opinion as to compliance with the securities (or "blue sky") laws or the real estate syndication laws of the State of Maryland. We assume no obligation to supplement this opinion if any applicable law changes after the date hereof or if we become aware of any fact that might change the opinion expressed herein after the date hereof. This opinion is being furnished to you for submission to the Commission as an exhibit to the Registration Statement, and, accordingly, may not be relied upon by, quoted in any manner to, or delivered to any other person or entity (except Sidley Austin Brown & Wood, counsel to the Company and the Trust, in connection with its opinion issued on the date hereof with respect to the Registration Statement) without, in each instance, our prior written consent. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the use of the name of our firm in the section entitled "Legal Matters" in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the 1933 Act. Very truly yours, /s/ Ballard Spahr Andrews & Ingersoll, LLP EX-8.1 7 p65494a1ex8-1.txt EX-8.1 1 Exhibit 8.1 SIDLEY AUSTIN BROWN & WOOD A PARTNERSHIP INCLUDING PROFESSIONAL CORPORATIONS CHICAGO BEIJING 555 WEST FIFTH STREET DALLAS LOS ANGELES, CALIFORNIA 90013 HONG KONG TELEPHONE 213 896 6000 NEW YORK FACSIMILE 213 896 6600 LONDON www.sidley.com SAN FRANCISCO SHANGHAI FOUNDED 1866 SEATTLE SINGAPORE WASHINGTON, D.C. TOKYO August 24, 2001 Starwood Hotels & Resorts Worldwide, Inc. 1111 Westchester Avenue White Plains, New York 10604 Starwood Hotels & Resorts 1111 Westchester Avenue White Plains, New York 10604 Re: Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts Registration Statement on Form S-3 Registration Nos. 333-40077 and 333-40077-01 Ladies and Gentlemen: We have acted as special counsel to Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (the "Corporation"), and Starwood Hotels & Resorts, a Maryland real estate investment trust (together with the Corporation, the "Company"), in connection with the preparation of the Registration Statement on Form S-3 of the Company initially filed on November 12, 1997 (as thereafter amended from time to time and together with all exhibits thereto, the "Registration Statement"). This opinion is being furnished in accordance with the requirements of Item 16 of Form S-3 and Item 601(b)(8) of Regulation S-K under the Securities Act of 1933, as amended (the "Act"). Capitalized terms used but not otherwise defined herein have the respective meanings set forth in the Registration Statement. Our opinion is based upon an examination of the Registration Statement and such other documents as we have deemed necessary or appropriate as a basis therefor. In our examination, we have assumed the legal capacity of all natural persons, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified, conformed, or photostatic copies, and the authenticity of the originals of such copies. In rendering our opinion, we have considered the applicable provisions of the Code, Treasury Regulations, judicial decisions, administrative rulings and other applicable 2 SIDLEY AUSTIN BROWN & WOOD LOS ANGELES Starwood Hotels & Resorts Worldwide, Inc. Starwood Hotels & Resorts August 24, 2001 Page 2 authorities, in each case as in effect on the date hereof. The statutory provisions, regulations, decisions, rulings and other authorities on which this opinion is based are subject to change, and such changes could apply retroactively. Opinions of counsel are not binding on the IRS or on any court. Accordingly, no assurance can be given that the IRS will not challenge the propriety of the opinion set forth herein or that such a challenge will not be successful. Based on and subject to the foregoing, the discussion set forth in the section of the Registration Statement entitled "Certain Federal Income Tax Considerations," to the extent such discussion relates to United States federal income tax matters, is a fair and accurate summary in all material respects of the matters addressed therein, based upon current laws and the assumptions stated or referred to therein and the qualifications stated therein. Other than expressly stated above, we express no opinion on any issue relating to the Company or to any investment therein or under any other law. We are furnishing this opinion to you for the Company's benefit in connection with the filing of the Registration Statement with the Securities and Exchange Commission (the "SEC") and this opinion is not to be used, circulated, quoted, or otherwise referred to for any other purpose without our written permission. This opinion is expressed as of the date hereof, and we disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented or assumed herein or any subsequent changes in applicable law, regulations or interpretations thereof. We consent to the filing of this opinion as Exhibit 8.1 to the Registration Statement and to the reference to Sidley Austin Brown & Wood therein under the caption "Legal Matters." In giving this consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Act or the rules or regulations of the SEC promulgated thereunder. Very truly yours, Sidley Austin Brown & Wood EX-12.1 8 p65494a1ex12-1.txt EX-12.1 1 EXHIBIT 12.1 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. PROGRAM FOR ANNUAL CLOSING OF ACCOUNTS - -------------------------------------------------------------------------------- EXHIBIT 12.1 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. STARWOOD HOTELS & RESORTS CALCULATION OF CONSOLIDATED RATIO OF EARNINGS TO TOTAL FIXED CHARGES (DOLLARS IN MILLIONS)
SIX MONTHS YEAR ENDED DECEMBER 31, ENDED JUNE 30, --------------------------------------------------- ----------------- 2000 1999 1998 1997 1996 2001 2000 ------- ------- ------- ------- ------- ------- ------- Earnings: Income from continuing operations ............... 401 $ (638) $ 220 $ (233) $ 156 175 167 Add: Adjustment for distributions in excess of equity earnings and losses (a) .......... (14) (30) (8) (3) (1) 6 (1) Provision for income taxes .................. 201 1,076 (89) 154 117 79 91 Minority equity in net income ............... 8 95 14 9 6 2 1 Amortization of interest capitalized ........ 1 1 4 2 4 -- -- ------- ------- ------- ------- ------- ------- ------- 597 504 141 (71) 282 262 258 ------- ------- ------- ------- ------- ------- ------- Fixed Charges: Interest and other financial charges ........ 457 516 473 33 82 199 222 Interest factor attributable to rentals (b) . 21 14 12 10 16 11 11 ------- ------- ------- ------- ------- ------- ------- 478 530 485 43 98 210 233 ------- ------- ------- ------- ------- ------- ------- Earnings, as adjusted, from continuing operations 1,075 $ 1,034 $ 626 $ (28) $ 380 472 491 ======= ======= ======= ======= ======= ======= ======= Fixed Charges: Fixed charges above ......................... 478 $ 530 $ 485 $ 43 $ 98 210 233 Interest capitalized ........................ 3 8 14 7 7 4 5 ------- ------- ------- ------- ------- ------- ------- Total fixed charges ......................... 481 $ 538 $ 499 $ 50 $ 105 214 238 ======= ======= ======= ======= ======= ======= ======= Ratio: Earnings, as adjusted, from continuing operations to fixed charges ................ 2.23 1.92 1.25 (c) 3.62 2.21 2.06 ======= ======= ======= ======= ======= ======= =======
Notes: (a) The adjustment represents distributions in excess of undistributed earnings and losses of companies in which at least 20% but less than 50% equity is owned. (b) The interest factor attributable to rentals consists of one-third of rental charges, which is deemed by Starwood to be representative of the interest factor inherent in rents. (c) Earnings were not adequate to cover total fixed charges by $78 million. EX-12.2 9 p65494a1ex12-2.txt EX-12.2 1 EXHIBIT 12.2 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. PROGRAM FOR ANNUAL CLOSING OF ACCOUNTS - -------------------------------------------------------------------------------- EXHIBIT 12.2 STARWOOD HOTELS & RESORTS CALCULATION OF RATIO OF EARNINGS TO TOTAL FIXED CHARGES (DOLLARS IN MILLIONS)
PERIOD YEAR ENDED FROM FEB 23, SIX MONTHS DECEMBER 31, TO DECEMBER 31, ENDED JUNE 30, ------------------- --------------- ------------------- 2000 1999 1998 2001 2000 ---- ---- ---- ---- ---- Earnings: Income from continuing operations ............... 460 $423 $412 $207 227 Add: Adjustment for distributions in excess of equity earnings and losses (a) .......... 3 1 5 2 2 Provision for income taxes .................. 1 2 1 1 -- Minority equity in net income ............... 3 2 10 1 1 Amortization of interest capitalized ........ 1 -- -- -- -- ---- ---- ---- ---- ---- 468 428 428 211 230 ---- ---- ---- ---- ---- Fixed Charges: Interest and other financial charges ........ 39 47 26 19 19 Interest factor attributable to rentals (b) . -- -- -- -- -- ---- ---- ---- ---- ---- 39 47 26 19 19 ---- ---- ---- ---- ---- Earnings, as adjusted, from continuing operations 507 $475 $454 $230 $249 ==== ==== ==== ==== ==== Fixed Charges: Fixed charges above ......................... 39 $ 47 $ 26 19 19 Interest capitalized ........................ 2 7 7 1 1 ---- ---- ---- ---- ---- Total fixed charges ......................... 41 $ 54 $ 33 20 20 ==== ==== ==== ==== ==== Ratio: Earnings, as adjusted, from continuing operations to fixed charges ................ 12.37 8.80 13.76 11.50 12.45 ===== ==== ===== ===== =====
Notes: (a) The adjustment represents distributions in excess of undistributed earnings and losses of companies in which at least 20% but less than 50% equity is owned. (b) As the entities owned by the Trust only lease fixed assets, they do not enter into any operational leases. EX-23.1 10 p65494a1ex23-1.txt EX-23.1 1 CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement on Form S-3 of our report dated February 7, 2001 included in Starwood Hotels & Resorts Worldwide, Inc.'s and Starwood Hotels & Resorts' Joint Annual Report on Form 10-K for the year ended December 31, 2000 and to all references to our firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP New York, New York August 20, 2001 -----END PRIVACY-ENHANCED MESSAGE-----




			Proposed
		Amount	Maximum	Amount of
Title of Each Class of Securities		to be	Aggregate	Registration
To Be Registered		Registered⁽¹⁾	Offering Price⁽¹⁾	Fee


Common stock, par value $0.01 per share, of Starwood Hotels & Resorts Worldwide, Inc. (the “Corporation”) (including the Preferred Stock Purchase Rights attached thereto), and Class B Shares of beneficial interest, par value $0.01 per share, of Starwood Hotels & Resorts (the “Trust”), which are attached and trade together as a unit (each such unit, a “Share”)⁽³⁾

Shares of Preferred Stock, par value $0.01 per share, of the Corporation and/or preferred shares of beneficial interest, par value $0.01 per share, of the Trust, which may be attached to and trade with one another⁽⁴⁾⁽⁵⁾

Depositary Shares⁽⁵⁾

Debt Securities⁽⁶⁾

Warrants to Purchase Shares, Preferred Stock or Debt Securities⁽⁷⁾

Convertible Notes⁽⁸⁾

	Total	$3,000,000,000	$3,000,000,000⁽⁹⁾	not applicable⁽²⁾


$2,650,000,000		$350,000,000
Starwood Hotels & Resorts		Starwood Hotels &
Worldwide, Inc.		Resorts






ABOUT THIS PROSPECTUS			1




WHERE YOU CAN FIND MORE INFORMATION			1




THE COMPANY			2




RISK FACTORS			3




FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE			8




USE OF PROCEEDS			9




RATIOS OF EARNINGS TO FIXED CHARGES AND EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS			9




DESCRIPTION OF DEBT SECURITIES			9




DESCRIPTION OF STOCK			19




DESCRIPTION OF DEPOSITARY SHARES AND RECEIPTS			30




DESCRIPTION OF WARRANTS			31




DESCRIPTION OF CONVERTIBLE NOTES			33




CERTAIN FEDERAL INCOME TAX CONSIDERATIONS			35




PLAN OF DISTRIBUTION			40




LEGAL MATTERS			42




EXPERTS			43






Registration fee		$	885,000	*




Fees and expenses of accountants			65,000




Fees and expenses of legal counsel			100,000




Fees and expenses of Trustee and counsel			10,000




Printing and engraving expenses			100,000




Miscellaneous			40,000

	Total	$	1,200,000






STARWOOD HOTELS & RESORTS WORLDWIDE, INC.		STARWOOD HOTELS & RESORTS




(Exact name of registrant as specified in its charter)		(Exact name of registrant as specified in its charter)



(1)	The proposed maximum offering price is not specified as to each class of securities to be registered hereby pursuant to General Instruction II(D) to Form S-3 under the Securities Act. The proposed maximum offering price per unit will be determined from time to time in connection with the issuance of securities registered hereunder. The proposed maximum offering price for the securities issued from time to time pursuant to this Registration Statement has been estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act.



(2)	The fee for the registration of securities hereunder has been previously paid.



(3)	Subject to note (9) below, there is being registered hereunder an indeterminate number of Shares as may be sold, from time to time. In addition, all Shares that may be issued upon conversion or redemption of Preferred Stock or Debt Securities registered hereunder, the number of which is indeterminable at this time, are also being registered hereunder. In no event will the aggregate offering price of all Shares issued from time to time pursuant to this Registration Statement exceed $1,500,000,000. The aggregate amount of Shares registered hereunder is further limited to that permissible under Rule 415(a)(4) under the Securities Act.



(4)	Subject to note (9) below, there is being registered hereunder an indeterminate number of shares of Preferred Stock as may be sold, from time to time.



(5)	Subject to note (9) below, there is being registered hereunder an indeterminate number of Depositary Shares to be evidenced by Depositary Receipts issued pursuant to a deposit agreement. If the Registrants elect to offer to the public fractional interests in shares of Preferred Stock registered hereunder, Depositary Receipts will be distributed to those persons purchasing the fractional interests and the shares of Preferred Stock will be issued to the depositary under the deposit agreement.



(6)	Subject to note (9) below, there is being registered hereunder an indeterminate principal amount of Debt Securities as may be sold, from time to time. If any Debt Securities are issued at an original issue discount, then the offering price shall be in such greater principal amount as shall result in an aggregate initial offering price not to exceed $3,000,000,000 less the dollar amount of any securities previously issued hereunder.



(7)	Subject to note (9) below, there is being registered hereunder an indeterminate amount and number of Warrants, representing rights to purchase Debt Securities, Preferred Stock or Shares registered hereunder.



(8)	Subject to note (9) below, there is being registered hereunder an indeterminate principal amount of Convertible Notes, convertible into Shares registered hereunder.



(9)	In no event will the aggregate initial offering price of all securities issued from time to time pursuant to this Registration Statement exceed $3,000,000,000 or the equivalent thereof in one or more foreign currencies, foreign currency units or composite currencies. The securities registered hereunder may be sold separately or as units with other securities registered hereunder.



(a)	Earnings to cover fixed charges were insufficient by $78 million.



(b)	Represents the results of ITT Corporation (now Sheraton Holding Corp.) and the results of the Company (inclusive of Westin Hotel Company) for the period from the closing of the ITT Corporation merger (February 23, 1998) through December 31, 1998.



(c)	Represents the results of ITT Corporation (now Sheraton Holding Corp.).


	•	other items deductible under accounting principles generally accepted in the United States.


	•	by delivering to the trustee for cancellation all outstanding debt securities of such series or by depositing with the trustee cash or securities (as applicable under the terms of the indenture) sufficient to pay and discharge the entire indebtedness evidenced by the outstanding debt securities


	•	10 days following a public announcement that there is an “acquiring person”, which may be a single person or a group of affiliated persons who have acquired beneficial ownership of 15% or more of the Corporation Shares; and


	•	10 business days (which we may extend under certain circumstances) after a tender or exchange offer commences that, if consummated, would result in a person or group beneficially owning 15% or more of the Corporation Shares.




	Ronald C. Brown


	Executive Vice President and


	Chief Financial Officer


Signature	Title	Date

/s/ BARRY S. STERNLICHT Barry S. Sternlicht	Chairman, Chief Executive Officer and Director (Principal Executive Officer)	August 15, 2001
/s/ RONALD C. BROWN Ronald C. Brown	Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)	August 24, 2001
/s/ BRUCE W. DUNCAN Bruce W. Duncan	Director	August 11, 2001
/s/ GEORGE J. MITCHELL George J. Mitchell	Director	August 13, 2001
/s/ STEPHEN R. QUAZZO Stephen R. Quazzo	Director	August 13, 2001



	Ronald C. Brown

	Vice President, Chief Financial Officer and


	Chief Accounting Officer


Exhibit
No.			Description of Exhibit

	*1.	1	Form of Underwriting Agreement — debt securities.
	*1.	2	Form of Underwriting Agreement — equity.
	4.	1	Charter of the Corporation, amended and restated as of February 1, 1995, as amended through March 26, 1999 (incorporated by reference to Exhibit 3.2 to the Corporation’s and the Trust’s Joint Annual Report on Form 10-K for the year ended December 31, 1998, as amended by the Form 10-K/ A filed May 17, 1999).
	4.	2	Amended and Restated Declaration of Trust of the Trust, as amended and restated through April 16, 1999 (incorporated by reference to Exhibit 3.1 to the Corporation’s and the Trust’s Joint Quarterly Report on Form 10-Q for the quarter ended June 30, 2000).
	4.	3	Bylaws of the Corporation, as amended through April 15, 1999 (incorporated by reference to Exhibit 3 to the Corporation’s and the Trust’s Joint Current Report on Form 8-K dated March 15, 1999).
	4.	4	Bylaws of the Trust, as amended through April 16, 1999 (incorporated by reference to Exhibit 3.3 to the Corporation’s and the Trust’s Joint Quarterly Report on Form 10-K for the quarterly period ended March 31, 1999).
	4.	5	Amended and Restated Intercompany Agreement, dated as of January 6, 1999, between the Corporation and the Trust (incorporated by reference to Exhibit 3 to the Trust’s Registration Statement on Form 8-A filed with the Commission on December 21, 1998, except that on January 6, 1999, the Intercompany Agreement was executed and dated as of January 6, 1999).
	4.	6	Rights Agreement, dated as of March 15, 1999, between the Corporation and ChaseMellon Shareholder Services, L.L.C., as Rights Agent (incorporated by reference to Exhibit 4 to the Corporation’s and the Trust’s Joint Current Report on Form 8-K dated March 15, 1999).
	4.	7	Form of Indenture for Debt Securities.
	4.	8	Form of Indenture for Convertible Notes (incorporated by reference to Exhibit 4.2 to the Corporation’s and the Trust’s Registration Statement on Form S-3 filed with the Commission on October 3, 1996 (Registration No. 333-13411)).
	4.	9	Form of Convertible Note (included in Exhibit 4.8).
	4.	10	Form of Indenture for convertible notes.
	4.	11	Form of convertible note (included in Exhibit 4.10).
	4.	12	Form of Preferred Stock. Any articles supplementary to the Corporation’s charter or the Trust’s Amended and Restated Declaration of Trust, as amended, authorizing the creation of any series of preferred stock or preferred shares of beneficial interest, respectively, and setting forth the rights, preferences and designations thereof will be filed as an exhibit subsequently included or incorporated by reference herein.
	*4.	13	Form of Deposit Agreement.
	*4.	14	Form of Debt Warrant Agreement.
	*4.	15	Form of Stock Warrant Agreement.
	5.	1	Opinion of Sidley Austin Brown & Wood.
	5.	2	Opinion of Ballard Spahr Andrews & Ingersoll, LLP.
	8.	1	Opinion of Sidley Austin Brown & Wood.
	12.	1	Computation of Consolidated Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges and Preferred Stock Dividends.
	12.	2	Computation of Ratios of Earnings to Fixed Charges and Earnings to Fixed Charges and Preferred Stock Dividends of the Trust.


*	To be filed by amendment or pursuant to a document or report incorporated herein by reference.