As filed with the Securities and Exchange Commission on May 14, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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Form S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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IRVINE APARTMENT COMMUNITIES, L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 33-0587829
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
550 Newport Center Drive, Suite 300,
Newport Beach, California 92660 (714) 720-5500
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
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JAMES E. MEAD
Senior Vice President, Chief Financial Officer and Secretary
IRVINE APARTMENT COMMUNITIES, INC.
550 Newport Center Drive
Suite 300
Newport Beach, CA 92660
(714) 720-5500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
with a copy to:
JEFFREY SMALL
DAVIS POLK & WARDWELL
450 Lexington Avenue
New York, New York 10017
Telephone (212) 450-4000
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Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box:
[ ]
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Proposed Maximum Proposed Maximum
Amount to be Offering Price Per Aggregate Offering Amount of
Title of Each Class of Securities Being Registered Registered Unit(1) Price(1) Registration Fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities.................................... $350,000,000(2) 100% $350,000,000(2) $106,061
==================================================================================================================================
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(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(2) Such amount represents the principal amount of Debt Securities issued at
this principal amount and the issue price, rather than the principal
amount of any Debt Securities issued at an original issue discount.
</TABLE>
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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SUBJECT TO COMPLETION
PROSPECTUS
$350,000,000
IRVINE APARTMENT COMMUNITIES, L.P.
Debt Securities
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Irvine Apartment Communities, L.P. (the "Operating
Partnership") may offer and issue from time to time unsecured non-convertible
investment grade debt securities (the "Debt Securities"). The Debt Securities
may be offered in one or more series, in amounts, at prices and on terms to be
determined by market conditions at the time of sale and to be set forth in a
supplement or supplements to this Prospectus (a "Prospectus Supplement").
The aggregate offering price of the Debt Securities will not exceed
$350,000,000.
Certain terms of any Debt Securities in respect of which this
Prospectus is being delivered will be set forth in the accompanying Prospectus
Supplement including, without limitation, the specific designation (including
whether such Debt Securities are senior or subordinated), aggregate principal
amount, purchase price, maturity, interest rate (which may be fixed or
variable) and time of payment of interest (if any), terms (if any) for the
subordination or redemption thereof, listing (if any) on a securities
exchange and any other specific terms of the Debt Securities.
See "Risk Factors" in the Prospectus Supplement for a
description of certain factors that should be considered by purchasers of the
Debt Securities offered hereby.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED ON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The Debt Securities may be sold on a negotiated or competitive
bid basis to or through underwriters or dealers designated from time to time
or to other purchasers directly or through agents designated from time to
time. Certain terms of the offering and sale of the Debt Securities,
including, where applicable, the names of the underwriters, dealers or agents,
if any, the purchase price of the Securities and the proceeds to the Operating
Partnership from such sale, and any applicable commissions, discounts and
other items constituting compensation of such underwriters, dealers or agents,
will also be set forth in the accompanying Prospectus Supplement.
The date of this Prospectus is ____, 1997.
IN CONNECTION WITH AN OFFERING, CERTAIN PERSONS PARTICIPATING
IN SUCH OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR
OTHERWISE AFFECT THE PRICE OF THE DEBT SECURITIES. SPECIFICALLY, THE
UNDERWRITERS FOR SUCH OFFERING MAY OVERALLOT IN CONNECTION WITH SUCH
OFFERING, AND MAY BID FOR, AND PURCHASE, THE DEBT SECURITIES IN THE OPEN
MARKET. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
No dealer, salesman or other person has been authorized to give
any information or to make any representation not contained or incorporated by
reference in this Prospectus or any Prospectus Supplement, and, if given or
made, such information or representation must not be relied upon as having
been authorized by the Operating Partnership, by Irvine Apartment Communities,
Inc., a Maryland corporation, the sole general partner of the Operating
Partnership, or by any underwriter, agent or dealer. This Prospectus and any
Prospectus Supplement shall not constitute an offer to sell or a solicitation
of an offer to buy any of the Debt Securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. Neither the delivery of this Prospectus
and any Prospectus Supplement nor any sale made thereunder shall, under any
circumstances, create any implication that the information therein is correct
as of any time subsequent to the date thereof.
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AVAILABLE INFORMATION
The sole general partner of the Operating Partnership, Irvine
Apartment Communities, Inc. (the "Company"), is, and following the
effectiveness of the Operating Partnership's registration statement on Form 10
filed on May 14, 1997, the Operating Partnership will be, subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith the Company files, and the
Operating Partnership may be required to file, reports and other information
with the Securities and Exchange Commission (the "Commission"). Reports,
proxy statements and other information filed by the Company or the Operating
Partnership with the Commission can be inspected and copied at the public
reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549 or at its Regional Offices located at
Suite 1400, Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60661 and at Seven World Trade Center, 13th Floor, New York, New York
10048, and copies of such material can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Company's Common Stock is listed on the New York Stock
Exchange, Inc. (the "New York Stock Exchange") and the Pacific Stock Exchange,
Inc. (the "Pacific Stock Exchange"). In addition, reports, proxy statements
and other information concerning the Company can be inspected at the offices
of the New York Stock Exchange, 20 Broad Street, New York, New York 10005 and
at the offices of the Pacific Stock Exchange, 301 Pine Street, San Francisco,
California 94104. Such material may also be accessed electronically by means
of the Commission's home page on the Internet at http://www.sec.gov.
This Prospectus constitutes a part of a Registration Statement
on Form S-3 (together with all amendments and exhibits thereto, the
"Registration Statement") filed with the Commission under the Securities Act
of 1933, as amended (the "Securities Act"). This Prospectus omits certain of
the information set forth in such Registration Statement in accordance with
the rules and regulations of the Commission. Reference is hereby made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to the Operating Partnership and the Debt Securities.
Any statements contained herein concerning the provisions of any document are
not necessarily complete, and in each instance reference is made to the copy
of such document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission for a more complete description of the
matter involved. Each such statement is qualified in its entirety by such
reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The following document, which has been filed with the
Commission, is hereby incorporated by reference:
Registration Statement on Form 10 of the Operating Partnership dated
May 14, 1997.
All documents filed by the Operating Partnership after the
date of this Prospectus pursuant to Sections 13(a), 13(c), 14 and 15(d) of
the Exchange Act, prior to the termination of the offering of the Debt
Securities offered hereby, shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such
documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein) modifies or supersedes
such statement. Any statements so modified or superseded shall be deemed
to constitute a part of this Prospectus, except as so modified or
superseded.
The Operating Partnership will provide without charge to each
person, including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon written or oral request of such person, a copy of any or all
of the documents referred to above which have been or may be incorporated by
reference in this Prospectus (other than certain exhibits to such documents).
Requests for such documents should be directed to Irvine Apartment
Communities, L.P., 550 Newport Center Drive, Suite 300, Newport Beach,
California 92660, Attention: Investor Relations (Telephone: (714) 720-5500).
THE OPERATING PARTNERSHIP
The Operating Partnership is engaged in the development and
operation of multifamily rental apartment communities on the Irvine Ranch in
Orange County, California and, beginning in 1997, in other locations in
California. The Operating Partnership's management and operating decisions
are under the unilateral control of Irvine Apartment Communities, Inc., a
Maryland corporation (the "Company"), a self-administered equity real estate
investment trust. The Operating Partnership and the Company were formed in
December 1993 to continue and expand the apartment community business of The
Irvine Company, a real estate and community development company. At March 31,
1997 the Company had a 45.1% general partnership interest in the Operating
Partnership and was its sole managing general partner. At such date, the
limited partners of the Operating Partnership had a 54.9% interest in the
Operating Partnership, with The Irvine Company and certain of its affiliates
owning a 54.7% limited partnership interest in the Operating Partnership.
At March 31, 1997, the Operating Partnership owned and operated
13,843 units in 53 apartment communities on the Irvine Ranch. Within its
portfolio of properties stabilized for more than two years are 43 apartment
communities. These properties had an average physical occupancy of 95.1%
for the quarter ended March 31, 1997. Within its portfolio of properties
stabilized for less than two years are 5 apartment communities. These
properties had an average physical occupancy of 94.0% for the quarter ended
March 31, 1997. The Company also had 1,295 units in 5 additional apartment
communities under construction or lease-up, with 302 units completed at
March 31, 1997 (together with completed communities, the "Properties").
Additionally, the Company recently acquired an apartment community site
located in Northern California's Silicon Valley. All of the Properties,
excluding the Northern California site, are located on the Irvine Ranch.
Until July 31, 2020, the Operating Partnership has the exclusive right, but
not the obligation, to acquire land from The Irvine Company for development
of additional apartment communities on the Irvine Ranch. The developed
portion of the Irvine Ranch, which borders approximately six miles of the
Pacific Ocean, includes significant parts of the cities of Irvine, Newport
Beach and Tustin. The Irvine Ranch has been developed over the past 30
years in accordance with an original master plan and is now one of the
major commercial, industrial, retail and residential centers in Southern
California.
The Operating Partnership has recently commenced an "off-Ranch"
expansion program through the acquisition of options to purchase three
apartment community development sites located in Northern California's Silicon
Valley. Through this acquisition and future acquisitions, the Company's
intent is to create new market positions in several of California's fastest
growing markets, beginning with the Silicon Valley and possibly San Diego in
the future, that possess strong rental demographics and economic growth
prospects similar to those on the Irvine Ranch.
The Operating Partnership is a Delaware limited partnership
formed in 1993. The Operating Partnership's executive offices are located at
550 Newport Center Drive, Newport Beach, California 92660, telephone number:
(714) 720-5500.
USE OF PROCEEDS
Unless otherwise set forth in the applicable Prospectus
Supplement, proceeds from the sale of the Debt Securities will be used by
the Operating Partnership for general corporate purposes, including the
repayment of existing indebtedness, ongoing development activities and
acquisitions of additional properties. Proceeds from the sale of Debt
Securities initially may be temporarily invested in short-term securities.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratios of
earnings to fixed charges for the Operating Partnership.
Year Ended December 31,
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1996 1995 1994 1993 1992
----- ----- ----- ----- -----
Ratio of Earnings to Fixed Charges. 2.07x 1.44x 1.25x .99x .96x
For the purpose of calculating the ratio of earnings to fixed
charges, earnings consist of net earnings before income taxes, extraordinary
items, minority/predecessor interest income and fixed charges. Fixed charges
consist of interest expense, capitalized interest and amortization of deferred
financing costs.
Prior to completion of the Company's initial public offering in
December 1993, the predecessor of the Company and the Operating Partnership
operated in a highly leveraged manner. As a result, although the Company, the
Operating Partnership and the predecessor have historically generated positive
net cash flow, the financial statements of the predecessor show net losses for
the periods prior to December 8, 1993. Consequently, the computation of the
ratio of earnings to fixed charges for such periods indicate that earnings
were inadequate to cover fixed charges by approximately $0.6 million and $2.2
million for the years ended December 31, 1993 and 1992, respectively.
DESCRIPTION OF THE DEBT SECURITIES
The following sets forth certain general terms and provisions
of the indentures under which the Debt Securities are to be issued. The
particular terms of the Debt Securities will be set forth in a Prospectus
Supplement relating to such Debt Securities.
The Debt Securities will represent unsecured general
obligations of the Operating Partnership, unless otherwise provided in the
Prospectus Supplement. As indicated in the applicable Prospectus Supplement,
the Debt Securities will either be senior debt, senior to all future
subordinated indebtedness of the Operating Partnership and pari passu with
other current and future unsecured, unsubordinated indebtedness of the
Operating Partnership or, in the alternative, subordinated debt, subordinate
in right of payment to current and future senior debt and pari passu with
other future subordinated indebtedness of the Operating Partnership. The Debt
Securities will be issued under one or more indentures to be executed by the
Operating Partnership and one or more trustees (each a "Trustee"). The
Indentures will be in the form that has been filed as an exhibit to the
Registration Statement of which this Prospectus is a part, subject to such
amendments or supplements as are adopted from time to time (each an
"Indenture" and collectively, the "Indentures"). The following summary of
certain provisions of the Indentures does not purport to be complete and is
subject to, and qualified in its entirety by reference to, all the provisions
of the Indentures, including the definitions therein of certain terms.
Wherever particular sections or defined terms of the Indentures are referred
to, it is intended that such sections or defined terms shall be incorporated
herein by reference.
General
The Indentures will not limit the amount of Debt Securities
which may be issued thereunder. Reference is made to the Prospectus
Supplement for the following terms of the Debt Securities offered pursuant
thereto: (i) designation (including whether they are senior debt or
subordinated debt), aggregate principal amount, purchase price and
denomination; (ii) the date of maturity; (iii) interest rate or rates (or
method by which such rate will be determined), if any; (iv) the dates on which
any such interest will be payable; (v) the place or places where the principal
of and interest, if any, on the Debt Securities will be payable; (vi) any
redemption or sinking fund provisions; (vii) the terms, if any, on which such
Debt Securities will be subordinate to other debt of the Company; (viii) if
other than the principal amount thereof, the portion of the principal amount
of the Debt Securities which will be payable upon declaration of acceleration
of the maturity thereof or provable in bankruptcy; (ix) any Events of Default
in addition to or in lieu of those described herein and remedies therefor; (x)
any trustees, authenticating or paying agents, transfer agents or registrars
or any other agents with respect to the Debt Securities; (xi) listing (if any)
on a securities exchange; (xii) whether such Debt Securities will be
certificated or in book-entry form; and (xiii) any other specific terms of the
Debt Securities, including any additional events of default or covenants
provided for with respect to the Debt Securities, and any terms which may be
required by or advisable under United States laws or regulations.
Debt Securities may be presented for exchange or transfer in
the manner, at the places and subject to the restrictions set forth in the
Debt Securities and the Prospectus Supplement. Such services will be provided
without charge, other than any tax or other governmental charge payable in
connection therewith, but subject to the limitations provided in the
Indentures.
Debt Securities will bear interest at a fixed rate or a
floating rate. Debt Securities bearing no interest or interest at a rate
which, at the time of issuance, is below the prevailing market rate, will be
sold at a discount below its stated principal amount. Special United States
federal income tax considerations applicable to any such discounted Debt
Securities or to any Debt Securities issued at par which is treated as having
been issued at a discount for United States income tax purposes will be
described in the relevant Prospectus Supplement.
Unless otherwise specified in a Prospectus Supplement, the
Indentures will not contain any covenant or other specific provision affording
protection to Holders of the Debt Securities in the event of a highly
leveraged transaction or a change in control of the Operating Partnership or
the Company, except to the limited extent described under "Consolidation,
Merger and Sale of Assets".
Modification and Waiver
Each Indenture will provide that modifications and amendments
of such Indenture may be made by the Operating Partnership and the applicable
Trustee, with the consent of the Holders of a majority in aggregate principal
amount of the outstanding Debt Securities issued under such Indenture which
are affected by the modification or amendment voting as one class; provided
that no such modification or amendment may, without the consent of the Holder
of each such Debt Security affected thereby, among other things: (a) extend
the final maturity of such Debt Securities, or reduce the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon,
or reduce any amount payable on redemption thereof, or reduce the amount of
the principal of Debt Securities issued with original issue discount that
would be due and payable upon an acceleration of the maturity thereof or the
amount thereof provable in bankruptcy, or extend the time or reduce the amount
of any payment to any sinking fund or analogous obligation relating to such
Debt Securities, or impair or affect the right of any Holder of Debt
Securities to institute suit for the payment thereof or, if such Debt
Securities provide therefor, any right of repayment at the option of the
Holder, (b) reduce the aforesaid percentage of such Debt Securities of any
series, the consent of the Holders of which is required for any such
supplemental indenture, or (c) reduce the percentage of such Debt Securities
of any series necessary to consent to waive any past default under such
Indenture to less than a majority, or (d) modify any of the provisions of the
sections of such Indenture relating to supplemental indentures with the
consent of the Holders, except to increase any such percentage or to provide
that certain other provisions of such Indenture cannot be modified or waived
without the consent of each Holder affected thereby, provided, however, that
this clause shall not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and concomitant changes
in such section or the deletion of this proviso. (Indenture Section 7.2)
Each Indenture will provide that a supplemental indenture which
changes or eliminates any covenant or other provision of such Indenture which
has expressly been included solely for the benefit of one or more particular
series of Debt Securities, or which modifies the rights of the Holders of such
series with respect to such covenant or other provision, shall be deemed not
to affect the rights under such Indenture of the Holders of Debt Securities of
any other series. (Indenture Section 7.2)
Each Indenture will provide that modifications and amendments
of such Indenture may be made by the Operating Partnership and the applicable
Trustee, without the consent of the Holders of any series of Debt Securities
issued thereunder: (1) to secure any Debt Securities issued thereunder; (2)
to evidence the succession of another entity to the Operating Partnership and
the assumption by any such successor of the covenants, agreements and
obligations of the Operating Partnership, in such Indenture and in the Debt
Securities issued thereunder; (3) to add to the covenants of the Operating
Partnership or to add any additional events of default; (4) to cure any
ambiguity, to correct or supplement any provision in such Indenture that may
be inconsistent with any other provision of such Indenture or to make any
other provisions with respect to matters or questions arising under such
Indenture, provided that such action shall not adversely affect the interests
of the Holders of any series of Debt Securities issued thereunder in any
material respect; (5) to establish the form and terms of Debt Securities
issued thereunder; (6) to evidence and provide for a successor trustee under
such Indenture with respect to one or more series of Debt Securities issued
thereunder or to provide for or facilitate the administration of the trusts
under such Indenture by more than one trustee; (7) to permit or facilitate the
issuance of Debt Securities in global form or bearer form or to provide for
uncertificated Debt Securities to be issued thereunder; (8) to change or
eliminate any provision of such Indenture, provided that any such change or
elimination shall become effective only when there are no Debt Securities
outstanding of any series created prior to the execution of such supplemental
indenture which are entitled to the benefit of such provision; or (9) to amend
or supplement any provision contained in such Indenture, which was required to
be contained in the Indenture in order for the Indenture to be qualified under
the Trust Indenture Act of 1939, if the Trust Indenture Act of 1939 or
regulations thereunder change what is so required to be included in qualified
indentures, in any manner not inconsistent with what then may be required for
such qualification. (Indenture Section 7.1)
Events of Default
The following will be events of default under each Indenture
with respect to each series of Debt Securities issued thereunder: (a) failure
to pay principal (or premium, if any) on such series of the Debt Securities
outstanding under such Indenture when due; (b) failure to pay any interest on
such series of the Debt Securities outstanding under such Indenture when due,
continued for 30 days; (c) default in the payment, if any, of any sinking fund
installment when due, payable by the terms of such series of Debt Securities;
(d) failure to perform any other covenant or warranty of the Operating
Partnership contained in such Indenture or such Debt Securities continued for
90 days after written notice; and (e) certain events of bankruptcy, insolvency
or reorganization of the Operating Partnership [or the Company]. In case an
event of default described in (a), (b) or (c) above shall occur and be
continuing with respect to any series of such Debt Securities, the applicable
Trustee or the Holders of not less than 25% in aggregate principal amount of
the Debt Securities of such series then outstanding (each such series acting
as a separate class) may declare the principal (or, in the case of discounted
Debt Securities, the amount specified in the terms thereof) of such series to
be due and payable. In case an event of default described in (d) above shall
occur and be continuing, the applicable Trustee or the Holders of not less
than 25% in aggregate principal amount of all Debt Securities of each affected
series then outstanding under such Indenture (treated as one class) may
declare the principal (or, in the case of discounted Debt Securities, the
amount specified in the terms thereof) of all Debt Securities of all such
series to be due and payable. If an event of default described in (e) above
shall occur and be continuing then the principal amount (or, in the case of
discounted Debt Securities, the amount specified in the terms thereof) of all
the Debt Securities outstanding shall be and become due and payable
immediately, without notice or other action by any Holder or the applicable
Trustee, to the full extent permitted by law. Any event of default with
respect to particular series of Debt Securities under such Indenture may be
waived by the Holders of a majority in aggregate principal amount of the
outstanding Debt Securities of such series (voting as a class), except in each
case a failure to pay principal of or premium, if any, or interest on such
Debt Securities or a default in respect of a covenant or provision which
cannot be modified or amended without the consent of each Holder affected
thereby. (Indenture Sections 4.1, 4.10)
Each Indenture will provide that the applicable Trustee may
withhold notice to the Holders of any default with respect to any series of
Debt Securities (except in payment of principal of or interest or premium on,
or sinking fund payment in respect of, the Debt Securities) if the applicable
Trustee considers it in the interest of Holders to do so. (Indenture Section
4.11)
The Operating Partnership will be required to furnish to each
Trustee annually a statement as to its compliance with all conditions and
covenants in the applicable Indenture. (Indenture Section 3.5)
Each Indenture will contain a provision entitling the
applicable Trustee to be indemnified by the Holders before proceeding to
exercise any trust or power under such Indenture at the request of such
Holders (Indenture Section 5.2). Each Indenture will provide that the Holders
of a majority in aggregate principal amount of the then outstanding Debt
Securities of any series may direct the time, method and place of conducting
any proceedings for any remedy available to the applicable Trustee or of
exercising any trust or power conferred upon the applicable Trustee with
respect to the Debt Securities of such series, provided, however, that the
applicable Trustee may decline to follow any such direction if, among other
reasons, the applicable Trustee, determines in good faith that the actions or
proceedings as directed may not lawfully be taken, would involve the
applicable Trustee in personal liability or would be unduly prejudicial to the
Holders of the Debt Securities of such series not joining in such direction
(Indenture Section 4.9). The right of a Holder to institute a proceeding
with respect to the applicable Indenture will be subject to certain conditions
precedent including, without limitation, that the Holders of not less than 25%
in aggregate principal amount of the Debt Securities of such series then
outstanding under such Indenture make a written request upon the applicable
Trustee to exercise its powers under such Indenture, indemnify the applicable
Trustee and afford the applicable Trustee reasonable opportunity to act, but
the Holder has an absolute right to receipt of the principal of, premium, if
any, and interest when due on the Debt Securities, to require conversion of
Debt Securities if such Indenture provides for convertibility at the option of
the Holder and to institute suit for the enforcement thereof (Indenture
Sections 4.6, 4.7).
Consolidation, Merger and Sale of Assets
Each Indenture will provide that the Operating Partnership may
not consolidate with, merge into or sell, convey or lease all or substantially
all of its assets to any Person unless the Operating Partnership is the
surviving entity or the successor Person is an entity organized under the laws
of any domestic jurisdiction and assumes the Operating Partnership's
obligations on the Debt Securities issued thereunder, and under such
Indenture, and after giving effect thereto no event of default, and no event
which, after notice or lapse of time or both, would become an event of default
shall have occurred and be continuing, and that certain other conditions are
met. (Indenture Sections 8.1, 8.2 )
No Conversion Rights
The Debt Securities will not be convertible into or
exchangeable for any capital stock of the Company or equity interest in the
Operating Partnership.
Discharge, Defeasance and Covenant Defeasance
Each Indenture will provide with respect to each series of Debt
Securities issued thereunder that the Operating Partnership may terminate its
obligations under such Debt Securities of a series and such Indenture with
respect to Debt Securities of such series if: (i) all Debt Securities of such
series previously authenticated and delivered, with certain exceptions, have
been delivered to the applicable Trustee for cancellation and the Operating
Partnership has paid all sums payable by it under the Indenture; or (ii) (A)
the Debt Securities of such series mature within one year or all of them are
to be called for redemption within one year under arrangements satisfactory to
the applicable Trustee for giving the notice of redemption, (B) the Operating
Partnership irrevocably deposits in trust with the applicable Trustee, as
trust funds solely for the benefit of the Holders of such Debt Securities, for
that purpose, money or U.S. Government Obligations or a combination thereof
sufficient (unless such funds consist solely of money, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the applicable Trustee), without
consideration of any reinvestment, to pay principal of and interest on the
Debt Securities of such series to maturity or redemption, as the case may be,
and to pay all other sums payable by it under such Indenture, and (C) the
Operating Partnership delivers to the applicable Trustee an officers'
certificate and an opinion of counsel, in each case stating that all
conditions precedent provided for in such Indenture relating to the
satisfaction and discharge of such Indenture with respect to the Debt
Securities of such series have been complied with. With respect to the
foregoing clause (i), only the Operating Partnership's obligations to
compensate and indemnify the applicable Trustee under the Indenture shall
survive. With respect to the foregoing clause (ii) only the Operating
Partnership's obligations to execute and deliver Debt Securities of such
series for authentication, to maintain an office or agency in respect of the
Debt Securities of such series, to have moneys held for payment in trust, to
register the transfer or exchange of Debt Securities of such series, to
deliver Debt Securities of such series for replacement or to be canceled, to
compensate and indemnify the applicable Trustee and to appoint a successor
trustee, and its right to recover excess money held by the applicable Trustee
shall survive until such Debt Securities are no longer outstanding.
Thereafter, only the Operating Partnership's obligations to compensate and
indemnify the applicable Trustee, and its right to recover excess money held
by the applicable Trustee shall survive. (Indenture Section 9.1)
Each Indenture will provide that the Operating Partnership (i)
will be deemed to have paid and will be discharged from any and all
obligations in respect of the Debt Securities issued thereunder of any series,
and the provisions of such Indenture will, except as noted below, no longer be
in effect with respect to the Debt Securities of such series ("legal
defeasance") and (ii) may omit to comply with any term, provision, covenant or
condition of such Indenture, and such omission shall be deemed not to be an
Event of Default under clause (d) of the first paragraph of "--Events of
Default" with respect to the outstanding Debt Securities of such series
("covenant defeasance"); provided that the following conditions shall have
been satisfied: (A) the Operating Partnership has irrevocably deposited in
trust with the applicable Trustee as trust funds solely for the benefit of the
Holders of the Debt Securities of such series, for payment of the principal of
and interest of the Debt Securities of such series, money or U.S. Government
Obligations or a combination thereof sufficient (unless such funds consist
solely of money, in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof delivered to
the applicable Trustee) without consideration of any reinvestment and after
payment of all federal, state and local taxes or other charges and assessments
in respect thereof payable by the applicable Trustee, to pay and discharge the
principal of and accrued interest on the outstanding Debt Securities of such
series to maturity or earlier redemption (irrevocably provided for under
arrangements satisfactory to the applicable Trustee), as the case may be; (B)
such deposit will not result in a breach or violation of, or constitute a
default under, such Indenture or any other material agreement or instrument to
which the Operating Partnership is a party or by which it is bound; (C) no
default with respect to such Debt Securities of such series shall have
occurred and be continuing on the date of such deposit; (D) the Operating
Partnership shall have delivered to such Trustee an opinion of counsel that
(1) the Holders of the Debt Securities of such series will not recognize
income, gain or loss for federal income tax purposes as a result of the
Operating Partnership's exercise of its option under this provision of such
Indenture and will be subject to federal income tax on the same amount and in
the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred and (2) the Holders of the Debt
Securities of such series have a valid security interest in the trust funds
subject to no prior liens under the Uniform Commercial Code, and (E) the
Operating Partnership has delivered to the applicable Trustee an officers'
certificate and an opinion of counsel, in each case stating that all
conditions precedent provided for in such Indenture relating to the defeasance
contemplated have been complied with. In the case of legal defeasance under
clause (i) above, the opinion of counsel referred to in clause (D)(1) above
may be replaced by a ruling directed to the applicable Trustee received from
the Internal Revenue Service to the same effect. Subsequent to a legal
defeasance under clause (i) above, the Operating Partnership's obligations to
execute and deliver Debt Securities of such series for authentication, to
maintain an office or agency in respect of the Debt Securities of such series,
to have moneys held for payment in trust, to register the transfer or exchange
of Debt Securities of such series, to deliver Debt Securities of such series
for replacement or to be cancelled, to compensate and indemnify the applicable
Trustee and to appoint a successor trustee, and its right to recover excess
money held by the applicable Trustee shall survive until such Debt Securities
are no longer outstanding. After such Debt Securities are no longer
outstanding, in the case of legal defeasance under clause (i) above, only the
Operating Partnership's obligations to compensate and indemnify the applicable
Trustee and its right to recover excess money held by the applicable Trustee
shall survive. (Indenture Sections 9.2 and 9.3)
Applicable Law
The Indentures will provide that the Debt Securities and the
Indentures will be governed by and construed in accordance with the laws of
the State of New York. (Indenture Section 10.8)
PLAN OF DISTRIBUTION
The Debt Securities may be sold (i) through agents, (ii)
through underwriters, (iii) through dealers or (iv) directly to purchasers
(through a specific bidding or auction process or otherwise). The
distribution of Debt Securities may be effected from time to time in one or
more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices relating to such
prevailing market prices or at negotiated prices.
Offers to purchase the Debt Securities may be solicited by
agents designated by the Operating Partnership from time to time. Any such
agent involved in the offer or sale of the Debt Securities will be named, and
any commissions payable by the Operating Partnership to such agent will be set
forth in the Prospectus Supplement. Unless otherwise indicated in the
Prospectus Supplement, any such agent will be acting on a best efforts basis
for the period of its appointment. Any such agent may be deemed to be an
underwriter, as that term is defined in the Securities Act, of the Debt
Securities so offered and sold.
If an underwriter or underwriters are utilized in the sale of
Debt Securities, the Operating Partnership will execute an underwriting
agreement with such underwriter or underwriters at the time an agreement for
such sale is reached, and the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including compensation of the underwriters and dealers, if any,
will be set forth in the Prospectus Supplement, which will be used by the
underwriters to make resales of the Debt Securities.
If a dealer is utilized in the sale of the Debt Securities,
the Operating Partnership will sell such Debt Securities to the dealer, as
principal. The dealer may then resell such Debt Securities to the public at
varying prices to be determined by such dealer at the time of resale. The
name of the dealer and the terms of the transactions will be set forth in the
Prospectus Supplement relating thereto.
Offers to purchase the Debt Securities may be solicited
directly by the Operating Partnership and sales thereof may be made by the
Operating Partnership directly to institutional investors or others. The
terms of any such sales, including the terms of any bidding or auction
process, if utilized, will be described in the Prospectus Supplement relating
thereto.
Agents, underwriters and dealers may be entitled under
agreements which may be entered into with the Operating Partnership to
indemnification by the Operating Partnership against certain liabilities,
including liabilities under the Securities Act, and any such agents,
underwriters or dealers, or their affiliates may be customers of, engage in
transactions with or perform services for the Operating Partnership in the
ordinary course of business.
If so indicated in the Prospectus Supplement, the Operating
Partnership will authorize agents and underwriters to solicit offers by
certain institutions to purchase Debt Securities from the Operating
Partnership at the public offering price set forth in the Prospectus
Supplement pursuant to Delayed Delivery Contracts ("Contracts") providing for
payment and delivery on the date stated in the Prospectus Supplement. Such
Contracts will be subject to only those conditions set forth in the Prospectus
Supplement. A commission indicated in the Prospectus Supplement will be paid
to underwriters and agents soliciting purchases of Debt Securities pursuant to
Contracts accepted by the Operating Partnership.
In connection with an offering, the Underwriters may engage in
transactions that stabilize, maintain or otherwise affect the price of the
Debt Securities or other securities of the Operating Partnership or the
Company. Specifically, the Underwriters may overallot such offering, creating
a syndicate short position. In addition, the Underwriters may bid for, and
purchase, the Debt Securities in the open market to cover syndicate shorts or
to stabilize the price of the Debt Securities. Finally, the underwriting
syndicate may reclaim selling concessions allowed for distributing the Debt
Securities in such offering, if the syndicate repurchases previously
distributed Debt Securities in syndicate covering transactions, in
stabilization transactions or otherwise. Any of these activities may
stabilize or maintain the market price of the Debt Securities above
independent market levels. The Underwriters are not required to engage in
these activities, and may end any of these activities at any time.
EXPERTS
The consolidated financial statements of the Operating
Partnership included in the Registration Statement on Form 10 of the
Operating Partnership have been audited by Ernst & Young LLP, independent
auditors, as stated in their report dated January 31, 1997 and are
incorporated herein by reference in reliance upon the report of such firm,
which report is given upon their authority as experts in accounting and
auditing.
Any financial statements and schedules hereafter incorporated
by reference in the registration statement of which this prospectus is a part
that have been audited and are the subject of a report by independent auditors
will be incorporated herein by reference in reliance upon such reports and
upon the authority of such firms as experts in accounting and auditing to the
extent covered by consents filed with the Commission.
LEGAL MATTERS
The validity of the Debt Securities offered hereby will be
passed upon for the Operating Partnership by Davis Polk & Wardwell, New York,
New York. Davis Polk & Wardwell will rely as to matters of Maryland law on
Piper & Marbury L.L.P., Baltimore, Maryland.
==============================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other expenses of Issuance and Distribution.
Registration fee........................... $ 106,061
Trustees' fees............................. 10,000
Printing and engraving expenses............ 100,000
Legal fees and expenses.................... 150,000
Accounting fees and expenses............... 75,000
Miscellaneous.............................. 68,939
--------
Total................................... $ 510,000
========
All amounts estimated except for registration fees.
Item 15. Indemnification of Directors and Officers.
The Amended and Restated Agreement of Limited Partnership (the
"Partnership Agreement") of the Operating Partnership dated as of December 1,
1993, as amended, contains provisions indemnifying the Company and the
Company's officers and directors against certain liabilities. The Partnership
Agreement provides for indemnification of the Company and the Company's
officers and directors to the fullest extent permitted by law; provided that no
indemnification shall be provided (i) for willful misconduct or a knowing
violation of the law or (ii) for any transaction for which a party seeking
indemnification received an improper personal benefit in violation or breach
of any provision of the Partnership Agreement. Such indemnification includes
the advance of expenses. Any indemnification pursuant to the Partnership
Agreement shall be made only out of the assets of the Operating Partnership,
and neither the Company nor any limited partner of the Operating Partnership
shall have any obligation to contribute to the capital of the Operating
Partnership or otherwise provide funds to enable the Operating Partnership to
fund its indemnification obligations. The indemnification provided by the
Partnership Agreement shall be in addition to any other rights to which a
person may be entitled. Any amendment, modification or repeal of the
indemnification provisions of the Partnership Agreement shall be prospective
only, and shall not apply to or have any effect on any right to
indemnification provided thereunder with respect to acts or omissions
occurring prior to such amendment, modification or repeal.
In addition, the Company's officers and directors are
indemnified under Maryland law and the Company's Articles of Incorporation.
Section 2-418 of the Maryland General Corporation Law permits the
indemnification of directors, officers, employees and agents of Maryland
corporations. ARTICLE EIGHTH of the Company's Articles of Amendment and
Restatement (the "Articles") authorizes the indemnification of directors and
officers to the full extent required or permitted by the General Laws of the
State of Maryland, now or hereafter in force, whether such persons are serving
the Company or, at its request, any other entity, which indemnification shall
include the advance of expenses under the procedures and to the full extent
permitted by law. ARTICLE EIGHTH of the Articles further provides that the
foregoing rights of indemnification shall not be exclusive of any other rights
to which those seeking indemnification may be entitled and that no amendment
or repeal of ARTICLE EIGHTH shall apply to or have any effect on any right to
indemnification provided thereunder with respect to acts or omissions
occurring prior to such amendment or repeal. In addition, the Company's
officers and directors are covered by certain directors' and officers'
liability insurance policies maintained by the Company. Reference is made to
Section 2-418 of the Maryland General Corporation Law and ARTICLE EIGHTH of
the Articles which are incorporated herein by reference.
Item 16. List of Exhibits and Exhibit Index
Exhibit 1.1 - Form of Underwriting Agreement
Exhibit 4.1 - Form of Indenture
Exhibit 5.1 - Opinion of Davis Polk & Wardwell as to the legality of Debt
Securities to be issued (to be filed by amendment)
Exhibit 5.2 - Opinion of Piper & Marbury L.L.P. as to the legality of Debt
Securities to be issued (to be filed by amendment)
Exhibit 12 - Statement re: Computation of Consolidated Ratio of Earnings to
Fixed Charges of the Operating Partnership
Exhibit 23.1 - Consent of Ernst & Young LLP
Exhibit 23.2 - Consent of Davis Polk & Wardwell (included in Exhibit 5.1)
Exhibit 23.3 - Consent of Piper & Marbury L.L.P. (included in Exhibit 5.2)
Exhibit 24 - Powers of Attorney (included on pages II-4 and II-5)
Exhibit 25 - Statement of Eligibility and Qualification of the Trustee
under the Trust Indenture Act (to be filed in accordance with
Section 305(b)(2) of the Trust Indenture Act of 1939)
Item 17. Undertakings. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, 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 this 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 and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in this registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement;
provided, however, that the undertakings set forth in paragraph (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed with or furnished to the Commission by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in this 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 herein, 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.
The undersigned registrant hereby further undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 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
this registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the provisions set forth or described
in Item 15 of this Registration Statement, or otherwise, the registrant has
been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrants of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person, in
connection with the securities registered hereby, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby further undertakes that:
(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
registrant 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.
The undersigned registrant hereby undertakes 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 Trust Indenture Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in Newport Beach, California, on the 13th day of
May, 1997.
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities,
Inc., its sole general partner
By: /s/ James E. Mead
----------------------------
James E. Mead
Senior Vice President,
Chief Financial Officer and
Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints James E. Mead, Shawn Howie,
Jeffrey Small and James M. Lurie, and each of them, his true and lawful
attorneys-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, and in any and all capacities, to
sign any and all amendments (including post-effective amendments) to the
Registration Statement to which this power of attorney is attached, as well as
any registration statement (or amendment thereto) relating to one or more of
the offerings covered hereby filed pursuant to Rule 462(b) promulgated under
the Securities Act of 1933, as amended, and to file the same and all exhibits
to them and other documents to be filed in connection with them, with the
Securities and Exchange Commission.
Pursuant to the requirements of the Securities Act of 1933,
this registration statement has been signed by the following persons in the
capacities as Directors and Officers of Irvine Apartment Communities, Inc.,
the sole general partner of the registrant, and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ------------------------------- ---------------------------------------- -----------
<S> <C> <C>
/s/ Donald Bren Chairman of the Board of Directors, May 13, 1997
---------------------------- President and Chief Executive Officer
Donald Bren (Principal Executive Officer)
/s/ Anthony M. Frank Director May 13, 1997
----------------------------
Anthony M. Frank
Director May 13, 1997
----------------------------
John F. Grundhofer
/s/ Bowen H. McCoy Director May 13, 1997
----------------------------
Bowen H. McCoy
/s/ Michael D. McKee Director May 13, 1997
----------------------------
Michael D. McKee
/s/ William H. McFarland Director May 13, 1997
----------------------------
William H. McFarland
/s/ Jack W. Peltason Director May 13, 1997
----------------------------
Jack W. Peltason
/s/ John F. Seymour, Jr. Director May 13, 1997
----------------------------
John F. Seymour, Jr.
/s/ James E. Mead Senior Vice President, May 13, 1997
---------------------------- Chief Financial Officer and
James E. Mead Secretary (Principal Financial Officer)
/s/ Shawn Howie Vice President, Corporate Finance and May 13, 1997
---------------------------- Controller (Principal Accounting Officer)
Shawn Howie
</TABLE>
Exhibit 1.1
IRVINE APARTMENT COMMUNITIES, L.P.
UNDERWRITING AGREEMENT
STANDARD PROVISIONS
(DEBT SECURITIES)
_______, 199_
From time to time, Irvine Apartment Communities, L.P., a
Delaware limited partnership (the "Operating Partnership"), may enter into one
or more underwriting agreements that provide for the sale of designated
securities to the several underwriters named therein. The standard provisions
set forth herein may be incorporated by reference in any such underwriting
agreement (an "Underwriting Agreement"). The Underwriting Agreement, including
the provisions incorporated therein by reference, is herein sometimes referred
to as this Agreement. Terms defined in the Underwriting Agreement are used
herein as therein defined.
The Operating Partnership has filed with the Securities and
Exchange Commission (the "Commission") a registration statement, including a
prospectus, relating to the Debt Securities, and has filed with, or transmitted
for filing to, or shall promptly hereafter file with or transmit for filing
to, the Commission a prospectus supplement (the "Prospectus Supplement")
specifically relating to the Offered Securities pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"). The term
"Registration Statement" means such post-effective amendment to the
registration statement, including the exhibits thereto, as amended to the date
of this Agreement. The term "Basic Prospectus" means the prospectus included
in the Registration Statement. The term "Prospectus" means the Basic
Prospectus together with the Prospectus Supplement. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Offered Securities, together with the Basic Prospectus. As used herein, the
terms "Basic Prospectus," "Prospectus" and "preliminary prospectus" shall
include in each case the documents, if any, incorporated by reference therein.
The terms "supplement," "amendment" and "amend" as used herein shall include
all documents deemed to be incorporated by reference in the Prospectus that
are filed subsequent to the date of the Basic Prospectus by the Operating
Partnership with the Commission pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act").
Irvine Apartment Communities, Inc., a Maryland corporation (the
"Company"), owns a general partnership interest in the Operating Partnership
and is its sole managing general partner. The Operating Partnership owns and
operates multifamily apartment communities (the "Properties"). The Operating
Partnership holds general and limited partnership interests in a partnership
(the "Property Partnership") which owns one of the Properties. The Company, the
Operating Partnership and the Property Partnership are herein collectively
referred to as the REIT Entities and all references to properties or assets of
the REIT Entities include, without limitation, the Properties, unless otherwise
noted.
The term "Contract Securities" means the Offered Securities to
be purchased pursuant to the delayed delivery contracts substantially in the
form of Schedule I hereto, with such changes therein as the Operating
Partnership may approve (the "Delayed Delivery Contracts"). The term
"Underwriters' Securities" means the Offered Securities other than Contract
Securities.
1. Representations and Warranties. Each of the Company and the
Operating Partnership, jointly and severally, represents and warrants to and
agrees with each of the Underwriters that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part
of the Registration Statement, when such part became effective, did not
contain, and each such part, as amended or supplemented, if applicable, will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading, (iii) the Registration Statement and the Prospectus comply,
and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations of
the Commission thereunder and (iv) the Prospectus does not contain and, as
amended or supplemented, if applicable, will not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, except that the representations and warranties set forth
in Section 1(b) do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any Underwriter
furnished to the Operating Partnership in writing by such Underwriter through
the Manager expressly for use therein or (B) to that part of the Registration
Statement that constitutes the Statement of Eligibility (Form T-1) under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), of the
Trustee.
(c) The Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and
to conduct its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be
in good standing would not have a material adverse effect on the REIT Entities,
taken as a whole. Other than the Operating Partnership, the Company has no
"significant subsidiaries" as defined in Rule 1-02 of Regulation S-X
promulgated by the Commission ("Significant Subsidiaries").
(d) Each of the Operating Partnership and the Property Partnership
have been duly formed, is validly existing as a limited partnership in good
standing under the laws of the jurisdiction of its formation, has the power and
authority to own its property and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not have a material
adverse effect on the REIT Entities, taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered
by the Company and the Operating Partnership.
(f) The Indenture has been duly qualified under the Trust Indenture
Act and has been duly authorized, executed and delivered by the Operating
Partnership and is a valid and binding agreement of the Operating Partnership,
enforceable in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the
availability of equitable remedies may be limited by equitable principles of
general applicability.
(g) If applicable, the Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Operating Partnership and are valid
and binding agreements of the Operating Partnership, enforceable in accordance
with their respective terms except as (i) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability.
(h) The Offered Securities have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by the Underwriters in accordance with the terms
of the Underwriting Agreement, in the case of the Underwriters' Securities, or
by institutional investors in accordance with the terms of any applicable
Delayed Delivery Contracts, in the case of the Contract Securities, will be
entitled to the benefits of the Indenture and will be valid and binding
obligations of the Operating Partnership, in each case enforceable in
accordance with their respective terms except as (i) the enforceability thereof
may be limited by bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (ii) rights of acceleration, if any, and the availability
of equitable remedies may be limited by equitable principles of general
applicability.
(i) The execution and delivery by the Company and the Operating
Partnership of, and the performance by them of their obligations under, this
Agreement, the Indenture, the Offered Securities and the Delayed Delivery
Contracts, as applicable, will not contravene any provision of applicable law
or the charter or by-laws of the Company, the certificate of limited
partnership or partnership agreement of the Operating Partnership, as amended
or restated, (the "OP Partnership Agreement"), the certificate of limited
partnership or partnership agreement of the Property Partnership (the
"Property Partnership Agreement") or any agreement or other instrument binding
upon the REIT Entities that is material to the REIT Entities, taken as a
whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the REIT Entities, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company or the Operating
Partnership of their obligations under this Agreement, the Indenture, the
Offered Securities or the Delayed Delivery Contracts, as applicable, except
such as may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Offered Securities.
(j) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the condition,
financial or otherwise, or in the earnings, business or operations of the REIT
Entities, taken as a whole, from that set forth in the Prospectus (exclusive of
any amendments or supplements thereto subsequent to the date of this
Agreement).
(k) There are no legal or governmental proceedings pending or
threatened to which any of the REIT Entities is a party or to which any of the
Properties is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required.
(l) Each preliminary prospectus filed as part of the post-effective
amendment to the registration statement as originally filed or as part of any
amendment thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act and the
applicable rules and regulations of the Commission thereunder.
(m) The Properties are, to the best knowledge of the REIT
Entities, in compliance with any and all applicable foreign, federal, state
and local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes, pollutants
or contaminants ("Environmental Laws"), and the REIT Entities and the Company
(i) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(ii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or approvals
would not, singly or in the aggregate, have a material adverse effect on the
REIT Entities, taken as a whole.
(n) To the best of the knowledge of the Company and the Operating
Partnership, there are no costs and liabilities associated with Environmental
Laws except as disclosed in the Registration Statement, which would, singly or
in the aggregate, have a material adverse effect on the REIT Entities, taken as
a whole.
(o) The Operating Partnership has (whether directly or indirectly
through the ownership of the Property Partnership) good title in fee simple to
the Properties and good title to all personal property owned as is material to
the business of the REIT Entities, taken as a whole, in each case free and
clear of all liens, encumbrances and defects except such as are described in
the Prospectus or in title policies held by the Operating Partnership or such
as do not materially affect the value of such property and do not interfere
with the use made and proposed to be made of such property by the REIT
Entities, (i) any real property held under lease by any REIT Entity is held by
it under valid, subsisting, enforceable leases, and no default by any REIT
Entity has occurred and is continuing thereunder, with such exceptions as are
not material and do not interfere in any material respect with the use made
and proposed to be made of such property by any REIT Entity, (ii) the
operation of the buildings, fixtures and other improvements located on the
Properties as presently conducted is not in violation of any applicable
building code, zoning ordinance or other law or regulation, except where such
violation of any applicable building code, zoning ordinance or other law or
regulation would not, singly or in the aggregate, have a material adverse
effect on the REIT Entities, taken as a whole, (iii) neither the Company nor
the Operating Partnership has received notice of any proposed special
assessment or any proposed material change in any property tax, zoning or land
use laws or availability of water for irrigation affecting all or any portion
of the Properties, (iv) there do not exist any material violations of any
declaration of covenants, conditions and restrictions (the "CC&R's") with
respect to any of the Properties, nor is there any existing state of facts or
circumstances or condition or event which could, with the giving of notice or
passage of time, or both, constitute such a violation and (v) the improvements
comprising any portion of the Properties (the "Improvements") are free of any
and all material physical, mechanical, structural, design and construction
defects and the Improvements (including, without limitation, all water,
electric, sewer, plumbing, heating, ventilation, gas and air conditioning
servicing the Improvements) are in good condition and proper working order and
are free of material defects.
(p) The REIT Entities have and will maintain liability, property,
casualty and other insurance policies, with respect to each of the Properties,
insuring them against the risks of loss arising out of or related to their
businesses, in an amount and on such terms as is adequate and appropriate for
such businesses.
(q) All of the partnership interests of the Operating Partnership
("OP Units") have been validly issued and are validly owned, directly or
indirectly, in the percentage amounts set forth in the Prospectus by the
Company and The Irvine Company, in the case of the Company, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity
(each of the foregoing a "Lien"). The Company is the sole general partner of
the Operating Partnership.
(r) All of the partnership interests of the Property Partnership
have been validly issued and are owned of record by the Operating Partnership
and a third party, in the case of the Operating Partnership, free and clear of
all liens.
2. Delayed Delivery Contracts. If the Prospectus provides for
sales of Offered Securities pursuant to Delayed Delivery Contracts, the
Operating Partnership hereby authorizes the Underwriters to solicit offers to
purchase Contract Securities on the terms and subject to the conditions set
forth in the Prospectus pursuant to Delayed Delivery Contracts. Delayed
Delivery Contracts may be entered into only with institutional investors
approved by the Operating Partnership of the types set forth in the
Prospectus. On the Closing Date, the Operating Partnership will pay to the
Manager as compensation for the accounts of the Underwriters the commission
set forth in the Underwriting Agreement in respect of the Contract Securities.
The Underwriters will not have any responsibility in respect of the validity
or the performance of any Delayed Delivery Contracts.
If the Operating Partnership executes and delivers Delayed
Delivery Contracts with institutional investors, the aggregate amount of
Offered Securities to be purchased by the several Underwriters shall be
reduced by the aggregate amount of Contract Securities; such reduction shall
be applied to the commitment of each Underwriter pro rata in proportion to the
amount of Offered Securities set forth opposite such Underwriter's name in the
Underwriting Agreement, except to the extent that the Manager determines that
such reduction shall be applied in other proportions and so advises the
Operating Partnership; provided, however, that the total amount of Offered
Securities to be purchased by all Underwriters shall be the aggregate amount
set forth above, less the aggregate amount of Contract Securities.
3. Terms of Public Offering. The Operating Partnership is advised
by the Manager that the Underwriters propose to make a public offering of
their respective portions of the Underwriters' Securities as soon after this
Agreement has been entered into as in the Manager's judgment is advisable. The
terms of the public offering of the Underwriters' Securities are set forth in
the Prospectus.
4. Payment and Delivery. Except as otherwise provided in this
Section, payment for the Underwriters' Securities shall be made by a wire
transfer to the Operating Partnership in immediately available funds at the
time and place set forth in the Underwriting Agreement, upon delivery to the
Manager for the respective accounts of the several Underwriters of the
Underwriters' Securities registered in such names and in such denominations
as the Manager shall request in writing not less than two full business days
prior to the date of delivery, with any transfer taxes payable in connection
with the transfer of the Underwriters' Securities to the Underwriters duly
paid.
5. Conditions to the Underwriters' Obligations. The several
obligations of the Underwriters are subject to the following conditions:
(a) Subsequent to the execution and delivery of the Underwriting
Agreement and prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of any
review for a possible change that does not indicate the direction of the
possible change, in the rating accorded any of the Operating Partnership's
securities by any "nationally recognized statistical rating organization," as
such term is defined for purposes of Rule 436(g)(2) under the Securities Act;
and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations of the REIT Entities, taken as a whole,
from that set forth in the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) that, in the
judgment of the Manager, is material and adverse and that makes it, in the
judgment of the Manager, impracticable to market the Offered Securities on the
terms and in the manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by an executive officer of the
Company, in its individual capacity and in its capacity as general partner of
the Operating Partnership, to the effect set forth in clause 5(a)(i) and to the
effect that the representations and warranties of the Company and the
Operating Partnership contained in this Agreement are true and correct as of
the Closing Date and that the Company and the Operating Partnership have each
complied with all of the agreements and satisfied all of the conditions on
their part to be performed or satisfied hereunder on or before the Closing
Date.
The officer signing and delivering such certificate may rely
upon the best of his or her knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Piper & Marbury L.L.P., Maryland counsel for the Company and the
Operating Partnership, or other counsel for the Company and the Operating
Partnership, dated the Closing Date, to the effect that:
(i) the Company has been duly incorporated, is validly existing as
a corporation in good standing under the laws of the State of Maryland, and has
the corporate power and authority to own its property and to conduct its
business as described in the Prospectus;
(ii) this Agreement has been duly authorized, executed and delivered
by the Company in its individual capacity and in its capacity as general
partner of the Operating Partnership;
(iii) the Indenture has been duly authorized, executed and delivered
by the Company in its capacity as general partner of the Operating
Partnership;
(iv) if applicable, the Delayed Delivery Contracts have been duly
authorized, executed and delivered by the Company in its capacity as general
partner of the Operating Partnership;
(v) the Offered Securities have been duly authorized by the Company
in its capacity as general partner of the Operating Partnership; and
(vi) the execution and delivery by the Company, in its individual
capacity and in its capacity as general partner of the Operating Partnership,
and the performance by the Company or the Operating Partnership of their
respective obligations under, this Agreement, the Indenture, the Offered
Securiites and the Delayed Delivery Contracts, as applicable, will not
contravene any provision of applicable law or the charter or by-laws of the
Company and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency of the State of Maryland is required for
the performance by the Company or the Operating Partnership of their
respective obligations under this Agreement, the Indenture, the Offered
Securities, the Delayed Delivery Contracts, as applicable (excluding the
securities or Blue Sky laws of the State of Maryland, as to which such counsel
need not express any opinion).
In rendering the foregoing opinions, Piper & Marbury, L.L.P. or
other counsel for the Company and the Operating Partnership may state that
their opinion relates only to the laws of the State of Maryland.
(d) The Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, special counsel for the Company and the
Operating Partnership, or other counsel for the Company and the Operating
Partnership, dated the Closing Date, to the effect that:
(i) based solely on certificates of public officials, such
counsel confirms that the Company is qualified to do business in
the State of California. To the best of such counsel's
knowledge, other than the Operating Partnership, the Company has
no Significant Subsidiaries;
(ii) the Operating Partnership has been duly formed, is
validly existing as a limited partnership in good standing under
the laws of the State of Delaware and has the power and
authority to own, lease and operate its property and to conduct
its business as described in the Prospectus. Based solely on
certificates of public officials, such counsel confirms that the
Operating Partnership is qualified to do business in the State
of California;
(iii) assuming due authorization, execution and delivery of
this Agreement by the Company in its capacity as general partner
of the Operating Partnership, this Agreement has been duly
authorized, executed and delivered by the Operating Partnership;
(iv) the Indenture has been duly qualified under the Trust
Indenture Act and, assuming due authorization, execution and
delivery by the Company in its capacity as general partner of
the Operating Partnership, is a valid and binding agreement of
the Operating Partnership, enforceable in accordance with its
terms except as (a) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors'
rights generally and (b) rights of acceleration and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(v) if applicable, assuming due authorization, execution and
delivery by the Company in its capacity as general partner of
the Operating Partnership, the Delayed Delivery Contracts are
valid and binding agreements of the Operating Partnership,
enforceable in accordance with their respective terms except as
(a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally
and (b) the availability of equitable remedies may be limited by
equitable principles of general applicability;
(vi) assuming due authorization by the Company in its capacity
as general partner of the Operating Partnership, the Offered
Securities, when executed and authenticated in accordance with
the provisions of the Indenture and delivered to and paid for by
the Underwriters in accordance with the terms of the
Underwriting Agreement, in the case of Underwriters' Securities,
or by institutional investors in accordance with the terms of
the Delayed Delivery Contracts, if applicable, in the case of
the Contract Securities, will be entitled to the benefits of the
Indenture and will be valid and binding obligations of the
Operating Partnership, enforceable in accordance with their
respective terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration, if
any, and the availability of equitable remedies may be limited
by equitable principles of general applicability;
(vii) assuming due authorization, execution and delivery by the
Company in its capacity as general partner of the Operating
Partnership, the execution and delivery by the Operating
Partnership of, and the performance by the Operating Partnership
of its obligations under, this Agreement, the Indenture, the
Offered Securities and the Delayed Delivery Contracts, as
applicable, will not contravene the certificate of limited
partnership of the Operating Partnership, the OP Partnership
Agreement, the Miscellaneous Rights Agreement (as defined in the
Prospectus) or any agreement or other instrument binding upon
any of the REIT Entities that is material to the REIT Entities,
taken as a whole, or any judgment or decree of any governmental
body, agency or court having jurisdiction over any of the REIT
Entities (it being understood that such counsel expresses no
opinion as to any judgment or decree of the United States
Department of Housing and Urban Development ("HUD")), and no
consent, approval, authorization or order of, or qualification
with, any governmental body or agency (it being understood that
such counsel expresses no opinion as to any consent, approval,
authorization or order of, or qualification with, HUD) is
required for the performance by the Operating Partnership of its
obligations under this Agreement, the Indenture, the Offered
Securities or the Delayed Delivery Contract, as applicable,
except such as may be required by the securities, Blue Sky or
real estate syndication laws of the various states in connection
with the offer and sale of the Offered Securities, provided that
in giving this opinion as to any agreement or other instrument
binding upon any of the REIT Entities, such counsel may rely
without independent investigation upon an opinion of counsel for
the Company and the Operating Partnership;
(viii) the statements (A) in the Prospectus under the captions
"Description of Debt Securities" and "Plan of Distribution";
(B) in the Registration Statement under Item 15, (C) in "Item 8
-- Legal Proceedings" of the Operating Partnership's
registration statement on Form 10 incorporated by reference in
the Registration Statement, (D) in "Item 3 - Legal Proceedings"
of the Operating Partnership's most recent annual report on Form
10-K, if any, incorporated by reference in the Prospectus and
(E) in "Item 1 - Legal Proceedings" of Part II of the Operating
Partnership's quarterly reports on Form 10-Q, if any, filed
since such annual report, in each case insofar as such
statements constitute summaries of the legal matters, documents
or proceedings referred to therein, fairly present the
information called for with respect to such legal matters,
documents and proceedings and fairly summarize the matters
referred to therein;
(ix) such counsel does not know of any legal or governmental
proceedings pending or threatened to which any of the REIT
Entities or any of the Properties is subject that are required
to be described in the Registration Statement or the Prospectus
and are not so described or of any statutes, regulations,
contracts or other documents that are required to be described
in the Registration Statement or the Prospectus or to be filed
or incorporated by reference as exhibits to the Registration
Statement that are not described, filed or incorporated as
required; and
(x) such counsel (A) is of the opinion that each document,
if any, filed pursuant to the Exchange Act and incorporated by
reference in the Prospectus (except for financial statements and
schedules included therein as to which such counsel need not
express any opinion) complied when so filed as to form in all
material respects with the Exchange Act and the applicable rules
and regulations of the Commission thereunder, (B) has no reason
to believe that (except for financial statements and schedules
as to which such counsel need not express any belief and except
for that part of the Registration Statement that constitutes the
Form T-1 heretofore referred to) each part of the Registration
Statement, when such part became effective, contained and, as of
the date such opinion is delivered, contains any untrue
statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading, (C) is of the opinion
that the Registration Statement and Prospectus (except for
financial statements and schedules included therein as to which
such counsel need not express any opinion) comply as to form in
all material respects with the Securities Act and the applicable
rules and regulations of the Commission thereunder and (D) has
no reason to believe that (except for financial statements and
schedules as to which such counsel need not express any belief)
the Prospectus as of the date such opinion is delivered contains
any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading.
In rendering the foregoing opinions, Davis Polk & Wardwell or
other counsel for the Company and the Operating Partnership may state that (i)
they have relied as to factual matters on certificates of one or more officers
of the Company and (ii) their opinion relates only to the federal laws of the
United States, the laws of the State of New York and the Revised Uniform
Limited Partnership Act of the State of Delaware.
(e) The Underwriters shall have received on the Closing Date an
opinion of Davis Polk & Wardwell, counsel for the Company and the Operating
Partnership, to the effect that such counsel confirms, as of the Closing Date,
the opinions set forth under the heading "Federal Income Tax Considerations"
in the Prospectus.
(f) The Underwriters shall have received on the Closing Date an
opinion of , special counsel for the Underwriters, dated the Closing Date,
covering the matters referred to in subparagraphs 5(d)(iii), 5(d)(iv), 5(d)(v),
5(d)(vi) and 5(d)(viii) (but only as to the statements in the Prospectus under
"Description of Debt Securities" and "Plan of Distribution") and clauses
5(d)(x)(B), 5(d)(x)(C) and 5(d)(x)(D).
With respect to subparagraph 5(d)(x) above, Davis Polk &
Wardwell may state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and Prospectus
and any amendments or supplements thereto and documents incorporated therein
by reference and review and discussion of the contents thereof, but are
without independent check or verification, except as specified. With respect
to clauses 5(d)(x)(B), 5(d)(x)(C) and 5(d)(x)(D), ___________ may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto (but not including documents incorporated therein by reference) and
review and discussion of the contents thereof (including documents
incorporated therein by reference), but are without independent check or
verification, except as specified.
The opinions of Piper & Marbury L.L.P. or other counsel for the
Company and the Operating Partnership described in paragraph 5(c) and of Davis
Polk & Wardwell or other counsel for the Company and the Operating Partnership
described in paragraph 5(d) above each shall be rendered to the Underwriters
at the request of the Company and the Operating Partnership and shall so state
therein.
(g) The Underwriters shall have received on the Closing Date a
letter, dated the Closing Date, in form and substance satisfactory to the
Underwriters, from the Operating Partnership's independent public accountants,
containing statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in or incorporated by
reference into the Prospectus.
6. Covenants of the Operating Partnership. In further
consideration of the agreements of the Underwriters herein contained, the
Company and the Operating Partnership covenant as follows:
(a) To furnish the Manager, without charge, 3 signed copies of the
Registration Statement (including exhibits thereto) and for delivery to each
other Underwriter a conformed copy of the Registration Statement (without
exhibits thereto) and, during the period mentioned in paragraph 6(c), as many
copies of the Prospectus, any documents incorporated by reference therein and
any supplements and amendments thereto or to the Registration Statement as the
Manager may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus with respect to the Offered Securities, to furnish to the
Manager a copy of each such proposed amendment or supplement and not to file
any such proposed amendment or supplement to which the Manager reasonably
objects.
(c) If, during such period after the first date of the public
offering of the Offered Securities as in the opinion of counsel for the
Underwriters the Prospectus is required by law to be delivered in connection
with sales by an Underwriter or dealer, any event shall occur or condition
exist as a result of which it is necessary to amend or supplement the
Prospectus in order to make the statements therein, in the light of the
circumstances when the Prospectus is delivered to a purchaser, not misleading,
or if, in the opinion of counsel for the Underwriters, it is necessary to
amend or supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses the Manager will
furnish to the Operating Partnership) to which Offered Securities may have
been sold by the Manager on behalf of the Underwriters and to any other
dealers upon request, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, be misleading or so that the Prospectus, as amended or
supplemented, will comply with law; it being understood that, in the case of
any amendment to the Prospectus by means of the filing of the Operating
Partnership's quarterly or annual reports under the Exchange Act, the
Underwriters and their counsel will be furnished copies promptly after the
filing thereof.
(d) To endeavor to qualify the Offered Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the Manager
shall reasonably request and to maintain such qualification for as long as the
Manager shall reasonably request.
(e) To make generally available to the Operating Partnership's
security holders and to the Manager as soon as practicable an earning
statement covering a twelve month period beginning on the first day of the
first full fiscal quarter after the date of this Agreement, which earning
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder. If such fiscal
quarter is the last fiscal quarter of the Operating Partnership's fiscal year,
such earning statement shall be made available not later than 90 days after
the close of the period covered thereby and in all other cases shall be made
available not later than 45 days after the close of the period covered
thereby.
(f) During the period beginning on the date of the Underwriting
Agreement and continuing to and including the Closing Date, not to offer, sell,
contract to sell or otherwise dispose of any debt securities of the Operating
Partnership substantially similar to the Offered Securities (other than (i)
the Offered Securities and (ii) commercial paper issued in the ordinary
course of business), without the prior written consent of the Manager.
(g) To pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation and filing
of the Registration Statement and the Prospectus and all amendments and
supplements thereto; (ii) the preparation, issuance and delivery of the
Offered Securities; (iii) the fees and disbursements of the Company's and the
Operating Partnership's counsel and accountants and of the Trustee and its
counsel; (iv) the qualification of the Offered Securities under state
securities or Blue Sky laws in accordance with the provisions of Section 6(d),
including filing fees and the fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of
any Blue Sky or Legal Investment Memoranda; (v) the printing and delivery to
the Underwriters in quantities as hereinabove stated of copies of the
Registration Statement and all amendments thereto and of any preliminary
prospectus and the Prospectus and any amendments or supplements thereto; (vi)
the printing and delivery to the Underwriters of copies of any Blue Sky or
Legal Investment Memoranda; (vii) any fees charged by rating agencies for the
rating of the Offered Securities; (viii) the filing fees and expenses, if any,
incurred with respect to any filing with the National Association of
Securities Dealers, Inc. made in connection with the Offered Securities; (ix)
any expenses incurred by the Operating Partnership or the Company in
connection with a "road show" presentation to potential investors.
7. Indemnification and Contribution. (a) The Company and the
Operating Partnership agree, jointly and severally, to indemnify and hold
harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or other
expenses reasonably incurred by any Underwriter or any such controlling person
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or any amendment thereof, any
preliminary prospectus or the Prospectus (as amended or supplemented if the
Operating Partnership shall have furnished any amendments or supplements
thereto), or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any such untrue statement or omission or alleged
untrue statement or omission based upon information relating to any
Underwriter furnished to the Operating Partnership in writing by such
Underwriter through the Manager expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company and the Operating Partnership, the
Company's directors, its officers who sign the Registration Statement and each
person, if any, who controls the Company and the Operating Partnership within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company
and the Operating Partnership to such Underwriter, but only with reference to
information relating to such Underwriter furnished to the Operating
Partnership in writing by such Underwriter through the Manager expressly for
use in the Registration Statement, any preliminary prospectus, the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to either paragraph 7(a) or 7(b) such person
(the "indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such indemnified party unless (i) the indemnifying
party and the indemnified party shall have mutually agreed to the retention of
such counsel or (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the indemnifying party shall not, in respect of the legal
expenses of any indemnified party in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties and that all such fees and expenses shall be reimbursed as
they are incurred. Such firm shall be designated in writing by the Manager, in
the case of parties indemnified pursuant to paragraph 7(a), and by the Company
and the Operating Partnership, in the case of parties indemnified pursuant to
paragraph 7(b). The indemnifying party shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written
consent if (i) such settlement is entered into more than 30 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying
party shall not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph 7(a) or 7(b)
is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable
by such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Operating Partnership on the one hand
and the Underwriters on the other hand from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 7(d)(i) above but also the
relative fault of the Company and the Operating Partnership on the one hand
and of the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Operating Partnership on the one hand and the
Underwriters on the other hand in connection with the offering of the Offered
Securities shall be deemed to be in the same respective proportions as the net
proceeds from the offering of such Offered Securities (before deducting
expenses) received by the Company and the Operating Partnership and the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover of the Prospectus Supplement, bear
to the aggregate public offering price of the Offered Securities. The relative
fault of the Company and the Operating Partnership on the one hand and the
Underwriters on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Company and the Operating Partnership or by the
Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Underwriters' respective obligations to contribute pursuant to this
Section are several in proportion to the respective principal amounts of
Offered Securities they have purchased hereunder, and not joint.
(e) The Operating Partnership and the Underwriters agree that it
would not be just or equitable if contribution pursuant to this Section were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in paragraph 7(d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies which
may otherwise be available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations, warranties and other statements of the
Company and the Operating Partnership contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of
this Agreement, (ii) any investigation made by or on behalf of any Underwriter
or any person controlling any Underwriter or the Company or the Operating
Partnership, its officers or directors or any person controlling the Company
or the Operating Partnership and (iii) acceptance of and payment for any of
the Offered Securities.
8. Termination. This Agreement shall be subject to termination by
notice given by the Manager to the Operating Partnership, if (a) after the
execution and delivery of the Underwriting Agreement and prior to the Closing
Date (i) trading generally shall have been suspended or materially limited on
or by, as the case may be, any of the New York Stock Exchange, the American
Stock Exchange, the National Association of Securities Dealers, Inc., the
Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall
have been suspended on any exchange or in any over-the-counter market, (iii) a
general moratorium on commercial banking activities in New York shall have
been declared by either Federal or New York State authorities or (iv) there
shall have occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in the judgment of the
Manager, is material and adverse and (b) in the case of any of the events
specified in clauses 8(a)(i) through 8(a)(iv), such event, singly or together
with any other such event, makes it, in the judgment of the Manager,
impracticable to market the Offered Securities on the terms and in the manner
contemplated in the Prospectus.
9. Defaulting Underwriters. If, on the Closing Date, any one or
more of the Underwriters shall fail or refuse to purchase Underwriters'
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate amount of Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase is not
more than one-tenth of the aggregate amount of the Underwriters' Securities to
be purchased on such date, the other Underwriters shall be obligated severally
in the proportions that the amount of Underwriters' Securities set forth
opposite their respective names in the Underwriting Agreement bears to the
aggregate amount of Underwriters' Securities set forth opposite the names of
all such non-defaulting Underwriters, or in such other proportions as the
Manager may specify, to purchase the Underwriters' Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to
purchase on such date; provided that in no event shall the amount of
Underwriters' Securities that any Underwriter has agreed to purchase pursuant
to this Agreement be increased pursuant to this Section by an amount in excess
of one-ninth of such amount of Underwriters' Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Underwriters' Securities and the
aggregate amount of Underwriters' Securities with respect to which such
default occurs is more than one-tenth of the aggregate amount of Underwriters'
Securities to be purchased on such date, and arrangements satisfactory to the
Manager and the Operating Partnership for the purchase of such Underwriters'
Securities are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or the Operating Partnership. In any such case either the Manager or the
Operating Partnership shall have the right to postpone the Closing Date, but in
no event for longer than seven days, in order that the required changes, if
any, in the Registration Statement and in the Prospectus or in any other
documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Operating
Partnership to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason the Operating Partnership shall be unable
to perform its obligations under this Agreement, the Operating Partnership will
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel) reasonably incurred by
such Underwriters in connection with this Agreement or the offering
contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
UNDERWRITING AGREEMENT
_________, 199_
IRVINE APARTMENT COMMUNITIES, L.P.
550 Newport Center Drive
Suite 300
Newport Beach, California 92660
Dear Sirs and Mesdames:
We (the "Manager") are acting on behalf of the underwriter or
underwriters (including ourselves) named below (such underwriter or
underwriters being herein called the "Underwriters"), and we understand that
Irvine Apartment Communities, L.P., a Delaware limited partnership (the
"Operating Partnership"), proposes to issue and sell [Currency and Principal
Amount] aggregate initial offering price of [Full title of Debt Securities]
(the "Debt Securities") (The Debt Securities are also referred to herein as the
"Offered Securities.") The Debt Securities will be issued pursuant to the
provisions of an Indenture dated as of _______________, 199_ (the "Indenture")
between the Operating Partnership and [NAME OF TRUSTEE], as Trustee (the
"Trustee").
Subject to the terms and conditions set forth or incorporated by
reference herein, the Operating Partnership hereby agrees to sell to the
several Underwriters, and each Underwriter agrees, severally and not jointly,
to purchase from the Operating Partnership the respective principal amounts of
Debt Securities set forth below opposite their names at a purchase price of
____% of the principal amount of Debt Securities [, plus accrued interest, if
any, from [Date of Offered Securities] to the date of payment and delivery](1):
Principal Amount
of
Name Debt Securities
---- ----------------
Total.................
[The principal amount of Debt Securities to be purchased by the
several Underwriters shall be reduced by the aggregate principal amount of Debt
Securities sold pursuant to delayed delivery contracts.](2)
The Underwriters will pay for the Offered Securities [(less any
Offered Securities sold pursuant to delayed delivery contracts)] upon delivery
thereof at [office] at ______ a.m. (New York time) on ___________, 199_, or at
such other time, not later than 5:00 p.m. (New York time) on __________, 199_,
as shall be designated by the Manager. The time and date of such payment and
delivery are hereinafter referred to as the Closing Date.(3)
- ----------
(1) To be added only if the transaction does not close "flat" (i.e., when
the purchaser pays accrued interest on the debt security at closing).
Unless otherwise provided in the Debt Securities, accrued interest, if
any, will be computed on the basis of a 360-day year of twelve 30-day
months.
(2) To be added only if delayed delivery contracts are contemplated.
(3) This paragraph would have to be modified for any Offered Securities that
are to be issued in bearer form.
The Offered Securities shall have the terms set forth in the
Prospectus dated ___________, 199_, and the Prospectus Supplement dated
____________, 199_, including the following:
Terms of Debt Securities
Maturity Date:
Interest Rate:
Redemption Provisions:
Interest Payment Dates: ____________ __ and
____________ __ commencing
____________ __, ____
[(Interest accrues from
____________ __, ____)](4)
Form and Denomination:
[Other Terms:]
[The commission to be paid to the Underwriters in respect of
the Offered Securities purchased pursuant to delayed delivery contracts
arranged by the Underwriters shall be ___% of the principal amount of the
Debt Securities so purchased.](5)
- ----------
(4)To be added only if the transaction does not close flat.
(5)To be added only if delayed delivery contracts are contemplated.
All provisions contained in the document entitled Irvine
Apartment Communities, L.P. Underwriting Agreement Standard Provisions (Debt
Securities) dated _______, 199_, a copy of which is attached hereto, are
herein incorporated by reference in their entirety and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein, except that (i) if any term defined in such document is
otherwise defined herein, the definition set forth herein shall control, (ii)
all references in such document to a type of security that is not an Offered
Security shall not be deemed to be a part of this Agreement and (iii) all
references in such document to a type of agreement that has not been entered
into in connection with the transactions contemplated hereby shall not be
deemed to be a part of this Agreement.
Please confirm your agreement by having an authorized officer
sign a copy of this Agreement in the space set forth below.
Very truly yours,
Acting severally on behalf of themselves
and the several Underwriters named herein
By:
By:
---------------------------
Name:
Title:
Accepted:
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities, Inc.,
its General Partner
By:
------------------------
Name:
Title:
Schedule I
DELAYED DELIVERY CONTRACT
________, 199_
Dear Sirs and Mesdames:
The undersigned hereby agrees to purchase from Irvine Apartment
Communities, L.P., a Delaware limited partnership (the "Operating
Partnership"), and the Operating Partnership agrees to sell to the undersigned
the Operating Partnership's securities described in Schedule A annexed hereto
(the "Securities"), offered by the Operating Partnership's Prospectus dated
__________________, 19__ and Prospectus Supplement dated ________________,
19__, receipt of copies of which are hereby acknowledged, at a purchase price
stated in Schedule A and on the further terms and conditions set forth in this
Agreement. The undersigned does not contemplate selling Securities prior to
making payment therefor.
The undersigned will purchase from the Operating Partnership
Securities in the principal amount and numbers on the delivery dates set forth
in Schedule A. Each such date on which Securities are to be purchased
hereunder is hereinafter referred to as a "Delivery Date."
Payment for the Securities which the undersigned has agreed to
purchase on each Delivery Date shall be made to the Operating Partnership or
its order by wire transfer in immediately available funds at the office of
___________________________, New York, N.Y., at 10:00 A.M. (New York time) on
the Delivery Date, upon delivery to the undersigned of the Securities to be
purchased by the undersigned on the Delivery Date, in such denominations and
registered in such names as the undersigned may designate by written or
telegraphic communication addressed to the Operating Partnership not less than
five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make
payment for the Securities on the Delivery Date shall be subject to the
conditions that (1) the purchase of Securities to be made by the undersigned
shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which the undersigned is subject and (2) the Operating
Partnership shall have sold, and delivery shall have taken place to the
underwriters (the "Underwriters") named in the Prospectus Supplement referred
to above of, such part of the Securities as is to be sold to them. Promptly
after completion of sale and delivery to the Underwriters, the Operating
Partnership will mail or deliver to the undersigned at its address set forth
below notice to such effect, accompanied by a copy of the opinion of counsel
for the Operating Partnership delivered to the Underwriters in connection
therewith.
Failure to take delivery of and make payment for Securities by
any purchaser under any other Delayed Delivery Contract shall not relieve the
undersigned of its obligations under this agreement.
This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors, but will not be assignable
by either party hereto without the written consent of the other.
If this Agreement is acceptable to the Operating Partnership,
it is requested that the Operating Partnership sign the form of acceptance
below and mail or deliver one of the counterparts hereof to the undersigned at
its address set forth below. This will become a binding agreement, as of the
date first above written, between the Operating Partnership and the
undersigned when such counterpart is so mailed or delivered.
This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York.
Yours very truly,
_________________________
(Purchaser)
By ______________________
_________________________
(Title)
_________________________
(Address)
Accepted:
IRVINE APARTMENT COMMUNITIES, L.P.
By ___________________
PURCHASER --- PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone and department of the representative of the
Purchaser with whom details of delivery on the Delivery Date may be discussed
is as follows: (Please print.)
Telephone No.
Name (Including Area Code) Department
---- --------------------- ----------
____________________ _____________________ ____________________
SCHEDULE A
Securities:
Number to be Purchased:
Purchase Price:
Delivery:
EXHIBIT 4.1
- ------------------------------------------------------------------------------
Irvine Apartment Communities, L.P.
AND
, Trustee
Indenture
Dated as of _____________
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
-------------
ARTICLE 1
Definitions
Section 1.1. Certain Terms Defined...................................1
ARTICLE 2
Securities
Section 2.1. Forms Generally.........................................6
Section 2.2. Form of Trustee's Certificate of Authentication.........6
Section 2.3. Amount Unlimited; Issuable in Series....................7
Section 2.4. Authentication and Delivery of Securities...............9
Section 2.5. Execution of Securities.................................9
Section 2.6. Certificate of Authentication..........................10
Section 2.7. Denomination of Date of Securities; Payments
of Interest....................................................10
Section 2.8. Registration, Transfer and Exchange....................11
Section 2.9. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities.....................................................12
Section 2.10. Cancellation of Securities; Destruction Thereof........13
Section 2.11. Temporary Securities...................................13
Section 2.12. Series May Include Tranches............................14
ARTICLE 3
Covenants of the Issuer and the Trustee
Section 3.1. Payment of Principal and Interest......................15
Section 3.2. Offices for Payments, Etc..............................15
Section 3.3. Appointment to Fill a Vacancy in Office of Trustee.....15
Section 3.4. Paying Agents..........................................15
Section 3.5. Certificate of the Issuer..............................16
Section 3.6. Securityholders Lists..................................17
Section 3.7. Reports by the Issuer..................................17
Section 3.8. Reports by the Trustee.................................17
ARTICLE 4
Remedies of the Trustee and
Securityholders On Event of Default
Section 4.1. Event of Default Defined; Acceleration of Maturity;
Waiver of Default..............................................17
Section 4.2. Collection of Indebtedness by Trustee; Trustee May Prove
Debt...........................................................20
Section 4.3. Application of Proceeds................................23
Section 4.4. Suits for Enforcement..................................24
Section 4.5. Restoration of Rights on Abandonment of Proceedings....24
Section 4.6. Limitations on Suits by Securityholders................24
Section 4.7. Unconditional Right of Securityholders to
Institute Certain Suits........................................25
Section 4.8. Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default..........................................25
Section 4.9. Control by Securityholders.............................25
Section 4.10. Waiver of Past Defaults................................26
Section 4.11. Trustee to Give Notice of Default, But May Withhold
in Certain Circumstances.......................................26
Section 4.12. Right of Court to Require Filing of Undertaking to Pay
Costs..........................................................27
ARTICLE 5
Concerning the Trustee
Section 5.1. Duties and Responsibilities of the Trustee; During
Default; Prior to Default......................................27
Section 5.2. Certain Rights of the Trustee..........................29
Section 5.3. Trustee Not Responsible for Recitals, Disposition
of Securities or Application of Proceeds Thereof...............30
Section 5.4. Trustee and Agents May Hold Securities;
Collections, etc...............................................30
Section 5.5. Moneys Held by Trustee.................................30
Section 5.6. Compensation and Indemnification of Trustee and Its
Prior Claim....................................................30
Section 5.7. Right of Trustee to Rely on Officers'
Certificate, etc...............................................31
Section 5.8. Persons Eligible for Appointment as Trustee............31
Section 5.9. Resignation and Removal; Appointment of Successor
Trustee........................................................32
Section 5.10 Acceptance of Appointment by Successor Trustee.........33
Section 5.11 Merger, Conversion, Consolidation or Succession to
Business of Trustee............................................34
ARTICLE 6
Concerning the Securityholders
Section 6.1. Evidence of Action Taken by Securityholders............35
Section 6.2. Proof of Execution of Instruments and of Holding of
Securities; Record Date........................................35
Section 6.3. Holders to Be Treated as Owners........................35
Section 6.4. Securities Owned by Issuer Deemed Not Outstanding......36
Section 6.5. Right of Revocation of Action Taken....................36
ARTICLE 7
Supplemental Indentures
Section 7.1. Supplemental Indentures Without Consent of
Securityholders...............................................37
Section 7.2. Supplemental Indentures with Consent of
Securityholders................................................39
Section 7.3. Effect of Supplemental Indenture.......................40
Section 7.4. Documents to Be Given to Trustee.......................40
Section 7.5. Notation on Securities in Respect of Supplemental
Indentures.....................................................40
ARTICLE 8
Consolidation, Merger, Sale or Conveyance
Section 8.1. Issuer May Consolidate, Etc., on Certain Terms.........41
Section 8.2. Successor Entity Substituted...........................41
Section 8.3. Opinion of Counsel to Trustee..........................42
ARTICLE 9
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 9.1. Defeasance Within One Year of Payment..................42
Section 9.2. Defeasance.............................................43
Section 9.3. Covenant Defeasance....................................44
Section 9.4. Application of Trust Money.............................46
Section 9.5. Repayment to Issuer....................................46
ARTICLE 10
Miscellaneous Provisions
Section 10.1. Incorporators, Stockholders, Officers and Directors
of General Partner and Issuer Exempt from Individual
Liability......................................................47
Section 10.2. Provisions of Indenture for the Sole Benefit of
Parties and Securityholders....................................47
Section 10.3. Successors and Assigns of Issuer Bound by Indenture...47
Section 10.4. Notices and Demands on Issuer, Trustee and
Securityholder.................................................47
Section 10.5. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein.............................48
Section 10.6. Payments Due on Saturdays, Sundays and Holidays.......49
Section 10.7. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939..........................................49
Section 10.8. New York Law to Govern.................................49
Section 10.9. Counterparts..........................................50
Section 10.10. Effect of Headings....................................50
ARTICLE 11
Redemption of Securities and Sinking Funds
Section 11.1. Applicability of Article..............................50
Section 11.2. Notice of Redemption; Partial Redemptions.............50
Section 11.3. Payment of Securities Called for Redemption...........51
Section 11.4. Exclusion of Certain Securities from Eligibility
for Selection for Redemption...................................52
Section 11.5. Mandatory and Optional Sinking Funds..................52
TESTIMONIUM........................................................
SIGNATURES.........................................................
ACKNOWLEDGMENTS....................................................
THIS INDENTURE, dated as of _______, ____ between Irvine
Apartment Communities, L.P., a Delaware limited partnership (the "Issuer"),
and ____________________________________, (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to
time of its unsecured debentures, notes or other evidences of indebtedness to
be issued in one or more series (the "Securities") up to such principal amount
or amounts as may from time to time be authorized in accordance with the terms
of this Indenture and to provide, among other things, for the authentication,
delivery and administration thereof, the Issuer has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid
indenture and agreement according to its terms have been done;
NOW, THEREFORE:
In consideration of the premises and the purchases of the
Securities by the holders thereof, the Issuer and the Trustee mutually
covenant and agree for the equal and proportionate benefit of the respective
holders from time to time of the Securities as follows:
ARTICLE 1
Definitions
Section 1.1. Certain Terms Defined. (a) The following
terms (except as otherwise expressly provided or unless the context
otherwise clearly requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings specified
in this Section. All other terms used in this Indenture that are defined
in the Trust Indenture Act of 1939 or the definitions of which in the
Securities Act of 1933 are referred to in the Trust Indenture Act of 1939,
including terms defined therein by reference to the Securities Act of 1933
(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 and in said Securities Act as in force at the
date of this Indenture. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation. The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Indenture as a
whole 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.
"Board of Directors" means either the Board of Directors of the
General Partner or any committee of such Board duly authorized to act
hereunder.
"Business Day" means, with respect to any Security, a day that
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 not a day on which
banking institutions are authorized by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or if at any time after the execution and delivery of this Indenture such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties on such date.
"Corporate Trust Office" means the office of the Trustee at
which the corporate trust business of the Trustee shall, at any particular
time, be principally administered, which office is, at the date as of which
this Indenture is dated, located at [Trust Office Location].
"Event of Default" means any event or condition specified as
such in Section 4.1 or in any Officers' Certificate or indenture supplemental
hereto establishing the terms of any series of Securities.
"General Partner" means Irvine Apartment Communities, Inc., a
Maryland corporation, in its capacity as general partner of the Issuer.
"Holder", "holder of Securities", "Securityholder" or other
similar terms mean the registered holder of any Security.
"Indenture" means this instrument as originally executed and
delivered or, if amended or supplemented as herein provided, as so amended or
supplemented or both, and shall include the forms and terms of particular
series of Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Article 5)
Irvine Apartment Communities, L.P., a Delaware limited partnership, and,
subject to Article 8, its successors and assigns.
"Officers' Certificate" means a certificate signed by the
chairman of the Board of Directors or the president or any vice president and
by the treasurer or the secretary or any assistant secretary of the General
Partner and delivered to the Trustee. Each such certificate shall comply with
Section 314 of the Trust Indenture Act of 1939 and include the statements
provided for in Section 10.5.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel who may be an employee of or counsel to the Issuer and who shall be
satisfactory to the Trustee. Each such opinion shall comply with Section 314 of
the Trust Indenture Act of 1939 and include the statements provided for in
Section 10.5, if and to the extent required hereby.
"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 any Security that
provides for an amount less than the principal amount thereof to be due and
payable upon a declaration of acceleration of the maturity thereof pursuant to
Section 4.1.
"Outstanding", when used with reference to Securities, shall,
subject to the provisions of Section 6.4, 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 2.9
(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
4.1.
"Periodic Offering" means an offering of Securities of a series
from time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated
maturity or maturities thereof and the redemption provisions, if any, with
respect thereto, are to be determined by the Issuer or its agents upon the
issuance of such Securities.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Principal" whenever used with reference to the Securities or
any Security or any portion thereof, shall be deemed to include "and premium,
if any".
"Responsible Officer" when used with respect to the Trustee
means the chairman of the board of directors, any vice chairman of the board of
directors, the chairman of the trust committee, the chairman of the executive
committee, any vice chairman of the executive committee, the president, any
vice president, the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with the particular subject.
"Security" or "Securities" has the meaning stated in the first
recital of this Indenture, or, as the case may be, Securities that have been
authenticated and delivered under this Indenture.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article Five, shall also
include any successor trustee.
"Trust Indenture Act of 1939" (except as otherwise provided in
Sections 7.1 and 7.2) means the Trust Indenture Act of 1939 as in force at
the date as of which this Indenture was originally executed.
"U.S. Government Obligations" means securities that are (i)
direct obligations of the United States of America for the payment of which
its full faith and credit is pledged or (ii) obligations of an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States of America, and shall also include a depository receipt issued by a
bank or trust company as custodian with respect to any such U.S. Government
Obligation or a specific payment of interest on or principal of any such U.S.
Government Obligation held by such custodian for the account of the holder of
a depository receipt; provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable to the holder
of such depository receipt from any amount received by the custodian in respect
of the U.S. Government Obligation or the specific payment of interest on or
principal of the U.S. Government Obligation evidenced by such depository
receipt.
"vice president" when used with respect to the General Partner
or the Trustee, means any vice president, whether or not designated by a
number or a word or words added before or after the title of "vice president".
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
(b) Reference is made to Section 311 of the Trust Indenture
Act. For purposes of Section 311(b)(4) and (6) of such
Act, the following terms shall mean:
(i) "Cash Transaction" means 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;
and
(ii) "Self-liquidating Paper" means any draft, bill of
exchange, acceptance or obligation which is made,
drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing,
manufacturing, 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 the security is received by
the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from
the making, drawing, negotiating or incurring of the
draft, bill of exchange, acceptance or obligation.
ARTICLE 2
Securities
Section 2.1. Forms Generally. The Securities of each series
shall be substantially in such form (not inconsistent with this Indenture) as
shall be established by or pursuant to a resolution of the Board of Directors
or in one or more indentures supplemental hereto, in each case with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture and may have imprinted or otherwise
reproduced thereon such legend or legends or endorsements, not inconsistent
with the provisions of this Indenture, as may be required to comply with any
law or with any rules or regulations pursuant thereto, or with any rules of any
securities exchange or to conform to general usage, all as may be determined
by the officers executing such Securities, as evidenced by their execution of
the Securities.
The definitive Securities shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Section 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 herein
and referred to in the within-mentioned Indenture.
TRUSTEE
as Trustee
By________________________________
Authorized Officer
Section 2.3. Amount Unlimited; Issuable in Series. The
aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall
be established in or pursuant to a resolution of the Board of Directors and set
forth in an Officers' Certificate, or established in one or more indentures
supplemental hereto, prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other
Securities)
(2) the designation, if any, of the Securities of the series
as senior or subordinate in right of payment to other
indebtedness of the Issuer;
(3) 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 2.8, 2.9, 2.11 or 11.3);
(4) the date or dates on which the principal of the
Securities of the series is payable, which date or dates may be
fixed or extendible;
(5) the rate or rates at which the Securities of the series
shall bear interest, if any, or the method by which such rate
shall be determined, the date or dates from which such interest
shall accrue, the interest payment dates on which such interest
shall be payable and the record dates for the determination of
Holders to whom interest is payable;
(6) the place or places where the principal of and any
interest on Securities of the series shall be payable (if other
than as provided in Section 3.2);
(7) 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;
(8) whether the Securities will be convertible at the option
of the Issuer or the Holder thereof into other securities or
property of the Issuer;
(9) the terms, if any, on which such Debt Securities will be
subordinate to other debt of the Issuer;
(10) the obligation, if any, of the Issuer to redeem,
purchase or repay Securities of the series pursuant to any
sinking fund or analogous provisions or at the option of a
Holder thereof and the price or prices 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;
(11) if other than denominations of $1,000 and any multiple
thereof, the denominations in which Securities of the series
shall be issuable;
(12) if other than the principal amount thereof, the portion
of the principal amount of Securities of the series which shall
be payable upon declaration of acceleration of the maturity
thereof pursuant to Section 4.1 or provable in bankruptcy
pursuant to Section 4.2;
(13) whether the Securities will be issued in global form or
bearer form or as uncertificated securities;
(14) any Events of Default or covenants with respect to the
Securities of a particular series, if not set forth herein;
(15) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture); and
(16) any trustees, authenticating or paying agents, transfer
agents or registrars or any other agents with respect to the
Securities of such series.
All Securities of any one series shall be substantially
identical except as to denomination and in a Periodic Offering and except as
may otherwise be provided in or pursuant to such resolutions of the Board of
Directors or in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or
pursuant to such resolutions of the Board of Directors or in any such
indenture supplemental hereto and any forms and terms of Securities to be
issued from time to time may be completed and established from time to time
prior to the issuance thereof by procedures described in such resolutions of
the Board of Directors or supplemental indenture.
Section 2.4. Authentication 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 executed by the
Issuer to the Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver such Securities to or upon the written order of 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 first authentication of any
Securities of such Series, and (subject to Section 5.1) shall be fully
protected in relying upon:
(1) a certified copy of any resolution or resolutions of the
Board of Directors authorizing the action taken pursuant to the
resolution or resolutions delivered under clause (2) below;
(2) a copy of any resolution or resolutions of the Board of
Directors relating to such series, in each case certified by the
Secretary or an Assistant Secretary of the General Partner;
(3) an executed supplemental indenture, if any;
(4) an Officers' Certificate setting forth the form and
terms of the Securities as required pursuant to Section 2.1 and
2.3, respectively and prepared in accordance with Section 10.5;
(5) an Opinion of Counsel, prepared in accordance with
Section 10.5, to the effect that
(a) that the form or forms and terms of such Securities
have been established by or pursuant to a resolution of the
Board of Directors or by a supplemental indenture as
permitted by Section 2.1 and 2.3 in conformity with the
provisions of this Indenture;
(b) 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 valid and binding
obligations of the Issuer;
(c) covering such other matters as the Trustee may
reasonably request.
Section 2.5. Execution of Securities. The Securities shall be
signed on behalf of the Issuer by both (a) the chairman of the Board of
Directors or any vice chairman of the Board of Directors or the president or
any vice president of the General Partner and (b) by the treasurer or any
assistant treasurer or secretary or any assistant secretary, under the General
Partner's corporate seal which may, but need not, be attested. Such signatures
may be the manual or facsimile signatures of the present or any future such
officers. The seal of the General Partner may be in the form of a facsimile
thereof and may be impressed, affixed, imprinted or otherwise reproduced on the
Securities. 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 that has been duly authenticated and delivered
by the Trustee.
In case any officer of the General Partner who shall have
signed any of the Securities shall cease to be such officer before the
Security so signed shall be authenticated and delivered by the Trustee or
disposed of by the Issuer, such Security nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security had not
ceased to be such officer of the General Partner, and any Security may be
signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security, shall be the proper officers of the General
Partner, although at the date of the execution and delivery of this Indenture
any such person was not such an officer.
Section 2.6. Certificate of Authentication. Only such
Securities as shall bear thereon a certificate of authentication substantially
in the form hereinbefore recited, executed by the Trustee by the manual
signature of one of its authorized officers, shall be entitled to the benefits
of this Indenture or be valid or obligatory for any purpose. Such certificate
by 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 2.7. Denomination of Date of Securities; Payments of
Interest. The Securities shall be issuable as registered securities without
coupons and in denominations as shall be specified as contemplated by Section
2.3. In the absence of any such specification with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations of
$1,000 and any multiple thereof. The Securities shall be numbered, lettered, or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the General Partner executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.
Each Security shall be dated the date of its authentication and
shall bear interest, if any, from the date and shall be payable on the dates,
in each case, which shall be specified as contemplated by Section 2.3.
The person in whose name any Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Security
subsequent to the record date and prior to such interest payment date, except
if and to the extent the Issuer shall default in the payment of the interest
due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Securities for such series are registered at the close of business on a
subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the Issuer to the holders of Securities not less
than 15 days preceding such subsequent record date. The term "record date" as
used with respect to any interest payment date (except a date for payment of
defaulted interest) shall mean the date specified as such in the terms of the
Securities of any particular series, or, if no such date is so specified, if
such interest payment date is the first day of a calendar month, the fifteenth
day of the next preceding calendar month or, if such interest payment date is
the fifteenth day of a calendar month, the first day of such calendar month,
whether or not such record date is a Business Day.
Section 2.8. Registration, Transfer and Exchange. The Issuer
will keep or cause to be kept at each office or agency to be maintained for the
purpose as provided in Section 3.2 a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will register, and will
register the transfer of, Securities as in this Article provided. Such register
shall be in written form in the English language or in any other form capable
of being converted into such form within a reasonable time. At all reasonable
times such register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Security or Securities of the same series in authorized denominations for
a like aggregate principal amount.
Any Security or Securities of any series may be exchanged for a
Security or Securities of the same series in other authorized denominations, in
an equal aggregate principal amount. Securities of any series to be exchanged
shall be surrendered at any office or agency to be maintained by the Issuer for
the purpose as provided in Section 3.2, and the Issuer shall execute and the
Trustee shall authenticate and deliver in exchange therefor the Security or
Securities of the same series which the Securityholder making the exchange
shall be entitled to receive, bearing numbers not contemporaneously
outstanding.
All Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee) be
duly endorsed by, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the holder or his attorney duly authorized in writing.
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
exchange or registration of transfer of Securities. No service charge shall be
made for any such transaction.
The Issuer shall not be required to exchange or register a
transfer of (a) any Securities of any series for a period of 15 days next
preceding the first mailing of notice of redemption of Securities of such
series to be redeemed, or (b) any Securities selected, called or being called
for redemption except, in the case of any Security where public notice has
been given that such Security is to be redeemed in part, the portion thereof
not so to be redeemed.
All Securities issued upon any transfer or exchange of
Securities shall be valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
Section 2.9. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security shall become
mutilated, defaced or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver, a new Security of the same
series, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated or defaced Security, or in lieu of and
substitution for the Security so destroyed, lost or stolen. In every case the
applicant for a substitute Security shall furnish to the Issuer and to the
Trustee and any agent of the Issuer or the Trustee such security or indemnity
as may be required by them to indemnify and defend and to save each of them
harmless and, in every case of destruction, loss or theft, evidence to their
satisfaction of the destruction, loss or theft of such Security and of the
ownership thereof.
Upon the issuance of any substitute Security, 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) connected therewith. In case
any Security 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, pay or
authorize the payment of the same (without surrender thereof except in the
case of a mutilated or defaced Security), 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 of any series issued pursuant to the
provisions of this Section 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 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 of such series duly authenticated and delivered hereunder. All
Securities shall be held and owned upon the express condition that, to the
extent permitted by law, the foregoing provisions are exclusive with respect
to the replacement or payment of mutilated, defaced or destroyed, lost or
stolen Securities and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments
or other securities without their surrender.
Section 2.10. 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, if surrendered to the Issuer or any agent of the Issuer or the
Trustee, shall be delivered to the Trustee for cancellation or, if surrendered
to the Trustee, shall be canceled by it; and no Securities shall be issued in
lieu thereof except as expressly permitted by any of the provisions of this
Indenture. The Trustee shall destroy canceled Securities 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 2.11. 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 as registered Securities without coupons, of any authorized
denomination, and substantially in the form of the definitive Securities of
such series 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. 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 at each office or agency to be maintained by
the Issuer for that purpose pursuant to Section 3.2, and the Trustee shall
authenticate and deliver in exchange for such temporary Securities of such
series a like aggregate principal amount of definitive Securities of the same
series of authorized denominations. Until so exchanged, the temporary
Securities of any series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series.
Section 2.12. Series May Include Tranches. A series of
Securities may include one or more tranches (each a "tranche") of Securities,
including Securities issued in a Periodic Offering. The Securities of
different tranches may have one or more different terms, including
authentication dates and public offering prices, but all the Securities within
each such tranche shall have identical terms, including authentication date
and public offering price. Notwithstanding any other provision of this
Indenture, with respect to Sections 2.3, 2.5, 2.7, 4.1 through 4.12, 7.2, 9.1
through 9.4 and 11.1 through 11.5, if any series of Securities includes more
than one tranche, all provisions of such sections applicable to any series of
Securities shall be deemed equally applicable to each tranche of any series of
Securities in the same manner as though originally designated a series unless
otherwise provided with respect to such series or tranche pursuant to Section
2.3. In particular, and without limiting the scope of the next preceding
sentence, any of the provisions of such Sections which provide for or permit
action to be taken with respect to a series of Securities shall also be deemed
to provide for and permit such action to be taken instead only with respect to
Securities of one or more tranches within that series (and such provisions
shall be deemed satisfied thereby), even if no comparable action is taken with
respect to Securities in the remaining tranches of that series.
ARTICLE 3
Covenants of the Issuer and the Trustee
Section 3.1. Payment of Principal and Interest. The Issuer
covenants and agrees for the benefit of each series of Securities that it will
duly and punctually pay or cause to be paid the principal of, and interest on,
each of the Securities of such series at the place or places, at the
respective times and in the manner provided in such Securities. Each
installment of interest on the Securities of any series may be paid by mailing
checks for such interest payable to or upon the written order of the holders
of Securities entitled thereto as they shall appear on the registry books of
the Issuer.
Section 3.2. Offices for Payments, Etc. So long as any of the
Securities remain outstanding, the Issuer will maintain in the Borough of
Manhattan, The City of New York, the following for each series: an office or
agency (a) where the Securities may be presented for payment, (b) where the
Securities may be presented for registration of transfer and for exchange as in
this Indenture provided and (c) where notices and demands to or upon the
Issuer in respect of the Securities or of this Indenture may be served. The
Issuer will give to the Trustee written notice of the location of any such
office or agency and of any change of location thereof. Unless otherwise
specified in accordance with Section 2.3, the Issuer hereby initially
designates the Corporate Trust Office of [Name of Trustee] [Trust Office
Location], as the office to be maintained by it for each such purpose. In case
the Issuer shall fail to so designate or maintain any such office or agency or
shall fail to give such notice of the location or of any change in the
location thereof, presentations and demands may be made and notices may be
served at the Corporate Trust Office.
Section 3.3. 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 5.9, a
Trustee, so that there shall at all times be a Trustee with respect to each
series of Securities hereunder.
Section 3.4. 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 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 agent for the
payment of the principal of or interest 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 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 interest on the Securities of such series when
the same shall be due and payable, and
(c) pay any such sums so held in trust by it to the Trustee upon
the Trustee's written request at any time during the continuance of the failure
referred to in clause (b) above.
The Issuer will, on or prior to each due date of the principal
of or interest on the Securities of such series, deposit with the paying agent
a sum sufficient to pay such principal or interest so becoming due, and
(unless such paying agent is the Trustee) the Issuer will promptly notify the
Trustee of any failure to take such action.
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 or interest on the Securities of such series, set aside,
segregate and hold in trust for the benefit of the holders of the Securities
of such series a sum sufficient to pay such principal or interest so becoming
due. The Issuer will promptly notify the Trustee of any failure to take such
action.
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 Section 9.3 and 9.4.
Section 3.5. Certificate of the Issuer. The Issuer will
furnish to the Trustee on or before April 30 in each year (beginning with the
first April 30 to occur after the initial issuance of Securities under this
Indenture) a brief certificate (which need not comply with Section 10.5) from
the principal executive, financial or accounting officer of the General
Partner as to his or her knowledge of the Issuer's compliance with all
conditions and covenants under the Indenture (such compliance to be determined
without regard to any period of grace or requirement of notice provided under
the Indenture) which certificate shall comply with the Trust Indenture Act.
Section 3.6. Securityholders Lists. If and so long as the
Trustee shall not be the Security registrar for the Securities of any series,
the Issuer will furnish or cause to be furnished to the Trustee a list in such
form as the Trustee may reasonably require of the names and addresses of the
holders of the Securities of such series pursuant to Section 312 of the Trust
Indenture Act of 1939 (a) semi-annually not more than 15 days after each
record date for the payment of interest on such Securities, as hereinabove
specified, as of such record date and on dates to be determined pursuant to
Section 2.3 for non-interest bearing securities in each year, and (b) at such
other times as the Trustee may request in writing, within thirty days after
receipt by the Issuer of any such request as of a date not more than 15 days
prior to the time such information is furnished.
Section 3.7. Reports by the Issuer. The Issuer covenants to
file with the Trustee, 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 which the Issuer may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934.
Section 3.8. Reports by the Trustee. Any Trustee's report
required under Section 313(a) of the Trust Indenture Act of 1939 shall be
transmitted on or before July 15 in each year following the date hereof, so
long as any Securities are outstanding hereunder, and shall be dated as of a
date convenient to the Trustee no more than 60 nor less than 45 days prior
thereto.
ARTICLE 4
Remedies of the Trustee and Securityholders On Event of Default
Section 4.1. Event of Default Defined; Acceleration of
Maturity; Waiver of Default. "Event of Default" with respect to 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):
(a) default in the payment of any installment of interest upon any
of the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal (or
premium, if any) on any of the Securities of such series as and when the same
shall become due and payable either at maturity, upon redemption, by
declaration or otherwise; or
(c) default in the payment of any sinking fund installment as and
when the same shall become due and payable by the terms of the Securities of
such series; or
(d) default in the performance, or breach, of any covenant or
warranty of the Issuer in respect of the Securities of such series (other than
a covenant or warranty in respect of the Securities of such series a default in
whose performance or whose breach is elsewhere in this Section specifically
dealt with), and continuance of such default or breach for a period of 90 days
after there has been given, by registered or certified mail, to the Issuer by
the Trustee or to the Issuer and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of all series affected thereby,
a written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder; or
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee or sequestrator (or similar official) of the Issuer or for
any substantial part of its property or ordering the winding up or liquidation
of its affairs, and such decree or order shall remain unstayed and in effect
for a period of 60 consecutive days; or
(f) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee or sequestrator (or similar official)
of the Issuer or for any substantial part of its property, or make any general
assignment for the benefit of creditors; or
(g) any other Event of Default provided in the supplemental
indenture or resolution of the Board of Directors under which such series of
Securities is issued or in the form of Security for such series.
If an Event of Default described in clauses (a), (b) or (c)
above occurs and is continuing with respect to any series of Securities, 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 amount 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) or (g) occurs and is continuing with respect to any series of Securities,
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
Securities of all such affected series 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 such Securities then Outstanding and
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 (e) or (f) occurs and is continuing,
then, and in each and every such case, unless the principal amount of all the
Securities shall have already become due and payable, the principal amount (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 interest accrued thereon, if any, shall be and become due and
payable immediately, without notice or other action by any Holder or the
Trustee, to the full extent permitted by applicable law.
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 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 all matured
installments of interest upon all the Securities of such series (or of all the
Securities, as the case may be) and the principal of 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, to the extent that payment of such interest is enforceable under
applicable law, on overdue installments of interest, at the same rate as the
rate of interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series (or at the respective
rates of interest or Yields to Maturity of all the Securities, as the case may
be) to the date of such payment or deposit) 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 the Indenture, other than the
non-payment of the principal of Securities 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 all the Outstanding Securities of series that have been
accelerated, each series voting as a single class, by written notice to the
Issuer and to the Trustee, may waive all defaults with respect to such series
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.
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 4.2. 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 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 any of the 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 -- then upon demand of the Trustee, the Issuer will pay to the
Trustee for the benefit of the Holders of the Securities of such series the
whole amount that then shall have become due and payable on all Securities of
series for principal or interest, as the case may be (with interest to the
date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any expenses and liabilities
incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of its negligence or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the registered
holders, whether or not the principal of and interest on the Securities of such
series be overdue.
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 and collect in the manner provided by law out of the
property of the Issuer or other obligor upon such Securities, wherever
situated, the moneys adjudged or decreed to be payable.
In case there shall be pending proceedings relative to the
Issuer or any other obligor upon the Securities under Title 11 of the United
States Code or any other applicable Federal or state bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor, or in case of any other comparable judicial proceedings relative to
the Issuer or other obligor upon the Securities of any series, or to the
creditors or property of the Issuer or such other obligor, the Trustee,
irrespective of whether the principal of any Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Trustee shall have made any demand pursuant to the provisions
of this Section, shall be entitled and empowered, by intervention in such
proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified
in the terms of such series) owing and unpaid in respect of the Securities of
any series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement 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 of
the Securityholders allowed in any judicial proceedings relative to the Issuer
or other obligor upon the Securities of any series, or to the creditors or
property of the Issuer or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their
behalf; and any trustee, receiver, or liquidator, custodian or other similar
official is hereby authorized by each of the Securityholders to make payments
to the Trustee, and, in the event that the Trustee shall consent to the making
of payments directly to the Securityholders, to pay to the Trustee such
amounts as shall be sufficient to cover reasonable compensation to the
Trustee, each predecessor Trustee and their respective agents, attorneys and
counsel, and all other 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 5.6.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Securityholder any plan or reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar person.
All rights of action and of asserting claims under this
Indenture, or under any of the Securities, may be enforced by the Trustee
without the possession of any of the Securities 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, each
predecessor Trustee and their respective agents and attorneys, shall be for
the ratable benefit of the holders of the Securities 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 a party) the Trustee shall be held to represent all
the holders of the Securities in respect to which such action was taken, and
it shall not be necessary to make any holders of such Securities parties to
any such proceedings.
Section 4.3. Application of Proceeds. Any moneys collected by
the Trustee pursuant to this Article in respect of any series 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 of the several Securities in respect of which monies 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 monies have been collected, including reasonable
compensation to the Trustee and 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 5.6;
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) upon the overdue installments of interest at the same rate as
the rate of interest or Yield to Maturity (in the case of Original Issue
Discount Securities) specified in such Securities, 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 have 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 and interest, with
interest upon the overdue principal, and (to the extent that such interest has
been collected by the Trustee) upon overdue installments of interest at the
same rate as the rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the Securities of 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 and interest or yield to maturity, without
preference or priority of principal over interest or yield to maturity, or of
interest or yield to maturity over principal, or of any installment of
interest over any other installment of interest, or of any Security of such
series over any other Security of such series, ratably to the aggregate of
such principal and accrued and unpaid interest or yield to maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer
or any other person lawfully entitled thereto.
Section 4.4. Suits for Enforcement. In case an Event of
Default has occurred, has not been waived and is continuing, the Trustee may
in its discretion proceed to protect and enforce the rights vested in it by
this Indenture by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any of such rights, either at law
or in equity or in bankruptcy or otherwise, whether for the specific
enforcement of any covenant or agreement contained in this Indenture or in aid
of the exercise of any power granted in this Indenture or to enforce any other
legal or equitable right vested in the Trustee by this Indenture or by law.
Section 4.5. 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 and the Trustee shall be
restored respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Issuer, the Trustee and the Securityholders
shall continue as though no such proceedings had been taken.
Section 4.6. Limitations on Suits by Securityholders. No
holder of any Security of any series 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
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than 25% in aggregate
principal amount of the Securities of such series then outstanding shall have
made written request upon the Trustee to institute such action or proceedings
in its own name as trustee hereunder and shall have offered to the Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 4.9; it being understood and intended, and being expressly
covenanted by the taker and Holder of every Security with every other taker
and Holder and the Trustee, that no one or more Holders of Securities of any
series shall have any right in any manner whatever by virtue or by availing of
any provision of this Indenture to affect, disturb or prejudice the rights of
any other such Holder of Securities, 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 the applicable series. For the
protection and enforcement of the provisions of this Section, each and every
Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 4.7. Unconditional Right of Securityholders to
Institute Certain Suits. Notwithstanding any other provision in this
Indenture and any provision of any Security, the right of any Holder of any
Security to receive payment of the principal of (premium, if any) and interest
on such Security on or after the respective due dates expressed in such
Security, or to institute suit for the enforcement of any such payment on or
after such respective dates, or to require conversion of Securities, if
applicable, shall not be impaired or affected without the consent of such
Holder.
Section 4.8. Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default. Except as provided in Section 4.6, no right or remedy
herein conferred upon or reserved to the Trustee or to the Securityholders 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 Securityholder 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 4.6, every power and remedy given by this
Indenture or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee
or by the Securityholders.
Section 4.9. Control by Securityholders. 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, 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 5.1) 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 forebearances 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 5.1) the
Trustee shall have no duty to ascertain whether or not such actions or
forebearances 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 4.10. Waiver of Past Defaults. Subject to Sections
4.1, 4.7 and 7.2, the Holders of a majority in aggregate principal amount (or,
if the Securities are Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms thereof) of the Outstanding
Securities of all series affected thereby (voting as a class) may on behalf of
the Holders of all the Securities of such series waive any past 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 each Holder affected as provided in Section 7.2 or a default or
Event of Default in the payment of principal or interest as specified in
clauses (a), (b) and (c) of Section 4.1.
Upon any such waiver, such default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have occurred
for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
Section 4.11. Trustee to Give Notice of Default, But May
Withhold in Certain Circumstances. The Trustee shall give to the
Securityholders of any series, as the names and addresses of such Holders
appear on the registry books, 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 (premium, if any) or interest on any of the
Securities of such series, or in the payment of any sinking or purchase fund
installment with respect to 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.
Section 4.12. Right of Court to Require Filing of Undertaking
to Pay Costs. All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for
any action taken, 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, to any suit instituted pursuant to Section 4.7 or
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 all
series affected thereby.
ARTICLE 5
Concerning the Trustee
Section 5.1. 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 a particular 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 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 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 wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to
the Securities of any 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; and
(c) the Trustee 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 pursuant to Section 4.9 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.
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.
The provisions of this Section 5.1 are in furtherance of and
subject to Sections 315 and 316 of the Trust Indenture Act of 1939.
Section 5.2. Certain Rights of the Trustee. In furtherance of
and subject to the Trust Indenture Act of 1939, and subject to Section 5.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate 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 an assistant secretary of the General
Partner;
(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 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 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.
Section 5.3. Trustee Not Responsible for Recitals, Disposition
of Securities or Application of Proceeds Thereof. The recitals contained
herein and in the Securities, except the Trustee's 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. 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 5.4. Trustee and Agents May Hold Securities;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in
its individual or any other capacity, may become the owner or pledgee of
Securities with the same rights it would have if it were not the Trustee or
such agent and 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 or such agent.
Section 5.5. Moneys Held by Trustee. Subject to the
provisions of Section 9.4 hereof, all moneys 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. Neither the
Trustee nor any agent of the Issuer or the Trustee shall be under any
liability for interest on any moneys received by it hereunder.
Section 5.6. Compensation and Indemnification of Trustee and
Its Prior Claim. The Issuer covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, reasonable compensation
(which 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 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 to the extent any such expense, disbursement or advance
may arise from its negligence or bad faith. The Issuer also covenants to
indemnify the Trustee and each predecessor Trustee for, and to hold it
harmless against, any loss, liability or expense arising out of or in
connection with the acceptance or administration of this 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, except to the extent such loss liability or expense
is due to the negligence or bad faith of the Trustee or such predecessor
Trustee. 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 senior claim 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.
Section 5.7. Right of Trustee to Rely on Officers'
Certificate, etc.. Subject to Sections 5.1 and 5.2, 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 5.8. Persons Eligible for Appointment as Trustee. The
Trustee for each series of Securities hereunder shall at all times be a
corporation having a combined capital and surplus of at least $50,000,000, and
which is eligible in accordance with the provisions of Section 310(a) of the
Trust Indenture Act of 1939. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of a Federal, State
or District of Columbia 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.
Section 5.9. Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed,
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 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 4.12, 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 shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act of 1939 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; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 310(a) of the Trust Indenture Act
of 1939 and shall fail to resign after written request therefor
by the Issuer or by any Securityholder; or
(iii) the Trustee 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 Section 315(e) of the Trust Indenture Act of 1939, 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.
(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 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 6.1 of the action in that regard taken by
the Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 5.9 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
5.10.
Section 5.10. Acceptance of Appointment by Successor Trustee.
Any successor trustee appointed as provided in Section 5.9 shall execute 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 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 9.4, 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 5.6.
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 co-trustees of the same trust and that each such
trustee shall be trustee of a trust or trusts under separate indentures.
Upon acceptance of appointment by any successor trustee as
provided in this Section 5.10, the Issuer shall mail notice thereof by
first-class mail to the Holders of Securities of any series 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 5.9. If the Issuer fails to mail such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Issuer.
Section 5.11. Merger, Conversion, Consolidation or Succession
to Business of Trustee. Any corporation into which the Trustee may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation succeeding to the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided that
such corporation shall be eligible under the provisions of Section 5.8, 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 any 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, 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.
ARTICLE 6
Concerning the Securityholders
Section 6.1. Evidence of Action Taken by Securityholders. Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by a specified
percentage in principal amount of the Securityholders of any or all series may
be embodied in and evidenced by one or more instruments of substantially
similar tenor signed by such specified percentage of Securityholders in person
or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument
or instruments are delivered to the Trustee. Proof of execution of any
instrument or of a writing appointing any such agent shall be sufficient for
any purpose of this Indenture and (subject to Sections 5.1 and 5.2)
conclusive in favor of the Trustee and the Issuer, if made in the manner
provided in this Article.
Section 6.2. Proof of Execution of Instruments and of Holding
of Securities; Record Date. Subject to Sections 5.1 and 5.2, the execution of
any instrument by a Securityholder or his agent or proxy may be proved in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Securities shall be proved by the Security register or by a
certificate of the registrar thereof. The Issuer may set a record date for
purposes of determining the identity of holders of Securities of any series
entitled to vote or consent to any action referred to in Section 6.1, which
record date may be set at any time or from time to time by notice to the
Trustee, for any date or dates (in the case of any adjournment or
reconsideration) not more than 60 days nor less than five days prior to the
proposed date of such vote or consent, and thereafter, notwithstanding any
other provisions hereof, only holders of Securities of such series of record
on such record date shall be entitled to so vote or give such consent or
revoke such vote or consent.
Section 6.3. 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 Security shall be registered upon the Security
register for such series as the absolute owner of such Security (whether or not
such Security shall be overdue and notwithstanding any notation of ownership
or other writing thereon) for the purpose of receiving payment of or on
account of the principal of and, subject to the provisions of this Indenture,
interest on such Security and for all other purposes; and neither the Issuer
nor the Trustee nor any agent of the Issuer or the Trustee shall be affected
by any notice to the contrary. All such payments so made to any such person,
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
any such Security.
Section 6.4. Securities Owned by Issuer Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding 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 5.1 and 5.2, 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 6.5. Right of Revocation of Action Taken. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
6.1, 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 serial number of which is shown by the evidence to be included
among the serial numbers of the Securities the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far
as concerns such 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 of any Securities
issued in exchange or substitution therefor, irrespective of whether or not
any notation in regard thereto is made upon any such Security. 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 7
Supplemental Indentures
Section 7.1. Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto 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 one or more series any property or assets;
(b) to evidence the succession of another entity to the Issuer, or
successive successions, and the assumption by the successor entity of the
covenants, agreements and obligations of the Issuer pursuant to Article Eight;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Board of Directors and the
Trustee shall consider to be for the protection of the Holders of Securities,
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 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
adversely affect the interests of the Holders of the Securities in any
material respect;
(e) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 2.3;
(f) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with respect to the Securities
of one or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one trustee, pursuant
to the requirements of Section 5.10;
(g) to permit or facilitate the issuance of Securities in
global form or bearer form or to provide for uncertificated Securities to
be issued;
(h) to change or eliminate any provision contained herein,
provided that any such change or elimination shall become effective only
when there are no Securities outstanding of any series created prior to the
execution of any supplemental indenture which is entitled to the benefit of
such provision; and
(i) to amend or supplement any provision contained herein,
which was required to be contained herein in order for this Indenture to be
qualified under the Trust Indenture Act of 1939, if the Trust Indenture Act
of 1939 or regulations thereunder change what is so required to be included
in qualified indentures, in any manner not inconsistent with what then may
be required for such qualification.
The Trustee is hereby authorized to join with the Issuer 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 7.2.
Section 7.2. Supplemental Indentures with Consent of
Securityholders. With the consent (evidenced as provided in Article 6) 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 resolution
of its Board of Directors, and the Trustee may, from time to time and at any
time, enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of 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) extend
the final maturity of any Security, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce
any amount payable on redemption thereof, or 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 4.1 or the
amount thereof provable in bankruptcy pursuant to Section 4.2, or extend the
time or reduce the amount of any payment pursuant to any sinking fund or
analagous obligation relating to such Securities, or materially and adversely
affect any right to convert such Securities in accordance with the Indenture,
or impair or affect the right of any Securityholder to institute suit for the
payment thereof or, if the Securities provide therefor, any right of repayment
at the option of the Securityholder without the consent of the Holder of each
Security so affected, or (b) reduce the aforesaid percentage of Securities of
any series, the consent of the Holders of which is required for any such
supplemental indenture, without the consent of the Holders of each Security so
offered, or (c) reduce the percentage of Securities of any series necessary to
consent to waive any past default under this Indenture to less than a
majority, without the consent of the Holders of each Security so affected, or
(d) modify any of the provisions of this Section 7.2, 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
Security affected thereby, provided, however, that this clause shall not be
deemed to require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section, or the
deletion of this proviso, in accordance with the requirements of Section 5.9,
5.10, 5.11 and 7.2.
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has expressly been
included solely for the benefit of one or more particular series of
Securities, or which modifies the rights of the Holders of Securities of such
series with respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of the Holders of Securities of any
other series.
Upon the request of the Issuer, accompanied by a copy of a
resolution of the Board of Directors certified by the secretary or an
assistant secretary of the Issuer authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders as aforesaid and other documents, if any,
required by Section 6.1, the Trustee shall join with the Issuer 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.
Promptly after the execution by the Issuer and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Issuer shall mail a notice thereof by first class mail to the Holders of
Securities of each series 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 7.3. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights, obligations,
duties and immunities under this Indenture of the Trustee, the Issuer and the
Holders of Securities of each series affected thereby shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 7.4. Documents to Be Given to Trustee. The Trustee,
subject to the provisions of Sections 5.1 and 5.2, may receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant to this Article Seven complies with
the applicable provisions of this Indenture.
Section 7.5. Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken at any such meeting. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, 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 then outstanding.
ARTICLE 8
Consolidation, Merger, Sale or Conveyance
Section 8.1. Issuer May Consolidate, Etc., on Certain Terms.
The Issuer covenants that it will not merge or consolidate with any other
entity or sell or convey all or substantially all of its assets to any Person,
unless (i) either the Issuer shall be the continuing entity, or the successor
entity or the Person which acquires by sale or conveyance substantially all
the assets of the Issuer (if other than the Issuer) shall be an entity
organized under the laws of the United States of America or any State thereof
and shall expressly assume the due and punctual payment of the principal of
and interest on all the Securities, according to their tenor, and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed or observed by the Issuer, by supplemental
indenture satisfactory to the Trustee, executed and delivered to the Trustee
by such corporation, and (ii) after giving effect to such merger or
consolidation, or such sale or conveyance, no Event of Default, and no event
which, after notice or lapse of time or both would become an Event of Default,
shall have occurred and be continuing.
Section 8.2. Successor Entity Substituted. In case of any such
consolidation, merger, sale or conveyance, and following such an assumption
by the successor entity, such successor entity shall succeed to and be
substituted for the Issuer, with the same effect as if it had been named
herein. Such successor entity may cause to be signed, and may issue either in
its own name or in the name of the Issuer prior to such succession any or all
of the Securities issuable hereunder which theretofore shall not have been
signed by the Issuer and delivered to the Trustee; and, upon the order of such
successor entity instead of the Issuer and subject to all the terms,
conditions and limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously shall have been
signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities which such successor entity thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All of
the Securities so issued shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter
issued in accordance with the terms of this Indenture as though all of such
Securities had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Securities thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a
conveyance by way of lease) the Issuer or any successor entity which shall
theretofore have become such in the manner described in this Article shall be
discharged from all obligations and covenants under this Indenture and the
Securities and may be liquidated and dissolved.
Section 8.3. Opinion of Counsel to Trustee. The Trustee,
subject to the provisions of Sections 5.1 and 5.2, may receive an Opinion of
Counsel, prepared in accordance with Section 11.5, as conclusive evidence that
any such consolidation, merger, sale, lease or conveyance, and any such
assumption, and any such liquidation or dissolution, complies with the
applicable provisions of this Indenture.
ARTICLE 9
Satisfaction and Discharge of Indenture; Unclaimed Moneys
Section 9.1. Defeasance Within One Year of Payment. Except as
otherwise provided in this Section 9.1, the Issuer may terminate its
obligations under the Securities of any series and this Indenture with respect
to Securities of such series if:
(i) all Securities of such series previously authenticated
and delivered (other than destroyed, lost or wrongfully taken
Securities of such series that have been replaced or Securities
of such series that are paid pursuant to Section 3.1 or
Securities of such series for whose payment money or securities
have theretofore been held in trust and thereafter repaid to
the Issuer, as provided in Section 9.5) have been delivered to
the Trustee for cancellation and the Issuer has paid all sums
payable by it hereunder; or
(ii) (A) the Securities of such series mature within one
year or all of them are to be called for redemption within one
year under arrangements satisfactory to the Issuer for giving
the notice of redemption, (B) the Issuer irrevocably deposits
in trust with the Trustee, as trust funds solely for the
benefit of the Holders of such Securities for that purpose,
money or U.S. Government Obligations or a combination thereof
sufficient (unless such funds consist solely of money, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee), without consideration of any
reinvestment, to pay principal of and interest on the
Securities of such series to maturity or redemption, as the case
may be, and to pay all other sums payable by it hereunder, and
(C) the Issuer delivers to the Trustee an Officers' Certificate
and an Opinion of Counsel, in each case stating that all
conditions precedent provided for herein relating to the
satisfaction and discharge of this Indenture with respect to
the Securities of such series and of the Securities of such
series have been complied with.
With respect to the foregoing clause (i), only the Issuer's
obligations under Section 5.6 in respect of the Securities of such series
shall survive. With respect to the foregoing clause (ii), only the Issuer's
obligations in Sections 2.2, 2.5, 2.6, 2.7, 2.8, 2.9, 2.10, 3.2, 3.4, 5.6, 5.9
and 9.5 in respect of the Securities of such series shall survive until the
Securities of such series are no longer outstanding. Thereafter, only the
Issuer's obligations in Sections 5.6 and 9.5 in respect of the Securities of
such series shall survive. After any such irrevocable deposit, the Trustee
upon request shall acknowledge in writing the discharge of the Issuer's
obligations under the Securities of such series and this Indenture with
respect to the Securities of such series except for those surviving
obligations specified above.
Section 9.2. Defeasance. The Issuer will be deemed to have
paid and will be discharged from any and all obligations in respect of the
Securities of any series, the provisions of this Indenture will, except as
provided below, no longer be in effect with respect to the Securities of such
series, the Trustee, at the expense of the Issuer, shall execute proper
instruments acknowledging the same and the Securities of any such series will
no longer be Outstanding pursuant to this Indenture; provided that the
following conditions shall have been satisfied:
(A) the Issuer has irrevocably deposited in trust with the
Trustee as trust funds solely for the benefit of the Holders of
the Securities of such series, for payment of the principal of
and interest on the Securities of such series, money or U.S.
Government Obligations or a combination thereof sufficient
(unless such funds consist solely of money, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the
Trustee) without consideration of any reinvestment and after
payment of all federal, state and local taxes or other charges
and assessments in respect thereof payable by the Trustee, to
pay and discharge the principal of and accrued interest on the
Outstanding Securities of such series to maturity or earlier
redemption (irrevocably provided for under arrangements
satisfactory to the Trustee), as the case may be;
(B) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Issuer is a party
or by which it is bound;
(C) no event which, with the giving of notice or lapse of
time, would become an Event of Default with respect to the
Securities of such series shall have occurred and be continuing
on the date of such deposit;
(D) the Issuer shall have delivered to the Trustee (1)
either (x) a ruling directed to the Trustee received from the
Internal Revenue Service to the effect that the Holders of the
Securities of such series will not recognize income, gain or
loss for federal income tax purposes as a result of the
Issuer's exercise of its option under this Section 9.2 and will
be subject to federal income tax on the same amount and in the
same manner and at the same times as would have been the case
if such option had not been exercised or (y) an Opinion of
Counsel to the same effect as the ruling described in clause
(x) above and (2) an Opinion of Counsel to the effect that the
Holders of the Securities of such series have a valid security
interest in the trust funds subject to no prior liens under the
UCC; and
(E) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating
that all conditions precedent provided for herein relating to
the defeasance contemplated by this Section 9.2 of the
Securities of such series have been complied with.
The Issuer's obligations in Sections 2.2, 2.5, 2.6, 2.7, 2.8,
2.9, 2.10, 3.2, 3.4, 5.6, 5.9 and 9.5 with respect to the Securities of such
series shall survive until such Securities are no longer outstanding.
Thereafter, only the Issuer's obligations in Sections 5.6 and 9.5 shall
survive.
Section 9.3. Covenant Defeasance. The Issuer may omit to
comply with any term, provision or condition set forth in Section 3.7 (or any
other specific covenant relating to such series provided for in a Board
Resolution or supplemental indenture pursuant to Section 2.3 which may by its
terms be defeased pursuant to this Section 9.3), and such omission shall be
deemed not to be an Event of Default under clauses (d) or (g) of Section 4.1,
with respect to the Outstanding Securities of a series if:
(i) the Issuer has irrevocably deposited in trust with the
Trustee as trust funds solely for the benefit of the Holders of
the Securities of such series, for payment of the principal of
and interest, if any, on the Securities of such series, money
or U.S. Government Obligations or a combination thereof in an
amount sufficient (unless such funds consist solely of money,
in the opinion of a nationally recognized firm of independent
public accountants expressed in a written certification thereof
delivered to the Trustee) without consideration of any
reinvestment and after payment of all federal, state and local
taxes or other charges and assessments in respect thereof
payable by the Trustee, to pay and discharge the principal of
and interest on the Outstanding Securities of such series to
maturity or earlier redemption (irrevocably provided for under
arrangements satisfactory to the Trustee), as the case may be;
(ii) such deposit will not result in a breach or violation
of, or constitute a default under, this Indenture or any other
material agreement or instrument to which the Issuer is a party
or by which it is bound;
(iii) no event which, with the giving of notice or lapse of
time, would become an Event of Default with respect to the
Securities of such series shall have occurred and be continuing
on the date of such deposit;
(iv) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that (A) the Holders of the Securities of
such series have a valid security interest in the trust funds
subject to no prior liens under the UCC and (B) such Holders
will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit and covenant defeasance
and will be subject to federal income tax on the same amount
and in the same manner and at the same times as would have been
the case if such deposit and defeasance had not occurred; and
(v) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, in each case stating
that all conditions precedent provided for herein relating to
the covenant defeasance contemplated by this Section 9.3 of the
Securities of such series have been complied with.
Section 9.4. Application of Trust Money. Subject to Section
9.5, the Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 9.1, 9.2 or 9.3, as the case
may be, in respect of the Securities of any series and shall apply the
deposited money and the proceeds from deposited U.S. Government Obligations in
accordance with the Securities of such series and this Indenture to the payment
of principal of and interest on the Securities of such series; but such money
need not be segregated from other funds except to the extent required by law.
Section 9.5. Repayment to Issuer. Subject to Sections 5.6,
9.1, 9.2 and 9.3, the Trustee and each Paying Agent shall promptly pay to the
Issuer upon request set forth in an Officers' Certificate any excess money
held by them at any time and thereupon shall be relieved from all liability
with respect to such money. The Trustee and any Paying Agent shall pay to the
Issuer upon written request any money held by them under this Indenture that
remains unclaimed for two years; provided that the Trustee or such Paying Agent
before being required to make any payment may cause to be published at the
expense of the Issuer once in a newspaper of general circulation in The City of
New York (which will, if practicable, be The Wall Street Journal (Eastern
Edition)) published in the English language at least once a day for at least
five days in each calendar week or with respect to any Security the interest on
which is based on the offered quotations in the interbank Eurodollar market for
dollar deposits in a similar newspaper in London (which will, if practicable,
be The Financial Times) or mail to each Holder entitled to such money at such
Holder's address (as set forth in the Security register) notice that such money
remains unclaimed and that after a date specified therein (which shall be at
least 30 days from the date of such publication or mailing) any unclaimed
balance of such money then remaining will be repaid to the Issuer. After
payment to the Issuer, Holders entitled to such money must look to the Issuer
for payment as general creditors unless an applicable law designates another
Person, and all liability of the Trustee and such Paying Agent with respect to
such money shall cease.
ARTICLE 10
Miscellaneous Provisions
Section 10.1. Incorporators, Stockholders, Officers and
Directors of General Partner and Issuer Exempt from Individual Liability. No
recourse under or upon any obligation, covenant or agreement contained in this
Indenture, or in any Security, 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, as such, of the General
Partner or the Issuer or of any successor, either directly or through the
Issuer or any successor, under any rule of law, statute or constitutional
provision or by the enforcement of any assessment or by any legal or equitable
proceeding or otherwise, all such liability being expressly waived and
released by the acceptance of the Securities by the holders thereof and as
part of the consideration for the issue of the Securities.
Section 10.2. Provisions of Indenture for the Sole Benefit of
Parties and Securityholders. Nothing in this Indenture or in the Securities,
expressed or implied, shall give or be construed to give to any person, firm or
corporation, other than the parties hereto and their successors and the Holders
of the Securities, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of the Securities.
Section 10.3. Successors and Assigns of Issuer Bound by
Indenture. All the covenants, stipulations, promises and agreements in this
Indenture contained by or in behalf of the Issuer shall bind its successors
and assigns, whether so expressed or not.
Section 10.4. Notices and Demands on Issuer, Trustee and
Securityholder. Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the
Holders of Securities to or on the Issuer may be given or served by being
deposited postage prepaid, first-class mail (except as otherwise specifically
provided herein) addressed (until another address of the Issuer is filed by the
Issuer with the Trustee) to Irvine Apartment Communities, L.P., 550 Newport
Center Drive, Suite 300, Newport Beach, California 92660. Any notice,
direction, request or demand by the Issuer or any Securityholder to or upon
the Trustee shall be deemed to have been sufficiently given or made, for all
purposes, if given or made at the Corporate Trust Office.
Where this Indenture provides for notice to Holders, such
notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each
Holder entitled thereto, at his last address as it appears in the Security
register. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in
regular mail service, it shall be impracticable to mail notice to the Issuer
and Securityholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice.
Section 10.5. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers' Certificate
stating that all conditions 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 have
been complied with, except that in the case of any such application or demand
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or demand,
no additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or
covenant provided for in this Indenture shall include (a) a statement that the
person making such certificate or opinion has read such covenant or condition,
(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
General Partner 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 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, upon the certificate,
statement or opinion of or representations by an officer of officers of the
Issuer, 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
General Partner 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, 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 10.6. Payments Due on Saturdays, Sundays and Holidays.
If the date of maturity of interest on or principal of the Securities of any
series or the date fixed for redemption or repayment of any such Security
shall not be a Business Day, then payment of interest or principal need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the date of maturity or the date fixed
for redemption, and no interest shall accrue for the period after such date.
Section 10.7. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this
Indenture limits, qualifies or conflicts with another provision included in
this Indenture by operation of Sections 310 to 317, inclusive, of the Trust
Indenture Act of 1939 (an "incorporated provision"), such incorporated
provision shall control.
Section 10.8. 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
such State, except as may otherwise be required by mandatory provisions of law.
Section 10.9. Counterparts. This Indenture may be executed in
any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
Section 10.10. 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.
ARTICLE 11
Redemption of Securities and Sinking Funds
Section 11.1. 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 2.3 for Securities of such series.
Section 11.2. Notice of Redemption; Partial Redemptions.
Notice of redemption to the Holders of Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30
days and not more than 60 days prior to the date fixed for redemption to such
Holders of Securities of such series at their last addresses as they shall
appear upon the registry books. Any notice which is mailed in the manner
herein provided shall be conclusively presumed to have been duly given,
whether or not the Holder receives the notice. Failure to give notice by mail,
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.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price, the place or
places of payment, that payment will be made upon presentation and surrender
of such Securities, that such redemption is pursuant to the mandatory or
optional sinking fund, or both, if such be the case, that interest accrued to
the date fixed for redemption will be paid as specified in such notice and
that on and after said date interest thereon or on the portions thereof to be
redeemed will cease to accrue. In case any Security of a 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
date fixed for redemption, upon surrender of such Security, a new Security or
Securities of such series in principal amount equal to the unredeemed portion
thereof will be issued.
The notice of redemption of Securities of any series to be
redeemed at the option of the Issuer shall be given by the Issuer or, at the
Issuer's request, by the Trustee in the name and at the expense of the Issuer.
At least one Business Day prior to the redemption date
specified in the notice of redemption given as provided in this Section, the
Issuer will deposit with the Trustee or with one or more paying agents (or, if
the Issuer is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 3.4) an amount of money sufficient to redeem on
the redemption date all the Securities of such series so called for redemption
at the appropriate redemption price, together with accrued interest to the
date fixed for redemption. If less than all the outstanding Securities of a
series are to be redeemed, the Issuer will deliver to the Trustee at least 70
days prior to the date fixed for redemption an Officers' Certificate stating
the aggregate principal amount of Securities to be redeemed.
If less than all the Securities of a series are to be redeemed,
the Trustee shall select, in such manner as it shall deem appropriate and
fair, Securities of such Series to be redeemed in whole or in part. Securities
may be redeemed in part in multiples equal to the minimum authorized
denomination for Securities of such series or any multiple thereof. The
Trustee shall promptly notify the Issuer in writing of the Securities of such
series selected for redemption and, in the case of any Securities of such
series selected for partial redemption, the principal amount thereof to be
redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities of any
series shall relate, in the case of any Security redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security which
has been or is to be redeemed.
Section 11.3. Payment of Securities Called for Redemption. If
notice of redemption has been given as above provided, the Securities or
portions of Securities specified in such notice shall become due and payable
on the date and at the place stated in such notice at the applicable
redemption price, together with interest accrued to the date fixed for
redemption, and on and after said date (unless the Issuer shall default in the
payment of such Securities at the redemption price, together with interest
accrued to said date) interest on the Securities or portions of Securities so
called for redemption shall cease to accrue and, except as provided in
Sections 5.5 and 9.4, such Securities shall cease from and after the date
fixed for redemption to be entitled to any benefit or security under this
Indenture, and the Holders thereof shall have no right in respect of such
Securities except the right to receive the redemption price thereof and unpaid
interest to the date fixed for redemption. On presentation and surrender of
such Securities at a place of payment specified in said notice, said
Securities or the specified portions thereof shall be paid and redeemed by the
Issuer at the applicable redemption price, together with interest accrued
thereon to the date fixed for redemption; provided that any semiannual payment
of interest becoming due on the date fixed for redemption shall be payable to
the Holders of such Securities registered as such on the relevant record date
subject to the terms and provisions of Section 2.4 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by the Security.
Upon presentation of any Security redeemed in part only, 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 , of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
Section 11.4. 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 and
certificate number 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 of record and
beneficially 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.
Section 11.5. Mandatory and Optional Sinking Funds. The
minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment", and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional
sinking fund payment". The date on which a sinking fund payment is to be made
is herein referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund
payment with respect to any series of Securities in cash, the Issuer may at its
option (a) deliver to the Trustee Securities of such series theretofore
purchased or otherwise acquired (except upon redemption pursuant to the
mandatory sinking fund) by the Issuer or receive credit for Securities of such
series (not previously so credited) theretofore purchased or otherwise
acquired (except as aforesaid) by the Issuer and delivered to the Trustee for
cancellation pursuant to Section 2.7, (b) receive credit for optional sinking
fund payments (not previously so credited) made pursuant to this Section, or
(c) receive credit for Securities of such series (not previously so credited)
redeemed by the Issuer through any optional redemption provision contained in
the terms of such series. Securities so delivered or credited shall be
received or credited by the Trustee at the sinking fund redemption price
specified in such Securities.
On or before the sixtieth day next preceding each sinking fund
payment date for any series, the Issuer will deliver to the Trustee a written
statement (which need not contain the statements required by Section 10.5)
signed by an authorized officer of the General Partner (a) specifying the
portion of the mandatory sinking fund payment to be satisfied by payment of
cash and the portion to be satisfied by credit of Securities of such series,
(b) stating that none of the Securities of such series has theretofore been so
credited, (c) stating that no defaults in the payment of interest or Events of
Default with respect to such series have occurred (which have not been waived
or cured) and are continuing and (d) stating whether or not the Issuer intends
to exercise its right to make an optional sinking fund payment with respect to
such series and, if so, specifying the amount of such optional sinking fund
payment which the Issuer intends to pay on or before the next succeeding
sinking fund payment date. Any Securities of such series to be credited and
required to be delivered to the Trustee in order for the Issuer to be entitled
to credit therefor as aforesaid which have not theretofore been delivered to
the Trustee shall be delivered for cancellation pursuant to Section 2.10 to
the Trustee with such written statement (or reasonably promptly thereafter if
acceptable to the Trustee). Such written statement shall be irrevocable and
upon its receipt by the Trustee the Issuer shall become unconditionally
obligated to make all the cash payments or payments therein referred to, if
any, on or before the next succeeding sinking fund payment date. Failure of
the Issuer, on or before any such sixtieth day, to deliver such written
statement and Securities specified in this paragraph, if any, shall not
constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Issuer (i) that the mandatory sinking fund payment
for such series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of
such series in respect thereof and (ii) that the Issuer will make no optional
sinking fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional
or both) to be made in cash on the next succeeding sinking fund payment date
plus any unused balance of any preceding sinking fund payments made in cash
shall exceed $50,000 (or a lesser sum if the Issuer shall so request) with
respect to the Securities of any particular series, such cash shall be applied
on the next succeeding sinking fund payment date to the redemption of
Securities of such series at the sinking fund redemption price together with
accrued interest to the date fixed for redemption. If such amount shall be
$50,000 or less and the Issuer makes no such request then it shall be carried
over until a sum in excess of $50,000 is available. The Trustee shall select,
in the manner provided in Section 11.2, for redemption on such sinking fund
payment date a sufficient principal amount of Securities of such series to
absorb said cash, as nearly as may be, and shall (if requested in writing by
the Issuer) inform the Issuer of the serial numbers of the Securities of such
series (or portions thereof) so selected. Securities of any series which are
(a) owned by the Issuer or an entity known by the Trustee to be directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer, as shown by the Security register, and not known to
the Trustee to have been pledged or hypothecated by the Issuer or any such
entity or (b) identified in an Officers' Certificate at least 60 days prior to
the sinking fund payment date as being beneficially owned by, and not pledged
or hypothecated by, the Issuer or an entity directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuer
shall be excluded from Securities of such series eligible for selection for
redemption. The Trustee, in the name and at the expense of the Issuer (or the
Issuer, if it shall so request the Trustee in writing) shall cause notice of
redemption of the Securities of such series to be given in substantially the
manner provided in Section 11.2 (and with the effect provided in Section 11.3)
for the redemption of Securities of such series in part at the option of the
Issuer. The amount of any sinking fund payments not so applied or allocated to
the redemption of Securities of such series shall be added to the next cash
sinking fund payment for such series and, together with such payment, shall be
applied in accordance with the provisions of this Section. Any and all sinking
fund moneys held on the stated maturity date of the Securities of any
particular series (or earlier, if such maturity is accelerated), which are not
held for the payment or redemption of particular Securities of such series
shall be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest on, the Securities
of such series at maturity.
At least one Business Day before each sinking fund payment
date, the Issuer shall pay to the Trustee in cash or shall otherwise provide
for the payment of all interest accrued to the date fixed for redemption on
Securities to be redeemed on the next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any
Securities of a series with sinking fund moneys or mail any notice of
redemption of Securities for such series by operation of the sinking fund
during the continuance of a default in payment of interest on such Securities
or of any Event of Default except that, where the mailing of notice of
redemption of any Securities shall theretofore have been made, the Trustee
shall redeem or cause to be redeemed such Securities, provided that it shall
have received from the Issuer a sum sufficient for such redemption. Except as
aforesaid, any moneys in the sinking fund for such series at the time when any
such default or Event of Default shall occur, and any moneys thereafter paid
into the sinking fund, shall, during the continuance of such default or Event
of Default, be deemed to have been collected under Article Four and held for
the payment of all such Securities. In case such Event of Default shall have
been waived as provided in Section 4.9 or the default cured on or before the
sixtieth day preceding the sinking fund payment date in any year, such moneys
shall thereafter be applied on the next succeeding sinking fund payment date
in accordance with this Section to the redemption of such Securities.
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 .
IRVINE APARTMENT COMMUNITIES,
L.P.
By_________________________________
[CORPORATE SEAL]
Attest:
By____________________________
[TRUSTEE]
By____________________________
[CORPORATE SEAL]
Attest:
By____________________________
STATE OF CALIFORNIA )
) ss.:
COUNTY OF ORANGE )
On this day of before me
personally came to me personally known,
who, being by me duly sworn, did depose and say that he resides at
that he is a of Irvine
Apartment Communities, Inc., one of the corporations described in and which
executed the above instrument; that he knows the corporate seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
[NOTARIAL SEAL]
_____________________________
Notary Public
STATE OF [ ])
) ss.:
COUNTY OF [ ])
On this day of before me
personally came to me personally known,
who, being by me duly sworn, did depose and say that he resides at
that he is a of , one
of the corporations described in and which executed the above instrument; that
he knows the corporate seal of said corporation; that the seal affixed to said
instrument is such corporate seal; that it was so affixed by authority of the
Board of Directors of said corporation, and that he signed his name thereto by
like authority.
[NOTARIAL SEAL]
______________________________
Notary Public
Exhibit 12
<TABLE>
<CAPTION>
Irvine Apartment Communities, L.P.
Computation of Consolidated Ratio of Earnings to Fixed Charges
(in thousands, except ratios)
Year Ended December 31, 1996 1995 1994 1993 1992
- ----------------------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Earnings
Earnings (Loss) Before Extraordinary Item............ $ 41,192 $ 25,056 $ 12,279 $ (387) $ (1,600)
Add back:
Interest Expense..................................... 29,506 25,894 26,827 50,248 49,154
Amortization of Deferred Financing Costs............. 2,627 8,510 15,942 3,012 1,474
Portion of Rent Expense Deemed to Represent Interest. 115 89 68
------- -------- -------- ------- --------
Earnings Available for Fixed Charges................. 73,440 59,549 55,116 52,873 49,028
------- -------- -------- ------- --------
Fixed Charges
Interest Expense..................................... 29,506 25,894 26,827 50,248 49,154
Amortization of Deferred Financing Costs............. 2,627 8,510 15,942 3,012 1,474
Capitalized Interest................................. 3,151 6,779 1,261 233 640
Portion of Rent Expense Deemed
to Represent Interest............................... 115 89 68
------- -------- -------- ------- --------
Fixed Charges........................................ $ 35,399 $ 41,272 $ 44,098 $ 53,493 $ 51,268
------- -------- -------- ------- --------
Ratio of Earnings to Fixed Charges................... 2.07x 1.44x 1.25x 0.99x 0.96x
Excess of Fixed Charges Over Earnings................ $(620) $(2,240)
- ------------
For the purpose of calculating the consolidated ratio of earnings to fixed
charges, earnings consist of earnings before income taxes, extraordinary
items, and fixed charges. Fixed charges consist of interest expense,
capitalized interest, amortization of deferred financing costs and that
portion of rental expense representative of the interest factor in leases.
</TABLE>
Exhibit 23.1
IRVINE APARTMENT COMMUNITIES, L.P.
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement (Form S-3) and related Prospectus of Irvine
Apartment Communities, L.P. for the registration of up to $350,000,000 of
debt securities and to the incorporation by reference therein of our
reports dated January 31, 1997, with respect to the consolidated financial
statements and related financial statement schedule of Irvine Apartment
Communities, L.P. included in its Form 10, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
Newport Beach, California
May 12, 1997
