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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 Date of Report (Date of earliest event
reported) September 25, 1997
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IRVINE APARTMENT COMMUNITIES, L.P.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware 0-22569 33-0587829
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(State of Incorporation) (Commission File Number) (I.R.S. Employer
Identification Number)
550 Newport Center Drive, Suite 300, Newport Beach, California 92660
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (714) 720-5500
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ITEM 5. OTHER EVENTS
Exhibits are filed herewith in connection with the issuance by Irvine
Apartment Communities, L.P. (the "Operating Partnership") of $100,000,000
aggregate principal amount of the Operating Partnership's 7% Notes due 2007
pursuant to the Operating Partnership's Registration Statement on Form S-3 (File
No. 333-27181).
ITEM 7. EXHIBITS
EXHIBITS
Exhibit 1.1 - Underwriting Agreement dated September 25, 1997 between the
Operating Partnership, Irvine Apartment Communities, Inc. and J.P.
Morgan Securities Inc., Goldman, Sachs & Co. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as the underwriters.
Exhibit 4.1 - Indenture (the "Indenture") dated as of October 1, 1997
between the Operating Partnership and First Trust of California,
National Association, as Trustee (the "Trustee").
Exhibit 4.2 - Supplemental Indenture (the "Supplemental Indenture") dated
as of October 1, 1997 between the Operating Partnership and the
Trustee.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
IRVINE APARTMENT COMMUNITIES, INC.
By: Irvine Apartment Communities,
Inc., its sole general partner
Date: October 1, 1997 By: /s/ Shawn Howie
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Shawn Howie
Vice President, Corporate Finance,
and Controller
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EXHIBIT 1.1
IRVINE APARTMENT COMMUNITIES, L.P.
7% NOTES DUE 2007
Underwriting Agreement
September 25, 1997
J.P. MORGAN SECURITIES INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Irvine Apartment Communities, L.P., a Delaware limited partnership (the
"Partnership"), proposes to issue and sell to the underwriters named in Schedule
II hereto (the "Underwriters"), for whom you are acting as representatives (the
"Representatives"), the principal amount of its debt securities identified in
Schedule I hereto (the "Securities"), to be issued under the indenture specified
in Schedule I hereto (the "Indenture") between the Partnership and the Trustee
identified in such Schedule (the "Trustee"). If the firm or firms listed in
Schedule II hereto include only the firm or firms listed in Schedule I hereto,
then the terms "Underwriters" and "Representatives", as used herein, shall each
be deemed to refer to such firm or firms.
The Partnership has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (the file number of which is set forth in Schedule I hereto) on Form
S-3, relating to, among other things, certain debt securities (the "Shelf
Securities") to be issued from time to time by the Partnership. The Partnership
also has filed with, or proposes to file with, the Commission pursuant to Rule
424 under the Securities Act a prospectus supplement specifically relating to
the Securities. The registration statement as amended to the date of this
Agreement
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(including Post-Effective Amendment No. 1 thereto) is hereinafter referred to as
the "Registration Statement" and the related prospectus covering the Shelf
Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "Basic Prospectus". The Basic Prospectus as
supplemented by the prospectus supplement specifically relating to the
Securities in the form first used to confirm sales of the Securities is
hereinafter referred to as the "Prospectus". Any reference in this Agreement to
the Registration Statement, the Basic Prospectus, any preliminary form of
Prospectus (a "preliminary prospectus") previously filed with the Commission
pursuant to Rule 424 or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the Securities Act which were filed under the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be; and any reference to "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
preliminary prospectus or the Prospectus shall be deemed to refer to and include
any documents filed under the Exchange Act after the date of this Agreement, or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be, which are deemed to be incorporated by reference therein.
Irvine Apartment Communities, Inc., a Maryland corporation (the
"Company"), owns a general partnership interest in the Partnership and is its
sole managing general partner. The Partnership owns and operates the Properties
(as defined in the Prospectus). The Partnership holds general and limited
partnership interests in a partnership (the "Property Partnership") which owns
one of the Properties. The Company, the Partnership and the Property Partnership
are herein collectively referred to as the "REIT Entities" and all references to
properties and assets of the REIT Entities include, without limitation, the
Properties, unless otherwise noted. For purposes of this Agreement, (i) the
Partnership and each other subsidiary (as defined in Rule 1-02 of Regulation S-X
promulgated by the Commission) of the Company is deemed a "Subsidiary" of the
Company and (ii) the Property Partnership and each other subsidiary (as defined
in Rule 1-02 of Regulation S-X promulgated by the Commission) of the Partnership
is deemed a "Subsidiary" of the Partnership.
The Partnership hereby agrees with the Underwriters as follows:
1. The Partnership agrees to issue and sell the Securities to the
several Underwriters as hereinafter provided, and each Underwriter, on the basis
of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Partnership the respective principal amount of Securities set forth
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opposite such Underwriter's name in Schedule II hereto at the purchase price set
forth in Schedule I hereto plus accrued interest, if any, from the date
specified in Schedule I hereto to the date of payment and delivery.
2. The Partnership understands that the several Underwriters intend (i)
to make a public offering of their respective portions of the Securities and
(ii) initially to offer the Securities upon the terms set forth in the
Prospectus.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Partnership to the
Representatives, no later than noon the Business Day (as defined below) prior to
the Closing Date (as defined below), on the date and at the time and place set
forth in Schedule I hereto (or at such other time and place on the same or such
other date, not later than the fifth Business Day (as defined below) thereafter,
as you and the Partnership may agree in writing). As used herein, the term
"Business Day" means any day other than a day on which banks are permitted or
required to be closed in New York City. The time and date of such payment and
delivery with respect to the Securities are referred to herein as the "Closing
Date".
Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of the Securities of one or more global notes (the "Global
Note") representing the Securities, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Securities duly paid by
the Company. The Global Note will be made available for inspection by the
Representatives at the office of J.P. Morgan Securities Inc. at the address set
forth above not later than 1:00 P.M., New York City time, on the Business Day
prior to the Closing Date.
4. Each of the Partnership and the Company, jointly and severally,
represents and warrants to each Underwriter that:
(a) the Registration Statement has been declared effective by
the Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge of
the Partnership and/or the Company, threatened by the Commission; the
Registration Statement and Prospectus (as amended or supplemented if
the Partner ship shall have furnished any amendments or supplements
thereto) comply, or will comply, as the case may be, in all material
respects with the Securities Act and the Trust Indenture Act of 1939,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "Trust Indenture Act"); and the Registration
Statement and any amendment thereto does not and will not, as of the
applicable effective date, contain
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any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading, and the Prospectus, as amended or supplemented,
if applicable, as of its date and at the Closing Date, does not and
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;
provided, however, that the foregoing representations and warranties
shall not apply to (i) that part of the Registration Statement which
constitutes the Statement of Eligibility and Qualification (Form T-1)
under the Trust Indenture Act of the Trustee, and (ii) statements or
omissions in the Registration Statement or the Prospectus made in
reliance upon and in conformity with information relating to any
Underwriter furnished to the Partnership and/or the Company in writing
by such Underwriter through the Representatives expressly for use
therein;
(b) the documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Exchange Act, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus or any further amendment or
supplement thereto, when such documents become effective or are filed
with the Commission, as the case may be, will conform in all material
respects to the requirements of the Exchange Act, and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading;
(c) Ernst & Young LLP, who have certified certain financial
statements and supporting schedules of the Partnership and its
Subsidiaries, and Deloitte & Touche LLP, who have certified certain
financial statements of Renaissance Villas, that have been included or
incorporated by reference in the Registration Statement and the
Prospectus are each independent public accountants as required by the
Securities Act;
(d) the historical financial statements of the Partnership,
and the related notes thereto, included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the
consolidated financial position of the Partnership and its Subsidiaries
taken as a whole as of the dates indicated and the results of
operations and the changes in their consolidated cash flows for the
periods specified; except as otherwise stated in the Registration
Statement and the Prospectus, said financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a
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consistent basis and comply with the applicable accounting requirements
of the Securities Act (including, without limitation, Rule 3-14 and
Rule 3-15 of Regulation S-X promulgated by the Commission), and all
adjustments necessary for a fair presentation of the results for such
periods have been made; the supporting schedules included or incorpo-
rated by reference in the Registration Statement and the Prospectus
present fairly the information required to be stated therein; the
financial information and data included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the
information included therein and have been prepared on a basis
consistent with that of the financial statements included or
incorporated by reference in the Registration Statement and the
Prospectus. Except as reflected or disclosed in the financial
statements included in the Registration Statement or otherwise set
forth in the Prospectus, the Partnership is not subject to any material
indebtedness, obligation or liability, contingent or otherwise;
(e) the historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the revenue and those
operating expenses included in such summaries of the properties related
thereto for the periods specified in conformity with generally accepted
accounting principles; the pro forma consolidated financial statements
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the pro forma financial position of the
Company and its Subsidiaries taken as a whole as of the dates indicated
and the results of operations for the periods specified; and such pro
forma financial statements have been prepared in accordance with
generally accepted accounting principles applied on a basis consistent
with the audited financial statements of the Partnership and its
Subsidiaries included or incorporated by reference in the Registration
Statement and the Prospectus, the assumptions on which such pro forma
financial statements have been prepared were, when such pro forma
financial statements were prepared, reasonable and are summarized in
the notes thereto, and any such pro forma financial statements have
been prepared, and the pro forma adjustments set forth
therein have been applied, in accordance with the applicable accounting
requirements of the Securities Act (including, without limitation,
Regulation S-X promulgated by the Commission), and any such pro forma
adjustments have been properly applied to the historical amounts in the
compilation of such statements;
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(f) since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there has not
been any material change in the capital stock or long-term debt of the
Partnership and its consolidated subsidiaries, or 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,
otherwise than as set forth or contemplated in the Prospectus; and
except as set forth or contemplated in the Prospectus none of the REIT
Entities nor any of their Subsidiaries has entered into any transaction
or agreement (whether or not in the ordinary course of business)
material to the REIT Entities and their Subsidiaries taken as a whole;
(g) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of 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 in good
standing would not have a material adverse effect on the REIT Entities,
taken as a whole; other than the Partnership, the Company has no
"significant subsidiaries" as defined in Rule 1-02 of Regulation S-X
promulgated by the Commission (the "Significant Subsidiaries"); the
Partnership has no Significant Subsidiaries;
(h) each of the Partnership and the Property Partnership has
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 its
business and is in good standing in California, which is the only other
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;
(i) the 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 this Agreement, will have been
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duly and validly executed, authenticated, issued and delivered and will
constitute valid and binding obligations of the Partnership entitled to
the benefits provided by the Indenture, enforceable in accordance with
their 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; the Indenture has been duly authorized and upon
effectiveness of the Registration Statement will have been duly
qualified under the Trust Indenture Act and, when executed and
delivered by the Partner ship and the Trustee, the Indenture will
constitute 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; and the Securities
and the Indenture will conform in all material respects to the
descriptions thereof in the Prospectus;
(j) neither the Company, the Partnership nor any of their
Subsidiaries is, or with the giving of notice or lapse of time or both
would be, in violation of or in default under, the Certificate of
Incorporation or by-laws of the Company, the certificates of limited
partnership of the Partnership and the Property Partnership, or the
Amended and Restated Agreement of Limited Partnership of Irvine
Apartment Communities, L.P. dated as of December 1, 1993, as amended
(the "OP Partnership Agreement"), or the partnership agreement of the
Property Partnership (the "Property Partnership Agreement"), or any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which any of the REIT Entities is a party or by which
any of them or any of their respective properties is bound, except for
violations and defaults which individually and in the aggregate are not
material to the REIT Entities taken as a whole; the issue and sale of
the Securities and the performance by the Partnership of all its
obligations under the Securities and the Indenture and the performance
by each of the Partnership and the Company of all their respective
obligations under this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement
or other agreement or instrument to which any of the REIT Entities is a
party or by which any of them or their respective properties is
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bound that is material to the REIT Entities taken as a whole, nor will
any such action result in any violation of the provisions of the
Certificate of Incorporation or the by-laws of the Company, the
certificates of limited partnership of the Partnership and the Property
Partnership, or the OP Partnership Agreement or the Property
Partnership Agreement, or any applicable law or statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the REIT Entities or any of their respective
properties; and no consent, approval, authorization, order, license,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities by the Partnership or the consummation of the transactions
contemplated by the Indenture by the Partnership or this Agreement by
the Partnership and the Company, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications as
have been obtained under the Securities Act, the Trust Indenture Act
and as may be required under state securities or Blue Sky Laws in
connection with the purchase and distribution of the Securities by the
Underwriters;
(k) each of the Partnership and the Property Partnership is
organized in conformity with the requirements for qualification as a
partnership under the Internal Revenue Code of 1986, as amended (the
"Code"), and its method of operation enables it to meet the
requirements for taxation as a partnership under the Code;
(l) neither the Partnership nor the Company is, and, after
giving effect to the offering and sale of the Securities, will be, an
"investment company" or an entity "controlled" by an "investment
company", as such terms are defined in the Investment Company Act of
1940, as amended (the "Investment Company Act");
(m) 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 incorpo-
rated as required;
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(n) each preliminary prospectus filed as part of 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;
(o) 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 (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;
(p) to the best of the knowledge of the Company and the
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;
(q) the 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 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; 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; the operation of the
buildings, fixtures and other improvements located on the Properties as
presently
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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; neither the
Company nor the 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; there do not exist any material
violations of any declaration of covenants, conditions and restrictions
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 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;
(r) 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 (other than
with respect to loss from earthquakes) arising out of or related to
their businesses, in an amount and on such terms as is adequate and
appropriate for such businesses;
(s) all of the partnership interests of the 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; the OP Units owned, directly or
indirectly, by the Company are owned 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
Partnership;
(t) all of the partnership interests of the Property
Partnership have been validly issued and are owned of record by the
Partnership and a third party; the partnership interests of the
Property Partnership owned of record by the Partnership are owned free
and clear of all Liens;
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(u) this Agreement has been duly authorized, executed and
delivered by each of the Company and the Partnership;
(v) immediately after any sale of Securities by the
Partnership hereunder, the aggregate amount of Securities which have
been issued and sold by the Partnership hereunder and of any securities
of the Partnership (other than the Securities) that shall have been
issued and sold pursuant to the Registration Statement will not exceed
the amount of securities registered under the Registration Statement;
and
(w) the Partnership and the Company have complied with all
provisions of Section 517.075, Florida Statutes (Chapter 92-198, Laws
of Florida) relating to doing business with the Government of Cuba or
with any person or affiliate located in Cuba.
5. Each of the Partnership and the Company covenants and agrees with
each of the several Underwriters as follows:
(a) to file the Prospectus in a form approved by you pursuant
to Rule 424 under the Securities Act not later than the Commission's
close of business on the second Business Day following the date of
determination of the offering price of the Securities or, if
applicable, such earlier time as may be required by Rule 424(b);
(b) to furnish to each Representative and counsel for the
Underwriters, at the expense of the Partnership, a signed copy of the
Registration Statement (as originally filed) and each amendment
thereto, in each case including exhibits and documents incorporated by
reference therein and, during the period mentioned in paragraph (e)
below, to furnish each of the Underwriters as many copies of the
Prospectus (including all amendments and supplements thereto) and
documents incorporated by reference therein as you may reasonably
request;
(c) from the date hereof and prior to the Closing Date, to
furnish to you a copy of any proposed amendment or supplement to the
Registration Statement or the Prospectus, for your review, and not to
file any such proposed amendment or supplement to which you reasonably
object;
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(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Partnership with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of the Securities, and during such
same period, to advise you promptly, and to confirm such advice in
writing, (i) when any amendment to the Registration Statement shall
have become effective, (ii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement
to the Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose, and (iv) of the receipt
by the Partnership of any notification with respect to any suspension
of the qualification of the Securities for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for
such purpose; and to use its best efforts to prevent the issuance of
any such stop order or notification and, if issued, to obtain as soon
as possible the withdrawal thereof;
(e) if, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by law
to be delivered in connection with sales by an Underwriter or dealer,
any event shall occur 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 it is necessary to amend or supplement
the Prospectus to comply with law, forthwith to prepare, file with the
Commission and furnish, at the expense of the Partnership, to the
Underwriters and to the dealers (whose names and addresses you will
furnish to the Partnership) to which Securities may have been sold by
you on behalf of the Underwriters and to any other dealers upon
request, such amendments or supplements to the Prospectus as may be
necessary 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;
(f) to endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and to continue such qualification in effect
so long as reasonably required for distribution of the Securi-
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ties; provided that the Partnership shall not be required to file a
general consent to service of process in any jurisdiction;
(g) to make generally available to its security holders and to
you as soon as practicable an earnings statement which shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder covering a period of at least
twelve months beginning with the first fiscal quarter of the
Partnership and the Company occurring after the "effective date" (as
defined in Rule 158) of the Registration Statement;
(h) during the period beginning on the date hereof and
continuing to and including the Business Day following the Closing
Date, not to offer, sell, contract to sell or otherwise dispose of any
debt securities of or guaranteed by the Partnership which are
substantially similar to the Securities (other than (i) the Securities
and (ii) commercial paper issued in the ordinary course of business),
without your prior written consent;
(i) to use the net proceeds received by the Partnership from
the sale of the Securities pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";
(j) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all costs and expenses incident to the performance of
its obligations hereunder, including without limiting the generality of
the foregoing, all costs and expenses (i) incident to the preparation,
issuance, execution, authentication and delivery of the Securities,
including any expenses of the Trustee, (ii) incident to the
preparation, printing and filing under the Securities Act of the
Registration Statement, the Prospectus and any preliminary prospectus
(including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or
qualification and determination of eligibility for investment of the
Securities under the laws of such jurisdictions as the Underwriters
may designate (including reasonable fees of counsel for the
Underwriters and their disbursements), (iv) related to any filing with
the National Association of Securities Dealers, Inc., (v) in connection
with the printing (including word processing and duplication costs)
and delivery of this Agreement, the Indenture, the Preliminary and
Supple-
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<PAGE> 14
mental Blue Sky Memoranda and any Legal Investment Survey and the
furnishing to Underwriters and dealers of copies of the Registration
Statement and the Prospectus, including mailing and shipping, as herein
provided, (vi) payable to rating agencies in connection with the rating
of the Securities and (vii) any expenses incurred by the Partnership
and the Company in connection with a "road show" presentation to
potential investors.
6. The several obligations of the Underwriters hereunder shall be
subject to the following conditions:
(a) the representations and warranties of the Partnership and
the Company contained herein are true and correct on and as of the
Closing Date as if made on and as of the Closing Date and the
Partnership and the Company shall have complied with all agreements and
all conditions on their part to be performed or satisfied hereunder at
or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission
pursuant to Rule 424 within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act; no
stop order suspending the effectiveness of the Registration Statement
shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your satisfaction;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any
downgrading, (ii) any intended or potential downgrading or (iii) any
review or possible change that does not indicate an improvement, in the
rating accorded any securities of or guaranteed by the Partnership by
any "nationally recognized statistical rating organization", as such
term is defined for purposes of Rule 436(g)(2) under the Securities
Act;
(d) since the respective dates as of which information is
given in the Prospectus there shall not have been any material change
in the capital stock or long-term debt of the Company or the
Partnership or any material adverse change, or any development
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<PAGE> 15
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, other wise than as set forth or
contemplated in the Prospectus, the effect of which in the judgment of
the Representatives makes it impracticable or inadvisable to proceed
with the public offering or the delivery of the Securities on the terms
and in the manner contemplated in the Prospectus; and neither the
Company nor the Partnership has sustained since the date of the latest
audited financial statements included or incorporated by reference in
the Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order or decree, otherwise than as set forth or contemplated in the
Prospectus;
(e) the Representatives shall have received on and as of the
Closing Date a certificate of an executive officer of the Company, in
its individual capacity and in its capacity as a general partner of the
Partnership, with specific knowledge about the Partnership's and the
Company's financial matters, reasonably satisfactory to you to the
effect set forth in subsections (a) through (c) (with respect to the
respective representations, warranties, agreements and conditions of
the Partnership and the Company) of this Section and to the further
effect that there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of
the REIT Entities taken as a whole from that set forth or contemplated
in the Registration Statement (the officer signing and delivering such
certificate may rely upon the best of his or her knowledge as to
proceedings threatened);
(f) Piper & Marbury L.L.P., Maryland counsel for the Company
and the Partnership, or other Maryland counsel for the Company and the
Partnership, shall have furnished to you their written opinion, dated
the Closing Date, in form and substance satisfactory to you, 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
15
<PAGE> 16
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
Partnership;
(iii) the Indenture has been duly authorized,
executed and delivered by the Company in its capacity as
general partner of the Partnership;
(iv) the Securities have been duly authorized and
executed by the Company in its capacity as general partner of
the Partnership;
(v) the execution and delivery by the Company, in its
individual capacity and in its capacity as general partner of
the Partnership, of this Agreement, the Indenture and the
Securities, and the performance by the Company of its
obligations under this Agreement, 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 of its obligations under this Agreement (excluding the
securities or Blue Sky laws of the State of Maryland, as to
which such counsel need not express any opinion); and
(vi) the OP Partnership Agreement has been duly
authorized, executed and delivered by the Company in its
capacity as general partner of the Partnership.
In rendering the foregoing opinions, Piper & Marbury, L.L.P.
or other Maryland counsel for the Company and the Partnership may state
that their opinion relates only to the laws of the State of Maryland.
(g) The Underwriters shall have received on the Closing Date
an opinion of Davis Polk & Wardwell, special counsel for the Company
and the Partnership, or other special counsel for the Company and the
Partnership, dated the Closing Date, to the effect that:
16
<PAGE> 17
(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 Partnership, the Company
has no Significant Subsidiaries;
(ii) the 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 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 Partnership, this Agreement has been
duly authorized, executed and delivered by the 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 Partnership, is a valid and binding agreement of the
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) assuming due authorization by the Company in its
capacity as general partner of the Partnership, the
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 this
Agreement, will be entitled to the benefits of the Indenture
and will be valid and binding obligations of the 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;
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<PAGE> 18
(vi) assuming due authorization, execution and
delivery by the Company in its capacity as general partner of
the Partnership, the execution and delivery by the Partnership
of, and the performance by the Partnership of its obligations
under, this Agreement, the Indenture and the Securities will
not contravene any provision of New York or federal law or
the Delaware Revised Uniform Limited Partnership Act or the
certificate of limited partnership of the 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, to the
best of such counsel's knowledge, any judgment or decree of
any New York or federal 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 New York
or federal 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 Partnership of its
obligations under this Agreement, the Indenture or the
Securities, 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 Securities;
(vii) the statements (A) in the Prospectus under the
captions "Description of Notes," "Description of the Debt
Securities" and "Plan of Distribution", (B) in the
Registration Statement under Item 15, (C) in "Item 8 - Legal
Proceedings" of the Partnership's registration statement on
Form 10 incorporated by reference in the Registration
Statement, (D) in "Item 1 - Legal Proceedings" of Part II of
the Partnership's quarterly reports on Form 10-Q, filed since
such Form 10, 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;
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<PAGE> 19
(viii) 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;
(ix) each of the Partnership and the Property
Partnership is currently organized in conformity with the
requirements for qualification as a partnership under the Code
and has been so organized since its formation, and its method
of operation has satisfied the requirements for taxation as a
partnership under the Code, and its proposed method of
operation will enable it to continue to do so;
(x) the Registration Statement has been declared
effective under the Securities Act; any required filing of the
Prospectus pursuant to Rule 424(b) has been made in the manner
and within the time period required by Rule 424(b); and, to
the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been
issued under the Securities Act and no proceedings therefor
have been instituted by the Commission;
(xi) 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 and statistical statements and schedules included or
incorporated by reference 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 and
statistical 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
19
<PAGE> 20
opinion that the Registration Statement and Prospectus (except
for financial and statistical statements and schedules
included or incorporated by reference 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 and
statistical 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 special counsel for the Company and the 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.
(h) The Underwriters shall have received on the Closing Date
an opinion of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the
Underwriters, dated the Closing Date, with respect to the validity of
the Indenture and the Securities, the Registration Statement, the
Prospectus and such other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters.
With respect to subparagraph 6(g)(xi) 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.
The opinions of Piper & Marbury L.L.P. or other counsel for
the Company and the Partnership described in paragraph 6(f) and of
Davis Polk & Wardwell or other special counsel for the Company and the
Partnership described in paragraph 6(g) above
20
<PAGE> 21
each shall be rendered to the Underwriters at the request of the
Company and the Partnership and shall so state therein.
(i) on the date hereof and on the Closing Date, Ernst & Young
LLP shall have furnished to you letters, dated such date, in form and
substance satisfactory to you, containing statements and information of
the type customarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain
financial information contained in or incorporated by reference in the
Registration Statement and the Prospectus;
(j) on or prior to the Closing Date, the Company shall have
furnished to the Representatives such further certificates and
documents as the Representatives shall reasonably request.
7. The Partnership and the Company, jointly and severally, hereby agree
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 the legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Partnership and the Company
shall have furnished any amendments or supplements thereto) or any preliminary
prospectus, 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 untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Partnership and/or the Company in
writing by such Underwriter through the Representatives expressly for use
therein, provided, however, that the foregoing indemnity agreement with respect
to any preliminary prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
purchased Securities, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Partnership shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or
21
<PAGE> 22
prior to the written confirmation of the sale of the Securities to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such losses, claims, damages or liabilities, unless such
failure is the result of noncompliance by the Partnership with Section 5(b)
hereof.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Partnership, the Company and its directors, each of the
officers of the Company who signs the Registration Statement and each person who
controls the Company or the Partnership within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, to the same extent as the
foregoing indemnity from the Partnership and the Company to each Underwriter,
but only with reference to information relating to such Underwriter furnished to
the Partnership or the Company in writing by such Underwriter through the
Representatives expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus. For purposes
of this Section 7 and Section 4(a), the only written information furnished by
the Underwriters to the Operating Partnership and the Company expressly for use
in the Registration Statement and the Prospectus is (a) the information in the
last paragraph on the cover page of the prospectus supplement forming a part of
the Prospectus specifically relating to the Securities, (b) the information
regarding stabilization on the inside front cover page of the prospectus
supplement forming a part of the Prospectus specifically relating to the
Securities and (c) the information in the third and sixth paragraphs and the
second sentence of the fourth paragraph under the caption "Underwriting" in the
prospectus supplement forming a part of the Prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "Indemnified Person") shall promptly
notify the person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, upon request of the Indemni-
fied Person, shall retain counsel reasonably satisfactory to the Indemnified
Person to represent the Indemnified Person and any others the Indemnifying
Person may designate in such proceeding and shall pay the fees and expenses of
such counsel related to such proceeding. In any such proceeding, any Indemnified
Person 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 Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed to
the contrary, (ii)
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<PAGE> 23
the Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person or (iii) the named parties in
any such proceeding (including any impleaded parties) include both the
Indemnifying Person and the Indemnified Person 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 Person
shall not, in connection with any proceeding or related proceeding 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 Indemnified Persons, and that all
such fees and expenses shall be reimbursed as they are incurred. Any such
separate firm for the Underwriters and such control persons of Underwriters
shall be designated in writing by the first of the named Representatives on
Schedule I hereto and any such separate firm for the Partnership or the Company,
its directors, its officers who sign the Registration Statement and such control
persons of the Partnership or the Company or authorized representatives shall be
designated in writing by the Partnership or the Company. The Indemnifying Person
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 Person agrees to indemnify any
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for fees and expenses of counsel as contemplated by the
second and third sentences of this paragraph, the Indemnifying Person 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 Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable
23
<PAGE> 24
by such Indemnified Person 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 Partnership and the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Partnership
and the Company on the one hand and 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 Partnership and the
Company on the one hand and the Underwriters on the other hand shall be deemed
to be in the same respective proportions as the net proceeds from the offering
of such Securities (before deducting expenses) received by the Partnership and
the total underwriting discounts and the commissions received by the
Underwriters bear to the aggregate public offering price of the Securities. The
relative fault of the Partnership and the Company 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 Partnership or the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Partnership, the Company and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 7 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 the immediately
preceding paragraph. The amount paid or payable by an Indemnified Person 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 Person in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 7, in no event
shall an Underwriter be required to contribute any amount in excess of the
amount by which the total price at which the 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
24
<PAGE> 25
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 7 are several in proportion to the
respective principal amount of the Securities set forth opposite their names in
Schedule I hereto, and not joint.
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.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Partnership and the Company set
forth 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
by or on behalf of the Partnership, the Company, its officers or directors or
any other person controlling the Company and (iii) acceptance of and payment for
any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representatives, by notice given to
the Partnership and the Company, if after the execution and delivery of this
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 Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company or the Partnership 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 Representatives,
is material and adverse and which, in the judgment of the Representatives, makes
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. If, on the Closing Date, any one or more of the Underwriters shall
fail or refuse to purchase Securities which it or they have agreed to purchase
under this Agreement, and the aggregate principal amount of Securities which
such defaulting Underwriter or Underwriters
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<PAGE> 26
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Securities, the other Underwriters shall be
obligated severally in the proportions that the principal amount of Securities
set forth opposite their respective names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the
Representatives may specify, to purchase the Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of Securities that
any Underwriter has agreed to purchase pursuant to Section 1 be increased
pursuant to this Section 9 by an amount in excess of one-tenth of such principal
amount of Securities without the written consent of such Underwriter. If, on the
Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase
Securities and the aggregate principal amount of Securities with respect to
which such default occurs is more than one-tenth of the aggregate principal
amount of Securities to be purchased, and arrangements satisfactory to you, the
Partnership and the Company for the purchase of such Securities are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter, the Partnership or the
Company. In any such case either you or the 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.
10. If this Agreement shall be terminated by the Underwriters, or any
of them, because of any failure or refusal on the part of the Partnership or the
Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason either the Partnership or the Company shall be
unable to perform its obligations under this Agreement or any condition of the
Underwriters' obligations cannot be fulfilled, the Partnership and the Company
agree to 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 expenses of their counsel) reasonably incurred
by such Underwriters in connection with this Agreement or the offering of
Securities.
11. This Agreement shall inure to the benefit of and be binding upon
the Partnership, the Company, the Underwriters, any controlling persons referred
to herein and their respective
26
<PAGE> 27
successors and assigns. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any other person, firm or corporation any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by you
jointly or by the first of the named Representatives set forth in Schedule I
hereto alone on behalf of the Under writers, and any such action taken by you
jointly or by the first of the named Representatives set forth in Schedule I
hereto alone shall be binding upon the Underwriters. All notices and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be given at the address set forth in Schedule
II hereto. Notices to the Partnership and the Company shall be given to it at
550 Newport Center Drive, Suite 300, Newport Beach, California 92660,
Attention: James E. Mead (Telephone: (714) 720-5500).
13. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument.
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<PAGE> 28
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to the conflicts
of laws provisions thereof.
Very truly yours,
IRVINE APARTMENT COMMUNITIES, L.P.
By: IRVINE APARTMENT COMMUNITIES, INC.,
its sole general partner
By: /s/ SHAWN HOWIE
-----------------------------------
Name: Shawn Howie
Title: Vice President, Corporate
Finance, and Controller
IRVINE APARTMENT COMMUNITIES, INC.
By: /s/ SHAWN HOWIE
-----------------------------------
Name: Shawn Howie
Title: Vice President, Corporate
Finance and Controller
Accepted: September 25, 1997
J.P. MORGAN SECURITIES INC.
GOLDMAN, SACHS & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: J.P. MORGAN SECURITIES INC.
By: /s/ KEYSHA BAILEY
-----------------------------------
Name: Keysha Bailey
Title: Vice President
<PAGE> 29
SCHEDULE I
Representatives: J.P. Morgan Securities Inc., Goldman, Sachs & Co. and
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Underwriting Agreement
dated: September 25, 1997
Registration Statement
No.: 333-27181
Title of Securities: 7% Notes due 2007 of Irvine Apartment Communities,
L.P.
Aggregate principal
amount: $100,000,000
Purchase Price: 98.558% of the principal amount of the
Securities, plus accrued interest, if any, from
October 1, 1997 to the Closing Date.
Price to Public: 99.208% of the principal amount of the
Securities, plus accrued interest, if any, from
October 1, 1997 to the Closing Date.
Indenture: Indenture dated as of October 1, 1997 between the
Partnership and First Trust of California, National
Association, as Trustee (the "Trustee"), as
supplemented by the First Supplemental Indenture
dated as of October 1, 1997 between the Partnership
and the Trustee.
<PAGE> 30
Maturity: October 1, 2007
Interest Rate: 7% per annum
Interest Payment Dates: April 1 and October 1, commencing
April 1, 1998
Closing Date and
Time of Delivery: 9:00 a.m., October 1, 1997
Closing Location: Skadden, Arps, Slate, Meagher & Flom LLP
919 Third Avenue
New York, New York 10022
Address for Notices J.P. Morgan Securities Inc.
to Underwriters: 60 Wall Street
New York, New York 10260
Attention: Syndicate Desk
<PAGE> 31
SCHEDULE II
<TABLE>
<CAPTION>
Principal Amount
of Securities
Underwriter To Be Purchased
- ----------- ----------------
<S> <C>
J.P. Morgan Securities Inc........................... $ 60,000,000
Goldman, Sachs & Co.................................. 20,000,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated........................... 20,000,000
------------
Total.............. $100,000,000
============
</TABLE>
<PAGE> 1
EXHIBIT 4.1
- -------------------------------------------------------------------------------
IRVINE APARTMENT COMMUNITIES, L.P.
AND
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION, TRUSTEE
INDENTURE
DATED AS OF OCTOBER 1, 1997
- --------------------------------------------------------------------------------
<PAGE> 2
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
TABLE OF CONTENTS
----------------------
ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Terms Defined............................................................1
ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally..................................................................6
SECTION 2.02. Form of Trustee's Certificate of Authentication..................................7
SECTION 2.03. Amount Unlimited; Certain Terms of Securities; Issuable
in Series..............................................................................7
SECTION 2.04. Authentication and Delivery of Securities........................................9
SECTION 2.05. Execution of Securities.........................................................10
SECTION 2.06. Certificate of Authentication...................................................10
SECTION 2.07. Denomination and Date of Securities; Payments of Interest.......................11
SECTION 2.08. Registration, Transfer and Exchange.............................................11
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities.......................13
SECTION 2.10. Cancellation of Securities; Destruction Thereof.................................14
SECTION 2.11. Temporary Securities............................................................14
SECTION 2.12. Series May Include Tranches.....................................................14
ARTICLE 3
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.01. Payment of Principal and Interest...............................................15
SECTION 3.02. Offices for Payments, Etc.......................................................15
SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee..............................16
SECTION 3.04. Paying Agents...................................................................16
SECTION 3.05. Certificate of the Issuer.......................................................17
SECTION 3.06. Securityholders Lists...........................................................17
SECTION 3.07. Reports by the Issuer...........................................................17
SECTION 3.08. Reports by the Trustee..........................................................17
</TABLE>
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<TABLE>
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ARTICLE 4
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 4.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default.....................................................................18
SECTION 4.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt..................................................................................21
SECTION 4.03. Application of Proceeds.........................................................23
SECTION 4.04. Suits for Enforcement...........................................................24
SECTION 4.05. Restoration of Rights on Abandonment of Proceedings.............................25
SECTION 4.06. Limitations on Suits by Securityholders.........................................25
SECTION 4.07. Unconditional Right of Securityholders to Institute Certain
Suits.................................................................................25
SECTION 4.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default.....................................................................26
SECTION 4.09. Control by Securityholders......................................................26
SECTION 4.10. Waiver of Past Defaults.........................................................27
SECTION 4.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances.................................................................27
SECTION 4.12. Right of Court to Require Filing of Undertaking to Pay
Costs.................................................................................27
ARTICLE 5
CONCERNING THE TRUSTEE
SECTION 5.01. Duties and Responsibilities of the Trustee; During Default;
Prior to Default......................................................................28
SECTION 5.02. Certain Rights of the Trustee...................................................29
SECTION 5.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof.........................................31
SECTION 5.04. Trustee and Agents May Hold Securities; Collections, etc........................31
SECTION 5.05. Moneys Held by Trustee..........................................................31
SECTION 5.06. Compensation and Indemnification of Trustee and Its
Prior Claim...........................................................................31
SECTION 5.07. Right of Trustee to Rely on Officers' Certificate, etc..........................32
SECTION 5.08. Persons Eligible for Appointment as Trustee.....................................32
SECTION 5.09. Resignation and Removal; Appointment of Successor
Trustee...............................................................................33
SECTION 5.10. Acceptance of Appointment by Successor Trustee..................................34
SECTION 5.11. Merger, Conversion, Consolidation or Succession to
Business of Trustee...................................................................35
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
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<C> <S> <C>
ARTICLE 6
CONCERNING THE SECURITYHOLDERS
SECTION 6.01. Evidence of Action Taken by Securityholders.....................................36
SECTION 6.02. Proof of Execution of Instruments and of Holding of Securities; Record Date.....36
SECTION 6.03. Holders to Be Treated as Owners.................................................37
SECTION 6.04. Securities Owned by Issuer Deemed Not Outstanding...............................37
SECTION 6.05. Right of Revocation of Action Taken.............................................37
ARTICLE 7
SUPPLEMENTAL INDENTURES
SECTION 7.01. Supplemental Indentures Without Consent of Securityholders......................38
SECTION 7.02. Supplemental Indentures with Consent of Securityholders.........................40
SECTION 7.03. Effect of Supplemental Indenture................................................41
SECTION 7.04. Documents to Be Given to Trustee................................................42
SECTION 7.05. Notation on Securities in Respect of Supplemental Indentures....................42
ARTICLE 8
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.01. Issuer May Consolidate, Etc., on Certain Terms..................................42
SECTION 8.02. Successor Entity Substituted....................................................43
SECTION 8.03. Opinion of Counsel to Trustee...................................................43
ARTICLE 9
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 9.01. Defeasance Within One Year of Payment...........................................44
SECTION 9.02. Defeasance......................................................................45
SECTION 9.03. Covenant Defeasance.............................................................46
SECTION 9.04. Application of Trust Money......................................................47
SECTION 9.05. Repayment to Issuer.............................................................47
</TABLE>
iii
<PAGE> 5
<TABLE>
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ARTICLE 10
MISCELLANEOUS PROVISIONS
SECTION 10.01. Incorporators, Stockholders, Officers and Directors of
General Partner and Issuer Exempt from Individual Liability...........................48
SECTION 10.02. Provisions of Indenture for the Sole Benefit of Parties and
Securityholders.......................................................................48
SECTION 10.03. Successors and Assigns of Issuer Bound by Indenture............................49
SECTION 10.04. Notices and Demands on Issuer, Trustee and
Securityholder........................................................................49
SECTION 10.05. Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein....................................................49
SECTION 10.06. Payments Due on Saturdays, Sundays and Holidays................................51
SECTION 10.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939.................................................................51
SECTION 10.08. New York Law to Govern.........................................................51
SECTION 10.09. Counterparts...................................................................51
SECTION 10.10. Effect of Headings.............................................................51
ARTICLE 11
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 11.01. Applicability of Article.......................................................51
SECTION 11.02. Notice of Redemption; Partial Redemptions......................................52
SECTION 11.03. Payment of Securities Called for Redemption....................................53
SECTION 11.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption..............................................................54
SECTION 11.05. Mandatory and Optional Sinking Funds...........................................54
</TABLE>
iv
<PAGE> 6
THIS INDENTURE, dated as of October 1, 1997 between Irvine Apartment
Communities, L.P., a Delaware limited partnership (the "ISSUER"), and First
Trust of California, National Association, (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 purchase 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 1.01. 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
<PAGE> 7
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 New
York City or 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 of 1939, 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 550 South Hope Street, Suite 500, Los Angeles,
California, 90071, provided that, for transfer, registration, exchange and
payment of Securities, "Corporate Trust Office" means in care of First Trust
National Association, 180 East Fifth Street, St. Paul, Minnesota 55101.
"EVENT OF DEFAULT" means any event or condition specified as such in
Section 4.01 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.
2
<PAGE> 8
"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 (i) the chairman
of the Board of Directors or the president or any vice president and (ii) 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 10.05.
"OPINION OF COUNSEL" means an opinion in writing signed by legal counsel
who may be an employee of or counsel to the Issuer. Each such opinion shall
comply with Section 314 of the Trust Indenture Act of 1939 and include the
statements provided for in Section 10.05, 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 4.01.
"OUTSTANDING", when used with reference to Securities, shall, subject to
the provisions of Section 6.04, 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
3
<PAGE> 9
(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 2.09 (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 4.01.
"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.
4
<PAGE> 10
"SECURITY REGISTER" has the meaning specified in Section 2.08.
"TRUST INDENTURE ACT OF 1939" (except as otherwise provided in Sections
7.01 and 7.02) means the Trust Indenture Act of 1939 as in force at the date as
of which this Indenture was originally executed.
"TRUSTEE" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article 5, shall also include
any successor trustee.
"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 of
1939. 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
5
<PAGE> 11
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 Issuer 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 Issuer arising from the
making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.
ARTICLE 2
SECURITIES
SECTION 2.01. 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 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
6
<PAGE> 12
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 2.03. Amount Unlimited; Certain Terms of Securities; 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. All Securities of
any series shall be senior securities of the Issuer, and not subordinated in
right of payment to any other indebtedness of the Issuer. 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) 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
2.08, 2.09, 2.11 or 11.03);
(3) the price (expressed as a percentage of the principal amount
thereof) at which such Securities will be issued and, if other than
the principal amount thereof, the portion of the principal amount
thereof payable upon declaration of acceleration of the maturity
thereof pursuant to Section 4.01 or provable in bankruptcy pursuant
to Section 4.02;
(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 method by which interest shall be computed, the
date or dates
7
<PAGE> 13
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 3.02);
(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) 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;
(9) if other than denominations of $1,000 and any multiple
thereof, the denominations in which Securities of the series shall
be issuable;
(10) whether the Securities will be issued in global form or
bearer form or as uncertificated securities;
(11) any Events of Default or covenants with respect to the
Securities of a particular series, if not set forth herein;
(12) whether the Securities will be listed on a securities
exchange;
(13) any trustees, authenticating or paying agents, transfer
agents or registrars or any other agents with respect to the
Securities of such series; and
(14) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
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
8
<PAGE> 14
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 2.04. 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 5.01) shall be fully protected in relying upon:
(1) a certified 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;
(2) an executed supplemental indenture, if any;
(3) an Officers' Certificate setting forth the form and terms of
the Securities as required pursuant to Section 2.01 and 2.03,
respectively and prepared in accordance with Section 10.05; or
(4) an Opinion of Counsel, prepared in accordance with Section
10.05, to the effect that
(a) 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
2.01 and 2.03 in conformity with the provisions of this
Indenture;
(b) 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; and
(c) covering such other matters as the Trustee may
reasonably request.
9
<PAGE> 15
SECTION 2.05. 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) the treasurer or any assistant treasurer or
secretary or any assistant secretary. Such signatures may be the manual or
facsimile signatures of the present or any future such officers. Typographical
and other minor errors or defects in any such reproduction of 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 2.06. 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 or signatories, 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 2.07. Denomination and 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 2.03. 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 2.03.
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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 2.08. 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 3.02 a register or registers (such register or registers
with respect to the Securities of any series, the "SECURITY REGISTER") 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. The
Security 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 the Security Register 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 3.02, 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 3.02, and the Issuer shall execute and the
Trustee shall authenticate and deliver in exchange therefor the Security or
Securities of the
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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 2.09. 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
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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
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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 3.02, 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
2.03, 2.05, 2.07, 4.01 through 4.12, 7.02, 9.01 through 9.04 and 11.01 through
11.05, 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 2.03. 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.
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ARTICLE 3
COVENANTS OF THE ISSUER AND THE TRUSTEE
SECTION 3.01. 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 3.02. Offices for Payments, Etc. So long as any of the
Securities remain outstanding, the Issuer will maintain in the United States,
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 2.03,
the Issuer hereby initially designates the Corporate Trust Office, 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 3.03. 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 5.09, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.04. 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
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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) that it will 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 9.03 and 9.04.
SECTION 3.05. 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 10.05) 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
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requirement of notice provided under the Indenture) which certificate shall
comply with the Trust Indenture Act of 1939.
SECTION 3.06. 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 2.03 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 3.07. 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 3.08. 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. A copy of
each such report shall, at the time of such transmission to Holders, be filed by
the Trustee with each stock exchange, if any, upon which any Securities are
listed, with the Commission and with the Issuer. The Issuer will notify the
Trustee when any Securities are listed on any stock exchange.
ARTICLE 4
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 4.01. 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
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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 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
(b) 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
(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 60 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) 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
(f) 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
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(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
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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 4.02. 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
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and payable on all Securities of such 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
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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 5.06.
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
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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 4.03. Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of Securities 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,
attorneys and counsel 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 5.06;
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
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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 4.04. 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 4.05. 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, the Trustee and the Holders of Securities 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 4.06. 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
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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 4.09 during such 60-day period; 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 4.07. 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,
shall not be impaired or affected without the consent of such Holder.
SECTION 4.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 4.06, 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 4.06, every power and remedy given by this Indenture or by law to the
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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 4.09. 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 5.01) 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 5.01) 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 4.01, 4.07
and 7.02, 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 7.02 or a default or Event of Default in the
payment of principal or interest as specified in clauses (a), (b) and (c) of
Section 4.01.
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
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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 4.07 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.
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ARTICLE 5
CONCERNING THE TRUSTEE
SECTION 5.01. 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
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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 4.09 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 5.01 are in furtherance of and subject to
Sections 315 and 316 of the Trust Indenture Act of 1939. Whether or not therein
expressly so provided, every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section 5.01.
SECTION 5.02. Certain Rights of the Trustee. In furtherance of and
subject to the Trust Indenture Act of 1939, and subject to Section 5.01:
(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;
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(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; provided, further, that the Trustee, in its discretion, may make
such further inquiry or investigation into such facts or matters as it may see
fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer, relevant to the facts or matters that are the subject of its
inquiry, personally or by agent or attorney; 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 5.03. 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
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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 5.04. 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 5.05. Moneys Held by Trustee. Subject to the provisions of
Section 9.04 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 5.06. 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
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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 5.07. Right of Trustee to Rely on Officers' Certificate, etc..
Subject to Sections 5.01 and 5.02, 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 5.08. 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 5.09. 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
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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
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provided for in Section 6.01 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 5.09 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 5.09 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 9.04,
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 5.06.
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.
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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 5.09. 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 5.08, 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 6.01. 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
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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 5.01 and 5.02) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 6.02. Proof of Execution of Instruments and of Holding of
Securities; Record Date. Subject to Sections 5.01 and 5.02, 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 6.01, 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 6.03. 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 6.04. 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
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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 5.01 and 5.02, 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 6.05. Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 6.01, 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.
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ARTICLE 7
SUPPLEMENTAL INDENTURES
SECTION 7.01. 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 8;
(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 and terms of Securities of any series as
permitted by Sections 2.01 and 2.03;
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(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 are 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 7.02.
SECTION 7.02. 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
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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
4.01 or the amount thereof provable in bankruptcy pursuant to Section 4.02, or
extend the time or reduce the amount of any payment pursuant to any sinking fund
or analagous obligation relating to such Securities, 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 7.02, 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 5.09, 5.10, 5.11 and 7.02.
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 6.01, 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.
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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 7.03. 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 7.04. Documents to Be Given to Trustee. The Trustee, subject to
the provisions of Sections 5.01 and 5.02, may receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 7 complies with the applicable provisions of
this Indenture.
SECTION 7.05. 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.
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ARTICLE 8
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 8.01. 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 (complying with Article 7),
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 8.02. 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.
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In the event of any such sale or conveyance (other than a conveyance by
way of lease) and upon any such assumption by a successor entity, the Issuer or
any successor entity which shall theretofore have become such in the manner
described in this Article 8 shall be discharged from all obligations and
covenants under this Indenture and the Securities and may be liquidated and
dissolved.
SECTION 8.03. Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Sections 5.01 and 5.02, may receive an Opinion of Counsel,
prepared in accordance with Section 10.05, 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 9.01. Defeasance Within One Year of Payment. Except as otherwise
provided in this Section 9.01, 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 3.01 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 9.05) 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 Trustee 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
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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 5.06 in respect of the Securities of such series shall survive.
With respect to the foregoing clause (ii), only the Issuer's obligations in
Sections 2.02, 2.05, 2.06, 2.07, 2.08, 2.09, 2.10, 3.02, 3.04, 5.06, 5.09 and
9.05 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 5.06 and 9.05 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 9.02. 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;
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(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 has 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 9.02 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 perfected first 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 9.02 of the Securities of
such series have been complied with.
The Issuer's obligations in Sections 2.02, 2.05, 2.06, 2.07, 2.08, 2.09,
2.10, 3.02, 3.04, 5.06, 5.09 and 9.05 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 5.06 and 9.05 shall
survive.
SECTION 9.03. Covenant Defeasance. The Issuer may omit to comply with
any term, provision or condition set forth in Article 3 (or any other specific
covenant relating to such series provided for in a Board Resolution or
supplemental indenture pursuant to Section 2.03 which may by its terms be
defeased pursuant to this Section 9.03), and such omission shall be deemed not
to be an Event of Default under clauses (d) or (f) of Section 4.01, with respect
to the Outstanding Securities of a series if:
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(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 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 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 9.03 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 and (B) such Holders have a valid perfected first
security interest in the trust funds subject to no prior liens
under the UCC; 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 9.03 of the
Securities of such series have been complied with.
SECTION 9.04. Application of Trust Money. Subject to Section 9.05, the
Trustee or Paying Agent shall hold in trust money or U.S. Government
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Obligations deposited with it pursuant to Section 9.01, 9.02 or 9.03, 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 9.05. Repayment to Issuer. Subject to Sections 5.06, 9.01, 9.02
and 9.03, 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 10.01. 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
47
<PAGE> 53
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 10.02. 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 10.03. 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 10.04. 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.
48
<PAGE> 54
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 10.05. 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, on 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.
49
<PAGE> 55
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 10.06. 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 from and after such date.
SECTION 10.07. 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 10.08. 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 10.09. 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.
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<PAGE> 56
ARTICLE 11
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 11.01. 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 2.03 for
Securities of such series.
SECTION 11.02. 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
51
<PAGE> 57
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 3.04) 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 by lot, in such manner as it shall deem appropriate,
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 11.03. 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 5.05 and 9.04, 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 2.04 hereof.
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<PAGE> 58
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 11.04. 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 11.05. 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 2.07, (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.
53
<PAGE> 59
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 10.05) 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 11.02, 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
54
<PAGE> 60
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 in 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 11.02 (and with the effect provided in Section 11.03)
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 4 and held for the payment of all such Securities. In
case such Event of Default shall have been waived as provided in Section 4.09 or
the default cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys
55
<PAGE> 61
shall thereafter be applied on the next succeeding sinking fund payment date in
accordance with this Section to the redemption of such Securities.
56
<PAGE> 62
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and attested, all as of October 1, 1997.
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities, Inc.,
its sole general partner
By: /s/ SHAWN HOWIE
--------------------------------------
Shawn Howie
Attest:
By: /s/ JAMES E. MEAD
------------------------------
James E. Mead
FIRST TRUST OF CALIFORNIA,
NATIONAL ASSOCIATION
By: /s/ LINDA VERSTUYFT
--------------------------------------
Linda Verstuyft
Attest:
By: /s/ BERTHA MARES
------------------------------
Bertha Mares
57
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
IRVINE APARTMENT COMMUNITIES, L.P.
Issuer
------
to
FIRST TRUST OF CALIFORNIA, NATIONAL ASSOCIATION
Trustee
-------
-------------------------
Supplemental Indenture No. 1
Dated as of October 1, 1997
-------------------------
$100,000,000
of
7% Notes due 2007
- --------------------------------------------------------------------------------
<PAGE> 2
SUPPLEMENTAL INDENTURE NO. 1, dated as of October 1, 1997 (the
"Supplemental Indenture"), between IRVINE APARTMENT COMMUNITIES, L.P., a limited
partnership duly organized and existing under the laws of the State of Delaware
(herein referred to as the "Operating Partnership" or the "Issuer"), and First
Trust of California, National Association, a national banking association duly
organized and existing under the laws of the United States of America, as
Trustee (herein called the "Trustee").
RECITALS OF THE OPERATING PARTNERSHIP
The Operating Partnership has heretofore delivered to the Trustee an
Indenture dated as of October 1, 1997 (the "Indenture"), a form of which has
been filed with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, as an exhibit to the Operating Partnership's Registration
Statement on Form S-3 (Registration No. 333-27181), providing for the issuance
from time to time of Debt Securities of the Operating Partnership (the
"Securities").
Sections 2.01 and 2.03 of the Indenture provide for the form of and
various other matters with respect to any series of Securities issued under the
Indenture to be established in an indenture supplemental to the Indenture.
Section 7.01(e) of the Indenture provides for the Operating Partnership
and the Trustee to enter into an indenture supplemental to the Indenture to
establish the form and terms of Securities of any series as provided by Sections
2.01 and 2.03 of the Indenture.
The Board of Directors of Irvine Apartment Communities, Inc., a
Maryland corporation and the general partner of the Operating Partnership (the
"General Partner"), has duly adopted resolutions authorizing the General
Partner, on behalf of the Operating Partnership, to execute and deliver this
Supplemental Indenture.
All the conditions and requirements necessary to make this Supplemental
Indenture, when duly executed and delivered, a valid and binding agreement in
accordance with its terms and for the purposes herein expressed, have been
performed and fulfilled.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of each of
the series of Securities provided for herein by the Holders thereof, it is
mutually cove-
<PAGE> 3
nanted and agreed, for the equal and proportionate bene- fit of all Holders of
the Notes, as follows:
ARTICLE ONE
RELATION TO INDENTURE; DEFINITIONS
----------------------------------
SECTION 1.1. Relation to Indenture.
This Supplemental Indenture constitutes an integral part of the
Indenture.
SECTION 1.2. Definitions.
For all purposes of this Supplemental Indenture, except as otherwise
expressly provided for or unless the context otherwise requires:
(1) Capitalized terms used but not defined herein shall have
the respective meanings assigned to them in the Indenture; and
(2) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections
of this Supplemental Indenture.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
the time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, including (without
duplication) Indebtedness incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary or such acquisition. Acquired Indebtedness
shall be deemed to be incurred on the date of the related acquisition of assets
from any Person, whether by merger or otherwise, or the date the acquired Person
becomes a Subsidiary.
"Annual Service Charge" for any period means the sum of the
Consolidated Interest Expense for such period of the Operating Partnership and
its Subsidiaries and the amount of dividends which are payable in cash during
such period in respect of any Disqualified Stock.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banks in the City of New York, New
York, the City of Los Angeles, California, or in the City of St. Paul, Minnesota
are authorized or required by law, regulation or executive order to close.
2
<PAGE> 4
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for capital stock),
warrants or options to purchase any thereof.
"Common Stock of the General Partner" means the common stock, par value
$.01 per share, of the General Partner.
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations of the Operating Partnership and its Subsidiaries plus
amounts which have been deducted, and minus amounts which have been added, for
the following (without duplication): (i) Consolidated Interest Expense of the
Operating Partnership and its Subsidiaries, (ii) provision for taxes of the
Operating Partnership and its Subsidiaries based on income, (iii) provisions for
gains and losses on properties and property depreciation and amortization, (iv)
the effect of any non-cash charge resulting from a change in accounting
principles in determining Earnings from Operations for such period and (v)
amortization of deferred charges.
"Consolidated Interest Expense" for any period means, without
duplication, all interest (including the interest component of rentals on
capitalized leases, letter of credit fees, commitment fees and other like
financial charges) and all amortization of debt discount on Indebtedness
(including, without limitation, payment- in-kind, zero coupon and other like
securities), but excluding legal fees, title insurance charges, and other
out-of-pocket fees and expenses incurred in connection with the issuance of
Indebtedness and the amortization of any such debt issuance costs that are
capitalized, all determined on a consolidated basis in accordance with GAAP.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for Indebtedness
or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part (other than Capital
3
<PAGE> 5
Stock which is redeemable solely in exchange for Capital Stock which is not
Disqualified Stock or the redemption price of which may, at the option of such
Person, be paid in Capital Stock which is not Disqualified Stock), in each case
on or prior to the Stated Maturity of the Notes. For purposes of this
definition, it is expressly understood that the OP Units shall not constitute
Disqualified Stock.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items and property
valuation losses, net as reflected in the financial statements of the Operating
Partnership and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or security
interest of any kind.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"GAAP" means generally accepted accounting principles in the United
States as in effect on the date hereof, consistently applied.
"Global Note" has the meaning specified in Section 2.9 hereof.
"Indebtedness" of the Operating Partnership or any Subsidiary means any
indebtedness of the Operating Partnership or any Subsidiary, whether or not
contingent, in respect of (i) borrowed money or evidenced by bonds, notes,
debentures or similar instruments whether or not such indebtedness is secured by
any Encumbrance existing on property owned by the Operating Partnership or any
Subsidiary, (ii) indebtedness for borrowed money of a Person other than the
Operating Partnership or a Subsidiary which is secured by any Encumbrance
existing on property owned by the Operating Partnership or any Subsidiary, to
the extent of the lesser of (x) the amount of indebtedness so secured and (y)
the fair market value of the property subject to such Encumbrance, (iii) the
reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued or amounts representing the balance deferred
and unpaid of the purchase price of any property or services, except any such
balance that constitutes an accrued expense or trade payable, or all conditional
sale obligations or obligations under any title retention agreement, (iv) the
principal amount of all obligations of the Operating
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<PAGE> 6
Partnership or any Subsidiary with respect to redemption, repayment or other
repurchase of any Disqualified Stock or (v) any lease of property by the
Operating Partnership or any Subsidiary as lessee which is reflected on the
Operating Partnership's consolidated balance sheet as a capitalized lease in
accordance with GAAP, to the extent, in the case of items of indebtedness under
(i) through (iii) above, that any such items (other than letters of credit)
would appear as a liability on the Operating Partnership's consolidated balance
sheet in accordance with GAAP, and also includes, to the extent not otherwise
included, any obligation by the Operating Partnership or any Subsidiary to be
liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Indebtedness of
another Person (other than the Operating Partnership or any Subsidiary) (it
being understood that Indebtedness shall be deemed to be incurred by the
Operating Partnership or any Subsidiary whenever the Operating Partnership or
such Subsidiary shall create, assume, guarantee or otherwise become liable in
respect thereof). For purposes of this definition, Indebtedness (i) shall not
include obligations of any Person (x) arising from the honoring by a bank or
other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business, provided that such obligations are extinguished within two Business
Days of their incurrence unless covered by any overdraft line and (y) resulting
from the endorsement of negotiable instruments for collection in the ordinary
course of business and consistent with past business practices; (ii) which
provides that an amount less than the principal amount thereof shall be due upon
any declaration of acceleration thereof shall be deemed to be incurred or
outstanding in an amount equal to the accreted value thereof at the date of
determination determined in accordance with GAAP; and (iii) shall not include
obligations under performance bonds, performance guarantees, surety bonds and
appeal bonds, stand-by letters of credit or similar obligations, incurred in the
ordinary course of business and on ordinary business terms (to the extent the
foregoing items are not drawn upon, or if drawn, such items are repaid within
three Business Days).
"Interest Payment Date" has the meaning specified in Section 2.3
hereof.
"Make-Whole Amount" means, in connection with any optional redemption
or accelerated payment of any Note, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or
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<PAGE> 7
paid and the amount of interest (exclusive of interest accrued to the date of
redemption or accelerated payment) that would have been payable in respect of
such dollar if such redemption or accelerated payment had not been made,
determined by discounting, on a semi-annual basis, such principal and interest
at the Reinvestment Rate (determined on the third Business Day preceding the
date such notice of Redemption is given or declaration of acceleration is made)
from the respective dates on which such principal and interest would have been
payable if such redemption or accelerated payment had not been made, over (ii)
the aggregate principal amount of the Notes being redeemed or paid.
"Non-Recourse Indebtedness" means Indebtedness with respect to which
recourse is limited to (i) specific assets related to a particular Property or
group of Properties subject to an Encumbrance securing such Indebtedness or (ii)
any Subsidiary (provided that if a Subsidiary is a partnership, there is no
recourse to the Operating Partnership as a general partner of such Partnership);
provided, however, that personal recourse of the Operating Partnership for any
such Indebtedness for fraud, misrepresentation, misapplication of cash, waste,
environmental claims and liabilities and other circumstances customarily
excluded by institutional lenders from exculpation provisions and/or included in
separate indemnification agreements in non-recourse financing of real estate
shall not, by itself, prevent such Indebtedness from being characterized as
Non-Recourse Indebtedness.
"Notes" has the meaning specified in Section 2.1 hereof.
"OP Units" means the units of limited partnership interest in the
Operating Partnership.
"Paying Agent" has the meaning specified in Section 2.11 hereof.
"Property" means, with respect to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
by such Person.
"Redemption Price" shall have the meaning specified in Section 2.5
hereof.
"Reinvestment Rate" means .25% (twenty-five one hundredths of one
percent) plus the arithmetic mean of the yields under the respective headings
"This Week" and "Last Week" published in the Statistical Release under
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<PAGE> 8
the caption "Treasury Constant Maturities" for the maturity (rounded to the
nearest month) corresponding to the remaining life to maturity of the Notes, as
of the payment date of the principal being redeemed or paid. If no maturity
exactly corresponds to such maturity, yields for the two published maturities
most closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For such purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
"Regular Record Date" has the meaning specified in Section 2.3 hereof.
"Stated Maturity" has the meaning specified in Section 2.3 hereof.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded United
States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination of the
Make-Whole Amount, then such other reasonably comparable index which shall be
designated by the Operating Partnership.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity or partnership interests of which are
owned, directly or indirectly, by such Person. For purposes of this definition,
"voting equity securities" means equity securities having voting power for the
election of directors, whether at all times or only so long as no senior class
of security has such voting power by reason of any contingency.
"Total Assets" as of any date means the sum of (i) $1,289,618,606
(which represents the product of (x) the sum of the number of shares of Common
Stock of the General Partner outstanding on June 30, 1997 (19,815,057 shares)
and the number of OP Units not held by the General Partner outstanding on June
30, 1997 (24,086,853 OP Units) and (y) $29.375 (the last reported sales price
per share of the Common Stock of the General Partner on the New York Stock
Exchange on June 30, 1997), (ii) $651,587,000 (which represents the principal
amount of the outstanding consolidated debt of the Operating Part-
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<PAGE> 9
nership and its Subsidiaries on June 30, 1997), (iii) the purchase price or cost
of any real estate assets or mortgages receivable acquired (including the value
at the time of such acquisition, of any OP Units or shares of Common Stock of
the General Partner issued in connection therewith) or developed after June 30,
1997 by the Operating Partnership or any Subsidiary, and (iv) cash and
restricted cash on the Operating Partnership's balance sheet; provided, however,
that Total Assets shall be reduced by the amount of the proceeds of any real
estate assets disposed of, or mortgages receivable written off as
non-collectible, after June 30, 1997 by the Operating Partnership or any
Subsidiary.
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money (excluding
infrastructure assessment bonds (totalling approximately $21.8 million as of
December 31, 1996)) and (ii) all other assets of the Operating Partnership and
its Subsidiaries not subject to an Encumbrance for borrowed money, determined in
accordance with GAAP (but excluding accounts receivable and intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Operating
Partnership and its Subsidiaries on such date, before depreciation and
amortization, determined on a consolidated basis in accordance with GAAP.
"Unsecured Indebtedness" means Indebtedness which is not secured by any
Encumbrance upon any of the properties of the Operating Partnership or any
Subsidiary.
ARTICLE TWO
THE SERIES OF NOTES
-------------------
SECTION 2.1. Title of the Securities.
There shall be a series of Securities designated the "7% Notes due
2007" (the "Notes").
SECTION 2.2. Limitation on Aggregate Principal Amount.
The aggregate principal amount of the Notes shall be limited to
$100,000,000, and, except as provided in this Section and in Section 2.09 of the
Indenture, the Operating Partnership shall not execute and the Trustee
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<PAGE> 10
shall not authenticate or deliver Notes in excess of such aggregate principal
amount.
Nothing contained in this Section 2.2 or elsewhere in this Supplemental
Indenture, or in the Notes, is intended to or shall limit execution by the
Operating Partnership or authentication or delivery by the Trustee of Notes
under the circumstances contemplated in the Indenture.
SECTION 2.3. Interest and Interest Rate; Maturity Date of Notes.
The Notes will bear interest at a rate of 7% per annum, from October 1,
1997 or from the immediately preceding Interest Payment Date to which interest
has been paid or duly provided for, payable semi-annually in arrears on April 1
and October 1 of each year, commencing April 1, 1998 (each, an "Interest Payment
Date"), to the Persons in whose name the Notes are registered in the Security
Register at the close of business on the March 15 or September 15 (whether or
not a Business Day), as the case may be, next preceding such Interest Payment
Date (each, a "Regular Record Date"). Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months. The interest so payable on any
Note which is not punctually paid or duly provided for on any Interest Payment
Date shall forthwith cease to be payable to the Person in whose name such Note
is registered on the relevant Regular Record Date, and such defaulted interest
shall instead be payable to the Person in whose name such Note is registered on
the special record date or other specified date determined in accordance with
the Indenture.
The Notes will mature on October 1, 2007 (the "Stated Maturity").
If any Interest Payment Date or the Stated Maturity falls on a day that
is not a Business Day, the required payment shall be made on the next Business
Day as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or the Stated Maturity, as the case may be.
SECTION 2.4. Limitations on Incurrence of Indebtedness.
(a) The Operating Partnership will not, and will not permit any
Subsidiary to, incur any Indebtedness if, immediately after giving effect to the
incurrence of such additional Indebtedness and the application of the
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proceeds thereof, the aggregate principal amount of all outstanding Indebtedness
of the Operating Partnership and its Subsidiaries on a consolidated basis
determined in accordance with GAAP is greater than 60% of the sum of (without
duplication) (i) the Total Assets of the Operating Partnership and its
Subsidiaries as of the end of the most recently completed calendar quarter of
the Operating Partnership for which financial information is available prior to
the incurrence of such additional Indebtedness and (ii) the purchase price or
cost of any real estate assets or mortgages receivable acquired or developed,
and the amount of any securities offering proceeds received (to the extent such
proceeds were not used to acquire real estate assets or mortgages receivable, to
develop real estate assets or to reduce Indebtedness), by the Operating
Partnership or any Subsidiary since the end of such calendar quarter, including
those proceeds obtained in connection with the incurrence of such additional
Indebtedness.
(b) The Operating Partnership will not, and will not permit any
Subsidiary to, incur any Indebtedness secured by any Encumbrance upon any of the
property of the Operating Partnership or any Subsidiary if, immediately after
giving effect to the incurrence of such additional Indebtedness and the
application of the proceeds thereof, the aggregate principal amount of all
outstanding Indebtedness of the Operating Partnership and its Subsidiaries on a
consolidated basis which is secured by any Encumbrance on property of the
Operating Partnership or any Subsidiary is greater than 40% of the sum of
(without duplication) (i) the Total Assets of the Operating Partnership and its
Subsidiaries as of the end of the most recently completed calendar quarter of
the Operating Partnership for which financial information is available prior to
the incurrence of such additional Indebtedness and (ii) the purchase price or
cost of any real estate assets or mortgages receivable acquired or developed,
and the amount of any securities offering proceeds received (to the extent that
such proceeds were not used to acquire real estate assets or mortgages
receivable, to develop real estate assets or to reduce Indebtedness), by the
Operating Partnership or any Subsidiary since the end of such calendar quarter,
including those proceeds obtained in connection with the incurrence of such
additional Indebtedness.
(c) The Operating Partnership and its Subsidiaries may not at any time
own Total Unencumbered Assets equal to less than 150% of the aggregate
outstanding principal amount of the Unsecured Indebtedness of the Operating
Partnership and its Subsidiaries on a consolidated basis.
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(d) The Operating Partnership will not, and will not permit any
Subsidiary to, incur any Indebtedness if the ratio of Consolidated Income
Available for Debt Service to the Annual Service Charge for the four consecutive
fiscal quarters most recently ended prior to the date on which such additional
Indebtedness is to be incurred shall have been less than 1.5:1, on a pro forma
basis after giving effect thereto and to the application of the proceeds
therefrom, and calculated on the assumption that (i) such Indebtedness and any
other Indebtedness incurred by the Operating Partnership and its Subsidiaries
since the first day of such four-quarter period and the application of the
proceeds therefrom, including to refinance other Indebtedness, had occurred at
the beginning of such period; (ii) the repayment or retirement of any other
Indebtedness by the Operating Partnership and its Subsidiaries since the first
day of such four-quarter period had been repaid or retired at the beginning of
such period (except that, in making such computation, the amount of Indebtedness
under any revolving credit facility shall be computed based upon the average
daily balance of such Indebtedness during such period); (iii) in the case of
Acquired Indebtedness or Indebtedness incurred in connection with any
acquisition since the first day of such four-quarter period, the related
acquisition had occurred as of the first day of such period with the appropriate
adjustments with respect to such acquisition being included in such pro forma
calculation; (iv) in the case of any acquisition or disposition by the Operating
Partnership or its Subsidiaries of any asset or group of assets since the first
day of such four-quarter period, whether by merger, stock purchase or sale, or
asset purchase or sale, such acquisition or disposition or any related repayment
of Indebtedness had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition or disposition being
included in such pro forma calculation and (v) Consolidated Interest Expense
attributable to any Indebtedness (whether existing or being incurred) computed
on a pro forma basis and bearing a floating interest rate shall be computed as
if the rate in effect on the date of computation (taking into account if such
Person or any of its Subsidiaries is a party to an interest rate agreement or
other interest protection agreement applicable to such floating rate
Indebtedness if such agreement shall remain in effect for the twelve month
period after the date of the transaction giving rise to the need to calculate
the ratio of Consolidated Income Available for Debt Service to Annual Service
Charge) had been the applicable rate for the entire period.
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(e) For purposes of determining any particular amount of Indebtedness
under this Section 2.4, guarantees of, liens securing, or letters of credit that
support, in each case, Indebtedness otherwise included in the determination of
such particular amount of Indebtedness, shall not be included. In addition, the
amount of Indebtedness issued at a price that is less than the principal amount
thereof shall be equal to the amount of the liability in respect thereof
determined in accordance with GAAP.
SECTION 2.5. Redemption.
The Notes may be redeemed at any time at the option of the Operating
Partnership, in whole or in part, at a redemption price equal to the sum of (i)
the principal amount of the Notes being redeemed plus accrued interest thereon
to the redemption date and (ii) the Make-Whole Amount, if any, with respect to
such Notes (the "Redemption Price"). If less than all the Notes are to be
redeemed at the option of the Operating Partnership, the Operating Partnership
will notify the Trustee at least 45 days prior to the redemption date (or such
shorter period as is satisfactory to the Trustee in its sole discretion) of the
aggregate principal amount of Notes to be redeemed, their redemption date and
the Redemption Price. The Trustee shall select, in such manner as it shall deem
appropriate, the Notes to be redeemed in whole or in part. Notes may be redeemed
in part in the minimum authorized denomination for Notes or in any integral
multiple thereof.
SECTION 2.6. Places of Payment.
The places of payment where the Notes may be presented or surrendered
for payment, where the Notes may be surrendered for registration of transfer or
exchange and where notices and demands to and upon the Operating Partnership in
respect of the Notes and the Indenture may be served shall be the Corporate
Trust Office.
SECTION 2.7. Method of Payment.
Payment of the principal of and interest on the Notes will be payable
by or on behalf of the Trustee at the Corporate Trust Office, in such lawful
money of the United States of America as at the time of payment is legal tender
for payment of public and private debts; provided, however, that at the option
of the Operating Partnership, payments of interest on the Notes may be made (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or (ii) by wire transfer to an account
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maintained by the Person entitled thereto located within the United States.
SECTION 2.8. Issue Price.
The Notes shall be issued to the public at a price of 99.208% (without
deduction of underwriting discounts and commissions) of the principal amount
thereof.
SECTION 2.9. Global Form.
The Notes shall be issued in the form of one or more registered global
Notes (each, a "Global Note" and collectively, the "Global Notes"). The
depositary for the Notes shall be The Depository Trust Company ("DTC"). Such
Global Note or Notes shall represent the aggregate amount of Notes outstanding
from time to time endorsed thereon. The aggregate amount of Notes outstanding
represented thereby may from time to time be increased or decreased to reflect
exchanges. Any endorsement of a Global Note to reflect the amount, or any
increase or decrease in the amount, of Notes outstanding represented thereby
shall be made in such manner and upon instructions given by such Person or
Persons as shall be specified therein or in an Officers' Certificate to be
delivered to the Trustee. Subject to the provisions of Section 2.11 of the
Indenture, if applicable, the Trustee shall deliver and redeliver any Notes in
the form of a permanent Global Note in the manner and upon instructions given by
the Person or Persons specified therein or in the applicable Officers'
Certificate. If an Officers' Certificate with respect to the authentication and
delivery of temporary Notes has been, or simultaneously is, delivered, any
instructions by the Operating Partnership with respect to endorsement or
delivery or redelivery of a Note in global form shall be in writing but need not
comply with Section 10.05 of the Indenture and need not be accompanied by an
Opinion of Counsel.
Notwithstanding the provisions of Sections 2.07 and 3.01 of the
Indenture, payment of principal of and any premium or Make-Whole Amount, if any,
and interest on any Global Note in permanent form shall be made to the Person or
Persons specified therein.
Notwithstanding the provisions of Section 6.03 of the Indenture and
except as provided in the preceding paragraph, the Operating Partnership, the
Trustee and any agent of the Operating Partnership and the Trustee shall treat
as the Holder of such principal amount of Notes represented by a Global Note the
Holder of such permanent Global Note, which shall initially be DTC or its
nominee.
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If DTC notifies the Operating Partnership that it is at any time
unwilling or unable to continue as depositary or ceases to be a clearing agency
registered under the Exchange Act, and a successor Person to act as the
depositary registered as a clearing agency under the Exchange Act is not
appointed by the Operating Partnership within 90 days, the Operating Partnership
will issue Notes in definitive form in exchange for such Notes issued in global
form. In addition, the Operating Partnership may at any time and in its sole
discretion determine not to have any of the Notes in the form of a Global Note
and, in such event, shall issue Notes in definitive form in exchange for all the
Notes issued in the form of a Global Note. Any Notes issued in definitive form
in exchange for Global Notes will be registered in such name or names as the
Person specified therein shall instruct the Trustee.
Any Global Note authenticated and delivered hereunder shall bear a
legend in substantially the following form:
"This Note is a Global Note within the meaning set forth in the
Indenture hereinafter referred to and is registered in the name of The
Depository Trust Company ("DTC"), as depositary, or a nominee of DTC.
This Note is exchangeable for Notes registered in the name of a person
other than DTC or its nominee only in the limited circumstances
described in the Indenture, and may not be transferred except as a
whole by DTC to a nominee of DTC or by a nominee of DTC to DTC or
another nominee of DTC or by DTC or its nominee to a successor
depositary or its nominee."
SECTION 2.10. Form of Notes.
The Notes shall be substantially in the form attached as Exhibit A
hereto.
SECTION 2.11. Registrar and Paying Agent.
The Trustee shall initially serve as Registrar for the Notes. First
Trust National Association shall initially serve as paying agent (the "Paying
Agent") for the Notes. The address of the Paying Agent is 180 East Fifth Street,
St. Paul, Minnesota 55101.
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SECTION 2.12. Defeasance.
The provisions of Article 9 of the Indenture relating to defeasance and
covenant defeasance shall be applicable to the Notes. The provisions of Section
9.03 of the Indenture shall apply to the covenants set forth in Sections 2.4 and
2.14 of this Supplemental Indenture and to those covenants specified in Section
9.03 of the Indenture.
SECTION 2.13. Events of Default.
The provisions of Article 4 of the Indenture relating to "Events of
Default," will apply to the Notes, except that whenever the principal amount of
the Notes may be declared or shall become automatically due and payable
following an Event of Default, references to "principal amount" shall be deemed
to include a reference to any Make-Whole Amount payable on the Notes. In
addition to the Events of Default set forth in Section 4.01 of the Indenture,
the following shall constitute Events of Default with respect to the Notes: (a)
failure to pay the Make-Whole Amount on any Notes when due; (b) default under
any Indebtedness other than Non-Recourse Indebtedness of the Operating
Partnership (or of any Subsidiary, the repayment of which the Operating
Partnership has guaranteed or for which the Operating Partnership is directly
responsible or liable as obligor or guarantor), having an aggregate principal
amount outstanding of at least $10,000,000, whether such indebtedness now exists
or shall hereafter be created, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to the date on
which it would otherwise have become due and payable, without such indebtedness
having been discharged, or such acceleration having been rescinded or annulled,
within a period of 10 days after there shall have been given written notice, by
registered or certified mail, to the Operating Partnership by the Trustee or to
the Operating Partnership and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Notes a written notice specifying
such default and requiring the Operating Partnership to cause such indebtedness
to be discharged or cause such acceleration to be rescinded or annulled and
stating that such notice is a "Notice of Default" under the Indenture and (c)
the entry by a court of competent jurisdiction of one or more judgments, orders
or decrees against the Operating Partnership or any Subsidiary in an aggregate
amount (excluding amounts covered by insurance) in excess of $10,000,000 and
such judgments, orders or decrees remain undischarged, unstayed and unsatisfied
in an aggregate amount (exclud-
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ing amounts covered by insurance) in excess of $10,000,000 for a period of 30
consecutive days.
SECTION 2.14. Provision of Financial Informa- tion.
Whether or not the Operating Partnership is subject to Section 13 or
15(d) of the Exchange Act, the Operating Partnership will, to the extent
permitted under the Exchange Act, file with the Commission the annual reports,
quarterly reports and other documents which the Operating Partnership would have
been required to file with the Commission pursuant to such Section 13 or 15(d)
if the Operating Partnership were so subject, such documents to be filed with
the Commission on or prior to the respective dates (the "Required Filing Dates")
by which the Operating Partnership would have been required so to file such
documents if the Operating Partnership were so subject.
The Operating Partnership will also in any event (x) within 15 days of
each Required Filing Date (i) if the Operating Partnership is not then subject
to Section 13 or 15(d) of the Exchange Act, transmit by mail to all Holders, as
their names and addresses appear in the Security Register, without cost to such
Holders, copies of the annual reports and quarterly reports that the Operating
Partnership would have been required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act if the Operating Partnership were
subject to such Sections, and (ii) file with the Trustee copies of the annual
reports, quarterly reports and other documents that the Operating Partnership
would have been required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act if the Operating Partnership were subject to such
Sections and (y) if filing such documents by the Operating Partnership with the
Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective Holder.
SECTION 2.15. Waiver of Certain Covenants.
The Operating Partnership may omit in any particular instance to comply
with the provisions of Sections 2.4 and 2.14 of this Supplemental Indenture and
with any other term, provision or condition with respect to the Notes (except
any such term, provision or condition which could not be amended without the
consent of all Holders of the Notes), if before or after the time for such
compliance the Holders of at least a majority in principal amount of all
outstanding Notes either waive
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such compliance in such instance or generally waive compliance with such
covenant or condition. Except to the extent so expressly waived, and until such
waiver shall become effective, the obligations of the Operating Partnership and
the duties of the Trustee in respect of any such term, provision or condition
shall remain in full force and effect.
SECTION 2.16. Waiver of Stay or Extension Laws.
The Operating Partnership covenants (to the extent that it may lawfully
do so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or performance of this Supplemental Indenture and the Indenture; and
the Operating Partnership (to the extent it may lawfully do so) hereby expressly
waives all benefit or advantage of any such law and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though
no such law had been enacted.
SECTION 2.17. No Exchange Listing.
The Notes will not initially be listed on a securities exchange.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
------------------------
SECTION 3.1. Ratification of Indenture.
Except as expressly modified or amended hereby, the Indenture continues
in full force and effect and is in all respects confirmed and preserved.
SECTION 3.2. Governing Law.
This Supplemental Indenture and each Note shall be governed by and
construed in accordance with the laws of the State of New York. This
Supplemental Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, and shall, to the extent applicable, be governed by such
provisions.
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SECTION 3.3. Counterparts.
This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
IRVINE APARTMENT COMMUNITIES, L.P.
By: IRVINE APARTMENT COMMUNITIES, INC.,
as General Partner
By: /s/ SHAWN HOWIE
--------------------------------
Name: Shawn Howie
Title: Vice President, Corporate
Finance and Controller
FIRST TRUST OF CALIFORNIA,
NATIONAL ASSOCIATION,
as Trustee
By: /s/ LINDA VERSTUYFT
--------------------------------
Name: Linda Verstuyft
Title: Vice President
Attest:
By: /s/ BERTHA MARES
--------------------------------
Name: Bertha Mares
Title: Assistant Vice President
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EXHIBIT A TO
SUPPLEMENTAL INDENTURE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW YORK, NEW
YORK, TO THE OPERATING PARTNERSHIP (AS DEFINED BELOW) OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST
COMPANY ("DTC"), AS DEPOSITARY, OR A NOMINEE OF DTC. THIS NOTE IS EXCHANGEABLE
FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC
TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITARY OR ITS NOMINEE.
Registered No. ________ PRINCIPAL AMOUNT
CUSIP No.: 46360QAA7 $100,000,000
IRVINE APARTMENT COMMUNITIES, L.P.
7% NOTE DUE 2007
IRVINE APARTMENT COMMUNITIES, L.P., a limited partnership duly
organized and existing under the laws of the State of Delaware (herein referred
to as the "Operating Partnership," which term shall include any successor entity
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, upon presentation, the
principal sum of ONE HUNDRED MILLION DOLLARS on October 1, 2007 and to pay
interest on the outstanding principal amount thereon from October 1, 1997, or
from the immediately preceding Interest Payment Date to which interest has been
paid or duly provided for, semi-annually in arrears on April 1 and October 1 in
each year, commencing April 1, 1998, at the rate of 7% per annum, until the
entire principal hereof is paid or made available for payment. The interest so
payable and punctually paid or duly provided for on any Interest Payment Date
will, as provided in the Indenture, be paid to the Person in whose name this
Note is registered at the close of business on the Regular Record Date for such
interest which shall be the March 15 or September 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date, and may either be paid to the
Person in whose name this Note is registered at the close of business on a
special record date for the payment of such Defaulted Interest to be fixed by
the Operating Partnership, notice whereof shall be given to Holders of the Notes
not less than 15 days prior to such special record date, all as more fully
provided in the Indenture. Payment of the principal of and interest on this Note
will be payable at the Corporate Trust Office as defined in the Indenture, in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Operating Partnership payments of interest on the Notes may
be made (i) by check mailed to the address of the Person entitled thereto as
such
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<PAGE> 22
address shall appear in the Security Register or (ii) by wire transfer to an
account of the Person entitled thereto located within the United States.
The Notes are one of a duly authorized issue of securities of the
Operating Partnership (herein called the "Notes"), issued and to be issued in
one or more series under an Indenture, dated as of October 1, 1997, as
supplemented by Supplemental Indenture No. 1, dated as of October 1, 1997, (as
so supplemented, herein called the "Indenture"), between the Operating
Partnership and First Trust of California, National Association (herein called
the "Trustee," which term includes any successor trustee under the Indenture),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Operating Partnership, the Trustee and the Holders
of the Notes and of the terms upon which the Notes are authenticated and
delivered. This Note is limited in aggregate principal amount to $100,000,000.
Notes may be redeemed at any time at the option of the Operating
Partnership, in whole or in part, upon notice of not more than 60 nor less than
30 days prior to the redemption date, at a Redemption Price equal to the sum of
(i) the principal amount of the Notes being redeemed plus accrued interest
thereon to the redemption date and (ii) the Make-Whole Amount, if any, with
respect to such Notes.
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Operating Partnership on this Note and (b) certain
restrictive covenants and the related defaults and Events of Default applicable
to the Operating Partnership, in each case, upon compliance by the Operating
Partnership with certain conditions set forth in the Indenture, which provisions
apply to this Note.
If an Event of Default with respect to the Notes shall occur and be
continuing, the principal of the Notes may be declared due and payable in the
manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given
written notice to the Trustee of a continuing Event of Default with respect to
the Notes, the Holders of not less than 25% in aggregate principal amount of the
Notes at the time Outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity and the Trustee shall not have received from
the Holders of a majority in aggregate principal amount of Notes at the time
Outstanding a direction inconsistent with such request, and the Trustee shall
have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the Holder of this Note for the enforcement of any payment of
principal hereof or any interest on or after the respective due dates expressed
herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Operating Partnership and the rights of the Holders of the Securities of each
series to be affected under the Indenture at any time by the Operating
Partnership and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities of each series of
Securities then Outstanding affected thereby. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of all Securities of such series, to waive compliance by the Operating
Partnership with certain provisions of the Indenture and certain past defaults
under the Indenture
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<PAGE> 23
and their consequences. Any such consent or waiver by the Holder of this Note
shall be conclusive and binding upon such Holder and upon all future Holders of
this Note and of any Security issued upon the registration of transfer hereof or
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Operating
Partnership, which is absolute and unconditional, to pay the principal of (and
Make-Whole Amount, if any) and interest on this Note at the times, place and
rate, and in the coin or currency, herein and therein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Note is registrable in the Security Register,
upon surrender of this Note for registration of transfer at the office or agency
of the Operating Partnership in any place of payment where the principal of (and
Make-Whole Amount, if any) and interest on this Note are payable, duly endorsed
by, or accompanied by a written instrument of transfer in form satisfactory to
the Operating Partnership and the Trustee duly executed by the Holder hereof or
his attorney duly authorized in writing, and thereupon one or more new Notes of
authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Notes are
exchangeable for a like aggregate principal amount of Notes of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Operating Partnership may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
Prior to due presentment of this Note for registration of transfer, the
Operating Partnership, the Trustee and any agent of the Operating Partnership or
the Trustee may treat the Person in whose name this Note is registered as the
owner hereof for all purposes, whether or not this Note be overdue, and neither
the Operating Partnership, the Trustee nor any such agent shall be affected by
notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in this Note, or because of any indebtedness
evidenced hereby or 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 Operating Partnership or of any successor, either
directly or through the Operating Partnership 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 this Note by
the Holder thereof and as part of the consideration for the issue of the Notes.
All capitalized terms used in this Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE NOTES, INCLUDING THIS NOTE, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Operating Partnership has caused "CUSIP"
numbers to be printed on the Notes as a convenience to the Holders of the Notes.
No representation is made as to the correctness or accuracy of such CUSIP
numbers as printed on the Notes, and reliance may be placed only on the other
identification numbers printed hereon.
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<PAGE> 24
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, IRVINE APARTMENT COMMUNITIES, L.P. has caused this
instrument to be duly executed.
Dated:
IRVINE APARTMENT COMMUNITIES, L.P.
By: IRVINE APARTMENT COMMUNITIES, INC.,
as General Partner
By: _______________________________
Name:
Title:
Attest:
______________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Notes of the series designated therein and referred
to in the within-mentioned Indenture.
FIRST TRUST OF CALIFORNIA, NATIONAL
ASSOCIATION,
as Trustee
By: _______________________________
Authorized Signatory
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<PAGE> 25
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ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
------------------------------------
.....................................
------------------------------------
..............................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
..............................................................................
the within Note of Irvine Apartment Communities, L.P. and hereby does
irrevocably constitute and appoint
...................................................................... Attorney
to transfer said Note on the books of the within-named issuer with full power of
substitution in the premises.
Dated: ........................ ...........................................
...........................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Note in every particular, without
alteration or enlargement or any change whatever.
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