UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
IRVINE APARTMENT COMMUNITIES, INC.
(Name of Issuer)
COMMON STOCK
$.01 PAR VALUE
(Title of Class of Securities)
463606-10
(CUSIP Number)
Michael D. McKee, Esq.
The Irvine Company
550 Newport Center Drive
Newport Beach, CA
Tel. No.: (714) 720-2333
(Name, Address and Telephone Number of
Person Authorized to Receive Notices
and Communications)
July 3, 1996
(Date of Event which Requires Filing of
this Statement)
If the filing person has previously filed a statement
on Schedule 13G to report the acquisition which is the
subject of this Schedule 13D, and is filing this statement
because of Rule 13d-1(b)(3) or (4), check the following:
[ ]
Check the following box if a fee is being paid with
this statement: [ ]
SCHEDULE 13D
______________________________ ________________________________
| | | |
|CUSIP No. 46360610 | | Page 2 of 36 Pages |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | The Irvine Company |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | 13-3177751 |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | _ |
| | (b) |_| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | OO |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(e) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | Michigan |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | 21,917,967 |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | -0- (See Item 5) |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | 21,917,967 |
| PERSON |____|_______________________________________________|
| WITH | 10 | SHARED DISPOSITIVE POWER |
| | | -0- (See Item 5) |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | 21,917,967 |
|_________________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 54.3% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | CO |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88)
SCHEDULE 13D
______________________________ ________________________________
| | | |
|CUSIP No. 46360610 | | Page 3 of 36 Pages |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | TIC Investment Company A |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | 33-0713216 |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | _ |
| | (b) |_| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | OO |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(e) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | California |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | -0- (See Item 5) |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | -0- (See Item 5) |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | -0- (See Item 5) |
| PERSON |____|_______________________________________________|
| WITH | 10 | SHARED DISPOSITIVE POWER |
| | | -0- (See Item 5) |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | 1,502,105 |
|____|____________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 7.5% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | PN |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88)
SCHEDULE 13D
______________________________ ________________________________
| | | |
|CUSIP No. 46360610 | | Page 4 of 36 Pages |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | TIC Investment Company C |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | 33-0713816 ] |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | _ |
| | (b) |_| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | OO |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(e) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | California |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | -0- (See Item 5) |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | -0- (See Item 5) |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | -0- (See Item 5) |
| PERSON |____|_______________________________________________|
| WITH | 10 | SHARED DISPOSITIVE POWER |
| | | -0- (See Item 5) |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | 1,490,700 |
|____|____________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |_| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 7.5% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | PN |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88)
SCHEDULE 13D
______________________________ ________________________________
| | | |
|CUSIP No. 46360610 | | Page 5 of 36 Pages |
|____________________________| |______________________________|
___________________________________________________________________________
| 1 | NAME OF REPORTING PERSON |
| | Donald L. Bren |
| | S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON |
| | ###-##-#### |
|____|____________________________________________________________________|
| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* |
| | _ |
| | (a) |_| |
| | _ |
| | (b) |_| |
| | |
|____|____________________________________________________________________|
| 3 | SEC USE ONLY |
| | |
|____|____________________________________________________________________|
| 4 | SOURCE OF FUNDS* |
| | PF |
|____|____________________________________________________________________|
| 5 | CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED _ |
| | PURSUANT TO ITEMS 2(d) or 2(e) |_| |
| | |
|____|____________________________________________________________________|
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION |
| | U.S.A. |
|____|____________________________________________________________________|
| | 7 | SOLE VOTING POWER |
| | | 183,325 |
| NUMBER OF |____|_______________________________________________|
| SHARES | 8 | SHARED VOTING POWER |
| BENEFICIALLY | | 0 |
| OWNED BY |____|_______________________________________________|
| EACH | 9 | SOLE DISPOSITIVE POWER |
| REPORTING | | 183,325 |
| PERSON |____|_______________________________________________|
| WITH | 10 | SHARED DISPOSITIVE POWER |
| | | 0 |
|____________________|____|_______________________________________________|
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON |
| | 183,325 |
|____|____________________________________________________________________|
| 12 | CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES _ |
| | CERTAIN SHARES* |X| |
|____|____________________________________________________________________|
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) |
| | 1.0% |
|____|____________________________________________________________________|
| 14 | TYPE OF REPORTING PERSON* |
| | IN |
|____|____________________________________________________________________|
*SEE INSTRUCTIONS BEFORE FILLING OUT!
SEC 1746 (9-88)
In accordance with Rule 101(a)(2)(ii) of Regulation S-T, this
Amendment No. 5 to Schedule 13D amends and restates the Schedule 13D dated
October 14, 1994, as previously amended (as so amended, the "Schedule 13D").
Item 1. Security and Company.
The class of equity securities to which this statement relates
is the Common Stock, $.01 par value per share (the "Shares"), of Irvine
Apartment Communities, Inc., a Maryland corporation (the "Company"). The
Company is the successor to Irvine Apartment Communities, Inc., a Delaware
corporation (the "Delaware Company"), which merged with and into the Company
on May 2, 1996. All references herein to the Company are deemed to be
references to the Delaware Company, where such references relate to dates
prior to May 2, 1996. The principal executive offices of the Company are
located at 550 Newport Center Drive, Suite 300, Newport Beach, CA 92660.
Item 2. Identity and Background.
This Schedule 13D is being filed by: The Irvine Company, a
Michigan corporation ("TIC"); TIC Investment Company A, a California general
partnership ("TICICA"); TIC Investment Company C ("TICICC"); and Mr. Donald
Bren.
TIC is the owner and developer of the Irvine Ranch, a 90 square
mile parcel of land located in central Orange County in Southern California.
TIC's principal business consists of the ownership, development, management
and leasing of real estate on the Irvine Ranch. TIC is a limited partner of
Irvine Apartment Communities, L.P., a Delaware limited partnership (the
"Operating Partnership"), of which the Company is the sole general partner.
TIC, directly or indirectly, owned Irvine Affordable Housing, Inc. ("IAH") and
the seven limited partnerships and one general partnership that, together with
TIC, contributed in December 1993 properties (or, in one case, a 99% general
and limited interest in a limited partnership that owns a property) to the
Operating Partnership in exchange for limited partnership units ("L.P. Units")
in the Operating Partnership. TIC is currently the sole general partner of
two such limited partnerships. On June 30, 1995 the other five limited
partnerships were liquidated and the L.P. Units owned by them were transferred
to TIC. TIC and one of its wholly-owned subsidiaries were the general
partners of the general partnership which on June 24, 1996 was liquidated and
the L.P. Units owned by it were transferred to TIC. TIC was also the sole
shareholder of Irvine Lease Co., Inc. ("ILCI"), which purchased 1,500,000 L.P.
Units on August 9, 1995 as more fully disclosed in Item 3 below, and also
purchased 2,105 additional L.P. Units on May 30, 1996. The L.P. Units owned
by ILCI were transferred to TICICA on June 21, 1996. Together, TIC, TICICA,
TICICC, the two limited partnerships and TIC Investment Company B, a California
general partnership ("TICICB") (see item 3 below), own 100% of the limited
partnership interests in the Operating Partnership, representing a 54.3%
interest in the Operating Partnership. The address of the principal business
and the principal office of TIC is 550 Newport Center Drive, Newport Beach, CA
92660. Information as to each director and executive officer of TIC is set
forth in Schedule A attached hereto, which is incorporated herein by reference.
TIC is the managing general partner (holding a 99%
partnership interest) of each of TICICA, TICICB and TICICC. DBIAC Investment
Company, a California corporation ("DBIAC"), holds the remaining 1% general
partnership interest of each of TICICA, TICICB and TICICC. The sole
shareholder of DBIAC is the Donald L. Bren Trust, dated June 26, 1987, as
amended, of which Mr. Donald Bren is the sole trustee. The principal business
of each of TICICA and TICICC is to acquire, hold title to and/or lease real or
personal property in Orange County, California. The address of the principal
executive offices and principal business of each of TICICA and TICICC is 550
Newport Center Drive, Newport Beach, CA 92660.
Information as to each executive officer and director of TIC is
set forth in Schedule A attached hereto, which is incorporated herein by
reference. Information as to each executive officer and director of DBIAC is
set forth in Schedule B attached hereto, which is incorporated herein by
reference.
Mr. Bren is the Chairman of the Board and the Chief Executive
Officer, as well as the sole shareholder, of TIC. Mr. Bren disclaims
beneficial ownership of the Shares directly or indirectly owned by TIC,
TICICA, TICICB and TICICC.
During the last five years, neither TIC, TICICA, TICICC nor any
other person controlling TIC, TICICA or TICICC nor, to the best of their
knowledge, any of the persons listed on Schedule A or Schedule B attached
hereto, nor any person listed in Item 5 or the footnotes thereto, has been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or has been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration.
In December 1993, TIC directly transferred certain rental
apartment communities (or, in one case, a 99% general and limited partnership
interest in a limited partnership that owns a property) to the Operating
Partnership in exchange for 15,784,000 L.P. Units.
In December 1993, TIC, acting as the general partner of two
limited partnerships and one general partnership, transferred certain rental
apartment communities to the Operating Partnership in exchange for 1,304,000
L.P. Units. On June 24, 1996, the general partnership was liquidated and the
160,000 L.P. Units owned by it were transferred to TIC. Upon such liquidation
and transfer, the general partnership ceased to be a limited partner of the
Operating Partnership.
In December 1993, IAH, acting as the general partner of five
limited partnerships transferred certain rental apartment communities in
exchange for 1,359,000 L.P. Units. On June 30, 1995, such limited
partnerships were liquidated and the 1,359,000 L.P. Units were transferred to
TIC.
The foregoing December 1993 transactions were conducted in
connection with the creation of an umbrella partnership real estate investment
trust (an "UP-REIT") as described in greater detail in the Prospectus forming
a part of the Form S-11 Registration Statement (File No. 33-68830) of the
Company filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended.
In March 1995, in connection with TIC's sale, through IAH, of
an apartment community land site to the Operating Partnership pursuant to the
Land Rights Agreement (as defined in Item 6), TIC, through IAH, received, upon
consummation of the sale, as payment of the purchase price by the Operating
Partnership, 336,432 L.P. Units. In November 1995 and March 1996, in
connection with TIC's sale, through IAH, of an apartment community land site
to the Operating Partnership pursuant to the Land Rights Agreement, TIC,
through IAH, received, upon consummation of the sale, as partial payment of
the purchase price by the Operating Partnership, 113,372 L.P. Units and 28,358
L.P. Units, respectively. In each case, the number of L.P. Units payable to
TIC was equal to the purchase price in dollars divided by the average of the
closing prices of the Common Stock on the New York Stock Exchange for the 10
trading days immediately preceding the closing date of the applicable sale.
The 478,162 L.P. Units owned by IAH were transferred to TICICB in June 1996.
On August 9, 1995, the Company sold 5,175,000 Shares to a group
of underwriters (the "Underwriters") at a price of $16.305 per Share (net of
the underwriting discount) in an underwritten public offering (the
"Offering"). The Company contributed the net proceeds of the Offering of
$84,378,375 to the Operating Partnership. On the same date, TIC, exercising
its right pursuant to the Partnership Agreement to make an additional capital
contribution to the Operating Partnership, made a contribution of $25,875,000
to the Operating Partnership through its wholly-owned subsidiary ILCI, for
which ILCI received 1,500,000 L.P. Units. For the purpose of calculating
adjusted ownership interests in the Operating Partnership pursuant to the
Partnership Agreement, such contribution was reduced to $24,457,500 (by
deducting an amount equal to the underwriting discount that would have been
applicable to Shares if such contribution had been used to acquire Shares in
the Offering). On June 21, 1996, such 1,500,000 L.P. Units together with an
additional 2,105 L.P. Units owned by ILCI were transferred to TICICA.
On July 3, 1996, the Company sold 1,490,700 Shares directly
to a group of institutional investors at a price of $20.125 per Share (the
"Direct Sale"). The Company contributed the net proceeds of the Direct
Sale of $30,000,337.50 to the Operating Partnership. On the same date,
TIC, exercising its right pursuant to the Partnership Agreement to make an
additional capital contribution to the Operating Partnership, made a
contribution of $30,000,337.50 to the Operating Partnership through TICICC,
for which TICICC received 1,490,700 L.P. Units.
Subject to the terms of the Partnership Agreement (defined
below in Item 4) and certain ownership limit provisions set forth in the
Articles of Amendment and Restatement of the Company (as amended by Articles
of Merger dated May 2, 1996, the "Articles of Incorporation"), the outstanding
L.P. Units of the Operating Partnership are exchangeable for Shares at an
exchange ratio of one Share for each L.P. Unit, subject to adjustment as set
forth in the Partnership Agreement.
Item 4. Purpose of Transaction.
TIC acquired the L.P. Units that are exchangeable into Shares
for investment purposes.
In each of January 1995, October 1995 and February 1996, the
Board of Directors of the Company approved the acquisition by the Operating
Partnership of an apartment community land site from TIC pursuant to the Land
Rights Agreement. The sale of the sites closed in March 1995, November 1995
and March 1996, respectively. The net cash purchase price for the site sold
in March 1995 was $5,418,381 and was paid by the Operating Partnership in L.P.
Units. The net cash purchase price for the sites sold in November 1995 and
March 1996 was $4,190,000 and $2,519,000, respectively, and was paid by the
Operating Partnership in part through the issuance of L.P. Units. In each
case, the number of L.P. Units received by TIC, through IAH, was determined as
provided in Item 3 above. All such L.P. Units owned by IAH were transferred
to TICICB in June 1996 as provided in Item 2 above. Upon such transfer, IAH
ceased to be a limited partner of the Operating Partnership.
On June 30, 1995 the five limited partnerships of which IAH was
the sole general partner were liquidated and the 1,359,000 L.P. Units owned by
such limited partnerships were transferred to TIC. Upon such liquidation and
transfer, such limited partnerships ceased to be limited partners of the
Operating Partnership.
On August 9, 1995 and May 30, 1996, upon the receipt by the
Operating Partnership of the capital contribution from ILCI, ILCI received a
limited partner unit certificate representing 1,500,000 L.P. Units and 2,105
L.P. Units, respectively. ILCI was admitted as an additional limited partner
of the Operating Partnership on August 9, 1995. ILCI acquired all such L.P.
Units, which are exchangeable for Shares on a one-for-one basis, for
investment purposes. All such L.P. Units were transferred to TICICA on June
21, 1996, TICICA was admitted to the Operating Partnership as a Substitute
Limited Partner and ILCI ceased to be a limited partner of the Operating
Partnership. TICICA acquired such L.P. Units for investment purposes.
On July 3, 1996, upon the receipt by the Operating
Partnership of the capital contribution from TICICC, TICICC received a
limited partner unit certificate representing 1,490,700 L.P. Units and was
admitted as an additional limited partner of the Operating Partnership.
TICICC acquired such L.P. Units, which are exchangeable for Shares on a
one-for-one basis, for investment purposes.
On December 1, 1993, TIC, directly and as general partner of
certain limited partnerships and one general partnership, and IAH as general
partner of certain limited partnerships (collectively, the "TIC Entities"),
entered into an Amended and Restated Agreement of Limited Partnership of
Irvine Apartment Communities, L.P. with the Company dated as of that date (as
amended, the "Partnership Agreement"). In accordance with the Partnership
Agreement and as described in Item 3, the TIC Entities effected the transfer
of certain rental apartment communities to the Operating Partnership in
exchange for an aggregate of 18,447,000 L.P. Units. Copies of the Partnership
Agreement and all amendments thereto are filed as exhibits hereto and are
incorporated herein by reference. The description herein of the Partnership
Agreement is qualified in its entirety by reference thereto.
The Company, as the sole general partner of the Operating
Partnership has unilateral control over the management, operation and business
of the Operating Partnership including the ability to cause the Operating
Partnership to enter into certain major transactions including acquisitions,
refinancings and the selection of property managers and any changes in the
Operating Partnership's distribution policies. The Board of Directors of the
Company manages the affairs of the Operating Partnership.
Pursuant to the Miscellaneous Rights Agreement dated March 20,
1996 between the Company, the Operating Partnership and TIC (the
"Miscellaneous Rights Agreement"), TIC has the right to nominate three persons
to the Board of Directors of the Company so long as TIC, its affiliates, the
stockholders of TIC and their affiliates or immediate family members
beneficially own at least 20% of the Shares of the Company (including for
these purposes Shares issuable upon exchange of L.P. Units). In the event
that this ownership falls below 20% but is at least 15%, TIC will have the
right to nominate two persons for election to the Board of Directors, and if
this ownership falls below 15% but is at least 10%, TIC will have the right to
nominate one person for election to the Board of Directors. A copy of the
Miscellaneous Rights Agreement is filed as Exhibit 12 hereto and is
incorporated herein by reference. The description herein of the Miscellaneous
Rights Agreement is qualified in its entirety by reference thereto.
Pursuant to the above, three TIC nominees have been elected to
the Company's nine member Board of Directors. Pursuant to Section 3.4 of the
Miscellaneous Rights Agreement, the Company agrees not to increase the size of
the Board of Directors to more than ten persons or to decrease the size of the
Board of Directors to less than eight persons without the written consent of
Irvine Persons (as defined therein) then owning, directly or indirectly,
Shares or L.P. Units. Pursuant to Article Ninth of the Articles of
Incorporation and Article III of the Company's Amended By-laws (the "Amended
By-laws") the consent of directors representing more than 75% of the entire
Board of Directors is required with respect to certain actions including (i) a
change of control (as defined in Article Ninth of the Articles of
Incorporation); (ii) the amendment of the Company's Articles of Incorporation
or Amended By-laws, or the Partnership Agreement; (iii) any waiver or
modification of the ownership limits provisions set forth in the Articles of
Incorporation; (iv) the merger, consolidation or sale of all or substantially
all the assets of the Company or the Operating Partnership; (v) the issuance
under certain circumstances of certain equity securities of the Company; (vi)
for the Company to take title to assets or to conduct business other than
through the Operating Partnership, or for the Company or the Operating
Partnership to engage in any business other than the ownership, construction,
development and operation of multi-family rental apartment communities; (vii)
making a general assignment for the benefit of creditors; or (viii)
terminating the Company's status as a REIT for tax purposes. Copies of the
Articles of Incorporation (Exhibits 13 and 14) and the Amended By-laws
(Exhibit 15) are incorporated herein by reference. The description herein of
the Articles of Incorporation and the Amended By-laws is qualified in its
entirety by reference thereto.
Pursuant to the Partnership Agreement, the consent of a
majority of the outstanding L.P. Units is required with respect to certain
extraordinary actions involving the Operating Partnership including (i) the
amendment, modification or termination of the Partnership Agreement, (ii) a
general assignment for the benefit of creditors or the appointment of a
custodian, receiver or trustee for any of the assets of the Operating
Partnership, (iii) the institution of any proceeding for bankruptcy of the
Operating Partnership, (iv) the transfer of any general partnership interests
in the Operating Partnership, including through any merger, consolidation or
liquidation of the Company, subject to certain exceptions, (v) the admission
of any additional or substitute general partner in the Operating Partnership;
(vi) for the Company to take title to assets (other than temporarily in
connection with an acquisition prior to contributing such assets to the
Operating Partnership) or to conduct business other than through the Operating
Partnership; and (vii) for the Company or the Operating Partnership to engage
in any business other than the ownership, construction, development and
operation of apartment communities.
In addition, until such time as the Company owns 90% or more of
the total percentage interest in the Operating Partnership, the consent of the
limited partners holding a majority interest in the L.P. Units will also be
required with respect to the liquidation of the Operating Partnership, the
sale or other transfer of all or substantially all of the assets of the
Operating Partnership and certain mergers and business combinations resulting
in the complete disposition of all L.P. Units.
As general partner of the Operating Partnership, the Company
has the ability to cause the Operating Partnership to issue additional units
of general and limited partnership interests in the Operating Partnership. In
the event that the Operating Partnership issues new L.P. Units (for cash but
not property), TIC will have the right to purchase L.P. Units at a purchase
price equal to the purchase price in the transaction giving rise to such
participation right in order, and to the extent necessary, to maintain its
percentage interest in the Operating Partnership.
Pursuant to the Partnership Agreement, TIC and the other
limited partners of the Operating Partnership, their affiliates and certain
related persons have certain rights, exercisable once in each twelve-month
period beginning on December 8, 1994 to exchange generally up to one-third of
the L.P. Units owned by them for Shares (subject to the applicable ownership
limit provision of the Articles of Incorporation) and to tender up to
one-third of the L.P. Units owned by them to the Company for cash payable
solely out of the net proceeds of an offering of the Shares.
In the event that the Company issues (whether for cash or
property) any Shares or securities convertible into, or exchangeable or
exercisable for, Shares, TIC, subject to certain limited exceptions, including
the issuance of Shares pursuant to any stock incentive plan adopted by the
Company or pursuant to TIC's exercise of the exchange rights or cash tender
rights described above, will have the right to purchase Shares or such
securities at a purchase price equal to the purchase price in the transaction
giving rise to the participation rights in order to maintain its interest in
the Company and the Operating Partnership on a consolidated basis. However,
other stockholders of the Company would have no participation rights to
purchase Shares or such securities and any such issuances might cause a
dilution of a stockholder's investment in the Company.
The purpose of the TIC Entities in entering into the
Partnership Agreement and creating an UP-REIT structure was to provide new
opportunities for growth and to enhance the overall value of the contributed
properties by reducing the existing level of indebtedness and the amount of
interest payable after the Company's initial public offering. As a
publicly-owned entity, TIC believes that the Company has access to the public
debt and equity capital markets, which will provide increased opportunities
for the development or acquisition of apartment communities.
TIC intends to review from time to time the Company's
business affairs and financial position. Based on such evaluation and
review, as well as general economic and industry conditions existing at the
time, TIC may consider from time to time various alternative courses of
action. Such actions may include, subject to the ownership limit
provisions of the Articles of Incorporation, the acquisition of Shares
through open market purchases, privately negotiated transactions, tender
offer, exchange offer or otherwise. Alternatively, such actions may
involve the exchange of L.P. Units for Shares, the exercise of the cash
tender rights or the sale of all or a portion of the Shares or L.P. Units
in the open market, in privately negotiated transactions, through a public
offering or otherwise. Except as set forth above, TIC has no plan or
proposals which relate to or would result in any of the transactions
described in subparagraphs (a) through (j) of Item 4 of Schedule 13D.
Item 5. Interest in Securities of the Company.
(a) The following table sets forth the beneficial ownership of
each person named in Item 2. The number of Shares beneficially owned through
rights to acquire represents the number of Shares into which L. P. Units
beneficially owned by the person are exchangeable. The percentage of all
Shares of Common Stock/L.P. Units owned assumes, with respect to each person,
that all L.P. Units beneficially owned by the person are exchanged for Shares
and that none of the L.P. Units held by other persons are exchanged for Shares.
<TABLE>
<CAPTION>
Percent of
Number of Percent of Shares All Shares
Shares of All Shares Beneficially of Common
Common of Common Number of Owned (Rights to Stock/L.P.
Person Stock Stock L.P. Units Acquire)(2) Units
- - - ------------------------ ---------------- ------------ --------------- ------------------ ------------
<S> <C> <C> <C> <C> <C>
The Irvine Company -- -- 21,917,967(1) 21,917,967 54.3%
TIC Investment -- -- 1,502,105(3) 1,502,105 7.5%
Company A
TIC Investment -- -- 1,490,700(4) 1,490,700 7.5%
Company C
DBIAC Investment -- -- (5) (5) (5)
Company
Donald Bren 183,325(5)(6) 1.0% --(7) --(7) 1.0%
Norman J. Metcalfe 40,000 .2% -- -- .2%
Raymond L. Watson 20,000 .1% -- -- .1%
William H. McFarland 20,000 .1% -- -- .1%
Richard G. Sim 5,000 * -- -- *
Michael D. McKee 5,000 * -- -- *
Richard F. Alden 17,200 * -- -- *
Thomas H. Nielsen 25,000 .1% -- -- .1%
Carl E. Reichardt 60,000(8) .3% -- -- .3%
Peter V. Ueberroth 12,000 * -- -- *
William T. White III 5,500 * -- -- *
<FN>
(1) The 21,917,967 L.P. Units include (i) 15,784,000 L.P. Units that TIC
received directly in exchange for its transfer of certain rental
apartment communities to the Operating Partnership, (ii) 1,359,000
L.P. Units that TIC received upon liquidation of certain limited
partnerships that contributed rental apartment communities to the
Operating Partnerships, (iii) the 160,000 L.P. Units that TIC
received upon liquidation of the general partnership that contributed
rental apartment communities to the Operating Partnership, (iv)
478,162 L.P. Units that TIC controls through its general partnership
interest in TICICB, (v) 1,144,000 L.P. Units that TIC controls as the
general partner of two limited partnerships that contributed rental
apartment communities to the Operating Partnership and (vi) 2,992,805
L.P. Units that TIC controls through its general partnership interest
in TICICA and TICICC.
(2) Assumes all of the L.P. Units are exchanged for Shares, without
regard to certain ownership limit provisions set forth in the
Articles of Incorporation. It is not anticipated that these
ownership limit provisions will be waived. TIC has the right, once
in every twelve month period beginning on December 8, 1994, generally
to exchange up to one third of the L.P. Units for Shares at an
exchange ratio of one L.P. Unit for each Share, subject to
adjustment. The Articles of Incorporation place a limit on ownership
by TIC, Mr. Bren and their affiliates, in the aggregate, of 20% of
the Shares.
(3) The 1,502,105 L.P. Units were transferred to TICICA from ILCI on June
21, 1996. The 1,502,105 L.P. Units are also included in the
21,917,967 L.P. Units deemed to be beneficially owned by TIC because
TIC is the managing general partner of TICICA.
(4) The 1,490,700 L.P. Units are also included in the 21,917,967 L.P.
Units deemed to be beneficially owned by TIC because TIC is the
managing general partner of TICICC.
(5) DBIAC is the 1% general partner of TICICA, TICICB and TICICC, which
in the aggregate own 3,470,967 L.P. Units. TIC is the managing
general partner of TICICA, TICICB and TICICC and such L.P. Units are
included in the 21,917,967 L.P. Units deemed to be beneficially owned
by TIC. The sole shareholder of DBIAC is the Donald L. Bren Trust,
dated June 26, 1987, as amended, of which Mr. Donald Bren is the sole
trustee. Assuming the exchange of the 3,470,967 L.P. Units for
Shares, DBIAC would be deemed to beneficially own 15.8% of the
Shares. Since TIC is the managing general partner of TICICA, TICICB
and TICICC, DBIAC disclaims beneficial ownership of such Shares.
(6) Shares are held by a trust of which Mr. Bren is trustee.
(7) Mr. Bren may be deemed the beneficial holder of the L.P. Units
beneficially owned by TIC due to his status as the sole
shareholder and Chairman of the Board of Directors of TIC. Assuming
the exchange of all L.P. Units for Shares, Mr. Bren would be deemed
to beneficially own 54.7% of the Shares. Mr. Bren disclaims
beneficial ownership of the Shares directly or indirectly owned by
TIC.
(8) Includes 10,000 shares Mr. Reichardt has a right to acquire through a
pension trust account.
* Less than .1%
</TABLE>
Except as set forth in this Item 5(a), neither TIC, TICICA nor
TICICC, nor any other person controlling TIC, TICICA or TICICC nor, to the
best of its knowledge, any persons named in Schedule A or Schedule B hereto
beneficially owns any Shares.
(b) The following table indicates, for each person listed in
the above table, the number of Shares beneficially owned as to which there is
sole power to vote or to direct the vote, shared power to vote or to direct the
vote, sole power to dispose or to direct the disposition, or shared power to
dispose or to direct the disposition. All persons listed below, including
those referenced in the footnotes, are citizens of the United States of
America.
<TABLE>
<CAPTION>
Sole Shared Sole Shared
Voting Voting Dispositive Dispositive
Person Power Power Power Power
- - - --------------------------------- ----------------- ------------ ------------------- --------------
<S> <C> <C> <C> <C>
The Irvine Company(1) 21,917,967 0 21,917,967 0
TIC Investment Company A(1) 0 0 0 0
TIC Investment Company C 0 0 0 0
DBIAC Investment Company(2) 0 0 0 0
Donald Bren(3) 183,325 0 183,325 0
Norman J. Metcalfe 40,000 0 40,000 0
Raymond L. Watson 20,000 0 20,000 0
William H. McFarland(4) 0 20,000 0 20,000
Richard G. Sim(5) 0 5,000 0 5,000
Michael D. McKee 5,000 0 5,000 0
Richard F. Alden(6) 15,000 2,200 15,000 2,200
Thomas H. Nielsen 25,000 0 25,000 0
Carl E. Reichardt 60,000 0 60,000 0
Peter V. Ueberroth(7) 0 12,000 0 12,000
William T. White, III(8) 500 5,000 500 5,000
<FN>
(1) TIC, as a contributor of properties to the Operating Partnership in
exchange for 15,784,000 L.P. Units, as the transferee of 1,359,000
L.P. Units upon the liquidation of five limited partnerships that
contributed properties to the Operating Partnership, as the
transferee of 160,000 L.P. Units upon the liquidation of the general
partnership that contributed rental apartment communities to the
Operating Partnership, as the managing general partner of TICICB
which received 478,162 L.P. Units pursuant to an agreement dated
June 21, 1996, as the direct or indirect owner of the two limited
partnerships that contributed properties to the Operating Partnership
in exchange for 1,144,000 L.P. Units, as the managing general
partner of TICICA which received 1,502,105 L.P. Units pursuant to an
agreement dated June 21, 1996, and as the managing general partner of
TICICC which received 1,490,700 L.P. Units pursuant to an agreement
dated July 3, 1996, has sole power to vote or direct the vote and to
dispose or direct the disposition (subject to the provisions of the
Partnership Agreement and the Miscellaneous Rights Agreement) of
21,917,967 L.P. Units.
(2) DBIAC is the 1% general partner of TICICA, TICICB and TICICC, which in
the aggregate own 3,470,967 L.P. Units. TIC is the managing general
partner of TICICA, TICICB and TICICC and such L.P. Units deemed to
be beneficially owned by TIC. The sole shareholder of DBIAC is the
Donald L. Bren Trust, dated June 26, 1987. as amended, which Mr.
Donald Bren is the sole trustee. Since TIC is the managing general
partner of TICICA, TICICB and TICICC, TIC has sole voting and
dispositive power with respect to such L.P. Units.
(3) Shares are held by a trust of which Mr. Bren is trustee.
(4) Voting and Dispositive Power is shared by Mr. McFarland's spouse,
Rose-Marie McFarland.
(5) Voting and Dispositive Power is shared by Mr. Sim's spouse, Ann Sim.
(6) Voting and Dispositive Power is shared by Mr. Alden's spouse,
Marjorie L. Alden.
(7) Voting and Dispositive Power is shared by Mr. Ueberroth's spouse,
Virginia M. Ueberroth.
(8) 7,000 shares are held in a trust, the co-trustees of which are Mr.
White and Terril E. Magee. Mr. Magee is an Executive Assistant of
Blanco Investments and Land, Ltd. located at 230 Newport Center Dr.,
Suite 300, Newport Beach, CA 92660.
</TABLE>
(c) Other than the transactions described
in Items 3 and 4 above, there have not been any
transactions effected during the past 60 days by the persons named in response
to paragraph (a).
(d) Inapplicable.
(e) Inapplicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Company.
Pursuant to the Miscellaneous Rights Agreement, the Company has
granted to TIC, its affiliates and certain related persons, registration
rights with respect to Shares owned by them whether acquired upon exchange of
L.P. Units pursuant to certain exchange rights, upon exercise of any option or
right of first refusal pursuant to the Land Rights Agreement (defined below),
pursuant to TIC's participation rights, in the open market or otherwise.
These registration rights, with certain limitations, grant such parties the
opportunity to demand registration of all or any portion of the Shares one
time each calendar year and the right to have such Shares registered
incidentally to any registration being conducted by the Company of Shares,
securities convertible or exchangeable for Shares or securities substantially
similar to Shares. The Company will bear expenses incident to its
registration requirements under the registration rights, except that such
expenses will not include any underwriting discounts or commissions.
The Company, TIC, the Operating Partnership and Mr. Bren
entered into an Exclusive Land Rights and Noncompetition Agreement dated as of
November 21, 1993 (as amended, the "Land Rights Agreement") which through July
31, 2020 provides the Company with the exclusive right, but not the
obligation, to acquire all land sites on the Irvine Ranch which are entitled
for residential development and designated by TIC as ready for rental
apartment community development (the "Future Land Sites"). The purchase price
for each Future Land Site is determined by appraisal and will be payable by
the Company in cash, L.P. Units or Shares at the option of the Company for
Future Land Site purchase rights exercised on or before July 31, 2000, and
thereafter at the option of TIC, but subject to a determination by a committee
of independent directors of the Board of Directors of the Company that the
method of payment will not adversely affect the Company's qualification as a
Real Estate Investment Trust. A copy of the Land Rights Agreement and all
amendments thereto are filed as exhibits hereto and are incorporated herein by
reference.
The Company, the Operating Partnership, TIC and IAH have
entered into an Agreement dated May 2, 1996, pursuant to which TIC and IAH
agreed to certain limitations on their ability to convert or transfer a
portion of the L.P. Units held by IAH. A copy of the May 2, 1996 Agreement
is filed as Exhibit 20 hereto and is incorporated herein by reference.
Pursuant to the June 21, 1996 agreement described in Item 2, TICICB assumed
IAH's obligations under such agreement.
Except for the agreements described in this Schedule 13D, to
the best knowledge of the persons signing this schedule, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
between the persons enumerated in Item 2, and any other person, with respect
to any securities of the Company, including, but not limited to, transfer or
voting of any of the securities, finder's fees, joint ventures, loan or option
arrangements, puts or calls, guarantees of profits, division of profits or
loss, or the giving or withholding of proxies.
Item 7. Material to be Filed as Exhibits.
Exhibit Description
------- -----------
1 Joint Filing Agreement dated as of July 12,
1996 among TIC, TICICA, TICICC and Donald
Bren
2 Amended and Restated Agreement of Limited
Partnership of Irvine Apartment Communities,
L.P. dated as of December 1, 1993 among the
Company, TIC and certain related parties of
TIC (the "Partnership Agreement") (previously
filed with the original of this Schedule 13D)
3 Agreement dated March 7, 1995 between IAH and
the Company, in its capacity as general
partner of the Operating Partnership,
supplementing the Partnership Agreement
(previously filed with Amendment No. 4 to
this Schedule 13D)
4 Amendment No. 1 dated as of April 20, 1995 to
the Partnership Agreement among the Company,
in its capacity as general partner of the
Operating Partnership, and the limited
partners named therein (previously filed with
Amendment No. 4 to this Schedule 13D)
5 Agreement dated June 30, 1995 among the
Company, in its capacity as general partner
of the Operating Partnership, certain limited
partnerships (the "Partnerships") which were
limited partners of the Operating Partnership
named therein, and IAH and Irvine Industrial
Development Company ("IIDC"), in their
capacities as partners of the Partnerships,
supplementing the Partnership Agreement
(previously filed with Amendment No. 4 to
this Schedule 13D)
6 Amendment No. 2 dated as of July 18, 1995 to
the Partnership Agreement among the Company,
in its capacity as general partner of the
Operating Partnership, and the limited
partners named therein (previously filed with
Amendment No. 4 to this Schedule 13D)
7 Amendment No. 3 dated as of August 9, 1995 to
the Partnership Agreement among the Company,
in its capacity as general partner of the
Operating Partnership, ILCI and the limited
partners named therein (previously filed with
Amendment No. 4 to this Schedule 13D)
8 Amendment No. 4 dated as of March 20, 1996 to
the Partnership Agreement among the Company,
in its capacity as general partner of the
Operating Partnership, and the limited
partners named therein
9 Amendment No. 5 dated as of May 1, 1996 to
the Partnership Agreement among the Company,
in its capacity as general partner of the
Operating Partnership, and the limited
partners named therein
10 Agreement dated June 21, 1996 among Parkwest
Associates, ILCI, IAH, the Company, in its
capacity as general partner of the Operating
Partnership, IIDC, TICICA, TICICB and TIC
11 Agreement dated July 3, 1996 between the
Company, in its capacity as general partner
of the Operating Partnership, and TICICC,
supplementing the Partnership Agreement
12 Miscellaneous Rights Agreement dated as of
March 20, 1996 among the Company, TIC and the
Operating Partnership
13 Articles of Amendment and Restatement of the
Company
14 Articles of Merger Between the Company and
Irvine Apartment Communities, Inc., a
Delaware corporation, dated as of May 2, 1996
15 Amended By-laws of the Company
16 Exclusive Land Rights and Noncompetition
Agreement dated as of November 23, 1993 among
the Company, the Operating Partnership, TIC
and Donald Bren (the "Land Rights Agreement")
(previously filed with the original of this
Schedule 13D)
17 Amendment No. 1 dated April 20, 1995 to the
Land Rights Agreement (previously filed with
Amendment No. 4 to this Schedule 13D)
18 Amendment No. 2 dated as of July 18, 1995 to
the Land Rights Agreement (previously filed
with Amendment No. 4 to this Schedule 13D)
19 Amendment No. 3 dated as of May 2, 1996 to
the Land Rights Agreement
20 Agreement dated May 2, 1996 among the
Company, TIC and IAH
SIGNATURES
After reasonable inquiry and to the best knowledge and belief
of the undersigned, the undersigned certifies that the information set forth
in this statement is true, complete and correct.
Date: July 13, 1996
THE IRVINE COMPANY
By:/s/ Michael D. McKee
-------------------------
Name: Michael D. McKee
Title: Executive
Vice-President
TIC INVESTMENT COMPANY A
By: THE IRVINE COMPANY, its managing
general partner
By:/s/ Michael D. McKee
-------------------------
Name: Michael D. McKee
Title: Secretary
TIC INVESTMENT COMPANY C
By: THE IRVINE COMPANY, its managing
general partner
By:/s/ Michael D. McKee
-------------------------
Name: Michael D. McKee
Title: Secretary
/s/ Donald L. Bren
----------------------------
DONALD L. BREN
Schedule A
DIRECTORS AND EXECUTIVE OFFICERS OF TIC
The name, business address, title, present principal occupation
or employment of each of the directors and executive officers of The Irvine
Company ("TIC") are set forth below. If no business address is given the
director's or officer's business address is 550 Newport Center Drive, Newport
Beach, CA 92658-8904. Unless otherwise indicated, each occupation set forth
opposite an individual's name refers to TIC. All of the persons listed below
are citizens of the United States of America.
Present Principal
Occupation Including
Name and Name and Address(1)
Business Address of Employer
---------------- ---------------------
Directors
- - - ---------
Donald Bren............................. Chairman and Chief Executive
Officer
Norman J. Metcalfe...................... Vice Chairman and Chief
Financial Officer
Raymond L. Watson....................... Vice Chairman
Gary H. Hunt............................ Executive Vice President
Corporate Affairs
William H. McFarland.................... Executive Vice President
Land and Residential
Development
Richard G. Sim.......................... Executive Vice President
Investment Properties
Richard F. Alden........................ Private Investor
11340 West Olympic Blvd,
Suite 280
Los Angeles, CA 90064
Donald M. Koll.......................... Chairman and Chief
4343 Von Karman Avenue Executive Officer,
Newport Beach, CA 92660 The Koll Company
Benjamin V. Lambert..................... Principal, Eastdil Realty
40 West 57th Street Inc.
New York, NY 10019
Donn B. Miller, Esq..................... President, Pearson-Sibert
136 El Camino, Suite 216
Beverly Hills, CA 90212
Thomas H. Nielsen....................... Managing Director,
600 Anton Blvd., U.S. Trust of California
Suite 150
Costa Mesa, CA 92626-7147
Carl E. Reichardt....................... Retired, Chairman and Chief Executive
420 Montgomery St., Officer, Wells Fargo Bank
12th Floor
San Francisco, CA 94104
Thomas C. Sutton........................ Chairman and Chief
700 Newport Center Drive Executive Officer, Pacific
Newport Beach, CA 92660 Mutual Life Insurance Co.
Peter V. Ueberroth...................... Managing Director,
500 Newport Center Drive Contrarian Group
Newport Beach, CA 92660
William T. White, III................... President, Blanco
230 Newport Center Drive, Investments and Land Ltd.
Suite 300
Newport Beach, CA 92660
Executive Officers (Who Are Not Directors)
- - - ------------------------------------------
Michael D. McKee, Esq................... Executive Vice President,
Chief Legal Officer and
Corporate Secretary
- - - ------------
(1) Same address as director's or officer's business address except where
indicated.
Schedule B
DIRECTORS AND EXECUTIVE OFFICERS OF
DBIAC INVESTMENT COMPANY A
The name, business address, title, present principal occupation
or employment of each of the directors and executive officers of DBIAC
Investment Company are set forth below. If no business address is given the
director's or officer's business address is 550 Newport Center Drive, Newport
Beach, CA 92658-8904. All of the persons listed below are citizens of the
United States of America.
Present Principal
Occupation Including
Name and Name and Address(1)
Business Address of Employer
---------------- --------------------
Directors(2)
Donald L. Bren.......................... Chairman and Chief
Executive Officer
Gary Babick............................. President
M. A. Pope.............................. Senior Vice President,
Chief Financial Officer
and Secretary
- - - ------------
(1) Same address as director's or officer's business address except where
indicated.
(2) There are no executive officers that are not also directors.
EXHIBIT INDEX
Exhibit Description Page
------- ----------- ----
1 Joint Filing Agreement dated as of
July 12, 1996 among TIC, TICICA,
TICICC and Donald Bren
2 Amended and Restated Agreement of
Limited Partnership of Irvine
Apartment Communities, L.P. dated
as of December 1, 1993 among the
Company, TIC and certain related
parties of TIC (the "Partnership
Agreement") (previously filed with
the original of this Schedule 13D)
3 Agreement dated March 7, 1995
between IAH and the Company, in
its capacity as general partner of
the Operating Partnership,
supplementing the Partnership
Agreement (previously filed with
Amendment No. 4 to this Schedule
13D)
4 Amendment No. 1 dated as of April
20, 1995 to the Partnership
Agreement among the Company, in
its capacity as general partner of
the Operating Partnership, and the
limited partners named therein
(previously filed with Amendment
No. 4 to this Schedule 13D)
5 Agreement dated June 30, 1995
among the Company, in its capacity
as general partner of the
Operating Partnership, certain
limited partnerships (the
"Partnerships") which were limited
partners of the Operating
Partnership named therein, and IAH
and Irvine Industrial Development
Company ("IIDC"), in their
capacities as partners of the
Partnerships, supplementing the
Partnership Agreement (previously
filed with Amendment No. 4 to this
Schedule 13D)
6 Amendment No. 2 dated as of July
18, 1995 to the Partnership
Agreement among the Company, in
its capacity as general partner of
the Operating Partnership, and the
limited partners named therein
(previously filed with Amendment
No. 4 to this Schedule 13D)
7 Amendment No. 3 dated as of August
9, 1995 to the Partnership
Agreement among the Company, in
its capacity as general partner of
the Operating Partnership, ILCI
and the limited partners named
therein (previously filed with
Amendment No. 4 to this Schedule
13D)
8 Amendment No. 4 dated as of March
20, 1996 to the Partnership
Agreement among the Company, in
its capacity as general partner of
the Operating Partnership, and the
limited partners named therein
9 Amendment No. 5 dated as of May 1,
1996 to the Partnership Agreement
among the Company, in its capacity
as general partner of the
Operating Partnership, and the
limited partners named therein
10 Agreement dated June 21, 1996
among Parkwest Associates, ILCI,
IAH, the Company, in its capacity
as general partner of the
Operating Partnership, IIDC,
TICICA, TICICB and TIC,
supplementing the Partnership
Agreement
11 Agreement dated July 3, 1996
between the Company, in its
capacity as general partner of the
Operating Partnership, and TICICC,
supplementing the Partnership
Agreement
12 Miscellaneous Rights Agreement
dated as of March 20, 1996 among
the Company, TIC and the Operating
Partnership
13 Articles of Amendment and
Restatement of the Company
14 Articles of Merger Between the
Company and Irvine Apartment
Communities, Inc., a Delaware
corporation, dated as of May 2,
1996
15 Amended By-laws of the Company
16 Exclusive Land Rights and
Noncompetition Agreement dated as
of November 23, 1993 among the
Company, the Operating
Partnership, TIC and Donald Bren
(the "Land Rights Agreement")
(previously filed with the
original of this Schedule 13D)
17 Amendment No. 1 dated April 20,
1995 to the Land Rights Agreement
(previously filed with Amendment
No. 4 to this Schedule 13D)
18 Amendment No. 2 dated as of July
18, 1995 to the Land Rights
Agreement (previously filed with
Amendment No. 4 to this Schedule
13D)
19 Amendment No. 3 dated as of May 2,
1996 to the Land Rights Agreement
20 Agreement dated May 2, 1996 among
the Company, TIC and IAH
Exhibit 1
- - - ---------
Joint Filing Agreement
----------------------
In accordance with Rule 13d-1(f) under the Securities Exchange
Act of 1934, the persons named below agree to the joint filing on behalf of
each of them of a Statement on Schedule 13D (including amendments thereto)
with respect to the Common Stock of the Company and further agree that this
Joint Filing Agreement be included as an exhibit to such joint filing. In
evidence thereof, the undersigned, being duly authorized, hereby execute this
Agreement this July 12, 1996. The Schedule may be executed in two or more
counterparts, any one of which need not contain the signatures of more than
one party, but all such parts taken together will constitute a part of this
Schedule.
THE IRVINE COMPANY
By:/s/ Michael D. McKee
--------------------------
Name: Michael D. McKee
Title: Executive
Vice President
TIC INVESTMENT COMPANY A
By: THE IRVINE COMPANY, its managing
general partner
By:/s/ Michael D. McKee
--------------------------
Name: Michael D. McKee
Title: Secretary
TIC INVESTMENT COMPANY C
By: THE IRVINE COMPANY, its managing
general partner
By:/s/ Michael D. McKee
--------------------------
Name: Michael D. McKee
Title: Secretary
/s/ Donald L. Bren
-----------------------------
DONALD L. BREN
Amendment to the Operating Partnership Agreement to accommodate issuance of
L.P. Units in connection with the issuance of REIT Shares pursuant to the
General Partner's dividend reinvestment/additional cash investment plan.
AMENDMENT No. 4 dated as of March 20, 1996 to the Amended and
Restated Agreement of Limited Partnership of Irvine Apartment Communities,
L.P. dated as of December 1, 1993, as amended (the "Existing Agreement") by
and among Irvine Apartment Communities, Inc., a Delaware corporation, as the
General Partner, and the Persons whose names are set forth on Exhibit A
thereto, as Limited Partners, together with any other Persons who become
Partners in the Partnership as provided therein.
W I T N E S S E T H:
WHEREAS, the General Partner has adopted a dividend
reinvestment and additional cash investment plan pursuant to which holders of
REIT Shares will have the opportunity from time to time to reinvest dividends
on REIT Shares in additional REIT Shares and to make additional cash
investments in order to purchase additional REIT Shares; and
WHEREAS, the General Partner may at its option satisfy its
obligations under such plan through the issuance of REIT Shares out of its
authorized but unissued REIT Shares; and
WHEREAS, in connection with the issuance of such newly issued
REIT Shares, the Original Limited Partners have the right under the Existing
Agreement to purchase additional L.P. Units in order to maintain in the
aggregate their Percentage Interest in the Partnership; and
WHEREAS, in connection with such issuance of REIT Shares
pursuant to Section 4.2 of the Miscellaneous Rights Agreement, Irvine Persons
(as defined therein) also have the right to purchase additional REIT Shares in
order to maintain in the aggregate their Purchase Percentage (as defined in
such Agreement).
WHEREAS, in accordance with Section 14.1 of the Existing
Agreement the General Partner is hereby proposing to amend the Existing
Agreement as set forth below in order to accommodate the foregoing purchase
rights of the Original Limited Partners; and
WHEREAS, the parties hereto agree that the execution of this
Amendment No. 4 by a Limited Partner and the delivery thereof to the General
Partner shall constitute the Consent and affirmative vote of such Limited
Partner to the amendment proposed hereby as required by Article 14 of the
Existing Agreement; and
WHEREAS, the execution and delivery of this Amendment No. 4 by
the General Partner has been approved by resolutions duly adopted by the Board
of Directors of the General Partner, including by a majority of the Directors
constituting the Independent Directors Committee of such Board.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. All terms used in this Amendment No. 4 shall have
the meanings set forth in the Existing Agreement.
Section 2. The definition of Capital Contribution in
Article 1 of the Existing Agreement is hereby amended to read in its
entirety as follows:
"Capital Contribution" means, with respect to any Partner,
any cash or the Gross Asset Value of any Contributed Property which such
Partner contributes to the Partnership pursuant to Sections 4.1, 4.2, 4.3 or
4.5 hereof or is deemed to contribute pursuant to Sections 4.6 and 4.8 hereof,
as such Gross Asset Value may be determined from time to time.
Section 3. Article 1 of the Existing Agreement is hereby
amended by adding the following definitions thereto:
"ACP Investment Amount" means with respect to a DRIP/ACP
Investment Date the aggregate amount of additional cash to be invested in
newly issued REIT Shares on such DRIP/ACP Investment Date pursuant to the
DRIP/ACP Plan.
"Actual Limited Partner Investment Amount" means with
respect to each DRIP/ACP Investment Date the dollar amount specified in the
election notice delivered pursuant to Section 4.8.A(2) not to exceed the
Maximum Limited Partner Investment Amount for such DRIP/ACP Investment
Date, provided that if such election notice is given but fails to specify
the Actual Limited Partner Investment Amount, then the Actual Limited
Partner Investment Amount shall be the Maximum Limited Partner Investment
Amount.
"Corresponding ACP/L.P. Unit Amount" means with respect to
each DRIP/ACP Investment Date a number of L.P. Units equal to "A" divided
by "B", where "A" equals a dollar amount equal to the Actual Limited
Partner Investment Amount for such DRIP/ACP Investment Date minus the
Maximum DRIP Limited Partner Investment Amount for such DRIP/ACP Investment
Date (provided that if the Maximum DRIP Limited Partner Investment Amount
is greater than the Actual Limited Partner Investment Amount, then "A"
shall be $0); and "B" equals the purchase price per newly issued REIT Share
issued on such DRIP/ACP Investment Date with additional cash investments,
determined as provided in the DRIP/ACP Plan.
"Corresponding DRIP/L.P. Unit Amount" means with respect to
each DRIP/ACP Investment Date a number of L.P. Units equal to "C" divided by
"D", where "C" equals the lesser of (i) Actual Limited Partner Investment
Amount for such DRIP/ACP Investment Date and (ii) the Maximum DRIP Limited
Partner Investment Amount for such DRIP/ACP Investment Date, and "D" equals
the purchase price per newly issued REIT Share issued on such DRIP/ACP
Investment Date as a result of the reinvestment of dividends, determined as
provided in the DRIP/ACP Plan.
"Corresponding L.P. Unit Amount" means with respect to each
DRIP/ACP Investment Date the aggregate of the Corresponding DRIP/L.P. Unit
Amount and the Corresponding ACP/L.P. Unit Amount, provided if such
calculation results in a fractional L.P. Unit, the Corresponding L.P. Unit
Amount shall be rounded downward.
"DRIP/ACP Investment Amount" means with respect to a DRIP/ACP
Investment Date the aggregate of the DRIP Investment Amount and the ACP
Investment Amount.
"DRIP Investment Amount" means with respect to a DRIP/ACP
Investment Date the aggregate amount of dividends paid on REIT Shares to be
reinvested in newly issued REIT Shares on such DRIP/ACP Investment Date
pursuant to the DRIP/ACP Plan.
"DRIP/ACP Investment Date" means the date on which the DRIP
Investment Amount is reinvested in newly issued REIT Shares and/or the date on
which the ACP Investment Amount is used to purchase newly issued REIT Shares,
in each case as set forth in the DRIP/ACP Plan.
"DRIP/ACP Plan" means the Irvine Apartment Communities, Inc.
Dividend Reinvestment and Additional Cash Investment Plan described in the
General Partner's Registration Statement on Form S-3 and any other dividend
reinvestment and additional cash investment plan established by the General
Partner.
"DRIP Percentage" has the meaning set forth in Section
4.8.A(1).
"Investing Entities" has the meaning set forth in Section
4.8.A(2).
"Maximum DRIP Limited Partner Investment Amount" means with
respect to each DRIP/ACP Investment Date a dollar amount equal to (A) the
Maximum Limited Partner Investment Amount times (B) the DRIP Percentage.
"Maximum Limited Partner Investment Amount" means with respect
to each DRIP/ACP Investment Date a dollar amount (subject to reduction as
provided in Section 4.8.A(5)) equal to (A) the DRIP/ACP Investment Amount for
such DRIP/ACP Investment Date divided by the Percentage Interest of the
General Partner in the Partnership in effect as of the close of business on
the third business day immediately preceding such DRIP/ACP Investment Date
minus (B) such DRIP/ACP Investment Amount.
Section 4. Article 4 of the Existing Agreement is hereby
amended by adding a new Section 4.8 as follows:
"Section 4.8. DRIP/ACP Plans
A. If at any time or from time to time, in connection with the
General Partner's DRIP/ACP Plan, any REIT Shares are to be issued by the
General Partner out of its authorized but unissued REIT Shares in satisfaction
of the General Partner's obligations thereunder:
(1) Promptly following the close of business on the third
business day preceding each DRIP/ACP Investment Date, the General Partner
shall give notice (which shall constitute a Funding Notice for purposes of
Section 4.5.F.) to each Original Limited Partner then holding a Limited
Partner Interest of the DRIP/ACP Investment Amount to be invested in newly
issued REIT Shares on such DRIP/ACP Investment Date. Such notice shall also
set forth the Maximum Limited Partner Investment Amount of the Original
Limited Partners and the percentage of the DRIP/ACP Investment Amount
constituting the DRIP Investment Amount (the "DRIP Percentage") and the
percentage constituting the ACP Investment Amount.
(2) Not later than the close of business on the business
day immediately preceding each DRIP/ACP Investment Date, the Original
Limited Partners then holding Limited Partner Interests shall give
irrevocable written notice to the General Partner of whether the Original
Limited Partners or any one or more of them elect to make a cash investment
on such DRIP/ACP Investment Date (not to exceed the Maximum Limited Partner
Investment Amount) for the purchase of additional Limited Partner Interests
in order to maintain the aggregate Percentage Interest of the Original
Limited Partners in the Partnership. Such notice shall specify the Actual
Limited Partner Investment Amount if the amount to be invested is less than
the Maximum Limited Partner Investment Amount and the identities of the
Original Limited Partner or Partners which will make such cash investment,
provided that the Original Limited Partners shall have the right to
designate any wholly owned subsidiary of The Irvine Company as the entity
which shall make a Capital Contribution in respect of all or a portion of
the Actual Limited Partner Investment Amount (the Original Limited Partner
or Partners or such subsidiary making the cash investment, the "Investing
Entities"). Failure by the Original Limited Partners to respond to the
Funding Notice shall be deemed an election by such Limited Partners not to
make any cash investment on such DRIP/ACP Investment Date.
(3) The General Partner shall, as soon as practicable
following the DRIP/ACP Investment Date, make a Capital Contribution to the
Partnership in an amount equal to the DRIP/ACP Investment Amount for such
DRIP/ACP Investment Date, provided that notwithstanding the amount of the
Capital Contribution actually made pursuant to the foregoing, the General
Partner shall be deemed to have contributed to the Partnership as a Capital
Contribution, in consideration of an additional General Partner Interest,
an amount equal to the Value as of the date of issuance of the REIT Shares
issued by General Partner on such DRIP/ACP Investment Date pursuant to the
DRIP/ACP Plan (provided, that, for these purposes, only the DRIP/ACP
Investment Date shall be considered) multiplied by the number of REIT
Shares issued on such DRIP/ACP Investment Date pursuant to the DRIP/ACP
Plan. Upon such contribution the Partnership will be deemed to have issued
to the General Partner a number of General Partner Units equal to the
number of newly issued REIT Shares issued by the General Partner on such
DRIP/ACP Investment Date pursuant to the DRIP/ACP Plan, and the Percentage
Interest of the General Partner and all other Partners shall be adjusted
based on that number of Partnership Units and not pursuant to Section 4.5.G
hereof.
(4) As soon as practicable following the DRIP/ACP
Investment Date, the Investing Entities shall make a Capital Contribution
to the Partnership in an amount equal to the Actual Limited Partner
Investment Amount for such DRIP/ACP Investment Date. Upon such
contribution the Partnership will issue a number of Limited Partners Units
equal to the Corresponding L.P. Unit Amount, and the Percentage Interest
of the Partners shall be adjusted based on that number of Partnership Units
and not pursuant to Section 4.5.G. hereof. Notwithstanding the amount of
the Capital Contribution actually made pursuant to the foregoing, each
Investing Entity shall be deemed to have contributed to the Partnership as
a Capital Contribution an amount equal to the Value as of the date of
issuance of the REIT Shares issued by the General Partner on such DRIP/ACP
Investment Date pursuant to the DRIP/ACP Plan (provided, that for these
purposes, only the DRIP/ACP Investment Date shall be considered) multiplied
by the product of (i) the number of Limited Partner Units issued to such
Investing Entity and (ii) the then current Conversion Factor.
(5) Notwithstanding anything in this Section 4.8.A to the
contrary, the Maximum Limited Partner Investment Amount shall be reduced to
the extent that Original Limited Partners have exercised rights under
Section 4.2 of the Miscellaneous Rights Agreement with respect to the
issuance of REIT Shares pursuant to the DRIP/ACP Plan that has resulted in
an additional Capital Contribution by the General Partner.
B. If at any time or from time to time, in connection with
the General Partner's DRIP/ACP Plan, any REIT Shares are to be issued by
the General Partner out of its authorized but unissued REIT Shares in
satisfaction of the General Partner's obligations under Section 4.2 of the
Miscellaneous Rights Agreement:
(1) The General Partner shall, as soon as practicable,
after the issuance of such REIT Shares, make a Capital Contribution to the
Partnership in an amount equal to the price paid to the General Partner for
such REIT Shares as set forth in Section 4.2 of the Miscellaneous Rights
Agreement.
(2) Notwithstanding the amount of the Capital Contribution
actually made pursuant to Section 4.8.B(1) above, the General Partner shall
be deemed to have contributed to the Partnership as a Capital Contribution,
in consideration of an additional General Partner Interest, an amount equal
to the Value as of the date of issuance of such REIT Shares (provided,
that, for these purposes, only the trade date on which the purchase of the
REIT Shares is consummated shall be considered) multiplied by the number of
REIT Shares issued pursuant to Section 4.2 of the Miscellaneous Rights
Agreement.
(3) The Partnership will be deemed to have issued to the
General Partner a number of General Partner Units equal to the number of
newly issued REIT Shares issued by the General Partner pursuant to Section
4.2 of the Miscellaneous Rights Agreement and the Percentage Interest of
the General Partner and all other Partners shall be adjusted based on that
number of Partnership Units and not pursuant to Section 4.5.G hereof."
Section 5. Except as amended by this Amendment No. 4, the
provisions of the Existing Agreement are ratified, approved and confirmed and
shall remain in full force and effect in accordance with its terms.
Section 6. This Amendment No. 4 shall become effective when
signed by the General Partner and a Majority-In-Interest of the Limited
Partners.
Section 7. This Amendment No. 4 shall be construed and
enforced in accordance with and governed by the laws of the State of Delaware,
without regard to the principles of conflicts of law.
Section 8. This Amendment No. 4 may be executed in
counterparts, all of which shall constitute one agreement binding on all
parties hereto, notwithstanding that all such parties are not signatories to
the original or same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment No. 4 as of the date and year first written above.
GENERAL PARTNER:
IRVINE APARTMENT COMMUNITIES, INC.,
a Delaware Corporation
By: /s/ Richard E. Moran Jr.
_________________________________
Name: Richard E. Moran Jr.
Title: Executive Vice President
and Chief Financial Officer
By:/s/ James E. Mead
_________________________________
Name: James E. Mead
Title: Senior Vice President and
Treasurer
LIMITED PARTNERS:
THE IRVINE COMPANY,
a Michigan corporation
By: /s/ Michael D. McKee
___________________________
Name: Michael D. McKee
Title: Executive Vice President
By: /s/ Norman J. Metcalfe
___________________________
Name: Norman J. Metcalfe
Title: Vice Chairman
PARKWEST ASSOCIATES,
a California general partnership
By: The Irvine Company,
a general partner
By: /s/ Michael D. McKee
___________________________
Name: Michael D. McKee
Title: Executive Vice President
By: /s/ Norman J. Metcalfe
___________________________
Name: Norman J. Metcalfe
Title: Vice Chairman
R.S.J. ASSOCIATES,
a California limited partnership
By: The Irvine Company, its
general partner
By: /s/ Michael D. McKee
___________________________
Name: Michael D. McKee
Title: Executive Vice President
By: /s/ Norman J. Metcalfe
___________________________
Name: Norman J. Metcalfe
Title: Vice Chairman
WOODBRIDGE WILLOWS ASSOCIATES,
a California limited partnership
By: The Irvine Company, its
general partner
By: /s/ Michael D. McKee
___________________________
Name: Michael D. McKee
Title: Executive Vice President
By: /s/ Norman J. Metcalfe
___________________________
Name: Norman J. Metcalfe
Title: Vice Chairman
IRVINE AFFORDABLE HOUSING, INC.,
a California corporation
By: /s/ William H. McFarland
__________________________
Name: William H. McFarland
Title: President
By: /s/ Michael D. McKee
___________________________
Name: Michael D. McKee
Title: Secretary
IRVINE LEASE CO., INC.,
a California corporation
By: /s/ William H. McFarland
__________________________
Name: William H. McFarland
Title: President
By: /s/ Michael D. McKee
___________________________
Name: Michael D. McKee
Title: Secretary
Amendment to the Operating Partnership Agreement to reflect transfer of
General Partner Interest to Irvine Apartment Communities Maryland, Inc., a
Maryland corporation, and certain other amendments.
AMENDMENT No. 5 dated as of May 1, 1996 to the Amended and
Restated Agreement of Limited Partnership of Irvine Apartment Communities,
L.P. dated as of December 1, 1993, as amended (the "Existing Agreement") by
and among Irvine Apartment Communities, Inc., a Delaware corporation ("IAC
Delaware"), as the General Partner, Irvine Apartment Communities Maryland,
Inc., a Maryland corporation ("IAC Maryland"), as successor General Partner,
and the Persons whose names are set forth on Exhibit A thereto, as Limited
Partners, together with any other Persons who become Partners in the
Partnership as provided therein.
W I T N E S S E T H:
WHEREAS, IAC Delaware and IAC Maryland have entered into
that certain Agreement and Plan of Merger dated as of March 20, 1996 (the
"Merger Agreement"), a copy of which is attached hereto as Annex A,
pursuant to which IAC Delaware will be merged (the "Merger") with and into
IAC Maryland upon the terms and subject to the conditions specified in the
Merger Agreement;
WHEREAS, pursuant to the Merger Agreement, (i) IAC Maryland
shall be the surviving entity in the Merger, (ii) as of the Effective Time
(as defined in the Merger Agreement) the separate corporate existence of
IAC Delaware shall cease, and (iii) IAC Maryland will change its name to
Irvine Apartment Communities, Inc.;
WHEREAS, on April 30, 1996 the stockholders of IAC Delaware
approved the Merger as required by Section 6.1(a) of the Merger Agreement;
WHEREAS, upon consummation of the Merger, the General Partner
Interest in the Partnership will be Transferred to IAC Maryland and IAC
Maryland will assume all the obligations of IAC Delaware as successor General
Partner;
WHEREAS, the Transfer of the General Partner Interest requires
the Consent of the Limited Partners pursuant to Section 11.2 of the Existing
Agreement;
WHEREAS, in accordance with Section 14.1 of the Existing
Agreement, IAC Delaware as General Partner and IAC Maryland as successor
General Partner are hereby proposing to amend certain provisions of the
Existing Agreement to reflect the Merger and the Transfer of the General
Partner Interest and are also proposing to amend Section 6.1 of the Existing
Agreement, all as set forth below;
WHEREAS, the parties hereto agree that the execution of this
Amendment by a Limited Partner and the delivery thereof to the General
Partner shall constitute the Consent and affirmative vote of such Limited
Partner to the Transfer of the General Partner Interest as required by
Section 11.2 of the Existing Agreement and also the Consent and affirmative
vote of such Limited Partner to the amendments to the Existing Agreement
proposed hereby as required by Article 14 of the Existing Agreement; and
WHEREAS, the execution and delivery of this Amendment No. 5 by
IAC Delaware as General Partner and IAC Maryland as successor General Partner
have been approved by resolutions duly adopted by their respective Boards of
Directors, including, in each case, by a majority of the Directors
constituting the Independent Directors Committee of the Board of Directors.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. All capitalized terms used in this Amendment No. 5
and not defined herein shall have the meanings set forth in the Existing
Agreement.
Section 2. Pursuant to Section 11.2.B of the Existing
Agreement, the Limited Partners hereby consent to and approve the Transfer
of the General Partner Interest from IAC Delaware to IAC Maryland, such
Transfer to be effective as of the Effective Time. In accordance with
Sections 11.2.B and 12.1 of the Existing Agreement, IAC Maryland shall be
admitted to the Partnership as successor General Partner effective
immediately prior to such Transfer, and all references in the Existing
Agreement, as amended hereby, to the General Partner shall refer to IAC
Maryland.
Section 3. As of the Effective Time, Article 1 of the
Existing Agreement is hereby amended as follows:
(a) The definition of "Certificate of Incorporation" is
amended to read in its entirety as follows:
""Certificate of Incorporation" means the Articles of Amendment
and Restatement of the General Partner filed in the office of the
State Department of Assessments and Taxation of the State of Maryland
on April 29, 1996, as amended or restated from time to time,
including any Articles Supplementary."
(b) The definition of "Deemed Value of the Partnership" is
amended (i) to delete the words "excluding any treasury shares but" in the
third and fourth lines thereof and (ii) to delete the words "Excess Stock"
in the fourth line thereof and to insert in their place the words "Excess
Common Stock".
(c) The definition of "Excess Stock" is deleted.
(d) The following definition is added:
""Excess Common Stock" and "Excess Preferred Stock" means the
classes of shares of the General Partner as defined in Subsection
4(A) of Section (c) of ARTICLE SIXTH of the Certificate of
Incorporation."
(e) The definition of "Irvine Apartment Communities" is
amended to read in its entirety as follows:
""Irvine Apartment Communities" means Irvine Apartment
Communities, Inc. (formerly Irvine Apartment Communities Maryland,
Inc.), a Maryland corporation."
(f) The definition of "Miscellaneous Rights Agreement" is
amended to read in its entirety as follows:
""Miscellaneous Rights Agreement" means the Miscellaneous
Rights Agreement dated March 20, 1996 among Irvine Apartment
Communities, the Partnership and The Irvine Company, as such
agreement may be amended, modified or restated from time to time."
Section 4. As of the Effective Time, Section 8.6.B. of the
Existing Agreement is hereby amended by deleting the words "ARTICLE FOURTH"
in the fourth line thereof and inserting in their place the words "ARTICLE
SIXTH."
Section 5. By its execution and delivery of this Amendment,
IAC Maryland hereby agrees in accordance with Section 11.2.B. of the
Existing Agreement (i) to be liable for all obligations and responsible for
all duties of the General Partner, (ii) to assume, as of the Effective
Time, all of the obligations of IAC Delaware as transferor General Partner
with respect to the transferred Partnership Interest and (iii) to be bound
by all of the terms and provisions of the Existing Agreement with respect
to the transferred Partnership Interest. IAC Maryland hereby makes to each
Partner the representations and warranties set forth in Section 3.4.C of
the Existing Agreement.
Section 6. In accordance with Section 12.3 of the Existing
Agreement, an amendment to the Certificate shall be filed to reflect the
admission of IAC Maryland as successor General Partner.
Section 7. As of the Effective Time, (i) the reference to
"a Miscellaneous Rights and Lock-Up Agreement" in clause (d) of Exhibit B
to the Existing Agreement shall mean the Miscellaneous Rights Agreement as
defined in Section 1(f) of this Amendment No. 5 and (ii) the second
paragraph of the legend in Exhibit D to the Existing Agreement shall be
deleted in its entirety.
Section 8.(a) Section 6.1 of the Existing Agreement is hereby
amended to read in its entirety as follows:
"Except as otherwise provided in this Article 6, and subject
to Section 11.6.C, Net Income and Net Loss will be allocated to each of the
Partners at the end of each calendar month using the interim closing of the
books method and taking into account varying interests in accordance with
the greater part of the month convention consistent with Section 11.6.C."
(b) The definition of "General Partner's Stock Incentive
Plans" in Article 1 of the Existing Agreement the is hereby amended to add
"The Irvine Apartment Communities, Inc. 1996 Long-Term Stock Incentive Plan,"
after the word "Directors," in the fourth line thereof.
Section 9. All costs and expenses incurred by IAC Delaware
or IAC Maryland in connection with the Merger, whether or not consummated,
shall constitute reimbursable expenses under Section 7.4.B of the Existing
Agreement.
Section 10. Except as amended by this Amendment No. 5, the
provisions of the Existing Agreement are ratified, approved and confirmed
and shall remain in full force and effect in accordance with its terms.
Section 11. This Amendment No. 5 shall become effective
when signed by IAC Delaware, as General Partner, IAC Maryland, as successor
General Partner, and a Majority-In-Interest of the Limited Partners.
Notwithstanding the foregoing, in the event the Merger Agreement is
terminated pursuant to Article VII thereof prior to the Effective Time, the
provisions of Sections 2, 3, 4, 5, 6 and 7 of this Amendment No. 5 shall
also be terminated and shall have no force and effect.
Section 12. This Amendment No. 5 shall be construed and
enforced in accordance with and governed by the laws of the State of Delaware,
without regard to the principles of conflicts of law.
Section 13. This Amendment No. 5 may be executed in
counterparts, all of which shall constitute one agreement binding on all
parties hereto, notwithstanding that all such parties are not signatories to
the original or same counterpart.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment No. 5 as of the date and year first written above.
GENERAL PARTNER:
IRVINE APARTMENT COMMUNITIES, INC.,
a Delaware corporation
By: /s/ Richard E. Moran Jr.
-------------------------
Name: Richard E. Moran Jr.
Title: Executive Vice President
and Chief Financial Officer
By: /s/ James E. Mead
-----------------
Name: James E. Mead
Title: Senior Vice President and
Treasurer
SUCCESSOR GENERAL PARTNER:
IRVINE APARTMENT COMMUNITIES MARYLAND, INC.
a Maryland corporation
By: /s/ Richard E. Moran Jr.
------------------------
Name: Richard E. Moran Jr.
Title: Executive Vice President
and Chief Financial Officer
By: /s/ James E. Mead
-----------------
Name: James E. Mead
Title: Senior Vice President and
Treasurer
LIMITED PARTNERS:
THE IRVINE COMPANY,
a Michigan corporation
By: /s/ Michael D. McKee
--------------------
Name: Michael D. McKee
Title: Executive Vice President
By: /s/ Norman J. Metcalfe
----------------------
Name: Norman J. Metcalfe
Title: Vice Chairman
PARKWEST ASSOCIATES,
a California general partnership
By: The Irvine Company,
a general partner
By: /s/ Michael D. McKee
--------------------
Name: Michael D. McKee
Title: Executive Vice President
By: /s/ Norman J. Metcalfe
----------------------
Name: Norman J. Metcalfe
Title: Vice Chairman
R.S.J. ASSOCIATES,
a California limited partnership
By: The Irvine Company, its
general partner
By: /s/ Michael D. McKee
--------------------
Name: Michael D. McKee
Title: Executive Vice President
By: /s/ Norman J. Metcalfe
----------------------
Name: Norman J. Metcalfe
Title: Vice Chairman
WOODBRIDGE WILLOWS ASSOCIATES,
a California limited partnership
By: The Irvine Company, its
general partner
By: /s/ Michael D. McKee
--------------------
Name: Michael D. McKee
Title: Executive Vice President
By: /s/ Norman J. Metcalfe
----------------------
Name: Norman J. Metcalfe
Title: Vice Chairman
IRVINE AFFORDABLE HOUSING, INC.,
a California corporation
By: /s/ William H. McFarland
------------------------
Name: William H. McFarland
Title: President
By: /s/ Michael D. McKee
--------------------
Name: Michael D. McKee
Title: Secretary
IRVINE LEASE CO., INC.,
a California corporation
By: /s/ William H. McFarland
------------------------
Name: William H. McFarland
Title: President
By: /s/ Michael D. McKee
--------------------
Name: Michael D. McKee
Title: Secretary
EXECUTION COPY
Agreement reflecting transfer of certain Limited Partner Interests in the
Operating Partnership.
Agreement dated June 21, 1996 among Parkwest Associates, a
California general partnership ("Parkwest"), Irvine Lease Co., Inc., a
California corporation ("ILC"), Irvine Affordable Housing, Inc., a California
corporation ("IAH" and, together with Parkwest and ILC, the "Transferor
Limited Partners"), Irvine Apartment Communities, Inc., a Maryland
corporation, in its capacity as general partner (the "General Partner") of
Irvine Apartment Communities, L.P., a Delaware limited partnership (the
"Operating Partnership"), Irvine Industrial Development Company, a California
corporation ("IIDC"), TIC Investment Company A, a California general
partnership ("TICICA"), TIC Investment Company B, a California general
partnership ("TICICB"), and The Irvine Company, a Michigan corporation
("TIC"). Capitalized terms used but not defined herein shall have the
meanings set forth in the Amended and Restated Agreement of Limited
Partnership of the Operating Partnership, dated as of December 1, 1993, as
amended (the "Partnership Agreement").
WHEREAS, each Transferor Limited Partner is the registered
owner of the number of Limited Partner Units of the Operating Partnership set
forth opposite its name on Annex A hereto.
WHEREAS, ILC and IAH desire to Transfer as of the date hereof
their Limited Partner Units, and the Limited Partner Interests represented
thereby, to TICICA and TICICB, respectively.
WHEREAS, TIC and IIDC are the general partners of Parkwest
having a 72.97% and 27.03% percentage interest in Parkwest, respectively.
WHEREAS, in connection with a plan of liquidation and
dissolution Parkwest is distributing on June 24, 1996 (the "Second Transfer
Date") to TIC and IIDC, in accordance with the percentages interests set
forth in the preceding paragraph, all of its right, title and interest in
and to the Limited Partner Units, and all of the Limited Partner Interests
represented thereby, set forth opposite its name in Annex A hereto; and in
connection with such distribution IIDC desires to transfer on the Second
Transfer Date all of its right, title and interest in and to such Limited
Partner Units, and the Limited Partner Interests represented thereby, to
TIC, its sole stockholder.
WHEREAS, in connection with the Transfers being made by ILC
and IAH to TICICA and TICICB, respectively, TICICA and TICICB desire to be
admitted to the Operating Partnership as Substituted Limited Partners in
accordance with the Partnership Agreement; and
WHEREAS, the General Partner by its acceptance of this
Agreement hereby consents to the Transfers of the Limited Partner Units
referred to herein, and the Limited Partner Interests represented thereby,
and to the admission of TICICA and TICICB as Substituted Limited Partners
of the Operating Partnership.
NOW, THEREFORE, in accordance with Article 11 of the
Partnership Agreement and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
1. Each Transferor Limited Partner hereby delivers to the
General Partner, and the General Partner hereby acknowledges receipt of, the
certificate or certificates for the Limited Partner Units set forth opposite
the name of such Transferor Limited Partner in Annex A hereto.
2. As of the date hereof, ILC hereby irrevocably assigns
and transfers to TICICA and IAH hereby irrevocably assigns and transfers to
TICICB all of their respective right, title and interest in and to the
Limited Partner Units, and all of the Limited Partner Interests represented
thereby, set forth opposite their names in Annex A hereto and irrevocably
appoints the General Partner as its agent to transfer the certificates for
such Limited Partner Units, and all of the Limited Partner Interest
represented thereby, on the books of the Operating Partnership.
3. As of the Second Transfer Date, Parkwest hereby
irrevocably assigns and transfers to TIC and IIDC, in accordance with the
percentage interests set forth in the third Whereas clause above, all of
its right, title and interest in and to the Limited Partner Units, and the
Limited Partner Interest represented thereby, set forth opposite its name
in Annex A hereto and irrevocably appoints the General Partner as its agent
to transfer the certificate for such Limited Partner Units, and all of the
Limited Partner Interests represented thereby, on the books of the
Operating Partnership.
4. As of the Second Transfer Date, IIDC hereby irrevocably
assigns and transfers to TIC all of its right, title and interest in and to
the Limited Partner Units, and the Limited Partner Interests represented
thereby, referred to in paragraph 3 above and irrevocably appoints the
General Partner as its agent to transfer such right, title and interest to
TIC on the books of the Operating Partnership.
5. Each of TICICA and TICICB hereby acknowledges that it
has received a copy of the Partnership Agreement executed by the General
Partner and the other Limited Partners and hereby agrees to all the terms
and conditions of the Partnership Agreement, including without limitation,
the power of attorney set forth in Section 2.4 thereof. TIC, TICICA and
TICICB hereby represent and warrant to each Partner pursuant to Section 3.4
of the Partnership Agreement as follows:
(a) All transaction contemplated by the Partnership
Agreement to be performed by them have been duly authorized
by all necessary action, including without limitation, that
of its general partners, directors or shareholders, as the
case may be;
(b) The consummation of the transactions contemplated
by the Partnership Agreement will not result in a breach or
violation of, or a default under, its partnership agreement,
charter or by-laws, as the case may be, any material
agreement by which it or any of its property is or are
bound, or any statute, regulation, order or other law to
which it or any of its partners or shareholders, as the case
may be, is or are subject;
(c) It is neither a "foreign person" within the
meaning of Section 1445(f) of the Code nor a "foreign
partner" within the meaning of Section 1446(e) of the Code;
(d) Upon acceptance hereof by the General Partner,
this Agreement will be binding upon and enforceable against
it in accordance with its terms;
(e) It is acquiring and will continue to hold its
interest in the Operating Partnership for its own account
for investment only and not for the purpose of, or with a
view toward, the resale or distribution of all or any part
thereof, nor with a view toward selling or otherwise
distributing such interest or any part thereof at any
particular time or under any predetermined circumstances
except as permitted under Article 11 of the Partnership
Agreement;
(f) It is an "accredited investor" as such term is
defined in Rule 501 promulgated under the Securities Act of
1933, as amended. It is a sophisticated investor, able and
accustomed to handling sophisticated financial matters for
itself, particularly real estate investments, and it has a
sufficiently high net worth that it does not anticipate a
need for the funds it will have invested in the Operating
Partnership in what it understand to be a highly speculative
and illiquid investment.
The representations and warranties set forth above shall survive the
effectiveness of the Transfers and TICICA's and TICICB's being admitted as
Substituted Limited Partners under the Partnership Agreement and the
dissolution, liquidation and termination of the Operating Partnership.
TIC, TICICA and TICICB further acknowledge that no representations as to
potential profit, cash flows, funds from operations or yield, if any, in
respect of Operating Partnership or the General Partner have been made by
an Partner or any employee or representative or Affiliate of any Partner,
and that projections and any other information, including, without
limitation, financial and descriptive information and documentation, which
may have been in any manner submitted to any of them shall not constitute
any representation or warranty of any kind or nature, express or implied.
6. Attached hereto is a signature page of the Partnership
Agreement duly executed by TICICA and TICICB and a copy of Amendment No. 8
to Exhibit A to the Partnership Agreement. TIC, TICICA and TICICB hereby
acknowledge that Amendment No. 8 to Exhibit A has been prepared by the
General Partner to reflect the revised Partnership Interests in the
Operating Partnership resulting from the Transfers of the Limited Partner
Units, and the Limited Partner Interests represented thereby, referred to
herein. TIC, TICICA and TICICB acknowledges that the General Partner will
distribute a copy of the executed signature page to the Partnership
Agreement and Amendment No. 8 to Exhibit A thereto to all Partners of the
Operating Partnership.
7. Upon acceptance hereof by the General Partner, (i)
TICICA and TICICB shall be admitted to the Operating Partnership as
Substituted Limited Partners and (ii) ILC and IAH will cease to be Limited
Partners of the Operating Partnership, all as provided in Article 11 of the
Partnership Agreement. Upon acceptance hereof by the General Partner but
effective as of the Second Transfer Date, Parkwest will cease to be a
Limited Partner of the Operating Partnership, all as provided in Article 11
of the Partnership Agreement.
8. Upon acceptance hereof by the General Partner, in
accordance with Article 11 of the Partnership Agreement, TICICA and TICICB,
as Limited Partners of the Operating Partnership, hereby assume, and, as of
the Second Transfer Date, TIC hereby assumes, all of the obligations of
ILC, IAH and Parkwest, respectively, under the Partnership Agreement with
respect to the transferred Partnership Interests and will have all rights
and powers and will be subject to all of the restrictions and liabilities
of a Limited Partner as set forth in the Partnership Agreement.
9. Upon acceptance hereof by the General Partner, the
General Partner shall issue (i) to TICICA a certificate representing
1,502,105 Limited Partner Units and (ii) to TICICB a certificate
representing 141,730 Limited Partner Units and a certificate representing
336,432 Limited Partner Units, which latter certificate shall contain the
legend required by that certain Agreement dated May 2, 1996 between the
General Partner, the Operating Partnership, TIC and IAH (the "May 2
Agreement"). TICICB hereby acknowledges receipt of a copy of the May 2
Agreement and agrees to be bound by all of the terms and provisions thereof
with respect to such 336,432 Limited Partner Units.
10. On the Second Transfer Date, the General Partner shall
issue to TIC a certificate representing 160,000 Limited Partner Units.
11. This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all of the parties
hereto, notwithstanding that all such parties are not signatories to the
original on the same counterpart.
12. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware, without
regard tot he principles of conflict of law.
PARKWEST ASSOCIATES
By: The Irvine Company,
a general partner
By: /s/ Michael D. McKee
--------------------------
By: /s/ Richard Pianin
--------------------------
IRVINE AFFORDABLE HOUSING, INC.
By: /s/ Richard Pianin
--------------------------
By: /s/ Michael D. McKee
--------------------------
IRVINE LEASE CO., INC.
By: /s/ Richard Pianin
--------------------------
By: /s/ Michael D. McKee
--------------------------
IRVINE INDUSTRIAL DEVELOPMENT
COMPANY
By: /s/ Richard Pianin
--------------------------
By: /s/ Michael D. McKee
--------------------------
TIC INVESTMENT COMPANY A
By: The Irvine Company,
a general partner
By: /s/ Michael D. McKee
--------------------------
By: /s/ Richard Pianin
--------------------------
TIC INVESTMENT COMPANY B
By: The Irvine Company,
a general partner
By: /s/ Michael D. McKee
--------------------------
By: /s/ Richard Pianin
--------------------------
THE IRVINE COMPANY
By: /s/ Michael D. McKee
--------------------------
By: /s/ Richard Pianin
--------------------------
Accepted as of the date
first above written
IRVINE APARTMENT COMMUNITIES, INC.,
as general partner of
Irvine Apartment Communities, L.P.
By: /s/ Richard E. Moran Jr.
-----------------------------------
Title: Executive Vice President
and Chief Financial Officer
By: /s/ James E. Mead
-----------------------------------
Title: Senior Vice President and
Treasurer
ANNEX A
<TABLE>
<CAPTION>
<S> <C> <C>
Number of Limited
Partner Units Certificate No.
------------------- -----------------
Parkwest Associates 160,000 003
Irvine Lease Co., Inc. 1,500,000 012
2,105 015
Irvine Affordable Housing, Inc. 336,432 010
113,372 013
28,358 014
</TABLE>
AMENDMENT NO. 8
TO
EXHIBIT A
PARTNERS, CONTRIBUTIONS AND
PARTNERSHIP INTERESTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Gross Asset Number
Value of of
Name and Address Cash Contributed Total Partnership Percentage
of Partner Contribution(1) Property(1) Property Units Interest
- - - ---------------- --------------- ----------- -------- ----------- ----------
General Partner
IRVINE APARTMENT $278,216,432.75(3) 0 $278,216,432.75(3) 16,986,751(3) 45.4021030%
COMMUNITIES, INC.
550 Newport Center Drive
Newport Beach, CA 92660
Limited Partners
THE IRVINE COMPANY 0 883,022,698(4) 883,022,698(4) 17,303,000(4) 46.2473718%
550 Newport Center Drive
Newport Beach, CA 92660
R.S.J. ASSOCIATES 0 27,286,000 27,286,000 535,000 1.4299453%
c/o The Irvine Company
550 Newport Center Drive
Newport Beach, CA 92660
WOODBRIDGE WILLOWS ASSOCIATES 0 9,989,000 9,989,000 609,000 1.6277322%
c/o The Irvine Company
550 Newport Center Drive
Newport Beach, CA 92660
TIC INVESTMENT COMPANY B 0 0 0 478,162(5) 1.2780290%
c/o The Irvine Company
550 Newport Center Drive
Newport Beach, CA 92660
TIC INVESTMENT COMPANY A 24,500,126.25(6) 0 24,500,126.25(6) 1,502,105(6) 4.0148187%
c/o The Irvine Company _____________ _____________ _____________ ___________ ____________
550 Newport Center Drive
Newport Beach, CA 92660
TOTAL $ 302,716,559 $ 920,297,698 $1,223,014,257 37,414,018 100.0000000%
============= ============= ============= =========== ============
_______________________
<FN>
(1) These amounts constitute the agreed value for purposes of the Act.
(2) Except with respect to the Limited Partner Units referred to in Notes
5 and 6 and 11,751 of the General Partner Units referred to in Note 3,
Partnership Units were allocated in accordance with the net asset value
of the property contributed by each Partner.
(3) Of which $193,602,600 was contributed in connection with the December
1993 initial public offering of 11,800,000 REIT Shares, $84,378,375 was
contributed in connection with the August 1995 offering of 5,175,000
REIT Shares, $200,000 was deemed contributed pursuant to Sections 4.6.B
and 4.5.G for 10,000 REIT Shares and $35,457.75 was deemed contributed
pursuant to Section 4.8.A(3) for 1,751 REIT Shares.
(4) Includes $65,898,000 gross asset value of property contributed by five
original limited partners which limited partners were liquidated on
June 30, 1995. The 1,359,000 Partnership Units owned by such limited
partners were transferred to The Irvine Company in connection with such
liquidation. Also includes $37,605,000 gross asset value of property
contributed by another original limited partner. The 160,000
Partnership Units owned by such limited partner were transferred to The
Irvine Company in June 1996.
(5) These Limited Partner Units were issued in accordance with Section
4.3.B. Of such Limited Partner Units, 478,162 were issued prior to
June 1, 1996 and were transferred to TIC Investment Company B in June
1996 when it was admitted as a Substituted Limited Partner.
(6) Of which $24,457,500 was contributed pursuant to Section 4.5.F and
4.5.G for 1,500,000 Limited Partner Units in connection with the August
1995 offering of REIT Shares and $42,626.25 was deemed contributed
pursuant to Section 4.8.A.(4) for 2,105 Limited Partner Units. Of such
Units, the 1,500,000 Limited Partner Units issued pursuant to Section
4.5.F and 4.5.G ($24,457,500) and 2,105 of the Limited Partner Units
issued pursuant to Section 4.8.A(4) ($42,626.25) were issued prior to
June 1, 1996 and were transferred to TIC Investment Company A in June
1996 when it was admitted as a Substituted Limited Partner.
</TABLE>
PARTNERSHIP AGREEMENT
SIGNATURE PAGE
SUBSTITUTED LIMITED PARTNERS
TIC INVESTMENT COMPANY A
By: The Irvine Company,
a general partner
By: /s/ Michael D. McKee
-------------------------
By: /s/ Richard Pianin
-------------------------
TIC INVESTMENT COMPANY B
By: The Irvine Company,
a general partner
By: /s/ Michael D. McKee
-------------------------
By: /s/ Richard Pianin
-------------------------
EXECUTION COPY
Agreement reflecting admission of TIC Investment Company C as an Additional
Limited Partner of the Operating Partnership.
Agreement dated July 3, 1996 between Irvine Apartment
Communities, Inc., a Maryland corporation, in its capacity as general partner
(the "General Partner") of Irvine Apartment Communities, L.P., a Delaware
limited partnership (the "Operating Partnership") and TIC Investment Company
C, a California general partnership ("TICICC"), a general partner of which is
The Irvine Company, a Michigan corporation ("TIC"). Capitalized terms used
but not defined herein shall have the meanings set forth in the Amended and
Restated Agreement of Limited Partnership of the Operating Partnership, dated
as of December 1, 1993, as amended (the "Partnership Agreement").
WHEREAS, the General Partner delivered a Funding Notice dated
June 28, 1996 to each of the Limited Partners with respect to its proposal to
make a Capital Contribution (the "GP Contribution") to the Operating
Partnership with the net proceeds of a public offering of its Common Stock
(the "Offering");
WHEREAS, pursuant to its Election Notice TIC elected to make a
Capital Contribution to the Operating Partnership in an amount equal to the
product of (x) 1,490,700 and (y) the public offering price per share of the
Common Stock in the Offering (the "TIC Contribution");
WHEREAS, TIC has informed the General Partner that the TIC
Contribution shall be made directly by TICICC; and
WHEREAS, in accordance with Section 4.5.D and Section 12.2 of
the Partnership Agreement, TICICC shall make the TIC Contribution to the
Operating Partnership, receive 1,490,700 Limited Partner Units and be admitted
as an Additional Limited Partner of the Operating Partnership;
NOW, THEREFORE, the parties hereto agree as follows:
1. TICICC hereby acknowledges that it has received a copy
of the Partnership Agreement executed by the General Partner and the other
Limited Partners and hereby agrees to keep, observe and perform all of the
terms, covenants and conditions of the Partnership Agreement, including
without limitation, the power of attorney set forth in Section 2.4 thereof.
TICICC hereby represents and warrants to each Partner pursuant to Section
3.4 of the Partnership Agreement as follows:
(a) All transactions contemplated by the Partnership
Agreement to be performed by TICICC have been duly
authorized by all necessary action, including without
limitation, that of its general partners;
(b) The consummation of the transactions contemplated
by the Partnership Agreement will not result in a breach or
violation of, or a default under, its partnership agreement,
any material agreement by which it or any of its property is
or are bound, or any statute, regulation, order or other law
to which it or any of its partners is or are subject;
(c) It is neither a "foreign person" within the
meaning of Section 1445(f) of the Code nor a "foreign
partner" within the meaning of Section 1446(e) of the Code;
(d) Upon acceptance hereof by the General Partner,
this Agreement will be binding upon and enforceable against
it in accordance with its terms;
(e) It is acquiring and will continue to hold its
interest in the Operating Partnership for its own account
for investment only and not for the purpose of, or with a
view toward, the resale or distribution of all or any part
thereof, nor with a view toward selling or otherwise
distributing such interest or any part thereof at any
particular time or under any predetermined circumstances
except as permitted under Article 11 of the Partnership
Agreement;
(f) It is an "accredited investor" as such term is
defined in Rule 501 promulgated under the Securities Act of
1933, as amended. It is a sophisticated investor, able and
accustomed to handling sophisticated financial matters for
itself, particularly real estate investments, and it has a
sufficiently high net worth that it does not anticipate a
need for the funds it will have invested in the Operating
Partnership in what it understand to be a highly speculative
and illiquid investment.
The representations and warranties set forth above shall survive the
effectiveness of TICICC being admitted as an Additional Limited Partner
under the Partnership Agreement and the dissolution, liquidation and
termination of the Operating Partnership. TICICC further acknowledge that
no representations as to potential profit, cash flows, funds from
operations or yield, if any, in respect of Operating Partnership or the
General Partner have been made by an Partner or any employee or
representative or Affiliate of any Partner, and that projections and any
other information, including, without limitation, financial and descriptive
information and documentation, which may have been in any manner submitted
to any of them shall not constitute any representation or warranty of any
kind or nature, express or implied.
2. Attached hereto is a counterpart signature page to the
Partnership Agreement duly executed by TICICC and a copy of Amendment No. 9
to Exhibit A to the Partnership Agreement. TICICC hereby acknowledges that
Amendment No. 9 to Exhibit A has been prepared by the General Partner to
reflect the revised Partnership Interests in the Operating Partnership
resulting from the GP Contribution and the TIC Contribution. TICICC
acknowledges that the General Partner will distribute a copy of the
executed signature page to the Partnership Agreement and Amendment No. 9 to
Exhibit A thereto to all Partners of the Operating Partnership.
3. Upon acceptance hereof by the General Partner and receipt
by the Operating Partnership from TICICC of the TIC Contribution and from the
General Partner of the GP Contribution, TICICC shall be admitted as an
Additional Limited Partner, the General Partner shall issue to TICICC a
certificate representing 1,490,700 Limited Partner Units, and Exhibit A to the
Partnership Agreement shall be amended as set forth in Amendment No. 9 to
Exhibit A of the Partnership Agreement attached hereto.
4. This Agreement may be executed in counterparts, all of
which together shall constitute one agreement binding on all of the parties
hereto, notwithstanding that all such parties are not signatories to the
original on the same counterpart.
5. This Agreement shall be construed and enforced in
accordance with and governed by the laws of the State of Delaware, without
regard to the principles of conflict of law.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date and year first written above.
GENERAL PARTNER:
IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation
By: /s/ Richard E. Moran Jr.
-------------------------------------------------
Title: Executive Vice President
and Chief Financial Officer
By: /s/ James E. Mead
-------------------------------------------------
Title: Senior Vice President and Treasurer
TIC INVESTMENT COMPANY C
By: The Irvine Company,
a general partner
By: /s/ Norman J. Metcalfe
--------------------------
By: /s/ Richard Pianin
--------------------------
AMENDMENT NO. 9
TO
EXHIBIT A
PARTNERS, CONTRIBUTIONS AND
PARTNERSHIP INTERESTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Gross Asset Number
Value of of
Name and Address Cash Contributed Total Partnership Percentage
of Partner Contribution(1) Property(1) Property Units Interest
- - - ---------------- --------------- ----------- -------- ----------- ----------
General Partner
IRVINE APARTMENT $308,216,770.25(3) 0 $308,216,770.25(3) 18,477,451(3) 45.7414527%
COMMUNITIES, INC.
550 Newport Center Drive
Newport Beach, CA 92660
Limited Partners
THE IRVINE COMPANY 0 883,022,698(4) 883,022,698(4) 17,303,000(4) 42.8340660%
550 Newport Center Drive
Newport Beach, CA 92660
R.S.J. ASSOCIATES 0 27,286,000 27,286,000 535,000 1.3244076%
c/o The Irvine Company
550 Newport Center Drive
Newport Beach, CA 92660
WOODBRIDGE WILLOWS ASSOCIATES 0 9,989,000 9,989,000 609,000 1.5075967%
c/o The Irvine Company
550 Newport Center Drive
Newport Beach, CA 92660
TIC INVESTMENT COMPANY B 0 0 0 478,162(5) 1.1837036%
c/o The Irvine Company
550 Newport Center Drive
Newport Beach, CA 92660
TIC INVESTMENT COMPANY A 24,500,126.25(6) 0 24,500,126.25(6) 1,502,105(6) 3.7185034%
c/o The Irvine Company
550 Newport Center Drive
Newport Beach, CA 92660
TIC INVESTMENT COMPANY C 30,000,337.50(7) 0 30,000,337.50(7) 1,490,700(7) 3.6902700%
c/o The Irvine Company
550 Newport Center Drive
Newport Beach, CA 92660
TOTAL $ 362,717,234 $ 920,297,698 $1,283,014,932 40,395,418 100.0000000%
============= ============= ============= =========== ============
_______________________
<FN>
(1) These amounts constitute the agreed value for purposes of the Act.
(2) Except with respect to the Limited Partner Units referred to in Notes
5 and 6 and 11,751 of the General Partner Units referred to in Note 3,
Partnership Units were allocated in accordance with the net asset
value of the property contributed by each Partner.
(3) Of which $193,602,600 was contributed in connection with the December
1993 initial public offering of 11,800,000 REIT Shares, $84,378,375
was contributed in connection with the August 1995 offering of
5,175,000 REIT Shares, $30,000,337.50 was contributed in connection
with the July 1996 offering of 1,490,700 REIT Shares, $200,000 was
deemed contributed pursuant to Sections 4.6.B and 4.5.G for 10,000
REIT Shares and $35,457.75 was deemed contributed pursuant to Section
4.8.A(3) for 1,751 REIT Shares.
(4) Includes $65,898,000 gross asset value of property contributed by five
original limited partners which limited partners were liquidated on
June 30, 1995. The 1,359,000 Partnership Units owned by such limited
partners were transferred to The Irvine Company in connection with
such liquidation. Also includes $37,605,000 gross asset value of
property contributed by another original limited partner. The 160,000
Partnership Units owned by such limited partner were transferred to
The Irvine Company in June 1996.
(5) These Limited Partner Units were issued in accordance with Section
4.3.B. Of such Limited Partner Units, 478,162 were issued prior to
June 1, 1996 and were transferred to TIC Investment Company B in June
1996 when it was admitted as a Substituted Limited Partner.
(6) Of which $24,457,500 was contributed pursuant to Section 4.5.F and
4.5.G for 1,500,000 Limited Partner Units in connection with the
August 1995 offering of REIT Shares and $42,626.25 was deemed
contributed pursuant to Section 4.8.A.(4) for 2,105 Limited Partner
Units. Of such Units, the 1,500,000 Limited Partner Units issued
pursuant to Section 4.5.F and 4.5.G ($24,457,500) and 2,105 of the
Limited Partner Units issued pursuant to Section 4.8.A(4)
($42,626.25) were issued prior to June 1, 1996 and were transferred to
TIC Investment Company A in June 1996 when it was admitted as a
Substituted Limited Partner.
(7) Contributed pursuant to Sections 4.5.F and 4.5.G for 1,490,700 Limited
Partner Units in connection with the July 1996 offering of REIT Shares.
</TABLE>
PARTNERSHIP AGREEMENT
COUNTERPART SIGNATURE PAGE
ADDITIONAL LIMITED PARTNER
TIC INVESTMENT COMPANY C
By: The Irvine Company,
a general partner
By: /s/ Norman J. Metcalfe
--------------------------
By: /s/ Richard Pianin
--------------------------
MISCELLANEOUS RIGHTS AGREEMENT
THIS MISCELLANEOUS RIGHTS AGREEMENT, dated as of March 20,
1996, is entered into by and among Irvine Apartment Communities Maryland,
Inc., a Maryland corporation (the "Company"), Irvine Apartment Communities,
L.P., a Delaware limited partnership (the "Operating Partnership"), and The
Irvine Company, a Michigan corporation (together with its successors, "The
Irvine Company").
RECITALS
WHEREAS, Irvine Apartment Communities, Inc., a Delaware
corporation ("IAC Delaware"), the Operating Partnership and The Irvine
Company entered into a Miscellaneous Rights and Lock-Up Agreement dated as
of December 1, 1993, as amended by Amendment No. 1 thereto dated as of July
18, 1995 and Amendment No. 2 thereto dated March 20, 1996 (the "Prior
Agreement");
WHEREAS, in connection with the December 1993 initial public
offering of shares of IAC Delaware's common stock, par value $.01 per share
(the "IAC Delaware Common Stock"), The Irvine Company and certain
partnerships, the partnership interests in which are owned in their
entirety, directly or indirectly, by The Irvine Company, transferred to the
Operating Partnership, subject to related debt, their respective real
property interests in certain multifamily apartment projects and The Irvine
Company transferred to the Operating Partnership its 99% general and
limited partnership interests in a limited partnership which owns a
multifamily apartment project, as well as its real property interests in
such project (collectively, the "Transfers");
WHEREAS, The Irvine Company and such subsidiaries received
units of limited partnership interest ("L.P. Units") in the Operating
Partnership in exchange for the Transfers of such real property and
partnership interests and IAC Delaware became the sole general partner of the
Operating Partnership;
WHEREAS, pursuant to an Agreement and Plan of Merger dated
as of March 20, 1996 among the Company and IAC Delaware (the "Merger
Agreement"), IAC Delaware will be merged with and into the Company, with
the Company as the surviving corporation (the "Merger") and all outstanding
shares of IAC Delaware Common Stock will automatically be converted into an
equal number of shares of the Company's common stock, par value $.01 per
share (the "Common Stock");
WHEREAS, the Articles of Amendment and Restatement of the
Company will provide as of the Effective Time (as defined in the Merger
Agreement) of the Merger, and the Amended and Restated Certificate of
Incorporation of IAC Delaware provides, that a majority of the Company's
board of directors (the "Board of Directors") shall be persons who are not
(i) affiliates (as that term is defined in Rule 144 under the Securities
Act of 1993, as amended), or an officer, director or employee, of The
Irvine Company or (ii) the spouse, ancestors and lineal descendants or
brother or sister (whether by the whole or half blood) of Donald L. Bren
("Unaffiliated Directors");
WHEREAS, the Prior Agreement provides that The Irvine Company
has certain rights to designate, for nomination and the filling of vacancies
on the Board of Directors, directors who are affiliated with The Irvine
Company;
WHEREAS, the Company and The Irvine Company intend that The
Irvine Company shall continue to have the right to designate, for nomination
and the filling of vacancies on the Board of Directors, directors who are
affiliated with The Irvine Company in accordance with the terms of this
Agreement;
WHEREAS, The Irvine Company and Donald Bren, its principal
shareholder, entered into that certain Exclusive Land Rights and Non-
Competition Agreement dated as of November 21, 1993, as amended by
Amendment No. 1 thereto dated April 20, 1995 and by Amendment No. 2 thereto
dated July 18, 1995 (the "Land Rights Agreement") with IAC Delaware and the
Operating Partnership pursuant to which The Irvine Company granted the
Company and the Operating Partnership the Exclusive Land Rights (as defined
therein) and The Irvine Company and Mr. Bren agreed to conduct all of
their rental apartment community development and ownership activities
through IAC Delaware through July 31, 2020;
WHEREAS, as a result of the Merger, the Company will assume all
of the rights and obligations of IAC Delaware under the Land Rights Agreement;
WHEREAS, pursuant to the Land Rights Agreement (i) The
Irvine Company has sold as of the date hereof seven land sites to the
Operating Partnership, of which three were sold in part for additional L.P.
Units in the Operating Partnership and (ii) the consideration for future
sales of land by The Irvine Company may be, except under certain
circumstances, either cash, Common Stock or L.P. Units, at the option of
the Company through July 31, 2000 and thereafter at the option of The
Irvine Company;
WHEREAS, as a result of the Merger and pursuant to the
Partnership Agreement (as defined below), L.P. Units owned by Irvine Persons
(as defined below) will be exchangeable for shares of Common Stock of the
Company upon the terms and subject to the conditions contained therein;
WHEREAS, The Irvine Company was willing to make, and cause
its subsidiaries to make, the Transfers and to enter into the Land Rights
Agreement in consideration of receiving the registration rights and the
proportional purchase rights provided for in the Prior Agreement and the
right to designate, for nomination and the filling of vacancies on the
Board of Directors, directors who are affiliated with The Irvine Company in
accordance with the terms of the Prior Agreement; and
WHEREAS, in anticipation of the Merger, the Company, the
Operating Partnership and The Irvine Company desire to amend and restate the
Prior Agreement, and confirm the agreement of the Company through the
execution and delivery of this Agreement, which shall become effective only
upon the consummation of the Merger.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, and for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. In addition to the definitions set
forth above, the following terms, as used herein, have the following meanings:
"ACP Investment Amount" means with respect to a DRIP/ACP
Investment Date the aggregate amount of additional cash to be invested in
newly issued shares of Common Stock on such DRIP/ACP Investment Date pursuant
to the DRIP/ACP Plan.
"Actual Investment Amount" means with respect to each DRIP/ACP
Investment Date the dollar amount specified in the election notice delivered
pursuant to Section 4.2(b) not to exceed the Maximum Investment Amount for
such DRIP/ACP Investment Date, provided that if such election notice is given
but fails to specify the Actual Investment Amount, then the Actual Investment
Amount shall be the Maximum Investment Amount.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control" when used with respect
to any Person, means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement" means this Agreement, as it may be amended,
supplemented or restated from time to time.
"Applicable Ratio" has the meaning set forth in Section 3.1(a)
hereof.
"Articles of Incorporation" means the Articles of Amendment
and Restatement of the Company as filed with the State Department of
Assessments and Taxation of the State of Maryland on April 29, 1996, as the
same may be amended, modified, restated or supplemented from time to time.
"Business Day" means any day except a Saturday, Sunday or other
day on which commercial banks in The City of New York or Los Angeles,
California are authorized by law to close.
"Commission" means the Securities and Exchange Commission.
"Conversion Factor" has the meaning set forth in the
Partnership Agreement.
"Convertible Securities" means any evidence of indebtedness,
shares of stock, options, warrants or other securities which are convertible
into or exchangeable, with or without payment of additional consideration of
cash or property, for shares of Common Stock or rights to acquire shares of
Common Stock, either immediately or on a specified date or the happening of a
specified event.
"Corresponding ACP Share Amount" means with respect to each
DRIP/ACP Investment Date a number of shares of Common Stock equal to "A"
divided by "B", where "A" equals a dollar amount equal to the Actual
Investment Amount for such DRIP/ACP Investment Date minus the Maximum DRIP
Investment Amount for such DRIP/ACP Investment Date (provided that if the
Maximum DRIP Investment Amount is greater than the Actual Investment Amount,
then "A" shall be $0); and "B" equals the purchase price per newly issued
share of Common Stock issued on such DRIP/ACP Investment Date with additional
cash investments, determined as provided in the DRIP/ACP Plan.
"Corresponding DRIP Share Amount" means with respect to each
DRIP/ACP Investment Date a number of shares of Common Stock equal to "C"
divided by "D", where "C" equals the lesser of (i) Actual Investment Amount
for such DRIP/ACP Investment Date and (ii) the Maximum DRIP Investment Amount
for such DRIP/ACP Investment Date, and "D" equals the purchase price per newly
issued share of Common Stock issued on such DRIP/ACP Investment Date as a
result of the reinvestment of dividends, determined as provided in the
DRIP/ACP Plan.
"Corresponding Share Amount" means with respect to each
DRIP/ACP Investment Date the aggregate of the Corresponding DRIP Share Amount
and the Corresponding ACP Share Amount, provided if such calculation results
in a fractional share of Common Stock, the Corresponding Share Amount shall be
rounded downward.
"Demand Registration" means a Demand Registration as defined in
Section 2.1.
"DRIP/ACP Investment Amount" means with respect to a DRIP/ACP
Investment Date the aggregate of the DRIP Investment Amount and the ACP
Investment Amount.
"DRIP/ACP Investment Date" means the date on which the DRIP
Investment Amount is reinvested in newly issued shares and/or the date on
which the ACP Investment Amount is used to purchase newly issued shares of
Common Stock, in each case as set forth in the DRIP/ACP Plan.
"DRIP/ACP Plan" means the Irvine Apartment Communities, Inc.
Dividend Reinvestment and Additional Cash Investment Plan described in the
General Partner's Registration Statement on Form S-3 and any other dividend
reinvestment and additional cash investment plan established by the Company.
"DRIP Investment Amount" means with respect to a DRIP/ACP
Investment Date the aggregate amount of dividends paid on shares of Common
Stock to be reinvested in newly issued shares of Common Stock on such DRIP/ACP
Investment Date pursuant to the DRIP/ACP Plan.
"DRIP Percentage" has the meaning set forth in Section 4.2(a).
"Effective Time" has the meaning set forth in the Merger
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchangeable L.P. Units" means L.P. Units which may be
exchangeable for Common Stock pursuant to Section 8.6 of the Partnership
Agreement (without regard to any limitations on the exercise of such exchange
right as a result of the Ownership Limit Provisions).
"Holder" means any Irvine Person who is the record or
beneficial owner of any Registrable Security or any assignee or transferee of
such Registrable Security unless such Registrable Security is acquired in a
public distribution pursuant to a registration statement under the Securities
Act or pursuant to transactions exempt from registration under the Securities
Act where securities sold in such transaction may be resold without subsequent
registration under the Securities Act.
"Immediate Family" of any individual means such individual's
estate and heirs, spouse, children (whether natural or adoptive or by
marriage), and any trust or estate, all the beneficiaries of which consist of
such individual or any of the foregoing.
"Incapacitated" shall have the meaning set forth in the
Partnership Agreement.
"Independent Director" means a person who is an Unaffiliated
Director and who has not been employed by The Irvine Company or any of its
subsidiaries within the five years preceding such person's election as a
director of the Company.
"Investing Entities" has the meaning set forth in Section
4.2(b).
"Irvine Persons" mean (i) The Irvine Company and its
Affiliates, (ii) Donald L. Bren and his Affiliates and Immediate Family, and
any successors thereto by descent or devise and (iii) on or after the date
that L.P. Units or shares of Common Stock owned by The Irvine Company are
distributed to the stockholders of The Irvine Company, the current
stockholders of The Irvine Company, any Affiliates of such stockholders and
the Immediate Family of such stockholders.
"Market Value" means, with respect to the Common Stock, the
average of the daily market price for the ten (10) consecutive trading days
immediately preceding the date of a written request for registration
pursuant to Section 2.1(a). The market price for each such trading day
shall be: (i) if the Common Stock is listed or admitted to trading on any
securities exchange or the NASDAQ-National Market System, the closing
price, regular way, on such day, or if no such sale takes place on such
day, the average of the closing bid and asked prices on such day, in either
case as reported in the principal consolidated transaction reporting
system, (ii) if the Common Stock is not listed or admitted to trading on
any securities exchange or the NASDAQ-National Market System, the last
reported sale price on such day or, if no sale takes place on such day, the
average of the closing bid and asked prices on such day, as reported by a
reliable quotation source designated by the Company, or (iii) if the Common
Stock is not listed or admitted to trading on any securities exchange or
the NASDAQ-National Market System and no such last reported sale price or
closing bid and asked prices are available, the average of the reported
high bid and low asked prices on such day, as reported by a reliable
quotation source designated by the Company, or if there shall be no bid and
asked prices on such day, the average of the high bid and low asked prices,
as so reported, on the most recent day (not more than (10) days prior to
the date in question) for which prices have been so reported; provided that
if there are no bid and asked prices reported during the ten (10) days
prior to the date in question, the Market Value of the Common Stock shall
be determined by the Company acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable
judgment, appropriate.
"Maximum DRIP Investment Amount" means with respect to each
DRIP/ACP Investment Date a dollar amount equal to (A) the Maximum Investment
Amount times (B) the DRIP Percentage.
"Maximum Investment Amount" means with respect to each DRIP/ACP
Investment Date a dollar amount equal to (A) the DRIP/ACP Investment Amount
for such DRIP/ACP Investment Date divided by a percentage (rounded to the
seventh decimal place) equal to 1 minus the Purchase Percentage in effect as
of the close of business on the third business day immediately preceding such
DRIP/ACP Investment Date, minus (B) such DRIP/ACP Investment Amount.
"Ownership Limit Provisions" mean the various provisions of the
Articles of Incorporation set forth in ARTICLE SIXTH thereof restricting the
ownership of Common Stock by certain Persons to specified percentages of the
outstanding Common Stock.
"Partnership Agreement" means the amended and restated
agreement of limited partnership of the Operating Partnership dated as of
December 1, 1993, as the same has been and in the future may be amended,
modified or restated from time to time, including, without limitation, that
certain amendment executed in connection with the Merger.
"Person" means an individual or a corporation, partnership,
limited liability company, association, trust, or any other entity or
organization, including a government or political subdivision or an agency or
instrumentally thereof.
"Piggy-Back Registration" means a Piggy-Back Registration as
defined in Section 2.2.
"Purchase Percentage" means at any time, with respect to any
Irvine Person, the ratio (expressed as a decimal and rounded to the nearest
thousandth with five ten-thousandths being rounded upwards) of (i) the sum
of (a) the number of shares of Common Stock then owned directly or
indirectly by such Irvine Person and (b) the REIT Share Amount applicable
to the Exchangeable L.P. Units then owned directly or indirectly by such
Irvine Person, over (ii) the sum of (a) the total number of shares of
Common Stock then outstanding and (b) the REIT Share Amount applicable to
all Exchangeable L.P. Units then outstanding, provided that in determining
the Purchase Percentage of a Person who became an Irvine Person solely as
the result of a distribution of shares of Common Stock or L.P. Units from
The Irvine Company to its stockholders, only those shares of Common Stock
or L.P. Units so acquired shall be included in clause (i) above.
"Registrable Securities" means shares of Common Stock of the
Company at any time owned, either of record or beneficially, by any Irvine
Person and no matter how acquired (including, without limitation, shares of
Common Stock issuable upon exchange of Exchangeable L.P. Units) until (i)
a registration statement covering such security has been declared effective
by the Commission and it has been disposed of pursuant to such effective
registration statement, (ii) it is sold under circumstances in which all of
the applicable conditions of Rule 144 (or any similar provisions then in
force) under the Securities Act are met or under which it may be sold
pursuant to Rule 144(k) or (iii) it has been otherwise transferred in a
transaction that would constitute a sale thereof under the Securities Act,
the Company has delivered a new certificate or other evidence of ownership
for it not bearing the legend required pursuant to the Partnership
Agreement and it may be resold without subsequent registration under the
Securities Act.
"REIT Share Amount" means, with respect to an Exchangeable L.P.
Unit, that number of shares of Common Stock equal to one (1) multiplied by the
Conversion Factor.
"Securities Act" means the Securities Act of 1933, as amended.
"Selling Holder" means a Holder who is selling Registrable
Securities pursuant to a registration statement under the Securities Act.
"Unaffiliated Directors" has the meaning set forth in the fifth
Recital to this Agreement.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
ARTICLE II
REGISTRATION RIGHTS
SECTION 2.1. Demand Registration. (a) Request for
Registration. At any time on or after the Effective Time, Holders of
Registrable Securities may make a written request for registration under
the Securities Act of all or part of its or their Registrable Securities (a
"Demand Registration"); provided, that the Company shall not be obligated
to effect more than one Demand Registration in any calendar year; and
provided, further, that the number of shares of Registrable Securities
proposed to be sold by the Holders making such written request shall have a
Market Value of at least $25,000,000. Subject to the foregoing, the number
of Demand Registrations which may be made pursuant to this Section 2.1
shall be unlimited. Any such request will specify the number of shares of
Registrable Securities proposed to be sold and will also specify the
intended method of disposition thereof. Within 10 days after receipt of
such request, the Company will give written notice of such registration
request to all other Holders of the Registrable Securities and include in
such registration all such Registrable Securities with respect to which the
Company has received written requests for inclusion therein within 20
Business Days after the receipt by the applicable Holder of the Company's
notice. Each such request will also specify the number of shares of
Registrable Securities to be registered and the intended method of
disposition thereof. Unless the Holder or Holders of a majority of the
Registrable Securities to be registered in such Demand Registration shall
consent in writing, no other party, including the Company (but excluding
another Holder of a Registrable Security), shall be permitted to offer
securities under any such Demand Registration.
(b) Effective Registration. A registration will not count as
a Demand Registration until it has become effective.
(c) Priority on Demand Registrations. If the Holders of a
majority of shares of the Registrable Securities to be registered in a Demand
Registration so elect by written notice to the Company, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the
form of an underwritten offering. The Holders of a majority of the shares of
the Registrable Securities making such Demand Registration shall select the
book-running managing Underwriter in connection with such offering; provided
that such managing Underwriter must be reasonably satisfactory to the Company.
The Company may select any additional investment banks and managers to be used
in connection with the offering; provided that such additional investment
bankers and managers must be reasonably satisfactory to a majority of the
Holders making such Demand Registration. To the extent 10% or more of the
Registrable Securities so requested to be registered are excluded from the
offering in accordance with Section 2.3, the Holders of such Registrable
Securities as a group shall have the right to one additional Demand
Registration under this Section in such calendar year with respect to such
Registrable Securities.
SECTION 2.2. Piggy-Back Registration. If the Company
proposes to file a registration statement under the Securities Act with
respect to an equity offering by the Company for its own account or for the
account of any of its respective securityholders of any class of security
(other than (i) any registration statement filed by the Company under the
Securities Act relating to an offering of Common Stock for its own account
as a result of the exercise of the cash tender rights set forth in Section
8.6 of the Partnership Agreement, other than any such registration
statement in which the Company has included additional securities for its
own account or for the account of others pursuant to Section 8.6E(5) of the
Partnership Agreement, (ii) any registration statement filed in connection
with a Demand Registration except as set forth in Section 2.1 hereof or
(iii) a registration statement on Form S-4 or S-8 (or any substitute form
that may be adopted by the Commission) or filed in connection with an
exchange offer or offering of securities solely to the Company's existing
securityholders), then the Company shall give written notice of such
proposed filing to the Holders of Registrable Securities as soon as
practicable (but in no event less than 10 days before the anticipated
filing date), and such notice shall offer such Holders the opportunity to
register such number of shares of Registrable Securities as each such
Holder may request (a "Piggy-Back Registration"). The Company shall use
its best efforts to cause the managing Underwriter or Underwriters of a
proposed underwritten offering to permit the Registrable Securities
requested to be included in a Piggy-Back Registration to be included on the
same terms and conditions as any similar securities of the Company included
therein.
SECTION 2.3. Reduction of Offering. Notwithstanding
anything contained herein, if the managing Underwriter or Underwriters of
an offering described in Section 2.1 or 2.2 deliver a written opinion to
the Company and the Holders of the Registrable Securities included in such
offering that (i) the size of the offering that the Holders, the Company
and such other persons intend to make or (ii) the kind of securities that
the Holders, the Company and any other persons or entities intend to
include in such offering are such that the success of the offering would be
materially and adversely affected by inclusion of the Registrable
Securities requested to be included, then (A) if the size of the offering
is the basis of such Underwriter's opinion, the amount of securities to be
offered for the accounts of Holders shall be reduced pro rata (according to
the Registrable Securities proposed for registration) to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount recommended by such managing Underwriter or
Underwriters; provided that, in the case of a Piggy-Back Registration, if
securities are being offered for the account of other persons or entities
as well as the Company, then with respect to the Registrable Securities
intended to be offered by Holders, the proportion by which the amount of
such class of securities intended to be offered by Holders is reduced shall
not exceed the proportion by which the amount of such class of securities
intended to be offered by such other persons or entities is reduced; and
(B) if the combination of securities to be offered is the basis of such
Underwriter's opinion, (x) the Registrable Securities to be included in
such offering shall be reduced as described in clause (A) above (subject to
the proviso in clause (A)) or, (y) if the actions described in clause (x)
would, in the judgment of the managing Underwriter, be insufficient to
substantially eliminate the adverse effect that inclusion of the
Registrable Securities requested to be included would have on such
offering, such Registrable Securities will be excluded from such offering.
SECTION 2.4. Registration Procedures; Filings; Information.
Whenever Holders request that any Registrable Securities be registered
pursuant to Section 2.1 hereof, the Company will use its best efforts to
effect the registration and the sale of such Registrable Securities in
accordance with the intended method of disposition thereof as quickly as
practicable, and in connection with any such request:
(a) The Company will as expeditiously as possible prepare
and file with the Commission a registration statement on any form
for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available
for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution
thereof, and use its best efforts to cause such filed registration
statement to become and remain effective for a period of not less
than 270 days; provided that if the Company shall furnish to the
Holders making a request pursuant to Section 2.1 a certificate
signed by either its Chairman, Vice Chairman, Chief Executive
Officer or President stating that in his good faith judgment it
would be significantly disadvantageous to the Company or its
shareholders for such a registration statement to be filed as
expeditiously as possible, the Company shall have a period of not
more than 90 days within which to file such registration statement
measured from the date of receipt of the request in accordance
with Section 2.1.
(b) The Company will, if requested, prior to filing a
registration statement or prospectus or any amendment or
supplement thereto, furnish to each Selling Holder and each
Underwriter, if any, of the Registrable Securities covered by such
registration statement copies of such registration statement as
proposed to be filed, and thereafter furnish to such Selling
Holder and Underwriter, if any, such number of conformed copies of
such registration statement, each amendment and supplement thereto
(in each case including all exhibits thereto and documents
incorporated by reference therein), the prospectus included in
such registration statement (including each preliminary
prospectus) and such other documents as such Selling Holder or
Underwriter may reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such Selling
Holder.
(c) After the filing of the registration statement, the
Company will promptly notify each Selling Holder of Registrable
Securities covered by such registration statement of any stop
order issued or threatened by the Commission and take all
reasonable actions required to prevent the entry of such stop
order or to remove it if entered.
(d) The Company will use its best efforts to (i) register
or qualify the Registrable Securities under such other securities
or blue sky laws of such jurisdictions in the United States as any
Selling Holder or managing Underwriter or Underwriters, if any,
reasonably (in light of such Selling Holder's intended plan of
distribution) requests and (ii) cause such Registrable Securities
to be registered with or approved by such other governmental
agencies or authorities as may be necessary by virtue of the
business and operations of the Company and do any and all other
acts and things that may be reasonably necessary or advisable to
enable such Selling Holder to consummate the disposition of the
Registrable Securities owned by such Selling Holder; provided that
the Company will not be required to (A) qualify generally to do
business in any jurisdiction where it would not otherwise be
required to qualify but for this paragraph (d), (B) subject itself
to taxation in any such jurisdiction or (C) consent to general
service of process in any such jurisdiction.
(e) The Company will immediately notify each Selling Holder
of such Registrable Securities, at any time when a prospectus
relating thereto is required to be delivered under the Securities
Act, of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an 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
promptly make available to each Selling Holder any such supplement
or amendment.
(f) The Company will enter into customary agreements
(including an underwriting agreement, if any, in customary form) and
take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable
Securities.
(g) The Company will make available for inspection by any
Selling Holder of such Registrable Securities, any Underwriter
participating in any disposition pursuant to such registration
statement and any attorney, accountant or other professional
retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively,
the "Records") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the
Company's officers, directors and employees to supply all
information reasonably requested by any Inspectors in connection
with such registration statement. Records which the Company
determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed by
the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such
registration statement or (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of
competent jurisdiction. Each Selling Holder of such Registrable
Securities agrees that information obtained by it as a result of
such inspections shall be deemed confidential and shall not be
used by it as the basis for any market transactions in the
securities of the Company or its Affiliates unless and until such
is made generally available to the public. Each Selling Holder of
such Registrable Securities further agrees that it will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the
Company, at its expense, to undertake appropriate action to
prevent disclosure of the Records deemed confidential.
(h) The Company will furnish to each Selling Holder and to
each Underwriter, if any, a signed counterpart, addressed to such
Selling Holder or Underwriter, of (i) an opinion or opinions of
counsel to the Company and (ii) a comfort letter or comfort
letters from the Company's independent public accountants, each in
customary form and covering such matters of the type customarily
covered by opinions or comfort letters, as the case may be, as the
Holders of a majority of the Registrable Securities included in
such offering or the managing Underwriter or Underwriters therefor
reasonably requests.
(i) The Company will otherwise use its best efforts to
comply with all applicable rules and regulations of the
Commission, and make available to its securityholders, as soon as
reasonably practicable, an earnings statement covering a period of
12 months, beginning within three months after the effective date
of the registration statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and
Rule 158 of the Commission promulgated thereunder (or any
successor rule or regulation hereafter adopted by the Commission).
(j) The Company will use its best efforts to cause all such
Registrable Securities to be listed on each securities exchange on
which similar securities issued by the Company are then listed.
The Company may require each Selling Holder of Registrable
Securities to promptly furnish in writing to the Company such information
regarding the distribution of the Registrable Securities as the Company may
from time to time reasonably request and such other information as may be
legally required in connection with such registration.
Each Selling Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in
Section 2.4(e) hereof, such Selling Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Selling Holder's
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 2.4(e) hereof, and, if so directed by the Company,
such Selling Holder will deliver to the Company all copies, other than
permanent file copies then in such Selling Holder's possession, of the most
recent prospectus covering such Registrable Securities at the time of
receipt of such notice. Each Selling Holder of Registrable Securities
agrees that it will immediately notify the Company at any time when a
prospectus relating to the registration of such Registrable Securities is
required to be delivered under the Securities Act of the happening of an
event as a result of which information previously furnished by such Selling
Holder to the Company in writing for inclusion in such prospectus contains
an untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances in which they were made. In
the event the Company shall give such notice, the Company shall extend the
period during which such registration statement shall be maintained
effective (including the period referred to in Section 2.4(a) hereof) by
the number of days during the period from and including the date of the
giving of notice pursuant to Section 2.4(e) hereof to the date when the
Company shall make available to the Selling Holders of Registrable
Securities covered by such registration statement a prospectus supplemented
or amended to conform with the requirements of Section 2.4(e) hereof.
SECTION 2.5. Registration Expenses. In connection with any
registration statement required to be filed hereunder, the Company shall
pay the following Registration expenses incurred in connection with the
registration hereunder (the "Registration Expenses"): (i) all registration
and filing fees, (ii) fees and expenses of compliance with securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities),
(iii) printing expenses, (iv) internal expenses (including, without
limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), (v) the fees and expenses incurred
in connection with the listing of the Registrable Securities, (vi)
reasonable fees and disbursements of counsel for the Company and customary
fees and expenses for independent certified public accountants retained by
the Company (including the expenses of any comfort letters or costs
associated with the delivery by independent certified public accountants of
a comfort letter or comfort letters requested pursuant to Section 2.4(h)
hereof), (vii) the reasonable fees and expenses of any special experts
retained by the Company in connection with such registration, and (viii)
reasonable fees and expenses of one counsel (who shall be reasonably
acceptable to the Company) for the Selling Holders. The Company shall have
no obligation to pay any underwriting fees, discounts or commissions
attributable to the sale of Registrable Securities, or any out-of-pocket
expenses of the Holders (or the agents who manage their accounts).
SECTION 2.6. Indemnification by the Company. The Company
agrees to indemnify and hold harmless each Selling Holder of Registrable
Securities, its officers, directors and agents, and each Person, if any,
who controls such Selling Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages and liabilities caused by any untrue statement
or alleged untrue statement of a material fact contained in any
registration statement or prospectus relating to the Registrable Securities
(as amended or supplemented if 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 such untrue statement or omission or alleged
untrue statement or omission based upon information furnished in writing to
the Company by such Selling Holder or on such Selling Holder's behalf
expressly for use therein. The Company also agrees to indemnify any
Underwriters of the Registrable Securities, their officers and directors
and each Person who controls such underwriters within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act on
substantially the same basis as that of the indemnification of the Selling
Holders provided in this Section 2.6.
SECTION 2.7. Indemnification by Holders of Registrable
Securities. Each Selling Holder agrees, severally but not jointly, to
indemnify and hold harmless the Company, its officers, directors and agents
and each Person, if any, who controls the Company within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
to the same extent as the foregoing indemnity from the Company to such
Selling Holder, but only with respect to information relating to such
Selling Holder furnished in writing by such Selling Holder or on such
Selling Holder's behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. In case any action or
proceeding shall be brought against the Company or its officers, directors
or agents or any such controlling person, in respect of which indemnity may
be sought against such Selling Holder, such Selling Holder shall have the
rights and duties given to the Company, and the Company or its officers,
directors or agents or such controlling person shall have the rights and
duties given to such Selling Holder, by Section 2.6. Each Selling Holder
also agrees to indemnify and hold harmless Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act on substantially the same basis as that of
the indemnification of the Company provided in this Section 2.7.
SECTION 2.8. Conduct of Indemnification Proceedings. In
case any proceeding (including any governmental investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to Section 2.6 or 2.7, such person (an "Indemnified Party") shall
promptly notify the person against whom such indemnity may be sought (an
"Indemnifying Party") in writing and the Indemnifying Party shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all
fees and expenses. In any such proceeding, any Indemnified Party shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to
the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnified
Party and the Indemnifying Party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the Indemnifying Party shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) at any
time for all such Indemnified Parties, and that all such fees and expenses
shall be reimbursed as they are incurred. In the case of any such separate
firm for the Indemnified Parties, such firm shall be designated in writing
by (i) in the case of Persons indemnified pursuant to Section 2.6, The
Irvine Company if The Irvine Company was a Selling Holder or if The Irvine
Company was not a Selling Holder, by the Selling Holders which owned a
majority of the Registrable Securities sold under the applicable
registration statement and (ii) in the case of Persons indemnified pursuant
to Section 2.7, the Company. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent,
but if settled with such consent, or if there be a final judgment for the
plaintiff, the Indemnifying Party shall indemnify and hold harmless such
Indemnified Parties from and against any loss or liability (to the extent
stated above) by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an Indemnified Party shall have
requested an Indemnifying Party to reimburse the Indemnified Party for fees
and expenses of counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 Business Days after receipt by
such Indemnifying Party of the aforesaid request and (ii) such Indemnifying
Party shall not have reimbursed the Indemnified Party in accordance with
such request prior to the date of such settlement. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending or threatened proceeding in respect of with
any Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such
settlement includes an unconditional release of such Indemnified Party from
all liability arising out of such proceeding.
SECTION 2.9. Contribution. If the indemnification provided
for in Section 2.6 or 2.7 hereof is unavailable to an Indemnified Party or
insufficient in respect of any losses, claims, damages or liabilities
referred to herein, then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims,
damages or liabilities (i) as between the Company and the Selling Holders
on the one hand and the Underwriters on the other, in such proportion as is
appropriate to reflect the relative benefits received by the Company and
the Selling Holders on the one hand and the Underwriters on the other from
the offering of the securities, or if such allocation is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits but also the relative fault of the Company and the
Selling Holders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations and (ii) as between the Company on the one hand and each
Selling Holder on the other, in such proportion as is appropriate to
reflect the relative fault of the Company and of each Selling Holder in
connection with such statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Company and the
Selling Holders on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total proceeds from the offering
(net of underwriting discounts and commissions but before deducting
expenses) received by the Company and the Selling Holders bear to the total
underwriting discounts and commissions received by the Underwriters, in
each case as set forth in the table on the cover page of the prospectus.
The relative fault of the Company and the Selling Holders on the one hand
and of the Underwriters on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company and the Selling Holders or
by the Underwriters. The relative fault of the Company on the one hand and
of each Selling Holder on the other 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 such party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Company and the Selling Holders agree that it would not
be just and equitable if contribution pursuant to this Section 2.9 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 which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in the immediately preceding paragraph shall be deemed to
include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 2.9, no Underwriter shall 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 which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and no Selling
Holder shall be required to contribute any amount in excess of the amount
by which the total price at which the securities of such Selling Holder
were offered to the public exceeds the amount of any damages which such
Selling Holder has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Selling
Holder's obligations to contribute pursuant to this Section 2.9 are several
in proportion to the proceeds of the offering received by such Selling
Holder bears to the total proceeds of the offering received by all the
Selling Holders and not joint.
SECTION 2.10. Participation in Underwritten Registrations.
No Person may participate in any underwritten registration hereunder unless
such Person (a) agrees to sell such Person's securities on the basis
provided in any underwriting arrangements approved by the Persons entitled
hereunder to approve such arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required under the terms of such
underwriting arrangements and these registration rights provided for in
this Article II.
SECTION 2.11. Rule 144. The Company covenants that it will
file any reports required to be filed by it under the Securities Act and
the Exchange Act and that it will take such further action as any Holder
may reasonably request, all to the extent required from time to time to
enable Holders to sell Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (a)
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Holder, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.
SECTION 2.12. Holdback Agreements. (a) Restrictions on
Public Sale by Holder of Registrable Securities. To the extent not
inconsistent with applicable law, each Holder whose securities are included
in a registration statement agrees not to effect any sale or distribution
of the issue being registered or a similar security of the Company, or any
securities convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144 under the Securities Act,
during the 14 days prior to, and during the 90-day period beginning on, the
effective date of such registration statement (except as part of such
registration), if and to the extent requested in writing by the Company in
the case of a non-underwritten public offering or if and to the extent
requested in writing by the managing Underwriter or Underwriters in the
case of an underwritten public offering.
(b) Restrictions on Public Sale by the Company and Others.
The Company agrees (i) not to effect any sale or distribution of any
securities similar to those being registered in accordance with Section 2.1
or Section 2.2 hereof, or any securities convertible into or exchangeable
or exercisable for such securities, during the 14 days prior to, and during
the 90-day period beginning on, the effective date of any registration
statement (except as part of such registration statement where the Holders
of a majority of the Registrable Securities to be included in such
registration statement consent or as part of registration statements filed
as set forth in Section 2.2(i) or (iii)) or the commencement of a public
distribution of Registrable Securities, if and to the extent requested in
writing by the Company in the case of a non-underwritten public offering or
if and to the extent requested in writing by the managing Underwriter or
Underwriters in the case of an underwritten public offering; and (ii) that
any agreement entered into after the date of the Agreement pursuant to
which the Company issues or agrees to issue any privately placed securities
shall contain a provision under which holders of such securities agree not
to effect any sale or distribution of any such securities during the
periods described in (i) above, in each case including a sale pursuant to
Rule 144 under the Securities Act (except as part of any such registration,
if permitted); provided, however, that the provisions of this paragraph (b)
shall not prevent the conversion or exchange of any securities pursuant to
their terms into or for other securities.
ARTICLE III
DIRECTOR DESIGNATION; SIZE OF BOARD OF DIRECTORS
SECTION 3.1. Designation of Directors. (a) For so long as
Irvine Persons together beneficially own in the aggregate either shares of
Common Stock or Exchangeable L.P. Units, and the ratio (the "Applicable
Ratio") of (i) the sum of the number of such shares of Common Stock and the
REIT Share Amount applicable to such Exchangeable L.P. Units, over (ii)
the sum of the total number of shares of Common Stock outstanding and the
REIT Share Amount for all Exchangeable L.P. Units, equals or exceeds 20%,
then the Irvine Persons will have the right to nominate for election to the
Board of Directors and for the filling of any vacancies on the Board of
Directors created by such nominees three (3) members of such Board of
Directors. In the event that the Applicable Ratio is less than 20% but is
greater than or equal to 15%, then the Irvine Persons will have the right
to nominate for election to the Board of Directors and for the filling of
any vacancies on the Board of Directors created by such nominees, two (2)
members of such Board of Directors. In the event that the Applicable Ratio
is less than 15% but greater than or equal to 10%, then the Irvine Persons
will have the right to nominate for election to the Board of Directors and
for the filling of any vacancies on the Board of Directors created by such
nominees, one (1) member of such Board of Directors. In the event the
Board of Directors is divided into classes, such designees shall be
allocated among such classes as evenly as practicable.
(b) The Company agrees to nominate for election to the Board
of Directors of the Company or for the filling of any vacancies on the Board
of Directors created by such nominees the persons designated by the Irvine
Persons pursuant to this Article III.
SECTION 3.2. Mechanics of Designation. (a) In the absence
of notice to the contrary from The Irvine Company, the rights granted to
the Irvine Persons pursuant to this Article III (including pursuant to
Section 3.4) shall be exercised on behalf of the Irvine Persons by The
Irvine Company. In the event The Irvine Company is Incapacitated, such
rights shall be exercised on behalf of the Irvine Persons by a single
Person who shall represent that he, she or it is acting as the duly
appointed attorney-in-fact of Irvine Persons beneficially owning a majority
of the total number of shares of Common Stock and the REIT Share Amount
referred to in clause (i) of Section 3.1(a) above.
(b) The Company shall give The Irvine Company (or, if
applicable, such other Person as shall be determined pursuant to Section
3.2(a) above) at least 60 days prior written notice of the date of the
proposed mailing of proxy materials for election of directors of the
Company. The Irvine Company (or, if applicable, such other Person) shall
within 10 days of receipt of such notice from the Company give written
notice (a "Section 3.2(b) Notice") to the Company of the name of each
person which The Irvine Company (or, if applicable, such other Person)
intends to nominate for election or reelection to the Board of Directors
and all information relating to each such person that is required to be
disclosed in solicitation of proxies for election of directors, or is
otherwise required, in each case pursuant to Regulation 14A under the
Exchange Act (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected). At
the request of the Board of Directors, any person so nominated for election
as a director shall furnish to the Secretary of the Company that
information required to be set forth in the Section 3.2(b) Notice.
SECTION 3.3. Certain Voting Requirements. The Irvine
Company agrees to vote, and to cause its subsidiaries to vote, all shares
of Common Stock as to which it or they have voting rights (i) for the
election of a slate of directors which shall consist of a majority of
Independent Directors, and (ii) in favor of the removal from the Board of
Directors, upon notice by the Company, of the person or persons designated
as Independent Directors and to elect to the unexpired term of such
Independent Director so removed another person designated as an Independent
Director by the Company. In addition, The Irvine Company agrees to use its
best efforts to cause all persons serving on the Board of Directors of the
Company as a result of a nomination by The Irvine Company pursuant to this
Article III to vote (i) for the nomination and, to the extent that they may
own shares, the election, of a slate of directors which shall consist of a
majority of Independent Directors, (ii) to the extent they may own shares,
in favor of the removal from the Board of Directors, upon notice by the
Company, of the person or persons designated as Independent Directors, and
(iii) for the nomination and, to the extent they may own shares, election,
for the unexpired term of each Independent Director so removed another
person designated as an Independent Director by the Company. The Company
agrees to use its best efforts to cause the Independent Directors to vote
(i) for the nomination and, to the extent they may own shares, the
election, of the directors which the Irvine Persons have nominated for
election as provided in this Article III, (ii) to the extent they may own
shares, in favor of the removal from the Board of Directors, upon notice
from The Irvine Company, of the person or persons designated by The Irvine
Company as directors, and (iii) for the nomination and, to the extent they
may own shares, election, for the unexpired term of each director so
removed another person designated by The Irvine Company. In the event of
any vacancies on the Board of Directors resulting from the death or
resignation of any director, The Irvine Company agrees to use its best
efforts to cause all persons designated by it as directors to vote in favor
of the person designated by the Company to fill such vacancy if such
director is an Independent Director, and the Company agrees to use its best
efforts to cause any remaining directors to vote in favor of the person
designated or nominated by The Irvine Company to fill any vacancy of a
director designated or nominated by The Irvine Company.
SECTION 3.4. Size of Board of Directors. The Company
agrees not to take any action either to increase the size of the Board of
Directors to more than ten (10) persons or to decrease the size of the Board
of Directors to less than eight (8) persons without the written consent of the
Irvine Persons then owning, directly or indirectly, shares of Common Stock or
Exchangeable L.P. Units.
ARTICLE IV
PROPORTIONAL PURCHASE
SECTION 4.1. General. If from time to time the Purchase
Percentage of any Irvine Person would be reduced as a result of any
issuance of Common Stock by the Company or could be reduced as a result of
any issuance of Convertible Securities (assuming, in the case of
Convertible Securities, the conversion, exchange, or exercise at such time
of the all Convertible Securities to be issued in such issuance) by the
Company (in either case, whether for cash, property or otherwise), the
Company shall so notify the Irvine Persons then owning Common Stock or
Exchangeable L.P. Units, directly or indirectly, in writing not less than
60 days prior to the proposed date of any such issuance and shall offer to
sell to each such Irvine Person, and, if such offer is accepted in writing
by (x) if such issuance is made pursuant to an underwriting or private
placement purchase agreement, the day such agreement is executed (it being
understood that the Company will give each such Irvine Person at least four
Business Day's prior notice of such date of execution) or (y) if such
issuance is not made pursuant to such an agreement, the fifth Business Day
prior to the proposed date of such issuance, the Company shall sell to each
such Irvine Person, that number of shares of Common Stock or the number or
amount of Convertible Securities to be issued which would result in the
Purchase Percentage of such Irvine Person immediately after such issuance
equalling the Purchase Percentage of such Irvine Person in effect
immediately prior to such issuance (assuming, in the case of Convertible
Securities, the conversion, exchange or exercise at such time of all
Convertible Securities to be issued in such issuance), or any lesser amount
of Common Stock or Convertible Securities to be issued in such issuance as
may be designated by the Irvine Person, in either case at a price per share
or other trading unit of such Common Stock or Convertible Securities, as
the case may be, to be received by the Company in such issuance, less any
underwriting discounts and commissions, and otherwise on the same terms as
may be applicable to such issuance; provided, however, that this Section
4.1 shall not be applicable to (i) any issuance of Common Stock or
Convertible Securities to directors, officers or employees of the Company
or any of its subsidiaries (including the Operating Partnership) pursuant
to any employee or director option, benefit or compensation plan of the
Company (including the Company's 1993 Long-Term Stock Incentive Plan, the
Company's 1993 Stock Option Plan for Directors and, if adopted at IAC
Delaware's 1996 Annual Meeting of Shareholders, the Company's 1996 Long-
Term Stock Incentive Plan) or (ii) any issuance of Common Stock by the
Company as a result of the exercise of the cash tender rights or exchange
rights set forth in Section 8.6 of the Partnership Agreement.
Notwithstanding anything to the contrary herein, no Irvine Person shall be
permitted to exercise the rights provided by this Section 4.1 to the extent
that such exercise would result in a violation of the Ownership Limit
Provisions. Notwithstanding the foregoing provisions of this Section 4.1,
in connection with the exercise by Irvine Persons of proportional purchase
rights as a result of the issuance pursuant to the Company's DRIP/ACP Plan
of shares of Common Stock out of its authorized but unissued shares of
Common Stock, the provisions of Section 4.2 of this Agreement will be
applicable.
Section 4.2. DRIP/ACP Plans. If at any time or from time
to time, in connection with the Company's DRIP/ACP Plan, any shares of
Common Stock are to be issued by the Company out of its authorized but
unissued shares of Common Stock in satisfaction of the Company's
obligations thereunder then each Irvine Person shall have the right,
subject to the following provisions of this Section 4.2, to purchase a
number of newly issued shares of Common Stock such that the Purchase
Percentage of such Irvine Person on the DRIP/ACP Investment Date after
giving effect to the shares of newly issued Common Stock sold on such date
pursuant to the DRIP/ACP Plan equals the Purchase Percentage of such Irvine
Person in effect as of the close of business on the third business day
immediately preceding the DRIP/ACP Investment Date. For purposes of the
foregoing:
(a) Promptly following the close of business on the third
business day preceding each DRIP/ACP Investment Date, the Company shall
give written notice to each Irvine Person then owning Common Stock or
Exchangeable L.P. Units, directly or indirectly, of the DRIP/ACP
Investment Amount to be invested in newly issued shares of Common Stock on
such DRIP/ACP Investment Date. Such notice shall also set forth the
Maximum Investment Amount of the Irvine Persons and the percentage of the
DRIP/ACP Investment Amount constituting the DRIP Investment Amount (the
"DRIP Percentage") and the percentage constituting the ACP Investment
Amount. In the absence of notice to the contrary from The Irvine Company,
the notice called for by this clause (a) shall be given to The Irvine
Company which shall have the sole responsibility of notifying Irvine
Persons of their rights under this Section 4.2 and the Company shall not be
liable to any Irvine Person by reason of The Irvine Company's failure to
provide notice to, or its delay in providing notice to, any Irvine Person.
(b) Not later than the close of business on the business
day immediately preceding each DRIP/ACP Investment Date, the Irvine Persons
then holding, directly or indirectly, Common Stock or Exchangeable L.P.
Units shall give irrevocable written notice to the Company of whether such
Irvine Persons or any one or more of them elect to make a cash investment
on such DRIP/ACP Investment Date (not to exceed in the aggregate the
Maximum Investment Amount) for the purchase of additional shares of Common
Stock in order to maintain the aggregate Purchase Percentage of such Irvine
Persons in the Company. Such notice shall specify the Actual Investment
Amount if the amount to be invested is less than the Maximum Investment
Amount and the identities of such Irvine Person or Persons which will make
such cash investment, provided that the Irvine Persons shall have the right
to designate any wholly owned subsidiary of The Irvine Company as the
entity which shall make a cash investment in respect of all or a portion of
the Actual Investment Amount (the Irvine Person or Persons or such
subsidiary making the cash investment, the "Investing Entities"). Failure
by the Irvine Persons to respond to the notice given by the Company
pursuant to Section 4.2(a) shall be deemed an election by such Irvine
Persons not to make any cash investment on such DRIP/ACP Investment Date.
(c) As soon as practicable following the DRIP/ACP
Investment Date, (1) the Investing Entities shall deliver to the Company by
wire transfer an amount equal to the Actual Investment Amount for such
DRIP/ACP Investment Date and, upon receipt thereof by the Company, the
Company will issue to the Investing Entities a number of shares of Common
Stock equal to the Corresponding Share Amount and (2) upon receipt thereof,
the Company will contribute such Actual Investment Amount for such DRIP/ACP
Investment Date to the Operating Partnership as a capital contribution in
accordance with Section 4.8.B of the Partnership Agreement.
(d) Notwithstanding anything to the contrary in this
Section 4.2, no Irvine Person shall be permitted to exercise the rights
provided by this Section 4.2 to the extent such exercise would result in a
violation of the Ownership Limit Provisions.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. New York Stock Exchange and Pacific Stock
Exchange Listings. In the event that (i) the Company shall issue shares of
Common Stock to The Irvine Company pursuant to the Land Rights Agreement in
connection with the Company's exercise of any option thereunder or (ii) the
Company shall issue any Common Stock in exchange for L.P. Units pursuant to
Section 8.6 of the Partnership Agreement, then in any such case the Company
agrees to cause any such shares of Common Stock to be listed on the New York
Stock Exchange and the Pacific Stock Exchange prior to or concurrently with
the issuance thereof by the Company.
SECTION 5.2. Remedies. In addition to being entitled to
exercise all rights provided herein and granted by law, including recovery
of damages, the Irvine Persons shall be entitled to specific performance of
the rights under this Agreement. The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Agreement and hereby agrees to
waive, to the fullest extent permitted by applicable law, the defense in
any action for specific performance that a remedy at law would be adequate.
SECTION 5.3. Amendments and Waivers. The provisions of
this Agreement, including the provisions of this sentence, may not be
amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given unless the Company has obtained
the written consent of The Irvine Company or its representative if The
Irvine Company is Incapacitated. No failure or delay by any party to
insist upon the strict performance of any covenant, duty, agreement or
condition of this Agreement or to exercise any right or remedy consequent
upon any breach thereof shall constitute waiver of any such breach or any
other covenant, duty, agreement or condition.
SECTION 5.4. Notices. All notices and other communications
in connection with this Agreement shall be made in writing by hand
delivery, registered first-class mail, telex, telecopier, or air courier
guaranteeing overnight delivery:
(1) if to any Irvine Person, initially c/o The Irvine Company,
550 Newport Center Drive, Newport Beach, California 92660 (Attention:
Chief Executive Officer), or to such other address and to such other
Persons as The Irvine Company may hereafter specify in writing; and
(2) if to the Company, initially at 550 Newport Center Drive,
Newport Beach, California 92660 (Attention: President), or to such
other address as the Company may hereafter specify in writing.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; when
received if deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; when receipt acknowledged, if telecopied; and on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
SECTION 5.5. Successors and Assigns. Except as expressly
provided in this Agreement the rights and obligations of the Irvine Persons
under this Agreement shall not be assignable by any Irvine Person to any
Person that is not an Irvine Person. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns.
SECTION 5.6. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Each party
shall become bound by this Agreement immediately upon affixing its signature
hereto.
SECTION 5.7. Governing Law. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of Maryland
without regard to the choice of law provisions thereof.
SECTION 5.8. Severability. In the event that any one or more
of the provisions contained herein, or the application thereof in any
circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and
of the remaining provisions contained herein shall not be affected or impaired
thereby.
SECTION 5.9. Effectiveness. This Agreement shall become
effective among the parties hereto only upon the consummation of the Merger.
Until such time, this Agreement shall have no force and effect and the Prior
Agreement shall remain in full force and effect.
SECTION 5.10. Entire Agreement. This Agreement is intended
by the parties as a final expression of their agreement and intended to be
a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.
There are no restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein with respect to the registration
rights granted by the Company with respect to the Registrable Securities.
This Agreement supersedes all prior agreements and understandings between
the parties with respect to such subject matter, including, as of the
effectiveness of this Agreement as specified in Section 5.9, the Prior
Agreement.
SECTION 5.11. Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
IRVINE APARTMENT COMMUNITIES MARYLAND INC.
By /s/ Richard E. Moran Jr.
---------------------------------------
Title: Executive Vice President and
Chief Financial Officer
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities Maryland, Inc.,
in its capacity as successor General Partner
as of the Effective Time of the Merger
By /s/ Richard E. Moran Jr.
---------------------------------------
Title: Executive Vice President and
Chief Financial Officer
THE IRVINE COMPANY
By /s/ Michael D. McKee
---------------------------------------
Title: Executive Vice President
By /s/ Norman J. Metcalfe
---------------------------------------
Title: Vice Chairman
ANNEX F
IRVINE APARTMENT COMMUNITIES MARYLAND, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
IRVINE APARTMENT COMMUNITIES MARYLAND, INC., a Maryland
corporation having its principal office in Baltimore City, Maryland (which is
hereinafter called the "Corporation"), hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
I. The Charter of the Corporation is hereby amended and
restated, so that the Charter, as so amended and restated, shall read
as follows:
FIRST: THE UNDERSIGNED, Anne M. Lindner, whose address is 36
South Charles Street, Baltimore, Maryland 21201, being at least eighteen years
of age, acting as incorporator, does hereby form a corporation under the
General Laws of the State of Maryland.
SECOND: The name of the corporation (which is hereinafter
called the "Corporation") is:
Irvine Apartment Communities Maryland, Inc.
THIRD: (a) The purposes for which and any of which the
Corporation is formed and the business and objects to be carried on and
promoted by it are:
(1) To engage in the business of a real estate investment
trust ("REIT") as that phrase is defined in the Internal Revenue Code of 1986,
as amended (the "Code"), and to engage in any lawful act or activity for which
corporations may be organized under the General Laws of the State of Maryland,
as the same exists or may hereafter be amended.
(2) To engage in any one or more businesses or transactions,
or to acquire all or any portion of any entity engaged in any one or more
businesses or transactions, which the Board of Directors may from time to time
authorize or approve, whether or not related to the business described
elsewhere in this Article or to any other business at the time or theretofore
engaged in by the Corporation.
(b) The foregoing enumerated purposes and objects shall be
in no way limited or restricted by reference to, or inference from, the
terms of any other clause of this or any other Article of the charter of
the Corporation, and each shall be regarded as independent; and they are
intended to be and shall be construed as powers as well as purposes and
objects of the Corporation and shall be in addition to and not in
limitation of the general powers of corporations under the Maryland General
Corporation Law ("Maryland Law").
FOURTH: The present address of the principal office of the
Corporation in this State is c/o The Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202.
FIFTH: The name and address of the resident agent of the
Corporation in this State are The Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202. Said resident agent is a Maryland
corporation.
SIXTH: (a) The total number of shares of stock of all
classes which the Corporation has authority to issue is 320,000,000,
consisting of (i) 150,000,000 shares of Common Stock (par value $0.01 per
share) (the "Common Stock"), (ii) 160,000,000 shares of excess stock (par
value $0.01 per share) (the "Excess Stock"), of which 150,000,000 shares
shall be Excess Common Stock and 10,000,000 shares shall be Excess
Preferred Stock, as such terms are defined in Subsection 4(A) of Section
(c) of this ARTICLE SIXTH, and (iii) 10,000,000 shares of Preferred Stock
(par value $1.00 per share) (the "Preferred Stock"), and amounting in
aggregate par value to $13,100,000.
(b) The Board of Directors may classify and reclassify any
unissued shares of Preferred Stock by setting or changing in any one or
more respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or
conditions of redemption of such shares of stock, including, but not
limited to, ownership restrictions consistent with the ownership
restrictions provided in Section (c) of this ARTICLE SIXTH with respect to
each series of Preferred Stock and the number of shares constituting each
series, and to increase or decrease the number of shares of any such series
to the extent permitted by the General Laws of the State of Maryland, as
amended from time to time.
(c) The following is a description of the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms and conditions of redemption of the
Common Stock, and in certain cases Preferred Stock, of the Corporation:
(1) The holders of each share of Common Stock shall be
entitled to one vote for each share of the Common Stock entitled to vote at
all meetings of the stockholders of the Corporation, and, except as
otherwise provided in respect of any class of stock hereafter classified or
reclassified, the exclusive voting power for all purposes shall be vested
in the holders of the Common Stock.
(2) Subject to the provisions of law and any preferences of
any class of stock hereafter classified or reclassified, dividends, including
dividends payable in shares of another class of the Corporation's stock, may
be paid on the Common Stock of the Corporation, out of funds legally available
therefor, at such time and in such amounts as the Board of Directors may deem
advisable.
(3) Subject to (i) the preferential rights of Preferred
Stock, if any, as may be determined by the Board of Directors pursuant to
Section (b) of this ARTICLE SIXTH and (ii) the preferential rights of
Excess Preferred Stock, if any, pursuant to Subsection (3)(A) of Section
(d) of this ARTICLE SIXTH, in the event of any liquidation, dissolution or
winding up of, or any distribution of the assets of, the Corporation,
whether voluntary or involuntary, the holders of the Common Stock shall be
entitled, after payment or provision for payment of the debts and other
liabilities of the Corporation and the amount to which the holders of any
class of stock hereafter classified or reclassified as having a preference
on distributions in the liquidation, dissolution or winding up of the
Corporation shall be entitled, to receive ratably with each other holder of
Common Stock, $1.00 per share, and after such payment, each holder of
shares of Common Stock shall be entitled to receive, ratably with each
other holder of Common Stock and each Purported Beneficial Transferee of
Excess Common Stock, that portion of the assets of the Corporation
available for distribution to its stockholders as the number of shares of
the Common Stock held by such holder bears to the total number of shares of
Common Stock and Excess Common Stock then outstanding, increased in the
case of holders of Common Stock by the sum described in Subsection (3) of
Section (d) of this ARTICLE SIXTH.
(4) Restrictions on Transfer; Exchange for Excess Stock:
(A) Definitions. Except as may be otherwise provided in
ARTICLES NINTH and TENTH, the following terms shall have the following
meanings for purposes of the charter of the Corporation:
"Beneficial Ownership" means, with respect to any Person,
ownership of shares of Common Stock or a series of Preferred Stock equal to
the sum of (i) the shares of Common Stock or such series of Preferred Stock
directly owned by such Person, (ii) the number of shares of Common Stock or
such series of Preferred Stock indirectly owned by such Person, (if such
Person is an "individual" as defined in Section 542(a)(2) of the Code)
taking into account the constructive ownership rules of Section 544 of the
Code, as modified by Section 856(h)(1)(b) of the Code, and (iii) the number
of shares of Common Stock which such Person is deemed to beneficially own
pursuant to Rule 13d-3 under the Exchange Act or which is attributed to
such Person pursuant to Section 318 of the Code, as modified by Section
856(d)(5) of the Code, provided that when applying this definition of
Beneficial Ownership to a Related Party, clause (iii) of this definition
and clause (b) of the definition of "Person" shall be disregarded. The
terms "Beneficial Owner", "Beneficially Owns" and "Beneficially Owned"
shall have the correlative meanings.
"Capital Stock" means the Common Stock and the Preferred Stock
of the Corporation.
"Charitable Beneficiary" means the beneficiary of the Trust as
determined pursuant to Subsection (5)(A) of Section (d) of this ARTICLE SIXTH.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute thereto. Reference to any
provision of the Code shall mean such provision as in effect from time to
time, as the same may be amended, and any successor thereto, as interpreted
by any applicable regulations or other administrative pronouncements as in
effect from time to time.
"Equity Security" has the meaning ascribed to it in the
Exchange Act and the rules and regulations thereunder (and any successor laws,
rules and regulations of similar import).
"Excess Common Stock" means Excess Stock that would, under
Subsection (5) of Section (d) this ARTICLE SIXTH, automatically be exchanged
for Common Stock upon a transfer of an interest in the Trust in which such
Excess Common Stock is held.
"Excess Preferred Stock" means Excess Stock that would, under
Subsection (5) of Section (d) this ARTICLE SIXTH, automatically be exchanged
for Preferred Stock upon a transfer of an interest in the Trust in which such
Excess Preferred Stock is held.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Rights" means the rights, granted under Section 8.6
of the Operating Partnership Agreement to certain of the limited partners
thereunder, to acquire Capital Stock.
"Irvine Board Representative" means a director of the
Corporation who was nominated for election or reelection as a director of
the Corporation by Irvine Persons (as defined in the Miscellaneous Rights
Agreement) pursuant to Article III of the Miscellaneous Rights Agreement
and, in the event of the death, resignation or removal of any such
director, the director who has been elected to fill such vacancy pursuant
to Article III of the Miscellaneous Rights Agreement.
"Look-Through Entity" means a Person that is either (i)
described in Section 401(a) of the Code as provided under Section 856(h)(3) of
the Code or (ii) registered under the Investment Company Act of 1940.
"Look-Through Ownership Limit" means 15% of the number of
Outstanding shares of Common Stock or, with respect to any series of
Preferred Stock, such percentage or percentages of the Outstanding shares
of such series as shall be established by the Board of Directors at the
time it authorizes such series of Preferred Stock pursuant to Section (b)
of this ARTICLE SIXTH.
"Market Price" on any date means the Closing Price on the
Trading Day immediately preceding such date. The "Closing Price" on any
date shall mean the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted
to trading on the NYSE or, if the Capital Stock is not listed or admitted
to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Capital Stock is listed
or admitted to trading or, if the Capital Stock is not listed or admitted
to trading on any national securities exchange, the last quoted price, or
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System or, if such system is
no longer in use, the principal other automated quotations system that may
then be in use, or if the Capital Stock is not quoted by any such
organization, the average of the closing bid and asked prices as furnished
by a professional market maker making a market in the Capital Stock
selected by the Board of Directors of the Corporation. "Trading Day" means
a day on which the principal national securities exchange on which the
Capital Stock is listed or admitted to trading is open for the transaction
of business or, if the Capital Stock is not listed or admitted to trading
on any national securities exchange, shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order to close.
"Merger" means the merger of Irvine Apartment Communities,
Inc., a Delaware corporation ("IAC Delaware"), with and into the Corporation
pursuant to the Agreement and Plan of Merger dated March 20, 1996 between the
Corporation and IAC Delaware.
"Miscellaneous Rights Agreement" means the Miscellaneous
Rights Agreement dated as of March 20, 1996 by and among the Corporation,
the Operating Partnership and The Irvine Company, as such agreement may be
amended, modified or restated from time to time. A copy of the
Miscellaneous Rights Agreement shall be available for inspection at the
office of the Secretary at the corporate headquarters of the Corporation.
"NYSE" means the New York Stock Exchange, Inc.
"Operating Partnership" means Irvine Apartment Communities,
L.P., a Delaware limited partnership.
"Operating Partnership Agreement" means the amended and
restated agreement of limited partnership of the Operating Partnership
dated as of December 1, 1993, as such agreement has been or in the future
may be amended, modified or restated from time to time. A copy of the
Operating Partnership Agreement shall be available for inspection at the
office of the Secretary at the corporate headquarters of the Corporation.
"Outstanding" means issued and outstanding shares of Common
Stock of the Corporation or the issued and outstanding shares of a series
of Preferred Stock of the Corporation, as the context may require, provided
that for purposes of the application of (i) the applicable Ownership Limit,
Look-Through Ownership Limit or Related Party Limit to any Person, the term
"Outstanding" shall be deemed to include the number of shares of Common
Stock or applicable series of Preferred Stock that such Person alone could
acquire pursuant to any options or convertible securities and (ii) the
applicable Related Party Limit, the term "Outstanding" shall be deemed to
include the number of shares of Common Stock or applicable series of
Preferred Stock that the Related Party whose ownership is being tested
would be permitted to acquire at such testing date pursuant to the Exchange
Rights. Notwithstanding the foregoing, shares of restricted Common Stock
issued pursuant to, but not yet vested in accordance with, the
Corporation's 1993 Long-Term Stock Incentive Plan (or any successor or
additional employee benefit plan) shall not be deemed to be Outstanding for
purposes of applying the applicable Ownership Limit, Related Party Limit or
Look-Through Ownership Limit.
"Ownership Limit" means, for any Person other than a Related
Party or Look-Through Entity, 7.4% of the number of the Outstanding shares
of Common Stock of the Corporation or, with respect to any series of
Preferred Stock, such percentage or percentages of the Outstanding shares
of such series as shall be established by the Board of Directors at the
time it authorizes such series of Preferred Stock pursuant to Section (b)
of this ARTICLE SIXTH.
"PSE" means the Pacific Stock Exchange, Inc.
"Person" means (a) an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or 501(c)(17)
of the Code), a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and (b) also includes a group as
that term is used for purposes of Section 13(d)(3) of the Exchange Act.
"Purported Beneficial Transferee" means, with respect to any
purported Transfer of Capital Stock which results in Excess Stock, the
purported beneficial transferee for whom the Purported Record Transferee
would have acquired shares of Capital Stock, if such Transfer had not
resulted in an exchange for such Excess Stock pursuant to Subsection (4)(D)
of Section (c) of this ARTICLE SIXTH (or in the event the provisions of
paragraphs (ii)-(vi) of Subsection 4(B) of Section (c) of this ARTICLE
SIXTH are in effect, had been valid under Subsection (4)(B) of Section (c)
of this ARTICLE SIXTH).
"Purported Record Transferee" means, with respect to any
purported Transfer of Capital Stock which results in Excess Stock, the
record holder of the Capital Stock if such Transfer had not resulted in an
exchange for such Excess Stock pursuant to Subsection (4)(D) of Section (c)
of this ARTICLE SIXTH (or in the event the provisions of paragraphs (ii)-
(vi) of Subsection 4(B) of Section (c) of this ARTICLE SIXTH are in effect,
had been valid under Subsection (4)(B) of Section (c) of this ARTICLE
SIXTH).
"REIT" means a Real Estate Investment Trust defined in
Section 856 of the Code.
"Related Party" means (i) The Irvine Company, a Michigan
corporation, its affiliates and successors and (ii) any other Person whose
ownership of shares of Common Stock would be attributed to Donald L. Bren
under Section 544 of the Code.
"Related Party Limit" means 20% of the number of Outstanding
shares of Common Stock applied, in the aggregate, to all Persons who are
Related Parties or, with respect to any series of Preferred Stock, such
percentage or percentages of the Outstanding shares of such series as shall
be established by the Board of Directors at the time it authorizes such
series of Preferred Stock pursuant to Section (b) of this ARTICLE SIXTH.
From the effective date of the Merger, the secretary of the Corporation, or
such other person as shall be designated by the Board of Directors, shall
upon request make available to the representative(s) of the Related Parties
and the Board of Directors, a schedule which sets forth any applicable
then-current Related Party Limit applicable to the Related Parties.
"Required Directors" means directors of the Corporation
representing more than 75% of the entire Board of Directors.
"Transfer" means any sale, transfer, gift, assignment,
devise or other disposition of a share of Capital Stock (including (i) the
granting of any option (including, but not limited to, an option to acquire
an option or any series of such options) or entering into any agreement for
the sale, transfer or other disposition of Capital Stock or (ii) the sale,
transfer, assignment or other disposition of any securities or rights
convertible into or exchangeable for Capital Stock), whether voluntary or
involuntary, whether of record or Beneficial Ownership, and whether by
operation of law or otherwise (including, but not limited to, any transfer
of an interest in other entities which results in a change in the
Beneficial Ownership of shares of Capital Stock). The terms "Transfers"
and "Transferred" shall have correlative meaning.
"Trust" means the applicable trust created pursuant to
Subsection (1) of Section (d) of this ARTICLE SIXTH.
"Trustee" means the trustee for the Trust, and any successor
trustee appointed by the Corporation, meeting the requirements of Subsection
(1) of Section (d) of this ARTICLE SIXTH.
"Units" means the units into which partnership interests in the
Operating Partnership are divided, and as the same may be adjusted, as
provided in the Operating Partnership Agreement.
(B) Restriction on Ownership and Transfers.
(i) Except as provided in Subsection (4)(I) of Section (c)
of this ARTICLE SIXTH, from and after the effective date of the Merger, (a)
no Person (other than a Related Party and a Look-Through Entity) shall
Beneficially Own shares of Common Stock or a series of Preferred Stock in
excess of the applicable Ownership Limit, (b) the Related Parties in the
aggregate shall not Beneficially Own shares of Common Stock or a series of
Preferred Stock in excess of the applicable Related Party Limit, and (c) no
Look-Through Entity shall Beneficially Own shares of Common Stock or a
series of Preferred Stock in excess of the applicable Look-Through
Ownership Limit.
(ii) Except as provided in Subsection (4)(I) of Section (c)
of this ARTICLE SIXTH, from and after the effective date of the Merger (and
subject to Section (f) of this ARTICLE SIXTH), any Transfer (whether or not
such Transfer is the result of transactions entered into through the
facilities of the NYSE or the PSE) that, if effective, would result in any
Person (other than a Related Party or a Look-Through Entity) Beneficially
Owning shares of Common Stock or a series of Preferred Stock in excess of
the applicable Ownership Limit shall be void ab initio as to the Transfer
of such shares of Common Stock or Preferred Stock which would be otherwise
Beneficially Owned by such Person in excess of the applicable Ownership
Limit, and the intended transferee shall acquire no rights in such shares
of Capital Stock.
(iii) Except as provided in Subsection (4)(I) of Section
(c) of this ARTICLE SIXTH, from the effective date of the Merger (and
subject to Section (f) of this ARTICLE SIXTH), any Transfer (whether or not
such Transfer is the result of transactions entered into through the
facilities of the NYSE or the PSE) that, if effective, would result in any
Related Party Beneficially Owning shares of Common Stock or a series of
Preferred Stock which when aggregated with, respectively, all shares of
Common Stock or such series of Preferred Stock directly or constructively
owned by any Related Party would cause the Related Parties to exceed the
applicable Related Party Limit shall be void ab initio as to the Transfer
of such shares of Common Stock or Preferred Stock which would be otherwise
Beneficially Owned by such Related Party in excess of the applicable
Related Party Limit, and such Related Party shall acquire no rights in such
shares of Capital Stock.
(iv) Except as provided in Subsection (4)(I) of Section (c)
of this ARTICLE SIXTH, from the effective date of the Merger (and subject
to Section (f) of this ARTICLE SIXTH), any Transfer (whether or not such
Transfer is the result of transactions entered into through the facilities
of the NYSE or the PSE) that, if effective, would result in any Look-
Through Entity Beneficially Owning shares of Common Stock or a series of
Preferred Stock in excess of the applicable Look-Through Ownership Limit
shall be void ab initio as to the Transfer of such shares of Common Stock
or Preferred Stock which would be otherwise Beneficially Owned by such
Look-Through Entity in excess of the applicable Look-Through Ownership
Limit, and such Look-Through Entity shall acquire no rights in such shares
of Capital Stock.
(v) Except as provided in Subsection (4)(I) of Section (c)
of this ARTICLE SIXTH, from the effective date of the Merger (and subject
to Section (f) of this ARTICLE SIXTH), any Transfer (whether or not such
Transfer is the result of a transaction entered into through the facilities
of the NYSE or the PSE) that, if effective, would result in the Capital
Stock being Beneficially Owned by less than 100 Persons (determined without
reference to any rules of attribution) shall be void ab initio as to the
Transfer of such shares of Capital Stock which would be otherwise
Beneficially Owned by the transferee and the intended transferee shall
acquire no rights in such shares of Capital Stock.
(vi) It is expressly intended that the restrictions on
ownership and transfer described in this Subsection (4)(B) shall apply with
respect to the Exchange Rights. A partner of the Operating Partnership
shall not be entitled to effect an exchange of an interest in the Operating
Partnership into Capital Stock if the direct or Beneficial Ownership of
Common Stock by reason of the applicable Related Party Limit would be
prohibited under the provisions of this ARTICLE SIXTH, and no Person shall
be deemed to Beneficially Own Capital Stock for which Units may be
exchangeable, at any testing date on which such Units are not exchangeable
into Capital Stock.
(vii) A Transfer of a share of Capital Stock which is null
and void under (1) paragraphs (ii), (iii), (iv), or (vi) of Subsection
(4)(B) of Section (c) of this ARTICLE SIXTH because it could, if effective,
result in the ownership of Common Stock or a series of Preferred Stock in
excess of the applicable Related Party Limit, Ownership Limit or Look-
Through Ownership Limit or (2) paragraph (v) of subsection 4(b) of Section
(c) of this ARTICLE SIXTH because it could, if effective, result in the
Capital Stock being beneficially owned by fewer than 100 Persons, shall not
adversely affect the validity of the Transfer of any other share of Capital
Stock in the same or any other related transaction.
(C) Remedies for Breach. If the Board of Directors or a
committee thereof shall at any time determine in good faith that a Transfer
or other event has taken place in violation of Subsection (4)(B) of Section
(c) of this ARTICLE SIXTH (whether or not such violation is intended), or
that a Person intends to acquire or has attempted to acquire Beneficial
Ownership of any shares of the Corporation's Capital Stock in violation of
subsection (4)(B) of Section (c) this ARTICLE SIXTH, the Board of Directors
or a committee thereof shall be empowered to take any action as it deems
advisable to refuse to give effect to or to prevent such Transfer or other
event, including, but not limited to, refusing to give effect to such
Transfer or other event on the books of the Corporation, demanding the
repayment of any distributions received in respect of shares of Common
Stock acquired in violation of Subsection (4)(B) of Section (c) of this
ARTICLE SIXTH or instituting proceedings to enjoin such Transfer or rescind
such Transfer or attempted Transfer; provided, however, that any Transfers
or attempted Transfers (or in the case of events other than a Transfer,
Beneficial Ownership) in violation of Subsection (4)(B) of Section (c) of
this ARTICLE SIXTH, regardless of any action (or non-action) by the Board
of Directors or such committee, (i) shall be void ab initio and (ii) shall
automatically result in the exchange described in Subsection (4)(D) of
Section (c) of this ARTICLE SIXTH.
(D) Exchange for Excess Stock. If, notwithstanding the
other provisions contained in this ARTICLE SIXTH, at any time from and
after the effective date of the Merger there is a purported Transfer
(whether or not such Transfer is the result of a transaction entered into
through the facilities of the NYSE or the PSE) or other change in the
capital structure of the Corporation or other event such that any Person
(other than a Related Party or a Look-Through Entity) would Beneficially
Own shares of Common Stock or a series of Preferred Stock in excess of the
applicable Ownership Limit, or that any Person who is a Related Party would
Beneficially Own shares of Common Stock or a series of Preferred Stock
which when aggregated with all shares of Common Stock or such series of
Preferred Stock directly or constructively owned by any Related Party would
cause the Related Parties to exceed the applicable Related Party Limit, or
that any Person who is a Look-Through Entity would Beneficially Own shares
of Common Stock or a series of Preferred Stock in excess of the applicable
Look-Through Ownership Limit, then, except as otherwise provided in
Subsection (4)(I) of Section (c) of this ARTICLE SIXTH, such shares of
Capital Stock in excess of the applicable Ownership Limit, Related Party
Limit or Look-Through Ownership Limit, as the case may be, (rounded up to
the nearest whole share) shall be automatically exchanged for an equal
number of shares of Excess Common Stock or Excess Preferred Stock, as the
case may be, having the terms set forth in Section (d) of this ARTICLE
SIXTH. Such exchange shall be effective as of the close of business on the
business day prior to the date of the Transfer or change in capital
structure or other event.
(E) Notice of Restricted Transfer. Any person who acquires
or attempts to acquire shares of Capital Stock in violation of Subsection
(4)(B) of Section (c) of this ARTICLE SIXTH, or any Person who is a
transferee such that Excess Stock results under Subsection (4)(D) of
Section (c) of this ARTICLE SIXTH, shall immediately give written notice to
the Corporation of such event and shall provide to the Corporation such
other information as the Corporation may request in order to determine the
effect, if any, of such Transfer or attempted Transfer or other event on
the Corporation's status as a REIT. Failure to give such notice shall not
limit the rights and remedies of the Board of Directors provided herein in
any way.
(F) Owners Required to Provide Information. From and after
the effective date of the Merger:
(i) Every record and Beneficial Owner of more than 5% (or
such other percentage between 1/2 of 1% and 5%, as determined by the Board
of Directors) of any class or series of Capital Stock of the Corporation
outstanding shall, within 30 days after January 1 of each year, give
written notice to the Corporation stating the name and address of such
record or Beneficial Owner, the number of shares of any class or series of
Capital Stock Beneficially Owned, and a full description of how such shares
are held. Each such record or Beneficial Owner of Capital Stock shall,
upon demand by the Corporation, disclose to the Corporation in writing such
additional information with respect to the Beneficial Ownership of the
Capital Stock as the Board of Directors, in its sole discretion, deems
appropriate or necessary to (i) comply with the provisions of the Code
regarding the qualification of the Corporation as a REIT under the Code,
and (ii) ensure compliance with the applicable Ownership Limit, Related
Party Limit or Look-Through Ownership Limit, as applicable. Each
stockholder of record, including without limitation any Person who holds
shares of Capital Stock on behalf of a Beneficial Owner, shall take all
reasonable steps to obtain the written notice described in this Subsection
(4)(F)(i) of Section (c) of this ARTICLE SIXTH from the Beneficial Owner.
(ii) Any Person who is a Beneficial Owner of shares of any
class or series of Capital Stock and any Person (including the stockholder
of record) who is holding shares of Capital Stock for a Beneficial Owner,
and any proposed transferee of shares, shall provide such information as
the Corporation, in its sole discretion, may request in order to determine
the Corporation's status or to comply with the requirements of any taxing
authority or other governmental agency, to determine any such compliance or
to ensure compliance with the applicable Ownership Limit, Related Party
Limit and Look-Through Ownership Limit, and shall provide a statement or
affidavit to the Corporation setting forth the number of shares of any
class or series of Capital Stock already Beneficially Owned by such
stockholder or proposed transferee and any related persons specified, which
statement or affidavit shall be in the form prescribed by the Corporation
for that purpose.
(G) Remedies Not Limited. Nothing contained in this ARTICLE
SIXTH shall limit the authority of the Board of Directors to take such other
action as it deems necessary or advisable (subject to the provisions of
Section (f) of this ARTICLE SIXTH) (i) to protect the Corporation and the
interests of its stockholders in the preservation of the Corporation's status
as a REIT, and (ii) to ensure compliance with the applicable Ownership Limit,
Related Party Limit and Look-Through Ownership Limit.
(H) Ambiguity. In the case of an ambiguity in the
application of any of the provisions of Subsection (4) of Section (c) of this
ARTICLE SIXTH, including any definition contained in Subsection (4)(A) of
Section (c) of this ARTICLE SIXTH, the Board of Directors shall have the power
to determine the application of the provisions of Subsection (4) of Section
(c) this ARTICLE SIXTH with respect to any situation based on its reasonable
belief, understanding or knowledge of the circumstances.
(I) Exceptions.
(i) The Board of Directors, upon receipt of a ruling from
the Internal Revenue Service or an opinion of tax counsel or other evidence
or undertakings acceptable to it, may waive the application, in whole or in
part, of the applicable Ownership Limit to a Person subject to such
Ownership Limit, if such person is not an individual for purposes of
Section 542(a) of the Code and is a corporation, partnership, estate or
trust, provided, however, in no event may any such exception cause such
Person's ownership, direct or indirect (without taking into account such
Person's ownership of an interest in the Operating Partnership), to exceed
9.8% of the value of Outstanding shares of the Corporation's Capital Stock
and Excess Stock, as such value is determined by the Board of Directors in
its sole discretion. In connection with any such exemption, the Board of
Directors may require such representations and undertakings from such
Person and may impose such other conditions as the Board deems necessary,
in its sole discretion, to determine the effect, if any, of the proposed
Transfer on the Corporation's status as a REIT.
(ii) Notwithstanding any other provision of this ARTICLE
SIXTH, the pledge to a financial institution by a Related Party of all or
any portion of the Capital Stock directly owned at any time or from time to
time shall not constitute a violation of Subsection (4)(B) of Section (c)
of this ARTICLE SIXTH and the pledgee financial institution shall not be
subject to the applicable Ownership Limit with respect to the Capital Stock
so pledged to it either as a result of the pledge or upon foreclosure.
(iii) For a period of 270 days following the purchase of
Capital Stock by an underwriter that (i) is a corporation, limited
liability company, partnership or other entity and (ii) participates in an
offering of the Capital Stock, such underwriter shall not be subject to the
applicable Ownership Limit with respect to the Capital Stock purchased by
it as a part of or in connection with such offering and with respect to any
Capital Stock purchased in connection with market making activities.
(5) Legend. (i) Each certificate for Common Stock shall
bear the following legend:
"The shares of Common Stock represented by this
certificate are subject to restrictions on transfer. No
person may Beneficially Own shares of Common Stock in excess
of the Ownership Limit or the Look-Through Ownership Limit,
as applicable, applicable to the Common Stock and the
Related Parties in the aggregate may not Beneficially Own
shares of Common Stock in excess of the Related Party Limit
applicable to the Common Stock, with certain further
restrictions and exceptions set forth in the Corporation's
Articles of Incorporation, as amended from time to time
("Articles"). Any person who attempts to Beneficially Own
shares of Common Stock in excess of the applicable
limitation must immediately notify the Corporation. All
capitalized terms in this legend have the meanings ascribed
to such terms in the Corporation's Articles, as the same may
be amended from time to time, a copy of which, including the
restrictions on transfer, will be sent without charge to
each stockholder who requests. If the restrictions on
transfer are violated, the transfer will be void in
accordance with the Articles and the shares of Common Stock
represented hereby will be automatically exchanged for
shares of Excess Common Stock which will be held in trust in
accordance with the Articles."
(ii) Each certificate for Preferred Stock shall bear the
following legend or such other legend as the Board of Directors may establish
in accordance with Section (b) of this ARTICLE SIXTH at the time such series
of Preferred Stock is established:
"The shares of Preferred Stock represented by this
certificate are subject to restrictions on transfer. No
person may Beneficially Own shares of this series of
Preferred Stock in excess of the Ownership Limit or Look-
Through Ownership Limit, as applicable, applicable to this
series of Preferred Stock and the Related Parties in the
aggregate may not Beneficially Own shares of this series of
Preferred Stock in excess of the Related Party Limit
applicable to this series of Preferred Stock, with certain
further restrictions and exceptions set forth in the
Corporation's Articles of Incorporation, as amended from
time to time ("Articles"). Any person who attempts to
Beneficially Own shares of this series of Preferred Stock in
excess of the applicable limitation must immediately notify
the Corporation. All capitalized terms in this legend have
the meanings ascribed to such terms in the Corporation's
Articles, as the same may be amended from time to time, a
copy of which, including the restrictions on transfer, will
be sent without charge to each stockholder who requests. If
the restrictions on transfer are violated, the transfer will
be void in accordance with the Articles and the shares of
Preferred Stock represented hereby will be automatically
exchanged for shares of Excess Preferred Stock which will be
held in trust in accordance with the Articles."
(6) Severability. If any provision of this ARTICLE SIXTH or
any application of any such provision is determined in a final and
unappealable judgment to be void, invalid or unenforceable by any Federal or
state court having jurisdiction over the issues, the validity and
enforceability of the remaining provisions shall not be affected and other
applications of such provision shall be affected only to the extent necessary
to comply with the determination of such court.
(7) Board of Directors Discretion. Anything in this
ARTICLE SIXTH to the contrary notwithstanding, the Board of Directors shall
be entitled to take or omit to take such actions as it in its discretion
shall determine to be advisable in order that the Corporation maintain its
status as and continue to qualify as a REIT, including, but not limited to,
reducing the applicable Ownership Limit, Related Party Limit and Look-
Through Ownership Limit in the event of a change in law.
(d) Excess Stock. The following is a description of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of the Excess Stock of the Corporation:
(1) Ownership in Trust. Upon any purported Transfer,
change in the capital structure of the Corporation or purported change in
Beneficial Ownership that results in Excess Stock pursuant to Subsection
(4)(D) of Section (c) of this ARTICLE SIXTH, such Excess Stock shall be
deemed to have been transferred to a person as trustee of a Trust for the
exclusive benefit of one or more organizations described in Section 170(b),
170(c), or 501(c)(3) of the Code (the "Charitable Beneficiary" or
"Charitable Beneficiaries"), as shall be designated by resolution of the
Board of Directors, such trustee to be a person who is unaffiliated with
(i) the Corporation; (ii) the Purported Beneficial Transferee; and (iii)
the Purported Record Transferee. At all times at least one Charitable
Beneficiary shall be designated by the Board of Directors. Where a
Transfer or other event results in an automatic exchange of shares of more
than one class for Excess Stock, then separate Trusts shall be deemed to
have been established for the Excess Stock attributable to the shares of
each such class. Shares of Excess Stock held in Trust for the exclusive
benefit of the Charitable Beneficiary shall be issued and outstanding
shares of Corporation Stock. The trustee of the Trust will be deemed to
own the shares of Excess Stock held in Trust for the exclusive benefit of
the Charitable Beneficiary on the day prior to the date of the violative
transfer. The Purported Beneficial Transferee shall have no rights in the
shares of Excess Stock except the right to receive a price for its interest
in the shares of Capital Stock which were exchanged for Excess Stock upon
the terms specified in Subsection 5(A) of Section (d) of this ARTICLE
SIXTH.
(2) Dividend Rights. Shares of Excess Stock shall be
entitled to dividends and distributions as if such shares of Excess Stock
were shares of Common Stock or Preferred Stock, as applicable, provided
that the dividends and distributions shall be paid to the Trustee to be
held in Trust for the exclusive benefit of the Charitable Beneficiary. Any
dividend or distribution paid prior to the discovery by the Corporation
that the shares of Capital Stock have been exchanged for Excess Stock shall
be repaid to the Corporation upon demand or, at the Corporation's sole
election, shall be offset against any future dividends or distributions
payable to the Purported Record Transferee. Any dividends so disgorged
shall be paid over to the Trustee for the exclusive benefit of the
Charitable Beneficiary.
(3) Rights Upon Liquidation. (A) Subject to the
preferential rights of Preferred Stock, if any, as may be determined by the
Board of Directors pursuant to Section (b) of this ARTICLE SIXTH, each
Purported Beneficial Transferee of shares of Excess Preferred Stock shall
be entitled to receive that portion of the assets of the Corporation which
a holder of Preferred Stock that was exchanged for such Excess Preferred
Stock would have been entitled to receive on liquidation had such Preferred
Stock remained outstanding and (B) subject to (i) the preferential rights
of Preferred Stock, if any, as may be determined by the Board of Directors
pursuant to Section (b) of this ARTICLE SIXTH, (ii) the preferential rights
of Excess Preferred Stock, if any, pursuant to Subsection (3)(A) of Section
(d) of this ARTICLE SIXTH and (iii) the preferential rights of the Common
Stock pursuant to Subsection (3) of Section (c) of this ARTICLE SIXTH, in
the event of any voluntary or involuntary liquidation, dissolution or
winding up of, or any distribution of the assets of, the Corporation, each
Purported Beneficial Transferee of shares of Excess Common Stock shall be
entitled to receive, ratably with each other holder of Common Stock and
Purported Beneficial Transferee of Excess Common Stock, that portion of the
assets of the Corporation available for distribution to its stockholders as
the number of shares of Excess Common Stock attributable to such holder
bears to the total number of shares of Common Stock and Excess Common Stock
then outstanding, provided that in the case of Subsections (3)(A) and (B)
of Section (d) of this ARTICLE SIXTH, no Purported Beneficial Transferee
shall be entitled to receive any amounts in excess of the price per share
such Purported Beneficial Transferee paid for the Capital Stock in any
purported Transfer that resulted in the Excess Stock or, if the Purported
Beneficial Transferee did not give value for such Excess Stock (through a
gift, devise or other transaction) in any purported Transfer, a price per
share equal to the Market Price on the date of any purported Transfer that
resulted in the Excess Stock, less the amount of any dividends received by
the Purported Record Transferee and not repaid or offset against future
dividends pursuant to Subsection (2) of Section (d) of this ARTICLE SIXTH,
with any remainder of such Transferee's ratable portion of the
Corporation's assets subject to ratable allocation among the holders of
Common Stock as an asset of the Corporation.
(4) Voting Rights. Subject to Maryland Law, effective as
of the date that Capital Stock is exchanged for Excess Stock pursuant to
Subsection 4(D) of Section (c) of this ARTICLE SIXTH, the holders of
Capital Stock that has been exchanged for Excess Stock shall not be
entitled to vote such Capital Stock on any matter, and, if such Capital
Stock has voting rights, all votes cast with respect to shares of Excess
Stock into which such Capital Stock has been exchanged shall be voted in
accordance with the direction of the Trustee of the Trust acting for the
benefit of the Charitable Beneficiary. The Trustee shall vote the shares
of Excess Stock for the exclusive benefit of the Charitable Beneficiary.
(5) Restrictions on Transfer.
(A) Excess Stock shall not be transferable. The Purported
Record Transferee may freely designate a Person as beneficiary of an
interest in the Trust (representing the number of shares of Excess Stock
held by the Trust attributable to a purported Transfer that resulted in the
Excess Stock), if (A) the shares of Excess Stock held in the Trust would
not be Excess Stock in the hands of such Person and (B) the Purported
Beneficial Transferee does not receive a price from such Person that
reflects a price per share for such Excess Stock that exceeds the lesser of
(i) the price per share such Purported Beneficial Transferee paid for the
Capital Stock in the purported Transfer that resulted in the Excess Stock,
or if the Purported Beneficial Transferee did not give value for such
Excess Stock (through a gift, devise or other transaction), a price per
share equal to the Market Price on the date of the purported Transfer that
resulted in the Excess Stock or (ii) the price per share of the Capital
Stock in the transfer described in the following sentence. Upon the
transfer of an interest in the Trust, the corresponding shares of Excess
Stock in the Trust shall be automatically exchanged for an equal number of
shares of Common Stock or shares of the applicable series of Preferred
Stock, as the case may be, and such shares of Capital Stock shall be
transferred of record to the transferee of the interest in the Trust if
such Capital Stock would not be Excess Stock in the hands of such
transferee. In the event of such transfer, the beneficial interest of the
Charitable Beneficiary in the Excess Shares would terminate. Prior to any
transfer of any interest in the Trust, the Purported Record Transferee must
give not less than five business days prior written notice to the
Corporation of the intended transfer and the Corporation must have waived
in writing its purchase rights under Subsection (6) of Section (d) of this
ARTICLE SIXTH.
(B) Notwithstanding the foregoing, if a Purported
Beneficial Transferee receives a price for its interest in the shares of
Capital Stock that were exchanged for Excess Stock that exceeds the amounts
allowable under Subsection (5)(A) of Section (d) of this ARTICLE SIXTH,
such Purported Beneficial Transferee shall, prior to the exchange of the
Excess Stock for Capital Stock, pay, or cause the Person designated
pursuant to Subsection 5(A) of Section (d) of this ARTICLE SIXTH to pay,
such excess to the Trustee to be held for the exclusive benefit of the
Charitable Beneficiary.
(C) If any of the transfer restrictions set forth in this
Subsection (5) of Section (d) of this ARTICLE SIXTH or any application
thereof is determined in a final and non-appealable judgment to be void,
invalid or unenforceable by any court having jurisdiction over the issue,
the Purported Record Transferee may be deemed, at the option of the
Corporation, to have acted as the agent of the Corporation in acquiring the
Excess Stock as to which such restrictions would, by their terms, apply,
and to hold such Excess Stock on behalf of the Corporation.
(6) Purchase Right in Excess Stock. Shares of Excess Stock
shall be deemed to have been offered for sale to the Corporation, or its
designee, at a price per share equal to the lesser of (i) the price per
share in the transaction that created such Excess Stock (or, in the case of
a devise or gift, the Market Price at the time of such devise or gift) and
(ii) the Market Price on the date the Corporation, or its designee, accepts
such offer. The Corporation shall have the right to accept such offer for
a period of ninety days after the later of (i) the date of the Transfer
which resulted in such Excess Stock and (ii) the date the Board of
Directors determines in good faith that a Transfer resulting in Excess
Stock has occurred. The Corporation may appoint a special trustee of the
Trust established under Subsection (1) of Section (d) of this ARTICLE SIXTH
for the purpose of consummating the purchase of Excess Stock by the
Corporation.
(7) Authorization. At such time as the Board of Directors
authorizes a series of Preferred Stock pursuant to Section (b) of this
ARTICLE SIXTH, without any further or separate action of the Board of
Directors, there shall be deemed to be authorized a series of Excess
Preferred Stock consisting of the number of shares included in the series
of Preferred Stock and having terms, rights, restrictions and
qualifications identical thereto, except to the extent that this ARTICLE
SIXTH requires different terms. In such event, any appropriate correlative
modification in all defined terms shall be deemed to have been made.
(e) Exchange of Units; Reservation of Shares.
(1) The Board of Directors of the Corporation is hereby
expressly vested with authority to issue, and shall issue, to the extent
that such issuance shall not result in a violation of Subsection (4)(B) of
Section (c) of this ARTICLE SIXTH, Capital Stock pursuant to the exercise
of Exchange Rights.
(2) Pursuant to the obligations of the Corporation under
the Operating Partnership Agreement to issue Capital Stock in connection
with the exercise of Exchange Rights and the issuance by the Corporation of
Capital Stock pursuant to the cash tender rights granted under Section 8.6
of the Operating Partnership Agreement, the Board of Directors is hereby
required to reserve a sufficient number of authorized but unissued shares
of Capital Stock to permit the Corporation to satisfy such obligations.
(f) Settlement. Nothing in this ARTICLE SIXTH shall be
interpreted to preclude the settlement of any transaction entered into through
facilities of the NYSE or the PSE.
SEVENTH: (a) The business and affairs of the Corporation
shall be managed by or under the direction of a Board of Directors. The
directors shall be divided into three classes, designated Class I, Class II
and Class III. Each class shall consist, as nearly as may be possible, of
one-third of the total number of directors constituting the entire Board of
Directors. Each director shall serve for a term ending on the date of the
third annual meeting of stockholders next following the annual meeting at
which such director was elected, pursuant to the By-Laws of the
Corporation, provided that directors initially designated as Class I
directors shall serve for a term ending on the date of the 1997 annual
meeting, directors initially designated as Class II directors shall serve
for a term ending on the date of the 1998 annual meeting, and directors
initially designated as Class III directors shall serve for a term ending
on the date of the 1999 annual meeting. Notwithstanding the foregoing,
each director shall hold office until such director's successor shall have
been duly elected and qualified or until such director's earlier death,
resignation or removal.
(b) The Board of Directors shall consist of not less than
three nor more than ten directors. The initial number of directors of the
Corporation shall be nine, which number may be increased or decreased by
the affirmative vote of a majority of the entire Board of Directors
pursuant to the By-Laws of the Corporation, provided that the number of
directors shall never be less than the minimum number permitted by Maryland
Law, as now or hereafter in force. In the event of any change in the
number of directors, the Board of Directors shall apportion any newly
created directorships among, or reduce the number of directorships in, such
class or classes as shall equalize, as nearly as possible, the number of
directors in each class. In no event will a decrease in the number of
directors shorten the term of any incumbent director. The names of the
directors who will serve until their successors are elected and qualify as
provided in Section (a) of this ARTICLE SEVENTH are as follows:
Name
Class I
Steven P. Albert
Michael D. McKee
Jack W. Peltason
Class II
Anthony M. Frank
Norman J. Metcalfe
John F. Seymour, Jr.
Class III
Donald Bren
John F. Grundhofer
Bowen H. McCoy
(c) Except during a period of vacancy or vacancies on the
Board of Directors, a majority of the directors shall at all times be
persons who are not (i) affiliates (as that term is defined in Rule 144
under the Securities Act of 1933, as amended), or an officer, director or
employee of The Irvine Company or any successor to The Irvine Company or
(ii) the spouse, ancestor or lineal descendant or brother or sister
(whether by the whole or half blood) of Donald L. Bren.
(d) There shall be no cumulative voting in the election of
directors. Election of directors need not be by written ballot unless the
By-Laws of the Corporation so provide.
(e) The stockholders may elect a successor to fill a
vacancy on the Board of Directors which results from the removal of a
director. A director elected by the stockholders to fill a vacancy which
results from the removal of a director serves for the balance of the term
of the removed director. A majority of the remaining directors, whether or
not sufficient to constitute a quorum, may fill a vacancy on the Board of
Directors which results from any cause except an increase in the number of
directors, and a majority of the entire Board of Directors may fill a
vacancy which results from an increase in the number of directors. A
director elected by the Board of Directors to fill a vacancy serves until
the next annual meeting of stockholders and until his or her successor is
elected and qualifies.
(f) No director may be removed from office by the
stockholders except for cause with the affirmative vote of the holders of not
less than 66 2/3% of the total voting power of all outstanding securities of
the Corporation then entitled to vote generally in the election of directors,
voting together as a single class.
(g) Notwithstanding the foregoing, whenever the holders of
one or more classes or series of Preferred Stock shall have the right, voting
separately as a class or series, to elect directors, the election, term of
office, filling of vacancies, removal and other features of such directorships
shall be governed by the terms established by the Board of Directors pursuant
to Section (b) of ARTICLE SIXTH applicable thereto, and such directors so
elected shall not be subject to the provisions of this ARTICLE SEVENTH unless
otherwise provided therein.
EIGHTH: (a) The following provisions are hereby adopted for
the purpose of defining, limiting, and regulating the powers of the
Corporation and of the directors and stockholders:
(1) Subject to the provisions of Section (b) of ARTICLE
NINTH, the Board of Directors is hereby empowered to authorize the issuance
from time to time of shares of its stock of any class, whether now or
hereafter authorized, or securities convertible into shares of its stock of
any class or classes, whether now or hereafter authorized, for such
consideration as may be deemed advisable by the Board of Directors and without
any action by the stockholders.
(2) No holder of any stock or any other securities of the
Corporation, whether now or hereafter authorized, shall have any preemptive
right to subscribe for or purchase any stock or any other securities of the
Corporation other than such, if any, as the Board of Directors, in its sole
discretion, may determine and at such price or prices and upon such other
terms as the Board of Directors, in its sole discretion, may fix; and any
stock or other securities which the Board of Directors may determine to offer
for subscription may, as the Board of Directors in its sole discretion shall
determine, be offered to the holders of any class, series or type of stock or
other securities at the time outstanding to the exclusion of the holders of
any or all other classes, series or types of stock or other securities at the
time outstanding.
(3) Notwithstanding any provision of law requiring the
authorization of any action by a greater proportion than a majority of the
total number of shares of all classes of capital stock or of the total number
of shares of any class of capital stock, such action shall be valid and
effective if authorized by the affirmative vote of the holders of a majority
of the total number of shares of all classes outstanding and entitled to vote
thereon, except as otherwise provided in the charter.
(4) The Corporation shall indemnify (A) its directors and
officers, whether serving the Corporation or at its request any other
entity, to the full extent required or permitted by the General Laws of the
State of Maryland now or hereafter in force, including the advance of
expenses under the procedures and to the full extent permitted by law and
(B) other employees and agents to such extent as shall be authorized by the
Board of Directors or the Corporation's By-Laws and be permitted by law.
The foregoing rights of indemnification shall not be exclusive of any other
rights to which those seeking indemnification may be entitled. The Board
of Directors may take such action as is necessary to carry out these
indemnification provisions and is expressly empowered to adopt, approve and
amend from time to time such By-Laws, resolutions or contracts implementing
such provisions or such further indemnification arrangements as may be
permitted by law. No amendment of the charter of the Corporation or repeal
of any of its provisions shall limit or eliminate the right to
indemnification provided hereunder with respect to acts or omissions
occurring prior to such amendment or repeal or shall limit or eliminate the
rights granted under indemnification agreements entered into by the
Corporation and its directors, officers, agents and employees.
(5) To the fullest extent permitted by Maryland statutory
or decisional law, as amended or interpreted, no director or officer of
this Corporation shall be personally liable to the Corporation or its
stockholders for money damages. Neither the amendment of the charter of
the Corporation nor the repeal of any of its provisions shall limit or
eliminate or reduce the limitation on liability provided to directors and
officers hereunder with respect to any act or omission occurring prior to
such amendment or repeal.
(6) The Corporation shall have the power to purchase and
maintain insurance on behalf of any person who is or was a director,
officer, employee, or agent of the Corporation, or who, while a director,
officer, employee, or agent of the Corporation, is or was serving at the
request of the Corporation as a director, officer, partner, trustee,
employee, or agent of another corporation, partnership, joint venture,
trust, other enterprise, or employee benefit plan against any liability
asserted against and incurred by such person in any such capacity or
arising out of such person's position, whether or not the Corporation would
have the power to indemnify against liability under the provisions of this
Section or under the General Laws of the State of Maryland, as amended or
interpreted.
(7) The Corporation reserves the right from time to time to
make any amendments of its charter which may now or hereafter be authorized
by law, including any amendments changing the terms or contract rights, as
expressly set forth in its charter, of any of its outstanding stock by
classification, reclassification or otherwise and all rights and powers
conferred upon stockholders, directors and officers herein are granted
subject to this reservation. Notwithstanding the foregoing, the provisions
set forth in Subsections (4) and (7) of Section (c) of ARTICLE SIXTH,
Sections (d) and (e) of ARTICLE SIXTH and in ARTICLES SEVENTH, NINTH,
TENTH, and this ARTICLE EIGHTH may not be repealed or amended in any
respect, and no other provision may be adopted, amended or repealed which
would have the effect of modifying or permitting the circumvention of the
provisions set forth in Subsections (4) and (7) of Section (c) of ARTICLE
SIXTH, Sections (d) and (e) of ARTICLE SIXTH and in ARTICLES SEVENTH,
NINTH, TENTH, and this ARTICLE EIGHTH unless such action is approved by the
affirmative vote of the holders of not less than 66 2/3% of the total
voting power of all outstanding securities of the Corporation then entitled
to vote generally in the election of directors, voting together as a single
class.
(8) Subject to ARTICLE NINTH and this ARTICLE EIGHTH the
Board of Directors shall have the power to adopt, amend or repeal the By-Laws
of the Corporation. The stockholders may adopt, amend or repeal the By-Laws
only with the affirmative vote of the holders of not less than 66 2/3% of the
total voting power of all outstanding securities of the Corporation then
entitled to vote generally in the election of directors, voting together as a
single class.
(9) Notwithstanding anything contained in the Corporation's
Charter to the contrary, the affirmative vote of the holders of not less than
66 2/3% of the total voting power of all outstanding securities of the
Corporation then entitled to vote generally in the election of directors,
voting together as a single class, and the approval of the Required Directors,
shall be required to terminate the Corporation's status as a real estate
investment trust for Federal income tax purposes.
(10) The provisions of Sections 3-701 to 3-709 of the
Corporations and Associations Article of the Annotated Code of Maryland
shall not apply to any share of the capital stock of the Corporation now or
hereinafter beneficially held (during the period of such beneficial
ownership) by The Irvine Company and any affiliate thereof, Donald L. Bren
and his affiliates and Immediate Family, and any successors thereto by
descent or devise, and any other person acting in concert or as a group
with any of the foregoing. Such shares of capital stock are exempted from
such Sections to the fullest extent permitted by Maryland Law. For
purposes of the foregoing and of Subsection (11) of Section (a) of this
ARTICLE EIGHTH, Immediate Family of any individual shall mean such
individual's estate and heirs, spouse and children (whether natural or
adoptive or by marriage) and any trust or estate, all the beneficiaries of
which consist of such Person or any of the foregoing.
(11) The provisions of Sections 3-601 to 3-604 of the
Corporations and Associations Article of the Annotated Code of Maryland
shall not apply to any "business combination" between the Corporation and
The Irvine Company and any affiliate thereof, Donald L. Bren and his
affiliates and Immediate Family and any successors thereto by descent or
devise, and any person acting in concert or as a group with any of the
foregoing; and that such persons are exempted from such Sections to the
fullest extent permitted by Maryland Law.
(b) The enumeration and definition of particular powers of
the Board of Directors included in the foregoing shall in no way be limited or
restricted by reference to or inference from the terms of any other clause of
this or any other Article of the charter of the Corporation, or construed as
or deemed by inference or otherwise in any manner to exclude or limit any
powers conferred upon the Board of Directors under the General Laws of the
State of Maryland now or hereafter in force.
NINTH: (a) A majority of the entire Board of Directors,
including at least one Irvine Board Representative, shall constitute a quorum
for the transaction of business at any annual or special meeting of the Board
of Directors of the Corporation and, except as provided in Section (b) of this
ARTICLE NINTH, the affirmative vote of a majority of the directors present at
a meeting at which a quorum is present shall be the act of the Board of
Directors.
(b) Notwithstanding the foregoing, the affirmative vote of
the Required Directors shall be required to approve the actions set forth in
clauses (i) through (viii) below and any such action shall not be effective
unless approved by the affirmative vote of the Required Directors:
(i) a Change of Control (as hereinafter defined) of the
Corporation or the Operating Partnership;
(ii) any amendment to the Charter or the By-Laws, or any
amendment to the Operating Partnership Agreement;
(iii) any waiver or modification of an applicable Ownership
Limit, Related Party Limit or Look-Through Ownership Limit;
(iv) any merger, consolidation, statutory share exchange or
sale of all or substantially all of the assets of the Corporation or the
Operating Partnership;
(v) the issuance of any Equity Securities of the Corporation
or any securities convertible into or exchangeable or exercisable for any
Equity Securities of the Corporation, provided that the affirmative vote of
the Required Directors shall not be required with respect to the issuance
of Equity Securities (excluding for purposes of this proviso, Equity
Securities (other than Common Stock) having any voting rights other than
voting rights required under Maryland Law or by the rules of the NYSE or
the PSE) (a) pursuant to any stock incentive plan adopted by the
Corporation, (b) in connection with The Irvine Company's exercise of the
Exchange Rights or the cash tender rights provided for in Section 8.6 of
the Operating Partnership Agreement, (c) in connection with the acquisition
of land for Common Stock pursuant to that certain Exclusive Land Rights and
Non-Competition Agreement dated as of November 21, 1993 among the
Corporation, the Operating Partnership, The Irvine Company and Donald Bren,
as the same may be amended, modified or restated from time to time or (d)
in a bona fide underwritten public offering managed by one or more
nationally recognized investment banking firms;
(vi) for the Corporation to take title to assets (other than
temporarily in connection with an acquisition prior to contributing such
assets to the Operating Partnership), or to conduct business other than
through the Operating Partnership, or for the Corporation or the Operating
Partnership to engage in any business other than the ownership, construction,
development and operation of multifamily rental apartment communities;
(vii) for the Corporation or the Operating Partnership to make
a general assignment for the benefit of creditors or to institute any
proceedings in bankruptcy or for the liquidation, dissolution, reorganization
or winding up of the Corporation or the Operating Partnership or to consent to
the taking of any such action against the Corporation or the Operating
Partnership; and
(viii)to terminate the Corporation's status as a real estate
investment trust for federal income tax purposes.
(c) Except as defined below, capitalized terms in this
ARTICLE NINTH have the meanings specified in Subsection (4)(A) of Section
(c) of ARTICLE SIXTH. For purposes of this ARTICLE NINTH:
(i) The term "Change of Control" of (A) the Corporation
shall mean (y) any transaction or series of transactions (whether by
purchase of existing shares of Common Stock, merger, statutory share
exchange, consolidation or otherwise, but not including the issuance of
newly issued shares of Common Stock by the Corporation in a bona fide
underwritten public offering managed by one or more nationally recognized
investment banking firms) the result of which is that either (1) any Person
or Group other than The Irvine Company or affiliates of The Irvine Company
becomes the Beneficial Owner, directly or indirectly, of 20% or more of the
total voting power in the aggregate of all classes of capital stock of the
Corporation then outstanding normally entitled to vote in the election of
directors of the Corporation (or any surviving or successor entity) or (2)
the Beneficial Owners of the capital stock of the Corporation normally
entitled to vote in the election of directors immediately prior to the
transaction beneficially own less than 80% of the total voting power in the
aggregate of all classes of capital stock of the Corporation then
outstanding normally entitled to vote in the election of directors of the
Corporation (or any surviving or successor entity) immediately after such
transaction or (z) any transaction or series of transactions (whether by
purchase of existing shares of Common Stock or Units, merger, statutory
share exchange, consolidation or otherwise, but not including the issue of
newly issued shares of Common Stock by the Corporation in a bona fide
public underwritten public offering managed by one or more nationally
recognized investment banking firms or the issuance of newly issued Units)
the result of which is that either (1) any Person or Group other than The
Irvine Company or affiliates of The Irvine Company becomes the Beneficial
Owner, directly or indirectly, of 20% or more of the total voting power in
the aggregate of all classes of capital stock of the Corporation then
outstanding (including shares of Common Stock issuable upon exchange of
Units, whether or not such Units are immediately exchangeable and without
regard to the applicable Ownership Limit or the applicable Related Party
Limit or the applicable Look-Through Ownership Limit) normally entitled to
vote in the election of directors of the Corporation (or any surviving or
successor entity) or (2) the Beneficial Owners of the capital stock of the
Corporation normally entitled to vote in the election of directors
immediately prior to the transaction beneficially own less than 80% of the
total voting power in the aggregate of all classes of capital stock of the
Corporation then outstanding (including shares of Common Stock issuable
upon exchange of Units, whether or not such Units are immediately
exchangeable and without regard to the applicable Ownership Limit or the
applicable Related Party Limit or the applicable Look-Through Ownership
Limit) normally entitled to vote in the election of directors of the
Corporation (or any surviving or successor entity) immediately after such
transaction; or (B) the Operating Partnership shall mean (i) any sale,
transfer or other conveyance (whether by merger, statutory share exchange
or consolidation of the Corporation or otherwise) by the Corporation of the
general partnership interest in the Operating Partnership, except such
transfers permitted under Section 11.2.B of the Operating Partnership
Agreement, (ii) any transaction or series of transactions (whether by
purchase of existing Units, issuance of Units, merger, consolidation or
otherwise) the result of which is that either (1) any Person or Group other
than The Irvine Company or affiliates of The Irvine Company becomes the
Beneficial Owner, directly or indirectly of Units which represent 20% or
more of the total percentage of limited partnership interests (including
interests of assignees) therein or (2) the Beneficial Owners of limited
partnership interests (including interests of assignees) therein
immediately prior to the transaction beneficially own less than 80% of the
total percentage of limited partnership interests (including interests of
assignees) therein then outstanding immediately after such transaction.
(ii) The term "Person" shall have the same meaning as such
term has for purposes of Sections 13(d) and 14(d) of the Exchange Act.
(iii) The term "Group" shall have the same meaning as such term
has for purposes of Sections 13(d) and 14(d) of the Exchange Act.
(iv) The term "Beneficial Owner" shall have the same meaning
as such term has for purposes of Rule 13d-3 promulgated under the Exchange
Act, except that a Person shall be deemed to have beneficial ownership of all
shares that a Person has the right to acquire, whether or not such right is
immediately exercisable.
TENTH: (a) In addition to any affirmative vote required by
law or the charter or By-Laws of the Corporation, the affirmative vote of
the holders of not less than 66 2/3% of all of the outstanding shares of
capital stock of the Corporation entitled to vote generally in the election
of directors of the Corporation shall be required for the approval or
authorization of any "Business Combination" (as hereinafter defined) of the
Corporation. Such affirmative vote shall be required notwithstanding the
fact that no vote may be required, or that a lesser percentage vote may be
specified by law or in any agreement with any national securities exchange
or otherwise. However, such 66 2/3% voting requirement shall not be
applicable if the Business Combination is solely between the Corporation
and another corporation of which the Corporation owns, directly or
indirectly, one hundred percent of the outstanding capital stock entitled
to vote in the election of directors of such corporation.
(b) Except as defined below, capitalized terms in this
ARTICLE TENTH have the meanings specified in Subsection (4)(A) of Section
(c) of ARTICLE SIXTH. For purposes of this ARTICLE TENTH:
(i) The term "Business Combination" shall mean (x) any
merger or consolidation of the Corporation or statutory share exchange to
which the Corporation is a party in which (1) the Corporation fails to
survive or is not the successor and that involves all or any "Substantial
Part" (as hereinafter defined) of the assets of the Corporation or (2) the
shares of capital stock of the Corporation entitled to vote generally in
the election of directors of the Corporation outstanding immediately prior
thereto represent (either by remaining outstanding or by being converted
into voting stock of the surviving or successor entity) less than 80% of
the voting power of shares of capital stock of the Corporation entitled to
vote generally in the election of directors of the Corporation (or such
surviving or successor entity), directly or indirectly, immediately after
such merger, consolidation or share exchange, (y) any sale, exchange,
transfer or other disposition (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Corporation
and (z) the execution of any agreement, contract or other arrangement
providing for any of the transactions described in the definition of
Business Combination.
(ii) The term "Substantial Part" as used with reference to
the assets of the Corporation shall mean assets having a value of more than
25% of the Total Market Capitalization (as hereinafter defined in this
ARTICLE TENTH) as of the end of the Corporation's most recent quarterly or
fiscal year-end consolidated balance sheet that has been delivered to
stockholders prior to the time the stockholders would be required to
approve or authorize the Business Combination. The value of the assets of
the Corporation for the purpose of determining whether such assets
constitute a Substantial Part shall be the book value of such assets as
reflected in the Corporation's most recent quarterly or fiscal year-end
consolidated balance sheet existing at the time the stockholders would be
required to approve or authorize the Business Combination or, if materially
different, the consideration involved in such transaction.
(iii) The term "Total Market Capitalization" shall mean the
sum of (1) the Market Value (as hereinafter defined) of the then
outstanding shares of Common Stock of the Corporation, (2) the Market Value
of shares of Common Stock for which Units are exchangeable pursuant to the
Exchange Rights (whether or not such Units are immediately exchangeable and
without regard to the applicable Ownership Limit, Related Party Limit and
Look-Through Ownership Limit) and (3) the total principal amount of
indebtedness of the Corporation and Operating Partnership (without
duplication) as reflected in the Corporation's most recent quarterly or
fiscal year-end consolidated balance sheet existing at the time the
stockholders would be required to approve or authorize the Business
Combination.
(iv) The term "Market Value" with respect to shares of Common
Stock shall mean the average of the Closing Prices for the ten (10)
consecutive Trading Days immediately prior to the date beginning fifteen (15)
days prior to the time the Board of Directors would be required to approve or
authorize the Business Combination.
ELEVENTH: The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, I have signed these Articles of
Incorporation, acknowledging the same to be my act, on March 15, 1996.
Witness:
/s/ Rachel B. Mandell /s/ Anne M. Lindner
- - - --------------------- -----------------------
II. (a) As of immediately before the amendment and
restatement the total number of shares of stock of all classes which
the Corporation has authority to issue is 100,000 shares, all of
which shares are Common Stock (par value $1.00 per share).
(b) As amended and restated the total number of shares
of stock of all classes which the Corporation has authority to
issue is 320,000,000 shares, consisting of (i) 150,000,000
shares of Common Stock (par value $0.01 per share), (ii)
160,000,000 shares of Excess Stock (par value $0.01 per share),
of which 150,000,000 shares shall be Excess Common Stock and
10,000,000 shares shall be Excess Preferred Stock and (iii)
10,000,000 shares of Preferred Stock (par value $1.00 per
share).
(c) The aggregate par value of all shares having a par
value is $100,000 before the amendment and $13,100,000 as
amended.
(d) The shares of stock of the Corporation are divided
into classes, and ARTICLE SIXTH, Sections (c) and (d) of I
above contain a description, as amended, of each class,
including the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption.
III. The foregoing amendment and restatement of the Charter of
the Corporation has been advised by the Board of Directors and
approved by the sole stockholder of the Corporation.
IN WITNESS WHEREOF, Irvine Apartment Communities Maryland, Inc.
has caused these presents to be signed in its name and on its behalf by its
President and witnessed by its Secretary on , 1996.
WITNESS: IRVINE APARTMENT COMMUNITIES
MARYLAND, INC.
/s/ Richard E. Moran Jr. By: /s/ Steven P. Albert
- - - ------------------------- --------------------------
Secretary President
THE UNDERSIGNED, President of Irvine Apartment Communities
Maryland, Inc., who executed on behalf of the Corporation the foregoing
Articles of Amendment and Restatement of which this certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles of Amendment and Restatement to be the corporate act of
said Corporation and hereby certifies that to the best of his knowledge,
information, and belief the matters and facts set forth therein with respect
to the authorization and approval thereof are true in all material respects
under the penalties of perjury.
/s/ Steven P. Albert
-----------------------------------
President
ARTICLES OF MERGER
BETWEEN
IRVINE APARTMENT COMMUNITIES MARYLAND, INC.
(a Maryland Corporation)
AND
IRVINE APARTMENT COMMUNITIES, INC.
(a Delaware Corporation)
IRVINE APARTMENT COMMUNITIES MARYLAND, INC., a corporation duly
organized and existing under the laws of the State of Maryland ("MD Corp"),
and IRVINE APARTMENT COMMUNITIES, INC., a corporation duly organized and
existing under the laws of the State of Delaware ("DE Corp"), do hereby
certify that:
FIRST: MD Corp and DE Corp agree to merge.
SECOND: The name and place of incorporation of each party to these
Articles of Merger are IRVINE APARTMENT COMMUNITIES MARYLAND, INC., a Maryland
corporation, and IRVINE APARTMENT COMMUNITIES, INC., a Delaware corporation.
MD Corp shall be the successor corporation in the merger and shall change its
name to IRVINE APARTMENT COMMUNITIES, INC. as a corporation of the State of
Maryland.
THIRD: The date of incorporation of DE Corp was September 10, 1993.
DE Corp is incorporated under the Delaware General Corporation Law. DE Corp
is not registered or qualified to do business in Maryland.
FOURTH: MD Corp has its principal office in Maryland in Baltimore
City. DE Corp does not have any principal office in Maryland. DE Corp does
not own an interest in land in Maryland.
FIFTH: The terms and conditions of the transaction set forth in
these Articles of Merger were advised, authorized, and approved by each
corporation party to these Articles of Merger in the manner and by the vote
required by its charter and the laws of the state of its incorporation. The
manner of approval was as follows:
(a) The Board of Directors of MD Corp, by written consent
dated March 19, 1996 signed by all the directors and filed with
the minutes of proceedings of the Board of Directors, adopted a
resolution which declared that the proposed merger was advisable
on substantially the terms and conditions set forth or referred to
in the resolution and directed that the proposed merger be
submitted for consideration by the sole stockholder of MD Corp by
unanimous written consent. The Board of Directors of DE Corp by
written consent dated March 19, 1996 signed by all the directors
and filed with the minutes of proceedings of the Board of
Directors, adopted a resolution which declared that the proposed
merger was advisable on substantially the terms and conditions set
forth or referred to in the resolution and directed that the
proposed merger be submitted for consideration at the annual
meeting of the stockholders of DE Corp.
(b) The proposed merger was approved by the sole stockholder
of MD Corp by unanimous written consent dated March 20, 1996. The
proposed merger was approved by the stockholders of DE Corp at the
annual meeting of stockholders held on April 30, 1996 by the vote
required under Delaware law.
SIXTH: The merger does not amend the charter of the successor, MD
Corp, except that Article Second of the charter is hereby deleted in its
entirety and the following substituted therefor:
"The name of the corporation (which is hereinafter called the
"Corporation") is:
Irvine Apartment Communities, Inc."
SEVENTH: The total number of shares of stock of all classes which
both MD Corp and DE Corp each have authority to issue is 320,000,000,
consisting of (i) 150,000,000 shares of Common Stock (par value $0.01 per
share) (the "Common Stock"), (ii) 160,000,000 shares of Excess Stock (par
value $0.01 per share) (the "Excess Stock"), of which 150,000,000 shares
shall be Excess Common Stock and 10,000,000 shares shall be Excess
Preferred Stock, as such terms are defined in the Charter of MD Corp and
(iii) 10,000,000 shares of Preferred Stock (par value $1.00 per share)
(the "Preferred Stock"), and amounting in aggregate par value to
$13,100,000.
EIGHTH: The merger does not increase the authorized stock of MD
Corp.
NINTH: The terms and conditions of the merger, the mode of carrying
the same into effect and the manner and basis of converting or exchanging
issued stock of the merging corporations into different stock or other
consideration are as follows:
(a) Each issued and outstanding share of the Common Stock of
MD Corp on the effective date of the merger, all of which are held by
DE Corp, shall, upon effectiveness and without further action,
automatically be canceled. No shares of any other class of capital
stock of MD Corp are outstanding.
(b) Each issued and outstanding share of Common Stock of DE
Corp on the effective date of the merger shall, upon effectiveness
and without further act, automatically be converted into, and become,
one share of the Common Stock of MD Corp. No other shares of any
other class of capital stock of DE Corp are outstanding.
TENTH: The merger shall become effective upon filing of these
Articles of Merger with the State of Maryland State Department of Assessments
and Taxation.
IN WITNESS WHEREOF, IRVINE APARTMENT COMMUNITIES MARYLAND, INC., and
IRVINE APARTMENT COMMUNITIES, INC. have caused these presents to be signed in
their respective names and on their respective behalves by their respective
presidents and witnessed by their respective secretaries on May 2, 1996.
WITNESS: IRVINE APARTMENT COMMUNITIES
MARYLAND, INC.
(a Maryland corporation)
/s/ Richard E. Moran Jr. /s/ Steven P. Albert
- - - ------------------------ -----------------------------
Secretary President
WITNESS: IRVINE APARTMENT COMMUNITIES,
INC.
(a Delaware corporation)
/s/ Richard E. Moran Jr. /s/ Steven P. Albert
- - - ------------------------ -----------------------------
Secretary President
THE UNDERSIGNED, President of IRVINE APARTMENT COMMUNITIES MARYLAND,
INC., a Maryland Corporation, who executed on behalf of the Corporation the
foregoing Articles of Merger of which this certificate is made a part, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Articles of Merger to be the corporate act of said Corporation and hereby
certifies that to the best of his knowledge, information and belief the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
/s/ Steven P. Albert
-----------------------------
President
THE UNDERSIGNED, President of IRVINE APARTMENT COMMUNITIES, INC., a
Delaware corporation, who executed on behalf of the Corporation the foregoing
Articles of Merger of which this certificate is made a part, hereby
acknowledges in the name and on behalf of said Corporation the foregoing
Articles of Merger to be the corporate act and deed of said Corporation and
hereby certifies that to the best of his knowledge, information and belief the
matters and facts set forth therein with respect to the authorization and
approval thereof are true in all material respects under the penalties of
perjury.
/s/ Steven P. Albert
-----------------------------
President
Exhibit 15
BY-LAWS
OF
IRVINE APARTMENT COMMUNITIES MARYLAND, INC.
(AS AMENDED AS OF APRIL 29, 1996)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be
in the City of Baltimore, State of Maryland.
Section 2. Other Offices. The Corporation may also have
offices at such other places both within and without the State of Maryland as
the Board of Directors may from time to time determine or the business of the
Corporation may require.
Section 3. Books. The books of the Corporation may be kept
within or without of the State of Maryland as the Board of Directors may from
time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Annual Meetings. The Corporation shall hold an
annual meeting of its stockholders commencing with the year 1997 to elect
directors and transact any other business within its powers or as may be
properly brought before the meeting, either on the second Tuesday of April in
each year if not a legal holiday, or on such other day within 30 days
thereafter as shall be set by the Board of Directors. If no other hour shall
be so designated such meeting shall be held at 10:00 a.m. Except as the
Charter or statute provides otherwise, any business may be considered at an
annual meeting without the purpose of the meeting having been specified in the
notice. Failure to hold an annual meeting does not invalidate the
Corporation's existence or affect any otherwise valid corporate acts.
Section 2. Special Meetings. At any time in the interval
between annual meetings, a special meeting of the stockholders may be
called by the Chairman of the Board or the President or by a majority of
the Board of Directors by vote at a meeting or in writing (addressed to the
Secretary of the Corporation) with or without a meeting. Special meetings
of the stockholders shall be called by the Secretary on the written request
of stockholders entitled to cast such percentage of all the votes entitled
to be cast at the meeting which represents the maximum percentage as may be
permitted for such purpose under the Maryland General Corporation Law, as
amended from time to time ("Maryland Law"). A request for a special
meeting shall state the purpose of the meeting and the matters proposed to
be acted on at it. The Secretary shall inform the stockholders who make
the request of the reasonably estimated costs of preparing and mailing a
notice of the meeting and, on payment of these costs to the Corporation,
notify each stockholder entitled to notice of the meeting. Unless
requested by stockholders entitled to cast a majority of all the votes
entitled to be cast at the meeting, a special meeting need not be called to
consider any matter which is substantially the same as a matter voted on at
any special meeting of stockholders held in the preceding 12 months.
Notwithstanding the foregoing, whenever holders of one or more classes or
series of Preferred Stock shall have the right, voting separately as a
class or series, to elect directors, such holders may call special meetings
of such holders pursuant to the terms of such classes or series.
Section 3. Place of Meetings. Meetings of stockholders shall
be held at such place in the United States as is set from time to time by the
Board of Directors.
Section 4. Notice of Meetings; Waiver of Notice. Not less
than ten nor more than 90 days before each stockholders' meeting, the
Secretary shall give written notice of the meeting to each stockholder
entitled to vote at the meeting and each other stockholder entitled to notice
of the meeting. The notice shall state the time and place of the meeting and,
if the meeting is a special meeting or notice of the purpose is required by
statute, the purpose of the meeting. Notice is given to a stockholder when
it is personally delivered to him or her, left at his or her residence or
usual place of business, or mailed to him or her at his or her address as it
appears on the records of the Corporation. Notwithstanding the foregoing
provisions, each person who is entitled to notice waives notice if he or she
before or after the meeting signs a waiver of the notice which is filed with
the records of stockholders' meetings, or is present at the meeting in person
or by proxy.
Section 5. Quorum; Voting. Unless statute or the Charter
provides otherwise, at a meeting of stockholders the presence in person or by
proxy of stockholders entitled to cast a majority of all the votes entitled to
be cast at the meeting constitutes a quorum, and a majority of all the votes
cast at a meeting at which a quorum is present is sufficient to approve any
matter which properly comes before the meeting, except that a plurality of all
the votes cast at a meeting at which a quorum is present is sufficient to
elect a director.
Section 6. Organization; Adjournments. (a) At each meeting of
stockholders, the Chairman of the Board, if one shall have been elected, (or
in his absence or if one shall not have been elected, the President) shall act
as chairman of the meeting. The Secretary (or in his absence or inability to
act, the person whom the chairman of the meeting shall appoint secretary of
the meeting) shall act as secretary of the meeting and keep the minutes
thereof.
(b) Whether or not a quorum is present, a meeting of
stockholders convened on the date for which it was called may be adjourned
from time to time without further notice by (i) the chairman of the meeting,
(ii) the Board of Directors or (iii) a majority vote of the stockholders
present in person or by proxy, in each case to a date not more than 120 days
after the original record date. Any business which might have been transacted
at the meeting as originally notified may be deferred and transacted at any
such adjourned meeting at which a quorum shall be present.
Section 7. General Right to Vote; Proxies. Unless the
Charter provides for a greater or lesser number of votes per share or
limits or denies voting rights, each outstanding share of stock, regardless
of class, is entitled to one vote on each matter submitted to a vote at a
meeting of stockholders. In all elections for directors, each share of
stock may be voted for as many individuals as there are directors to be
elected and for whose election the share is entitled to be voted. A
stockholder may vote the stock the stockholder owns of record either in
person or by proxy. A stockholder may sign a writing authorizing another
person to act as proxy. Signing may be accomplished by the stockholder or
the stockholder's authorized agent signing the writing or causing the
stockholder's signature to be affixed to the writing by any reasonable
means, including facsimile signature. A stockholder may authorize another
person to act as proxy by transmitting, or authorizing the transmission of,
a telegram, cablegram, datagram, or other means of electronic transmission
to the person authorized to act as proxy or to a proxy solicitation firm,
proxy support service organization, or other person authorized by the
person who will act as proxy to receive the transmission. Unless a proxy
provides otherwise, it is not valid more than 11 months after its date. A
proxy is revocable by a stockholder at any time without condition or
qualification unless the proxy states that it is irrevocable and the proxy
is coupled with an interest. A proxy may be made irrevocable for so long
as it is coupled with an interest. The interest with which a proxy may be
coupled includes an interest in the stock to be voted under the proxy or
another general interest in the Corporation or its assets or liabilities.
Section 8. List of Stockholders. At each meeting of
stockholders, a full, true and complete list of all stockholders entitled to
vote at such meeting, showing the number and class of shares held by each and
certified by the transfer agent for such class or by the Secretary, shall be
furnished by the Secretary.
Section 9. Conduct of Business and Voting. At all meetings
of stockholders, unless the voting is conducted by inspectors, the proxies
and ballots shall be received, and all questions touching the qualification
of voters and the validity of proxies, the acceptance or rejection of votes
and procedures for the conduct of business not otherwise specified by these
By-Laws, the Charter or law, shall be decided or determined by the chairman
of the meeting. If demanded by stockholders, present in person or by
proxy, entitled to cast 10% in number of votes entitled to be cast, or if
ordered by the Chairman of the Board of Directors, the vote upon any
election or question shall be taken by ballot and, upon like demand or
order, the voting shall be conducted by two inspectors, in which event the
proxies and ballots shall be received, and all questions touching the
qualification of voters and the validity of proxies and the acceptance or
rejection of votes shall be decided, by such inspectors. Unless so
demanded or ordered, no vote need be by ballot and voting need not be
conducted by inspectors. The chairman of the meeting shall appoint any
such inspector or inspectors, unless otherwise directed by a majority vote
of stockholders present in person or by proxy at the meeting. No candidate
for election as a director at a meeting shall serve as an inspector
thereat.
Section 10. Informal Action by Stockholders. Any action
required or permitted to be taken at a meeting of stockholders may be taken
without a meeting if there is filed with the records of stockholders meetings
a unanimous written consent which sets forth the action and is signed by each
stockholder entitled to vote on the matter and a written waiver of any right
to dissent signed by each stockholder entitled to notice of the meeting but
not entitled to vote at it.
Section 11. Nomination of Directors. Subject to the final
paragraph of this Section 11, only persons who are nominated in accordance
with the procedures set forth in these By-Laws shall be eligible to serve
as directors. Nominations of persons for election to the Board of
Directors of the Corporation may be made at a meeting of stockholders (a)
by or at the direction of the Board of Directors or (b) by any stockholder
of the Corporation who is a stockholder of record at the time of giving of
notice provided for in this Section 11, who shall be entitled to vote for
the election of directors at the meeting and who complies with the notice
procedures set forth in this Section 11. Such nominations, other than
those made by or at the direction of the Board of Directors, must be made
pursuant to timely notice in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice shall be delivered to or mailed and
received at the principal executive offices of the Corporation not less
than 60 days nor more than 90 days prior to the meeting; provided, however,
that in the event that less than 70 days' notice or prior public disclosure
of the date of the meeting is given or made to stockholders, notice by the
stockholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date
of the meeting or such public disclosure was made. Such stockholder's
notice shall set forth (a) as to each person whom the stockholder proposes
to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations
of proxies for election of directors, or is otherwise required, in each
case pursuant to Regulation 14A under the Securities Exchange Act of 1934
(including such person's written consent to being named in the proxy
statement as a nominee and to serving as a director if elected); and (b) as
to the stockholder giving the notice (i) the name and address, as they
appear on the Corporation's books, of such stockholder and (ii) the class
and number of shares of the Corporation which are beneficially owned by
such stockholder. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall
furnish to the Secretary of the Corporation that information required to be
set forth in a stockholder's notice of nomination which pertains to the
nominee. Notwithstanding anything in these By-Laws to the contrary but
subject to the next succeeding paragraph, no person shall be eligible to
serve as a director of the Corporation unless nominated in accordance with
the procedures set forth in this By-Law. The chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that a
nomination was not made in accordance with the procedures prescribed by the
By-Laws, and if he should so determine, he shall so declare to the meeting
and the defective nomination shall be disregarded. Notwithstanding the
foregoing provisions of this Section 11, a stockholder shall also comply
with all applicable requirements of the Securities Exchange Act of 1934,
and the rules and regulations thereunder with respect to the matters set
forth in this Section.
The provisions of this Section 11 requiring prior notice to
nominate directors shall not be applicable to a person or entity which has the
right to nominate for election or re-election to the Board of Directors one or
more person as provided in Article III of that certain Miscellaneous Rights
Agreement dated as of March 20, 1996, as the same may be amended, modified or
restated from time to time (the "Miscellaneous Rights Agreement"), among the
Corporation, The Irvine Company and Irvine Apartment Communities, L.P., (the
"Operating Partnership").
Section 12. Notice of Business. Subject to the final
paragraph of this Section 12, at any meeting of the stockholders, only such
business shall be conducted as shall have been brought before the meeting
(a) by or at the direction of the Board of Directors or (b) by any
stockholder of the Corporation who is a stockholder of record at the time
of giving of the notice provided for in this Section 12, who shall be
entitled to vote at such meeting and who complies with the notice
procedures set forth in this Section 12. For business to be properly
brought before a stockholder meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary of the
Corporation. To be timely, a stockholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation
not less than 60 days nor more than 90 days prior to the meeting; provided,
however, that in the event that less than 70 days' notice or prior public
disclosure of the date of the meeting is given or made to stockholders,
notice by the stockholder to be timely must be received no later than the
close of business on the 10th day following the day on which such notice of
the date of the meeting was mailed or such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the meeting (a) a brief description of
the business desired to be brought before the meeting and the reasons for
conducting such business at the meeting, (b) the name and address, as they
appear on the Corporation's books, of the stockholder proposing such
business, (c) the class and number of shares of the Corporation which are
beneficially owned by the stockholder and (d) any material interest of the
stockholder in such business. Notwithstanding anything in the By-Laws to
the contrary but subject to the next succeeding paragraph, no business
shall be conducted at a stockholder meeting except in accordance with the
procedures set forth in this Section 12. The chairman of the meeting
shall, if the facts warrant, determine and declare to the meeting that
business was not properly brought before the meeting and in accordance with
the provisions of the By-Laws, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before
the meeting shall not be transacted. Notwithstanding the foregoing,
provisions of this Section 12, a stockholder shall also comply with all
applicable requirements of the Securities Exchange Act of 1934, and the
rules and regulations thereunder with respect to the matters set forth in
this Section 12.
The provisions of this Section 12 requiring prior notice to
bring business before a meeting of stockholders shall not be applicable to
the person or entity which has the right to nominate for election or re-
election to the Board of Directors one or more persons as provided in
Article III of the Miscellaneous Rights Agreement and, subject to
compliance with applicable law, any such person or entity may bring before
any meeting of stockholders any business, without the need to give advance
notice of such business.
Section 13. Miscellaneous Rights Agreement. The provisions
of Article III of the Miscellaneous Rights Agreement with respect to
certain matters relating to governance of the Corporation (including the
right to designate nominees for election as a director, to designate
persons to fill vacancies on the Board of Directors and limitations on
increasing or decreasing the size of the Board of Directors) (the
"Miscellaneous Rights") shall, in addition to constituting contractual
obligations of the Corporation, have the same effect as By-Laws of the
Corporation. In the event of any inconsistency between any Miscellaneous
Right created by the Miscellaneous Rights Agreement and any other provision
of these By-Laws (other than a By-Law adopted by a vote of stockholders
prior to the execution and delivery of any amendment to the Miscellaneous
Rights Agreement creating such Miscellaneous Right), to the extent
permitted by applicable law, the Miscellaneous Right shall control.
ARTICLE III
DIRECTORS
Section 1. General Powers. Except as otherwise provided in
Maryland Law or the Charter, the business and affairs of the Corporation shall
be managed by or under the direction of the Board of Directors. All powers of
the Corporation may be exercised by or under authority of the Board of
Directors, except as conferred on or reserved to the stockholders by statute
or by the Charter or By-Laws.
Section 2. Number, Classes, Term of Office, etc. The Board
of Directors shall consist of not less than three nor more than ten
directors, with the exact number of directors to be determined from time to
time solely by resolution adopted by the affirmative vote of a majority of
the entire Board of Directors. The directors shall be divided into three
classes, designated Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. Except as otherwise
provided in the Charter, each director shall serve for a term ending on the
date of the third annual meeting of stockholders next following the annual
meeting at which such director was elected. Notwithstanding the foregoing,
each director shall hold office until such director's successor shall have
been duly elected and qualified or until such director's earlier death,
resignation or removal. Directors need not be stockholders.
Section 3. Majority of Unaffiliated Directors. Except
during a period of vacancy or vacancies on the Board of Directors, a
majority of the directors shall at all times be persons who are not (i)
affiliates (as that term is defined for purposes of Rule 144 under the
Securities Act of 1933, as amended), or an officer, director or employee,
of The Irvine Company or (ii) the spouse, ancestors and lineal descendants
or brother or sister (whether by the whole or half blood) of Donald L.
Bren ("Unaffiliated Directors").
Section 4. Quorum and Manner of Acting. (a) Unless the
Charter or these By-Laws require a greater number, a majority of the total
number of directors, including, if one or more of such nominees has been
elected to the Board of Directors, at least one director of the Corporation
who was nominated for election or reelection as a director of the
Corporation pursuant to Article III of the Miscellaneous Rights Agreement
(or, in the event of the death, resignation or removal of any such
director, a director who has been elected to fill such vacancy pursuant to
Article III of the Miscellaneous Rights Agreement) (an "Irvine Board
Representative"), shall Constitute a quorum for the transaction of
business, and, except as provided in paragraphs (b) and (c) below, the
affirmative vote of a majority of the directors present at a meeting at
which a quorum is present shall be the act of the Board of Directors. When
a meeting is adjourned to another time or place (whether or not a quorum is
present), notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting, the Board of Directors may transact any
business which might have been transacted at the original meeting. If a
quorum shall not be present at any meeting of the Board of Directors the
directors present thereat may adjourn the meeting, from time to time,
without notice other than announcement at the meeting, until a quorum shall
be present.
(b) Notwithstanding the foregoing, the affirmative vote of
directors representing more than 75% of the entire Board of Directors (the
"Required Directors") shall be required to approve the actions set forth in
clauses (i) through (viii) below and such action shall not be effective unless
approved by the affirmative vote of the Required Directors (capitalized terms
in this Section 4(b) have the meanings specified in ARTICLE NINTH of the
Articles of Incorporation):
(i) a Change of Control of the Corporation or the Operating
Partnership;
(ii) any amendment to the Charter or these By-Laws, or any
amendment to the Operating Partnership Agreement;
(iii) any waiver or modification of an applicable Ownership
Limit, Related Party Limit or Look-Through Ownership Limit;
(iv) any merger, consolidation or sale of all or substantially
all of the assets of the Corporation or the Operating Partnership;
(v) the issuance of any Equity Securities of the Corporation
or any securities convertible into or exchangeable or exercisable for any
Equity Securities of the Corporation, provided that the affirmative vote of
the Required Directors shall not be required with respect to the issuance
of Equity Securities (excluding for purposes of this proviso, Equity
Securities (other than Common Stock) having any voting rights other than
voting rights required by Maryland Law or by the rules of the NYSE) (a)
pursuant to any stock incentive plan adopted by the Corporation, (b) in
connection with The Irvine Company's exercise of the Exchange Rights or the
cash tender rights provided for in Section 8.6 of the Operating Partnership
Agreement, (c) in connection with the acquisition of land for common stock
pursuant to that certain Exclusive Land Rights and Non-Competition
Agreement dated as of November 21, 1993 among the Corporation, the
Operating Partnership, The Irvine Company and Donald L. Bren, as the same
may be amended, modified or restated from time to time (the "Land Rights
Agreement") or (d) in a bona fide underwritten public offering managed by
one or more nationally recognized investment banking firms;
(vi) for the Corporation to take title to assets (other than
temporarily in connection with an acquisition prior to contributing such
assets to the Operating Partnership), or to conduct business other than
through the Operating Partnership, or for the Corporation or the Operating
Partnership to engage in any business other than the ownership, construction,
development and operation of multifamily rental apartment communities;
(vii) for the Corporation or the Operating Partnership to make
a general assignment for the benefit of creditors or to institute any
proceedings in bankruptcy or for the liquidation, dissolution, reorganization
or winding up of the Corporation or the Operating Partnership or to consent to
the taking of any such action against the Corporation or the Operating
Partnership; and
(viii) to terminate the Corporation's status as a real estate
investment trust for federal income tax purposes.
(c) Notwithstanding any other provision of these By-Laws but
subject to the provisions of paragraph (b) above, the following actions of the
Board of Directors shall require the approval of the Independent Directors
Committee established pursuant to Section 10 of this Article III:
(i) the selection of an independent appraiser on behalf of
the Corporation pursuant to the Land Rights Agreement; and
(ii) all transactions between the Corporation or the
Operating Partnership and The Irvine Company and affiliates of The Irvine
Company and Mr. Bren including, but not limited to, (a) whether or not the
Corporation shall exercise any of its rights under the Land Rights
Agreement and (b) the terms of any agreement between the Corporation and
the Operating Partnership and The Irvine Company or affiliates of The
Irvine Company and Mr. Bren.
Section 5. Time and Place of Meetings. The Board of
Directors shall hold its meetings at such place, either within or without
the State of Maryland, and at such time as may be determined from time to
time by the Board of Directors (or the Chairman in the absence of a
determination by the Board of Directors).
Section 6. Annual Meeting. The Board of Directors shall
meet for the purpose of organization, the election of officers and the
transaction of other business, as soon as practicable after each annual
meeting of stockholders, on the same day and at the same place where such
annual meeting shall be held. Notice of such meeting need not be given.
In the event such annual meeting is not so held, the annual meeting of the
Board of Directors may be held at such place either within or without the
State of Maryland, on such date and at such time as shall be specified in a
notice thereof given as hereinafter provided in Section 9 of this Article
III or in a waiver of notice thereof signed by any director who chooses to
waive the requirement of notice.
Section 7. Regular Meetings. After the place and time of
regular meetings of the Board of Directors shall have been determined and
notice thereof shall have been once given to each member of the Board of
Directors, regular meetings at such place and time may be held without further
notice being given.
Section 8. Special Meetings. Special meetings of the Board
of Directors may be called by the Chairman of the Board and shall be called
by the Chairman of the Board, President or Secretary on the written request
of three directors. Notice of special meetings of the Board of Directors
shall be given to each director at least three days before the date of the
meeting in such manner as is determined by the Board of Directors.
Section 9. Notice of Meeting. Except as provided in
Sections 6 or 7, the Secretary shall give notice to each director of each
regular and special meeting of the Board of Directors. The notice shall
state the time and place of the meeting. Notice is given to a director
when it is delivered personally to him or her, left at his or her residence
or usual place of business, or sent by telegraph, facsimile transmission or
telephone, at least 24 hours before the time of the meeting or, in the
alternative by mail to his or her address as it shall appear on the records
of the Corporation, at least 72 hours before the time of the meeting.
Unless the By-Laws or a resolution of the Board of Directors provides
otherwise, the notice need not state the business to be transacted at or
the purposes of any regular or special meeting of the Board of Directors.
No notice of any meeting of the Board of Directors need be given to any
director who attends except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened, or to any director who, in
writing executed and filed with the records of the meeting either before or
after the holding thereof, waives such notice. Any meeting of the Board of
Directors, regular or special, may adjourn from time to time to reconvene
at the same or some other place, and no notice need be given of any such
adjourned meeting other than by announcement.
Section 10. Committees. (a) The Board of Directors may,
by resolution passed by a majority of the entire Board, designate one or
more committees, each committee to consist of such number of directors of
the Corporation as is equal to or greater than the minimum number permitted
by Maryland Law. The Board may designate one or more directors as
alternate members of any committee, who may replace any absent or
disqualified member at any meeting of the committee. Any such committee,
to the extent provided in the resolution of the Board of Directors, shall
have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the corporation,
except the power to declare dividends or other distributions on stock,
elect directors, issue stock other than as permitted by Maryland Law,
recommend to the stockholders any action which requires stockholder
approval, amend the By-Laws, or approve any merger or share exchange which
does not require stockholder approval. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Directors when
required.
(b) The Corporation shall initially have the following
committees, the specific authority and members of which shall be as designated
herein or by resolution of the Board of Directors:
(i) An Executive Committee, which shall have such authority
to act in lieu of the Board of Directors on all matters permitted by law
including the power to acquire and dispose of real property and the power to
authorize the execution of contracts and agreements, other than matters which
must be approved by the Independent Directors Committee or the Required
Directors.
(ii) An Independent Directors Committee which shall have
the authority to approve the actions of the Board of Directors as specified
in Section 4(c) of the Article III. The Independent Directors Committee
shall consist of at least five persons each of whom shall be an
Unaffiliated Director and shall be a person who has not been employed by
The Irvine Company or any of its subsidiaries within the five years
preceding such person's election as a director of the Corporation.
(iii) An Audit Committee, which will consist solely of
persons who are not officers or employees of the Corporation and which
shall make recommendations concerning the engagement of independent public
accountants, review with the independent public accountants the plans and
results of the audit engagement, approve professional services provided by
the independent public accountants, review the independence of the
independent public accountants, consider the range of audit and non-audit
fees and review the adequacy of the Corporation's internal accounting
controls. The Audit Committee shall consist of three persons, at least two
of which shall be Unaffiliated Directors.
(iv) A Compensation Committee, which shall consist solely of
persons who are not employees or officers of the Corporation and which shall
determine compensation for the Corporation's executive officers and administer
any stock incentive plan adopted by the Corporation. At least two members of
the Compensation Committee shall be Unaffiliated Directors.
Section 11. Action by Consent. Unless otherwise restricted
by the Charter or these By-Laws, any action required or permitted to be
taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting, if all members of the Board or committee,
as the case may be, consent thereto in writing, and the writing or writings
are filed with the minutes of proceedings of the Board or committee.
Section 12. Telephonic Meeting. Unless otherwise
restricted by the Charter or these By-Laws, members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or such committee, as
the case may be, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can
hear each other, and such participation in a meeting shall constitute
presence in person at the meeting.
Section 13. Resignation. Any director may resign at any time
by giving written notice to the Board of Directors or to the Secretary of the
Corporation. The resignation of any director shall take effect upon receipt
of notice thereof or at such later time as shall be specified in such notice;
and unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
Section 14. Vacancies. The stockholders may elect a
successor to fill a vacancy on the Board of Directors which results from
the removal of a director. A director elected by the stockholders to fill
a vacancy which results from the removal of a director serves for the
balance of the term of the removed director. A majority of the remaining
directors, whether or not sufficient to constitute a quorum, may fill a
vacancy on the Board of Directors which results from any cause except an
increase in the number of directors, and a majority of the entire Board of
Directors may fill a vacancy which results from an increase in the number
of directors. A director elected by the Board of Directors to fill a
vacancy serves until the next annual meeting of stockholders and until his
or her successor is elected and qualifies.
Section 15. Removal. No director may be removed from
office by the stockholders except for cause with the affirmative vote of
the holders of not less than 66 2/3% of the total voting power of all
outstanding securities of the Corporation then entitled to vote generally
in the election of directors, voting together as a single class.
Section 16. Compensation. Unless otherwise restricted by the
Charter or these By-Laws, the Board of Directors shall have authority to fix
the compensation of directors, including fees and reimbursement of expenses.
Section 17. Preferred Directors. Notwithstanding anything
else contained herein, whenever the holders of one or more classes or
series of Preferred Stock shall have the right, voting separately as a
class or series, to elect directors, the election, term of office, filing
of vacancies, removal and other features of such directorships shall be
governed by the terms of the resolutions applicable thereto adopted by the
Board of Directors pursuant to the Charter, and such directors so elected
shall not be subject to the provisions of sections 2, 14 and 15 of this
Article III unless otherwise provided therein.
ARTICLE IV
OFFICERS
Section 1. Principal Officers. The principal officers of
the Corporation shall be a President (who shall be the Chief Executive
Officer of the Corporation), one or more Vice Presidents, a Treasurer and a
Secretary who shall have the duty, among other things, to record the
proceedings of the meetings of stockholders and directors in a book kept
for that purpose. The Corporation may also have such other principal
officers, including one or more controllers, as the Board may in its
discretion appoint. The Chairman of the Board shall be a director; the
other officers may be directors.
Section 2. Election, Term of Office and Remuneration. The
principal officers of the Corporation shall be elected annually by the Board
of Directors at the annual meeting thereof. Each such officer shall hold
office until his successor is elected and qualified, or until his earlier
death, resignation or removal. The remuneration of all officers of the
Corporation shall be fixed by the Board of Directors. Any vacancy in any
office shall be filled in such manner as the Board of Directors shall
determine.
Section 3. Subordinate Officers. In addition to the
principal officers enumerated in Section 1 of this Article IV, the
Corporation may have one or more Assistant Treasurers,, Assistant
Secretaries and Assistant Controllers and such other subordinate officers,
agents and employees as the Board of Directors may deem necessary, each of
whom shall hold office for such period as the Board of Directors may from
time to time determine. The Board of Directors may delegate to any
principal officer the power to appoint and to remove any such subordinate
officers, agents or employees.
Section 4. Removal. Except as otherwise permitted with
respect to subordinate officers, any officer may be removed, with or
without cause, at any time, by resolution adopted by the Board of
Directors; provided that no such removal shall alter, void or otherwise
affect any change in any written contractual relationship between the
Corporation and any such officer that is removed from office.
Section 5. Resignation. Any officer may resign at any time
by giving written notice to the Board of Directors (or to a principal
officer if the Board of Directors has delegated to such principal officer
the power to appoint and to remove such officer). The resignation of any
officer shall take effect upon receipt of notice thereof or at such later
time as shall be specified in such notice; and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make
it effective.
Section 6. Powers and Duties. The officers of the
Corporation shall have such powers and perform such duties incident to each
of their respective offices and such other duties as may from time to time
be conferred upon or assigned to them by the Board of Directors.
ARTICLE V
GENERAL PROVISIONS
Section 1. Fixing the Record Date. In order that the
Corporation may determine the stockholders entitled to notice of or to vote
at any meeting of stockholders or any adjournment thereof, the Board of
Directors may fix a record date or direct that the stock transfer books be
closed for a stated period for the purpose of making any proper
determination with respect to stockholders. The record date shall not be
prior to the close of business on the day the record date is fixed nor,
subject to Article II, Section 4, more than 90 days before the date on
which the vote or notice requiring the determination will be taken; the
transfer books may not be closed for a period longer than 20 days; and, in
the case of a meeting of stockholders, the record date or the closing of
the transfer books shall be at least ten days before the date of the
meeting. If no record date is fixed by the Board of Directors and the
stock transfer books are not closed, the record date for determining
stockholders entitled to notice of or to vote at a meeting of stockholders
shall be the later of the close of business on the day on which notice is
given or the 30th day prior to the date of the meeting. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided that
the Board of Directors may fix a new record date for the adjourned meeting.
Section 2. Dividends. Subject to limitations contained in
Maryland Law and the Charter, the Board of Directors may declare and pay
dividends upon the shares of capital stock of the Corporation, which
dividends may be paid either in cash, in property or in shares of the
capital stock of the Corporation. In order that the Corporation may
determine the stockholders entitled to receive payment of any dividend or
other distribution or allotment of any rights or the stockholders entitled
to exercise any rights in respect of any change, conversion or exchange of
stock, or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the
date upon which the resolution fixing the record date is adopted, and which
record date shall not be more than 90 days prior to such action. If no
record date is fixed, the record date for determining stockholders for any
such purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
Section 3. Fiscal Year. The fiscal year of the Corporation
shall commence on January 1 and end on December 31 of each year.
Section 4. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization
and the words "Corporate Seal, Maryland". The seal may be used by causing it
or a facsimile thereof to be impressed, affixed or otherwise reproduced.
Section 5. Voting of Stock Owned by the Corporation. The
President, a Vice-President, or a proxy appointed by either of them, on
behalf of the Corporation, may attend, vote at and grant proxies to be used
at any meeting of stockholders of any corporation (except this Corporation)
in which the Corporation may hold stock. The Board of Directors, however,
may by resolution appoint some other person to vote such shares, in which
case such person shall be entitled to vote such shares upon the production
of a certified copy of such resolution.
Section 6. Amendments. These By-Laws or any of them, may be
altered, amended or repealed, or new By-Laws may be made, by the stockholders
entitled to vote thereon at any annual or special meeting thereof or by the
Required Directors.
Amendment to Land Rights Agreement to reflect reincorporation of IAC in
Maryland.
AMENDMENT No. 3 dated as of May 2, 1996 to the Exclusive Land
Rights and Non-Competition Agreement dated as of November 21, 1993 as amended
by Amendment No. 1 thereto dated April 20, 1995 and Amendment No. 2 thereto
dated July 18, 1995 (as so amended, the "Existing Agreement").
W I T N E S S E T H:
WHEREAS, The Irvine Company, a Michigan corporation ("Irvine"),
Irvine Apartment Communities, L.P., a Delaware limited partnership
("Partnership"), Irvine Apartment Communities, Inc., a Delaware corporation
("IAC Delaware"), and Mr. Donald Bren, an individual ("Bren"), have entered
into the Existing Agreement;
WHEREAS, on May 2, 1996 and pursuant to an Agreement and Plan
of Merger dated as of March 20, 1996 IAC Delaware was merged (the "Merger")
with and into Irvine Apartment Communities Maryland, Inc., a Maryland
corporation, which was the surviving corporation in the Merger and which in
connection with the Merger changed its name to Irvine Apartment Communities,
Inc. ("IAC Maryland"); and
WHEREAS, the parties hereto desire to amend the Existing
Agreement as set forth below as a result of the Merger in order to reflect the
assumption by IAC Maryland of all of IAC Delaware's rights and obligations
thereunder.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. IAC Maryland hereby assumes all of the rights and
all of the obligations of IAC Delaware under the Existing Agreement and agrees
to be bound by the terms of the Existing Agreement as if originally named a
party thereto and Irvine, Partnership and Bren hereby consent to such
assumption.
Section 2. From and after the date hereof all references in
the Existing Agreement to IAC Delaware and REIT shall be deemed for all
purposes to mean IAC Maryland.
Section 3. Except as amended hereby, the provisions of the
Existing Agreement are ratified, approved and confirmed and shall remain in
full force and effect in accordance with its terms.
Section 4. The validly, construction and enforceability of
this Amendment shall be governed in all respects by the internal laws of
the State of California without regard to its conflict of laws rules.
Section 5. This Amendment may be executed in two or more
counterparts, all of which taken together with signature pages from each
party hereto shall be considered the same agreement, binding against all
parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
"IRVINE" "PARTNERSHIP"
THE IRVINE COMPANY, IRVINE APARTMENT COMMUNITIES, L.P.,
a Michigan corporation a Delaware Limited Partnership
By: /s/ Norman J. Metcalfe By: IRVINE APARTMENT COMMUNITIES, INC.,
-------------------------- a Maryland corporation, its sole
Norman J. Metcalfe General Partner
Vice Chairman
By: /s/ Michael D. McKee By: /s/ Richard E. Moran Jr.
-------------------------- ----------------------------------
Michael D. McKee Richard E. Moran Jr.
Executive Vice President Executive Vice President and
Chief Financial Officer
By: /s/ James E. Mead
-------------------------------
James E. Mead
Senior Vice President and Treasurer
"BREN" "REIT"
IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation
/s/ Donald Bren By: /s/ Richard E. Moran Jr.
- - - ------------------------ -------------------------------
DONALD BREN Richard E. Moran Jr.
Executive Vice President
and Chief Financial Officer
By: /s/ James E. Mead
-------------------------------
James E. Mead
Senior Vice President and Treasurer
Agreement relating to restrictions on transfer, convertibility and
redemption of the 336,432 L.P. Units issued in March 1995 as partial
consideration for the purchase of the Newport Ridge land site.
Agreement dated May 2, 1996 between Irvine Apartment
Communities, Inc., a Maryland corporation (the "Company"), Irvine Apartment
Communities, L.P., a Delaware limited partnership (the "Partnership"), The
Irvine Company, a Michigan corporation, and Irvine Affordable Housing, Inc., a
California corporation (IAH").
RECITALS
--------
WHEREAS, pursuant to the Exclusive Land Rights and
Non-Competition Agreement dated as of November 21, 1993, as amended by
Amendments No. 1 and No. 2 thereto, on March 7, 1995 The Irvine Company and
IAH sold certain land to the Partnership for 336,432 units of limited
partnership interest (the "L.P. Units") in the Partnership and the assumption
by the Partnership of the related assessment district debt, which L.P. Units
are convertible into 336,432 shares (the "Underlying Shares") of Common Stock,
par value $.01 per share ("Common Stock"), of the Company in accordance with
Section 8.6 of the Amended and Restated Agreement of Limited Partnership of
the Partnership dated as of December 1, 1993, as amended (the "Partnership
Agreement");
WHEREAS, such L.P. Units are represented by L.P. Unit
Certificate No. 10 registered in the name of IAH ("Certificate No. 10");
WHEREAS, in connection with the Company's Supplemental Listing
Application to the New York Stock Exchange (the "NYSE") relating to the
listing on the NYSE, upon official notice of issuance, of the Underlying
Shares, The Irvine Company and IAH have agreed for purposes of NYSE Rule
312.03 to certain limitations on their ability to convert and transfer such
336,432 L.P. Units into Common Stock as set forth in this Agreement; and
WHEREAS, the NYSE will immediately list 118,000 of the
Underlying Shares and will permit the listing of the remaining 218,432
Underlying Shares only upon a transfer of the L.P. Units to a person which is
not a "substantial securityholder" as set forth in Section 2 hereof.
NOW, THEREFORE, in consideration of the premises and for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Irvine Company and IAH agree that they will not
convert, or cause the conversion of, more than 118,000 of such 336,432 L.P.
Units into Common Stock of the Company. The Irvine Company and IAH further
agree that the remaining 218,432 L.P. Units may only be redeemed by the
Partnership for cash, including as a result of an exercise by The Irvine
Company and IAH of their cash tender rights pursuant to Section 8.6 of the
Partnership Agreement.
2. Notwithstanding Section 1, in the event that IAH transfers
in accordance with the Partnership Agreement such 336,432 L.P. Units or any
portion thereof to a person which is not a "substantial security holder"
within the meaning of NYSE Rule 312.03, such transferee will be permitted to
convert all of such transferred L.P. Units into Common Stock of the Company in
accordance with Section 8.6 of the Partnership Agreement without regard to the
limitations set forth in Section 1 hereof. If the proposed transferee of all
or any portion of such 336,432 L.P. Units is a "substantial security holder"
within the meaning of such Rule, such transfer will be subject to the
additional condition that the proposed transferee agree to be bound by the
terms of this Agreement with respect to the L.P. Units so transferred.
3. The following legend shall be placed on Certificate No. 10:
"THE TRANSFER OF THE L.P. UNITS REPRESENTED BY THIS CERTIFICATE
AND THE CONVERSION THEREOF INTO COMMON STOCK OF IRVINE
APARTMENT COMMUNITIES, INC. (THE "COMPANY") ARE SUBJECT TO THE
LIMITATIONS SET FORTH IN AN AGREEMENT DATED MAY 2, 1996, A COPY
OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICE."
4. The provisions of this Agreement shall only apply to the
336,432 L.P. Units represented by Certificate No. 10 and any L.P. Unit
certificates issued on transfer or exchange thereof and shall not apply to any
other L.P. Units issued by the Partnership.
5. This Agreement shall constitute the consent of The Irvine
Company and IAH required by Sections 7.3.A(5) and 7.3.D(iv) of the Partnership
Agreement and the parties hereto authorize the Company to provide a copy of
this Agreement to the NYSE.
6. Except as set forth herein, the provisions of the
Partnership Agreement shall apply to such 336,432 L.P. Units.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
IRVINE APARTMENT COMMUNITIES, INC.
By: /s/ Richard E. Moran Jr.
------------------------------
Richard E. Moran Jr.
Executive Vice President and
Chief Financial Officer
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities, Inc., its
General Partner
By: /s/ Richard E. Moran Jr.
------------------------------
Richard E. Moran Jr.
Executive Vice President and Chief
Financial Officer
THE IRVINE COMPANY
By: /s/ Michael D. McKee
------------------------------
Title: Executive Vice President
IRVINE AFFORDABLE HOUSING, INC.
By: /s/ William H. McFarland
------------------------------
Title: President
