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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) April 9, 1998
IRVINE APARTMENT COMMUNITIES, INC.
IRVINE APARTMENT COMMUNITIES, L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
Maryland 1-12478 33-0698698
Delaware 0-22569 33-0587829
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
550 Newport Center Drive, Suite 300, Newport Beach, California 92660
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrants' telephone number, including area code (714) 720-5500
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ITEM 5. Other Events.
Exhibits are filed herewith in connection with the Registration
Statement on Form S-3 (File No. 333-27181) filed by Irvine Apartment
Communities, L.P. (the "PARTNERSHIP") with the Securities and Exchange
Commission relating to the Partnership's Debt Securities.
EXHIBITS
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Exhibit 1.1 - Distribution Agreement dated April 9, 1998 among the Partnership,
Irvine Apartment Communities, Inc. and J.P. Morgan Securities Inc.,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated
Exhibit 4.1 - Officers' Certificate dated April 9, 1998 setting forth certain terms and
provisions applicable to the Partnership's Medium Term Notes, Series
A
Exhibit 4.2 - Form of Fixed Rate Medium-Term Note, Series A
Exhibit 4.3 - Form of Floating Rate Medium-Term Note, Series A
Exhibit 4.4 - Supplemental Indenture No. 2 dated as of April 9, 1998 to the
Indenture dated October 1, 1997 between the Partnership and
U.S. Bank Trust National Association, Trustee
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
IRVINE APARTMENT COMMUNITIES, INC.
By: /s/ SHAWN HOWIE
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Name: Shawn Howie
Vice President, Corporate Finance and
Controller
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities, Inc.,
its sole general partner
By: /s/ SHAWN HOWIE
---------------------------------------
Name: Shawn Howie
Date: April 9, 1998 Title: Vice President, Corporate Finance
and Controller
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INDEX TO EXHIBITS
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Exhibit 1.1 - Distribution Agreement dated April 9, 1998 among the Partnership,
Irvine Apartment Communities, Inc. and J.P. Morgan Securities Inc.,
Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Morgan Stanley & Co. Incorporated
Exhibit 4.1 - Officers' Certificate dated April 9, 1998 setting forth certain terms and
provisions applicable to the Partnership's Medium Term Notes, Series
A
Exhibit 4.2 - Form of Fixed Rate Medium-Term Note, Series A
Exhibit 4.3 - Form of Floating Rate Medium-Term Note, Series A
Exhibit 4.4 - Supplemental Indenture No. 2 dated as of April 9, 1998 to the
Indenture dated October 1, 1997 between the Partnership and
U.S. Bank Trust National Association, Trustee
</TABLE>
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EXHIBIT 1.1
IRVINE APARTMENT COMMUNITIES, L.P.
$250,000,000
MEDIUM-TERM NOTES, SERIES A
Due 9 Months or More from Date of Issue
Distribution Agreement
April 9, 1998
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
MORGAN STANLEY & CO. INCORPORATED
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Irvine Apartment Communities, L.P., a Delaware limited
partnership (the "Operating Partnership"), confirms its agreement with each of
you with respect to the issue and sale from time to time by the Operating
Partnership of its Medium-Term Notes, Series A Due 9 Months or More from Date of
Issue (the "Securities") in an aggregate initial offering price of up to
$250,000,000, as such amount shall be reduced by the aggregate initial offering
price of any other debt securities issued by the Operating Partnership, whether
within or without the United States ("Other Securities") pursuant to the
registration statement referred to below, and agrees with each of you
(individually, an "Agent", and collectively, the "Agents", which term shall
include any additional agents appointed pursuant to Section 13 hereof) as set
forth in this Agreement. The Securities will be issued from time to time under
an indenture dated as of October 1, 1997, as amended by Supplemental Indenture
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No. 2 dated as of April __, 1998 (as so amended, "Indenture") between the
Operating Partnership and U.S. Bank Trust National Association with offices in
California, formerly First Trust of California, National Association, as Trustee
(the "Trustee"). The Securities shall have the maturities, interest rates,
redemption provisions, if any, and other terms set forth in the Prospectus
referred to below as it may be amended or supplemented from time to time. The
Securities will be issued, and the terms and rights thereof established, from
time to time by the Operating Partnership in accordance with the Indenture.
On the basis of the representations and warranties herein
contained, but subject to the terms and conditions stated herein including
Section 14 and the next sentence of this paragraph, and to the reservation by
the Operating Partnership of the right to sell Securities directly to investors
on its own behalf, the Operating Partnership hereby (i) appoints the Agents as
agents of the Operating Partnership for the purpose of soliciting and receiving
offers to purchase Securities from the Operating Partnership by others pursuant
to Section 2(a) hereof and (ii) agrees that, except as otherwise contemplated
herein, whenever it determines to sell Securities directly to any Agent as
principal, it will enter into a separate agreement (each such agreement a "Terms
Agreement"), substantially in the form of Exhibit A hereto, relating to such
sale in accordance with Section 2(b) hereof. Notwithstanding any provision of
this Agreement to the contrary, the Operating Partnership shall have the right
to sell Securities directly on its own behalf, and may in its discretion solicit
and accept offers to purchase and accept unsolicited offers to purchase
Securities directly on its own behalf or from any broker or dealer not a party
to this Agreement (whether acting as principal or as agent) provided that (i) if
any such broker or dealer is acting on an agency basis such offer to purchase
was not solicited by the Operating Partnership or the Company and such broker or
dealer is engaged on terms substantially similar (including with respect to
commissions) to those set forth in this Agreement and (ii) each Agent is given
notice of such purchase, including in the case of any such agency sale the terms
of engagement of such broker or dealer, by the Operating Partnership promptly
after the purchase is agreed to. Each Agent acknowledges that, in the case of
any sale of Securities by the Operating Partnership not resulting from a
solicitation made or offer to purchase received by such Agent, or arising in
connection with a purchase by such Agent as principal, no commission shall be
payable by the Operating Partnership to such Agent with respect to such sale.
The Operating Partnership has prepared and filed with the
Securities and Exchange Commission (the "Commission") in accordance with the
provisions of the Securities Act of 1933, as amended, and the rules and
regulations of the Commission thereunder (collectively, the "Securities Act"), a
registration statement (the file number of which is 333-27181) on Form S-3
relating to debt securities (the "Shelf Securities") to be issued from time to
time by the Operating Partnership. The Operating Partnership has also filed
with, or proposes to file with, the Commission pursuant to Rule 424 under the
Securities Act supplements to the prospectus included in the registration
statement that will describe certain terms of the Securities. The registration
statement, including the exhibits thereto, as amended to the Commencement Date
(as hereinafter defined) is hereinafter referred to as the "Registration
Statement" and the related prospectus covering the Shelf Securities in the form
in which it appears in the Registration Statement is hereinafter referred to as
the "Basic Prospectus." The Basic Prospectus as supplemented by the prospectus
supplement
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specifically relating to the Securities in the form first used to confirm sales
of the Securities is hereinafter referred to as the "Prospectus." If the Company
has filed an abbreviated registration statement pursuant to Rule 462(b) under
the Securities Act (the "Rule 462 Registration Statement"), then any reference
herein to the term "Registration Statement" shall be deemed to include such Rule
462 Registration Statement. Any reference in this Agreement to the Registration
Statement, the Basic Prospectus, any preliminary form of Prospectus (a
"preliminary prospectus") previously filed with the Commission pursuant to Rule
424 or the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the
Securities Act which were filed under the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder
(collectively, the "Exchange Act") on or before the date of this Agreement or
the date of the Basic Prospectus, any preliminary prospectus or the Prospectus,
as the case may be; and any reference to "amend", "amendment" or "supplement"
with respect to the Registration Statement, the Basic Prospectus, any
preliminary prospectus or the Prospectus, including any supplement to the
Prospectus that sets forth only the terms of a particular issue of the
Securities (a "Pricing Supplement"), shall be deemed to refer to and include any
documents filed under the Exchange Act after the date of this Agreement, or the
date of the Basic Prospectus, any preliminary prospectus or the Prospectus, as
the case may be, which are deemed to be incorporated by reference therein.
If the Operating Partnership elects to rely upon Rule 434 ("Rule
434") promulgated under the Securities Act, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). If
Rule 434 is relied on, the term "Prospectus" shall refer to the Basic Prospectus
together with the Term Sheet and all references in this Agreement to the date of
the Prospectus shall mean the date of the Term Sheet. For purposes of this
Agreement, all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("EDGAR").
Irvine Apartment Communities, Inc., a Maryland corporation (the
"Company"), owns a general partnership interest in the Operating Partnership and
is its sole managing general partner. The Operating Partnership owns and
operates the "Properties" (as defined in the Prospectus). The Operating
Partnership holds general and limited partnership interests in San Rafael
Apartments Limited Partnership, a California limited partnership (the "Property
Partnership"), which owns one of the Properties. The Company, the Operating
Partnership and the Property Partnership are herein collectively referred to as
the "REIT Entities" and all references to properties and assets of the REIT
Entities include, without limitation, the Properties, unless otherwise noted.
For purposes of this Agreement (i) the Operating Partnership and each other
subsidiary (as defined in Rule 1-02 of Regulation S-X promulgated by the
Commission) of the Company is deemed a "Subsidiary" of the Company and (ii) the
Property Partnership and each other subsidiary (as defined in Rule 1-02 of
Regulation S-X promulgated by the Commission) of the Operating Partnership is
deemed a "Subsidiary" of the Operating Partnership.
1. Representations.
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(a) The Operating Partnership and the Company each represents and
warrants to, and agrees with, each Agent as of the Commencement Date, as of each
date on which the Operating Partnership accepts an offer to purchase Securities
(including any purchase by an Agent as principal pursuant to a Terms Agreement
or otherwise), as of each date the Operating Partnership issues and sells
Securities and as of each date the Registration Statement or the Prospectus is
amended or supplemented as follows (it being understood that such
representations and warranties shall be deemed to relate to the Registration
Statement, the Basic Prospectus and the Prospectus, each as amended or
supplemented to each such date):
(i) Compliance with Registration Requirements. The
Registration Statement has been declared effective by the Commission under the
Securities Act; no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or, to the knowledge of the Company or the Operating Partnership, threatened by
the Commission; and the Registration Statement and Prospectus, as amended or
supplemented, if applicable, comply, or will comply, as the case may be, in all
material respects with the Securities Act and the Trust Indenture Act of 1939,
as amended, and the rules and regulations thereunder (collectively, the "TIA"),
and do not and will not, as of the applicable effective date as to the
Registration Statement and any amendment or supplement thereto and as of the
date of the Prospectus and any amendment or supplement thereto, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; except that the
foregoing representations and warranties shall not apply to (i) that part of the
Registration Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) under the TIA of the Trustee, and (ii) statements or
omissions in the Registration Statement or the Prospectus made in reliance upon
and in conformity with information relating to any Agent furnished to the
Company in writing by any Agent expressly for use therein;
(ii) Incorporation by Reference. The documents
incorporated by reference in the Prospectus, when they became effective or were
filed with the Commission, as the case may be, conformed in all material
respects to the requirements of the Securities Act or the Exchange Act, as
applicable, and none of such documents contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, or any further amendment or
supplement thereto, when such documents become effective or are filed with the
Commission, as the case may be, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and will
not contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(iii) Independent Accountants. The accountants who have
certified certain financial statements and supporting schedules that have been
included or incorporated by reference
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in the Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act.
(iv) Financial Statements. The historical financial
statements of the Operating Partnership, and the related notes thereto, included
or incorporated by reference in the Registration Statement and the Prospectus
present fairly the consolidated financial position of the Operating Partnership
and its Subsidiaries taken as a whole as of the dates indicated and the results
of operations and the changes in their consolidated cash flows for the periods
specified; except as otherwise stated in the Registration Statement and the
Prospectus, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis and
comply with the applicable accounting requirements of the Securities Act
(including, without limitation and if and to the extent applicable, Rule 3-14
and Rule 3-15 of Regulation S-X promulgated by the Commission), and all
adjustments necessary for a fair presentation of the results for such periods
have been made; the supporting schedules included or incorporated by reference
in the Registration Statement and the Prospectus present fairly the information
required to be stated therein; the financial information and data included or
incorporated by reference in the Registration Statement and the Prospectus
present fairly the information included or incorporated by reference therein and
have been prepared on a basis consistent with that of the financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus. Except as reflected or disclosed in the financial statements
included in the Registration Statement or otherwise set forth in the Prospectus,
the Operating Partnership is not subject to any material indebtedness,
obligation or liability, contingent or otherwise;
(v) Summaries of Revenue. The historical summaries of
revenue and certain operating expenses included or incorporated by reference in
the Registration Statement and the Prospectus present fairly the revenue and
those operating expenses included in such summaries of the properties related
thereto for the periods specified in conformity with generally accepted
accounting principles; the pro forma consolidated financial statements, if any,
included or incorporated by reference in the Registration Statement and the
Prospectus fairly present such pro forma information taken as a whole for the
periods specified; and such pro forma financial statements have been prepared in
accordance with generally accepted accounting principles applied on a basis
consistent with the audited financial statements of the Operating Partnership
and its Subsidiaries included in the Registration Statement and the Prospectus,
the assumptions on which such pro forma financial statements have been prepared
were, when such pro forma financial statements were prepared, reasonable and are
summarized in the notes thereto, and any such pro forma financial statements
have been prepared, and the pro forma adjustments set forth therein have been
applied, in accordance with the applicable accounting requirements of the
Securities Act (including, without limitation, Regulation S-X promulgated by the
Commission), and any such pro forma adjustments have been properly applied to
the historical amounts in the compilation of such statements;
(vi) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration Statement
and the Prospectus, there has not been
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any material change in the partners' capital or long-term debt of the Operating
Partnership and its consolidated Subsidiaries, or any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the REIT Entities considered as one enterprise, whether or
not arising in the ordinary course of business, otherwise than as set forth or
contemplated in the Prospectus; and except as set forth or contemplated in the
Prospectus none of the REIT Entities nor any of their Subsidiaries has entered
into any transaction or agreement (whether or not in the ordinary course of
business) material to the REIT Entities and their Subsidiaries taken as a whole;
(vii) Good Standing of the Operating Partnership and the
Property Partnership. Each of the Operating Partnership and the Property
Partnership has been duly formed, is validly existing as a limited partnership
in good standing under the laws of the jurisdiction of its formation, has the
power and authority to own its property and to conduct its business as described
in the Prospectus and is duly qualified to transact its business and is in good
standing in California, which is the only other jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the REIT Entities
taken as a whole;
(viii) Good Standing of the Company. The Company has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of its jurisdiction of incorporation, has the corporate power and
authority to own its property and to conduct its business as described in the
Prospectus, and is duly qualified to transact business and is in good standing
in each jurisdiction in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the extent that the
failure to be so qualified or in good standing would not have a material adverse
effect on the REIT Entities, taken as a whole; other than the Operating
Partnership, the Company has no "significant subsidiaries" as defined in Rule 1-
02 of Regulation S-X promulgated by the Commission (the "Significant
Subsidiaries"); the Operating Partnership has no Significant Subsidiaries;
(ix) Authorization of Agreements. This Agreement and any
applicable Terms Agreement has been duly authorized, executed and delivered by
each of the Operating Partnership and the Company;
(x) Authorization and Description of Securities. The
Securities have been duly authorized, and, when executed and authenticated in
accordance with the Indenture and delivered to and paid for by the purchasers
thereof in accordance with this Agreement and any applicable Terms Agreement,
will have been duly and validly executed, authenticated, issued and delivered
and will constitute valid and binding obligations of the Operating Partnership
entitled to the benefits provided by the Indenture, enforceable in accordance
with their respective terms except as (a) the enforceability thereof may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (b) rights of acceleration, if any, and the availability of
equitable remedies may be limited by equitable principles of general
applicability; the Indenture has been duly authorized, executed and delivered by
the Operating Partnership and qualified under the TIA and
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constitutes a valid and binding agreement of the Operating Partnership,
enforceable in accordance with its terms except as (a) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (b) rights of acceleration, if any, and the
availability of equitable remedies may be limited by equitable principles of
general applicability; and the Indenture conforms, and the Securities of any
particular issuance of Securities will conform in all material respects to the
descriptions thereof in the Prospectus as amended or supplemented to relate to
such issuance of Securities;
(xi) Absence of Defaults and Conflicts. Neither the
Company, the Operating Partnership nor any of their Subsidiaries is, or with the
giving of notice or lapse of time or both would be, in violation of or in
default under, the articles of incorporation (the "Articles of Incorporation")
or by-laws of the Company, the certificates of limited partnership of the
Operating Partnership and the Property Partnership, the Second Amended and
Restated Agreement of Limited Partnership of the Operating Partnership dated as
of January 20, 1998, as amended (the "OP Agreement"), the partnership agreement
of the Property Partnership (the "Property Partnership Agreement"), or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which any of the REIT Entities is a party or by which any of them
or any of their respective properties is bound, except for violations and
defaults which individually and in the aggregate are not material to the REIT
Entities taken as a whole; the issue and sale of the Securities and the
performance by the Operating Partnership of all its obligations under the
Securities and the Indenture and the performance by each of the Operating
Partnership and the Company of all their respective obligations under this
Agreement and the consummation of the transactions herein and therein
contemplated (A) do not and will not contravene (1) the Articles of
Incorporation or by-laws of the Company, the certificates of limited partnership
of the Operating Partnership and the Property Partnership, the OP Agreement or
the Property Partnership Agreement, or (2) any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to which any of the
Company or its Subsidiaries is a party or by which any of them or their
respective properties is bound that is material to the Company and its
Subsidiaries, taken as a whole, or (3) any provision of applicable law or
statute, or (4) any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any of its Subsidiaries
except for a contravention which would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or business
prospects of, with respect to clauses (A)(2), (A)(3) and (A)(4), the Company and
its Subsidiaries, taken as a whole and (B) does not require any consent,
approval, authorization, order, license, registration or qualification of or
with any such court or governmental agency or body for the issue and sale of the
Securities by the Operating Partnership or the consummation by the Operating
Partnership or the Company, as the case may be, of the transactions contemplated
by the Indenture, this Agreement or any applicable Terms Agreement, except such
consents, approvals, authorizations, orders, licenses, registrations or
qualifications as have been obtained under the Securities Act or the TIA and as
may be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Securities by the Agents;
(xii) Absence of Proceedings. There are no legal or
governmental proceedings pending or threatened to which any of the REIT Entities
is a party or to which any of
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the Properties is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed or incorporated by
reference as exhibits to the Registration Statement that are not described,
filed or incorporated as required;
(xiii) Title to Property. The Operating Partnership has
(whether directly or indirectly through the ownership of the Property
Partnership) good title in fee simple to the Properties and good title to all
personal property owned as is material to the business of the REIT Entities,
taken as a whole, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus or in title policies held
by the Operating Partnership or such as do not materially affect the value of
such property and do not interfere with the use made and proposed to be made of
such property by the REIT Entities; any real property held under lease by any
REIT Entity is held by it under valid, subsisting, enforceable leases, and no
default by any REIT Entity has occurred and is continuing thereunder, with such
exceptions as are not material and do not interfere in any material respect with
the use made and proposed to be made of such property by any REIT Entity; the
operation of the buildings, fixtures and other improvements located on the
Properties as presently conducted is not in violation of any applicable building
code, zoning ordinance or other law or regulation, except where such violation
of any applicable building code, zoning ordinance or other law or regulation
would not, singly or in the aggregate, have a material adverse effect on the
REIT Entities, taken as a whole; neither the Company nor the Operating
Partnership has received notice of any proposed special assessment or any
proposed material change in any property tax, zoning or land use laws or
availability of water for irrigation affecting all or any portion of the
Properties; there do not exist any material violations of any declaration of
covenants, conditions and restrictions with respect to any of the Properties,
nor is there any existing state of facts or circumstances or condition or event
which could, with the giving of notice or passage of time, or both, constitute
such a violation; and the improvements comprising any portion of the Properties
(the "Improvements") are free of any and all material physical, mechanical,
structural, design and construction defects and the Improvements (including,
without limitation, all water, electric, sewer, plumbing, heating, ventilation,
gas and air conditioning servicing the Improvements) are in good condition and
proper working order and are free of material defects;
(xiv) Insurance. The REIT Entities have and will maintain
liability, property, casualty and other insurance policies, with respect to each
of the Properties, insuring them against the risks of loss (other than with
respect to loss from earthquakes) arising out of or related to their businesses,
in an amount and on such terms as is adequate and appropriate for such
businesses;
(xv) Investment Company Act. Neither the Operating
Partnership nor the Company is, and after giving effect to the offering and sale
of the Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Prospectus will be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act");
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(xvi) Environmental Laws. The Properties are, to the best
knowledge of the REIT Entities, in compliance with any and all applicable
foreign, federal, state and local laws and regulations relating to the
protection of human health and safety, the environment or hazardous or toxic
substances or wastes, pollutants or contaminants ("Environmental Laws"), and the
REIT Entities (i) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct their respective
businesses and (ii) are in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material adverse effect
on the REIT Entities, taken as a whole;
(xvii) Environmental Liabilities. To the best knowledge of
the Company and the Operating Partnership, there are no costs and liabilities
associated with Environmental Laws except as disclosed in the Registration
Statement, which would, singly or in the aggregate, have a material adverse
effect on the REIT Entities, taken as a whole;
(xviii)Partnership Status. Each of the Operating
Partnership and the Property Partnership is organized in conformity with the
requirements for qualification as a partnership under the Internal Revenue Code
of 1986, as amended (the "Code"), and its method of operation enables it to be
subject to tax as a partnership and not as a corporation or an association
taxable as a corporation under the Code;
(xix) Operating Partnership. The partnership interests of
the Operating Partnership (the "OP Units") have been validly issued and the OP
Units owned, directly or indirectly, by the Company are owned free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity
(each of the foregoing a "Lien"). The Company is the sole general partner of the
Operating Partnership;
(xx) Property Partnership. All of the partnership
interests of the Property Partnership have been validly issued and are owned of
record by the Operating Partnership and a third party; the partnership interests
of the Property Partnership owned of record by the Operating Partnership are
owned free and clear of all Liens;
(xxi) Aggregate Sales. Immediately after any sale of
Securities by the Operating Partnership hereunder or under any applicable Terms
Agreement, the aggregate amount of Securities which have been issued and sold by
the Operating Partnership hereunder or under any Terms Agreement and of any
securities of the Operating Partnership (other than the Securities) that shall
have been issued and sold pursuant to the Registration Statement will not exceed
the amount of debt securities registered under the Registration Statement; and
(xxii) Florida Law. The Operating Partnership and the
Company have complied with all provisions of Section 517.075, Florida Statutes
(Chapter 92-198, Laws of Florida)
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relating to doing business with the Government of Cuba or with any person or
affiliate located in Cuba.
(b) Officer's Certificates. Any certificate signed by the general
partner of the Operating Partnership, any officer of the Company or any of their
subsidiaries delivered to the Agents or to counsel for the Agents shall be
deemed a representation and warranty by the Operating Partnership or the
Company, respectively, to each Agent as to the matters covered thereby.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations
and warranties herein contained, but subject to the terms and conditions herein
set forth, each of the Agents hereby severally and not jointly agrees, as agent
of the Operating Partnership, to use its reasonable efforts to solicit offers to
purchase the Securities from the Operating Partnership upon the terms and
conditions set forth in the Prospectus as amended or supplemented from time to
time. However, the Operating Partnership reserves the right to sell Securities
directly on its own behalf, and may in its discretion solicit and accept offers
to purchase except unsolicited offers to purchase Securities directly on its own
behalf or from any broker or dealer not a party to this Agreement (whether
acting as principal or as agent) provided that (i) if any such broker or dealer
is acting on an agency basis such offer to purchase was not solicited by the
Operating Partnership or the Company and such broker or dealer is engaged on
terms substantially similar (including with respect to commissions) to those set
forth in this Agreement and (ii) each Agent is given notice of such purchase,
including in the case of any such agency sale the terms of engagement of such
broker or dealer, by the Operating Partnership promptly after the purchase is
agreed to. Each Agent acknowledges that, in the case of any sale of Securities
by the Operating Partnership not resulting from a solicitation made or offer to
purchase received by such Agent, or arising in connection with a purchase by
such Agent as principal, no commission shall be payable by the Operating
Partnership to such Agent with respect to such sale.
The Operating Partnership reserves the right, in its sole
discretion, to instruct the Agents to suspend at any time, for any period of
time or permanently, the solicitation of offers to purchase Securities. Upon
receipt of at least one business day's prior notice from the Operating
Partnership, each Agent will suspend solicitation of offers to purchase
Securities from the Operating Partnership until such time as the Operating
Partnership has advised such Agent or Agents that such solicitation may be
resumed. During the period of time that such solicitation is suspended, the
Operating Partnership shall not be required to deliver any opinions, letters or
certificates in accordance with Sections 4(i), 4(j) and 4(k) hereof; provided
that if the Registration Statement or Prospectus is amended or supplemented
during the period of suspension (other than by an amendment or supplement
providing solely for a change in the interest rates, redemption provisions,
amortization schedules or maturities offered for the Securities or for a change
that the Agents deem to be immaterial), no Agent shall be required to resume
soliciting offers to purchase Securities until the Operating Partnership has
delivered such opinions, letters and certificates as such Agent may
reasonably request.
10
<PAGE> 11
The Operating Partnership agrees to pay each Agent, as
consideration for the sale of each Security resulting from a solicitation made
or an offer to purchase received by such Agent, a commission in the form of a
discount from the purchase price of such Security in an amount equal to the
following applicable percentage of the principal amount of such Security sold:
<TABLE>
<CAPTION>
COMMISSION PERCENTAGE
OF AGGREGATE PRINCIPAL
RANGE OF MATURITIES AMOUNT OF SECURITIES SOLD
- ------------------- -------------------------
<S> <C>
From 9 months to less than 1 year.............. .125%
From 1 year to less than 18 months............. .150%
From 18 months to less than 2 years............ .200%
From 2 years to less than 3 years.............. .250%
From 3 years to less than 4 years.............. .350%
From 4 years to less than 5 years.............. .450%
From 5 years to less than 6 years.............. .500%
From 6 years to less than 7 years.............. .550%
From 7 years to less than 10 years............. .600%
From 10 years to less than 15 years............ .625%
From 15 years to less than 20 years............ .700%
20 years to and including 30 years............. .750%
Greater than 30 years.......................... To be negotiated
</TABLE>
The Agents are authorized to solicit offers to purchase
Securities only in the principal amount of $1,000 or any amount in excess
thereof which is an integral multiple of $1,000. Each Agent shall communicate to
the Operating Partnership, orally or in writing, each offer to purchase
Securities received by such Agent as agent that in its judgment should be
considered by the Operating Partnership. The Operating Partnership shall have
the sole right to accept offers to purchase the Securities and may reject any
such offer in whole or in part. Each Agent shall have the right, in its sole
discretion, to reject any offer to purchase Securities, as a whole or in part,
that it considers to be unacceptable and any such rejection shall not be deemed
a breach of its agreements herein contained. The procedural details relating to
the issue and delivery of Securities sold by an Agent as agent and the payment
therefor are set forth in the Administrative Procedures (as hereinafter
defined).
(b) Purchase as Principal. Each sale of Securities to any Agent
as principal shall be made in accordance with the terms of this Agreement and
(unless such Agent shall otherwise agree) a Terms Agreement which will provide
for the sale of such Securities to, and the purchase thereof by, such Agent. A
Terms Agreement will be substantially in the form of Exhibit A hereto but may
take the form of an exchange of any standard form of written telecommunication
between an Agent and the Operating Partnership and may also specify certain
provisions relating to the reoffering of such Securities by such Agent. The
commitment of any Agent to purchase Securities as principal, whether pursuant to
any Terms Agreement or otherwise, shall be deemed to have been made on the basis
of the representations and warranties of the Operating Partnership and the
Company herein contained and shall be subject to the terms and conditions herein
and in the applicable Terms Agreement. Each agreement by an Agent to purchase
Securities as principal (pursuant to a Terms Agreement or otherwise) shall
specify the principal amount of Securities to be
11
<PAGE> 12
purchased by such Agent pursuant thereto, the price to be paid to the Operating
Partnership for such Securities, the maturity date of such Securities, the
interest rate or interest rate basis, if any, applicable to such Securities, any
other terms of such Securities, the time and date and place of delivery of and
payment for such Securities (the time and date of any and each such delivery and
payment, the ("Time of Delivery"), any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the reoffering of
Securities, and shall also specify any requirements for opinions of counsel,
accountants' letters and officers' certificates pursuant to Section 4 hereof.
Unless otherwise specified in a Terms Agreement, the procedural details relating
to the issue and delivery of Securities purchased by an Agent as principal and
the payment therefore shall be as set forth in the Administrative Procedures.
(c) Obligations Several. The Operating Partnership acknowledges
that the obligations of the Agents are several and not joint and, subject to the
provisions of this Section 2, each Agent shall have complete discretion as to
the manner in which it solicits purchasers for the Securities and as to the
identity thereof.
(d) Administrative Procedures. The Agents and the Operating
Partnership agree to perform their respective duties and obligations
specifically provided to be performed in the Medium-Term Notes Administrative
Procedures (the "Administrative Procedures") attached hereto as Exhibit B, as
the same may be amended from time to time. The Administrative Procedures may be
amended only by written agreement of the Operating Partnership and the Agents.
(e) Other Securities. The Operating Partnership agrees to notify
each Agent of sales by the Operating Partnership of Other Securities.
3. Commencement Date. The documents required to be delivered
pursuant to Section 6 hereof on the Commencement Date (as defined below) shall
be delivered to the Agents at the offices of Skadden, Arps, Slate Meagher &
Flom, Los Angeles, California, at 8:00 a.m., Los Angeles time, on the date of
this Agreement, which date and time of such delivery may be postponed by
agreement between the Agents and the Operating Partnership but in no event shall
be later than the day prior to the date on which solicitation of offers to
purchase Securities is commenced or the first date on which the Operating
Partnership accepts an offer by any Agent to purchase Securities as principal
(such time and date being referred to herein as the "Commencement Date").
4. Covenants. The Operating Partnership and the Company each
covenant and agree with each Agent as follows:
(a) (i) to make no amendment or supplement to the Registration
Statement or the Prospectus prior to the termination of the offering of the
Securities pursuant to this Agreement or any Terms Agreement which shall be
disapproved by any Agent after reasonable opportunity to
comment thereon, provided, however, that the foregoing shall not apply to any of
the Operating Partnership's periodic filings with the Commission described in
clause (iii) below, copies of which filings the Operating Partnership will cause
to be delivered to the Agents promptly after their
12
<PAGE> 13
transmission to the Commission for filing; (ii) subject to the foregoing clause
(i), promptly to cause each Prospectus Supplement to be filed with or
transmitted for filing to the Commission in accordance with Rule 424(b) under
the Securities Act and to prepare, with respect to any Securities to be sold
through or to such Agent pursuant to this Agreement, a Pricing Supplement with
respect to such Securities in a form previously approved by such Agent and to
file such Pricing Supplement in accordance with Rule 424(b) under the Securities
Act; and (iii) promptly to file all reports and any definitive proxy or
information statements required to be filed by the Operating Partnership with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
for so long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities. The Operating Partnership will promptly
advise each Agent (A) of the filing of any amendment or supplement to the Basic
Prospectus or any amendment to the Registration Statement and of the
effectiveness of any such amendment to the Registration Statement, (B) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any order preventing or suspending the use of any
prospectus relating to the Securities or the initiation or threatening of any
proceeding for that purpose, or of any request by the Commission for any
amendment or supplement of the Registration Statement or Prospectus or for
additional information; and (C) of the receipt by the Operating Partnership of
any notification with respect to any suspension of the qualification of the
Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceeding for any such purpose. The Operating Partnership
agrees to use every reasonable effort to prevent the issuance of any such stop
order or of any such order preventing or suspending the use of any such
prospectus or of any notification suspending any such qualification and, if
issued, to use promptly every reasonable effort to obtain withdrawal thereof as
soon as possible. If the Basic Prospectus is amended or supplemented as a result
of the filing under the Exchange Act of any document incorporated by reference
in the Prospectus, no Agent shall be obligated to solicit offers to purchase
Securities so long as it is not reasonably satisfied with such document;
(b) to endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the Agents shall
reasonably request and to continue such qualification in effect so long as
reasonably required in connection with the distribution of the Securities;
provided that the Operating Partnership shall not be required to file a general
consent to service of process in any jurisdiction or to qualify as a foreign
partnership, or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject;
(c) to furnish each Agent and counsel to the Agents, at the
expense of the Operating Partnership, a conformed copy of the Registration
Statement (as originally filed) and each amendment thereto, in each case
including exhibits and documents incorporated by reference therein and, during
the period mentioned in paragraph (d) below, to furnish each Agent as many
copies of the Prospectus (including all amendments and supplements thereto) and
documents incorporated by reference therein as such Agent may reasonably
request;
(d) if at any time when a prospectus relating to the Securities
is required to be
13
<PAGE> 14
delivered under the Securities Act, any event shall occur as a result of which
the Prospectus, as then amended or supplemented, would include an untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in the light of the circumstances when
such Prospectus is delivered to a purchaser, not misleading, or, if in the
opinion of counsel for the Agents or counsel for the Operating Partnership, it
is necessary at any time to amend or supplement the Prospectus to comply with
law, to immediately notify the Agents by telephone (with confirmation in
writing) and request each Agent (i) in its capacity as agent of the Operating
Partnership, to suspend solicitation of offers to purchase Securities from the
Operating Partnership (and, if so notified, such Agent shall cease such
solicitations and cease using the Prospectus as soon as practicable, but in any
event not later than one business day later); and (ii) to cease sales of any
Securities such Agent may then own as principal. If the Operating Partnership
shall decide to amend or supplement the Registration Statement or the
Prospectus, as then amended or supplemented, it shall so advise each Agent
promptly by telephone (with confirmation in writing) and, at its expense, shall
prepare and cause to be filed promptly with the Commission an amendment or
supplement to the Registration Statement or the Prospectus, as then amended or
supplemented, that will correct such statement or omission or effect such
compliance and will supply such amended or supplemented Prospectus to the Agents
in such quantities as they may reasonably request. If such amendment or
supplement and the documents, opinions, letters and certificates furnished to
the Agents pursuant to Sections 4(e), 4(i), 4(j) and 4(k) in connection with the
preparation and filing of such amendment or supplement are satisfactory in all
respects to the Agents, then upon the filing with the Commission of such
amendment or supplement to the Prospectus or upon the effectiveness of an
amendment to the Registration Statement, the Agents will resume the solicitation
of offers to purchase Securities hereunder. Notwithstanding any other provision
of this Section 4(d), if during such period an Agent continues to own Securities
purchased from the Operating Partnership by such Agent as principal or in the
event such Agent, in the opinion of its counsel, is otherwise required to
deliver a prospectus in respect of a transaction in the Securities, if any event
described in this Section 4(d) occurs the Operating Partnership will, at its own
expense, promptly prepare and file with the Commission an amendment or
supplement, that will correct such statement or omission or effect such
compliance, will supply such amended or supplemented Prospectus to such Agent in
such quantities as such Agent may reasonably request and shall furnish to such
Agent pursuant to Section 4(e), 4(i), 4(j) and 4(k) such documents,
certificates, opinions and letters as it may request in connection with the
preparation and filing of such amendment or supplement;
(e) to furnish to the Agents during the term of this Agreement
such relevant documents and certificates of officers of the Operating
Partnership relating to the business, operations and affairs of the Operating
Partnership, the Registration Statement, the Basic Prospectus, any amendments or
supplements thereto, the Indenture, the Securities, this Agreement, the
Administrative Procedures, any applicable Terms Agreement and the performance by
the Operating Partnership of its obligations hereunder or thereunder as the
Agents may from time to time reasonably request and shall notify the Agents
promptly in writing of any downgrading or withdrawal, or on its receipt of any
notice of (i) any intended or potential downgrading or withdrawal or (ii) any
surveillance, review or possible change that does not indicate an improvement in
the rating accorded any of the securities of, or guaranteed by, the Operating
Partnership by any "nationally
14
<PAGE> 15
recognized statistical rating organization", as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(f) to make generally available to its security holders and to
the Agents as soon as practicable earnings statements which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission
promulgated thereunder covering periods of at least twelve months beginning in
each case with the first fiscal quarter of the Operating Partnership occurring
after the "effective date" (as defined in Rule 158) of the Registration
Statement with respect to each sale of Securities;
(g) so long as any Securities are outstanding, to furnish to the
Agents copies of all reports or other communications (financial or other)
furnished to holders of Securities and copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Operating Partnership is
listed;
(h) that, from the date of any applicable Terms Agreement with an
Agent or other agreement by an Agent to purchase Securities as principal and
continuing to and including the business day following the related Time of
Delivery, not to offer, sell, contract to sell or otherwise dispose of any debt
securities of or guaranteed by the Operating Partnership which are substantially
similar to the Securities, without the prior written consent of such Agent;
(i) that each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or supplement
providing solely for a change in the interest rates, redemption provisions,
amortization schedules or maturities offered on the Securities or for a change
which the Agents deem to be immaterial) and each time the Operating Partnership
sells Securities to such Agent as principal pursuant to a Terms Agreement or
other agreement and such Terms Agreement or other agreement specifies the
delivery of opinions under this Section 4(i) as a condition to the purchase of
Securities pursuant to such Terms Agreement or other agreement, the Operating
Partnership shall furnish or cause to be furnished forthwith to such Agent
written opinions of Davis Polk & Wardwell and Piper & Marbury L.L.P., or other
counsels for the Operating Partnership satisfactory to such Agent, dated the
date of such amendment or supplement, or the related Time of Delivery relating
to such sale, as the case may be, in form satisfactory to such Agent, of the
same tenor as the opinions referred to in Section 6(c) and 6(d), respectively,
hereof but modified to relate to the Registration Statement and the Prospectus
as amended or supplemented to the date of such opinion, or, in lieu of such
opinion, counsel last furnishing such an opinion may furnish to the Agents a
letter to the effect that such Agent may rely on the opinion of such counsel
which was last furnished to such Agent to the same extent as though it were
dated the date of such letter (except that the statements in such last opinion
shall be deemed to relate to the Registration Statement and the Prospectus as
amended or supplemented to the date of delivery of such letter).
(j) that each time the Registration Statement or the Prospectus
shall be amended or supplemented to include or incorporate amended or
supplemented financial information and each time the Operating Partnership sells
Securities to such Agent as principal pursuant to a Terms
15
<PAGE> 16
Agreement or other agreement and such Terms Agreement or other agreement
specifies the delivery of a letter under this Section 4(j) as a condition to the
purchase of Securities pursuant to such Terms Agreement or other agreement, the
Operating Partnership shall cause the independent certified public accountants
who have certified the financial statements of the Operating Partnership and its
subsidiaries included or incorporated by reference in the Registration Statement
forthwith to furnish such Agent a letter, dated the date of such amendment or
supplement or the related Time of Delivery relating to such sale, as the case
may be, in form satisfactory to such Agent, of the same tenor as the letter
referred to in Section 6(e) hereof but modified to relate to the Registration
Statement and the Prospectus as amended or supplemented to the date of such
letter with such changes as may be necessary to reflect such amended or
supplemented financial information included or incorporated by reference in the
Registration Statement or the Prospectus as amended or supplemented, provided,
however, that, with respect to any financial information or other matter, such
letter may reconfirm as true and correct at such date, as though made at and as
of such date, rather than repeat statements with respect to such financial
information or other matters made in the letter referred to in Section 6(e)
hereof which was last furnished to such Agent;
(k) that each time the Registration Statement or the Prospectus
shall be amended or supplemented (other than by an amendment or supplement
providing solely for a change in the interest rates, redemption provisions,
amortization schedules or maturities offered on the Securities or for a change
which the Agents deem to be immaterial), and each time the Operating Partnership
sells Securities to such Agent as principal and the applicable Terms Agreement
or other agreement specifies the delivery of a certificate under this Section
4(k) as a condition to the purchase of Securities pursuant to such Terms
Agreement or other agreement, the Operating Partnership shall furnish or cause
to be furnished forthwith to such Agent a certificate signed by an executive
officer of the Operating Partnership, dated the date of such amendment or
supplement or the related Time of Delivery relating to such sale, as the case
may be, in form satisfactory to such Agent, of the same tenor as the
certificates referred to in Section 6(b) but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
date of delivery of such certificate or to the effect that the statements
contained in the certificate referred to in Section 6(b) hereof which was last
furnished to such Agent are true and correct at such date as though made at and
as of such date (except that such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended or supplemented to such
date).
5. Costs and Expenses. The Operating Partnership covenants and
agrees with each Agent that the Operating Partnership will, whether or not any
sale of Securities is consummated, pay all costs and expenses incident to the
performance of its obligations hereunder and under any applicable Terms
Agreement, including without limiting the generality of the foregoing, all costs
and expenses: (i) incident to the preparation, issuance, execution,
authentication and delivery of the Securities, including any expenses of the
Trustee, (ii) incident to the preparation, printing and filing under the
Securities Act of the Registration Statement, the Prospectus and any preliminary
filing (including in each case all exhibits, amendments and supplements
thereto), (iii) incurred in connection with the registration or qualification
and determination of eligibility for investment of the Securities under the laws
of such jurisdictions as the Agents (or in connection with any Terms
16
<PAGE> 17
Agreement, the applicable Agent) may designate (including reasonable fees of
counsel for the Agents (or such Agent) and their disbursements), (iv) in
connection with the listing of the Securities on any stock exchange, (v) related
to any filing with the National Association of Securities Dealers, Inc., (vi) in
connection with the printing (including word processing and duplication costs)
and delivery of this Agreement, the Indenture, any Blue Sky Memoranda and any
Legal Investment Survey and the furnishing to the Agents and dealers of copies
of the Registration Statement and the Prospectus, including mailing and
shipping, as herein provided, (vii) payable to rating agencies in connection
with the rating of the Securities, (viii) in connection with the reasonable fees
and disbursements of counsel for the Agents incurred in connection with the
offering and sale of the Securities, including any opinions to be rendered by
such counsel hereunder and (ix) in connection with any advertising and
out-of-pocket expenses incurred by the Agents.
6. Conditions. The obligations of any Agent, as agent of the
Operating Partnership, at any time ("Solicitation Time") to solicit offers to
purchase the Securities, the obligation of any Agent to purchase Securities as
principal pursuant to any Terms Agreement or otherwise, and the obligation of
any other purchaser to purchase Securities shall in each case be subject (l) to
the condition that all representations and warranties of the Operating
Partnership herein and all statements of officers of the Operating Partnership
and its general partners made in any certificate furnished pursuant to the
provisions hereof are true and correct (i) in the case of an Agent's obligation
to solicit offers to purchase Securities, at and as of such Solicitation Time
and (ii) in the case of any Agent's or any other purchaser's obligation to
purchase Securities, at and as of the time the Operating Partnership accepts the
offer to purchase such Securities and, as the case may be, at and as of the
related Time of Delivery or time of purchase; (2) to the condition that at or
prior to such Solicitation Time, time of acceptance, Time of Delivery or time of
purchase, as the case may be, the Operating Partnership shall have complied with
all agreements and all conditions on its part to be performed or satisfied
hereunder; and (3) to the following additional conditions when and as specified:
(a) Prior to such Solicitation Time or corresponding Time of
Delivery or time of purchase, as the case may be:
(i) the Prospectus as amended or supplemented (including,
if applicable, the Pricing Supplement) with respect to such Securities shall
have been filed with the Commission pursuant to Rule 424(b) under the Securities
Act within the applicable time period prescribed for such filing by the rules
and regulations under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement shall be in effect and no proceeding
for that purpose shall have been commenced or shall be pending before or
threatened by the Commission to the knowledge, after due inquiry, of the
Operating Partnership; and all requests for additional information on the part
of the Commission shall have been complied with to the reasonable satisfaction
of such Agent;
(ii) there shall not have occurred any downgrading, nor
shall any notice have been given of (A) downgrading or withdrawal, (B) any
intended or potential downgrading or withdrawal or (C) any surveillance, review
or possible change that does not indicate an
17
<PAGE> 18
improvement, in the rating accorded any securities of or guaranteed by the
Operating Partnership or any Subsidiary by any "nationally recognized
statistical rating organization", as such term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act;
(iii) since the respective dates as of which information
is given in the Prospectus there shall not have been any material change in the
partners' capital or long-term debt of the Operating Partnership or any of the
Subsidiaries on a consolidated basis, except as described or contemplated in the
Prospectus, or any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
REIT Entities considered as one enterprise, whether or not arising in the
ordinary course of business, the effect of which in the judgment of the
applicable Agent makes it impracticable or inadvisable to proceed with the
solicitation by such Agent of offers to purchase Securities the Operating
Partnership or the purchase by such Agent of Securities from the Operating
Partnership, as principal, as the case may be, on the terms and in the manner
contemplated in the Prospectus, as so amended or supplemented; and neither the
Operating Partnership nor any of its subsidiaries has sustained since the date
of the latest audited financial statements included or incorporated by reference
in the Prospectus any material loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus; and
(iv) (A) trading generally shall not have been suspended
or materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (B) trading of any securities of or
guaranteed by the Operating Partnership shall not have been suspended on any
exchange or in any over-the-counter market, (C) a general moratorium on
commercial banking activities in New York shall not have been declared by either
Federal or New York State authorities, or (D) there shall not have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of such Agent or Agents or of such
other purchaser, is material and adverse and which in the judgment of such Agent
or Agents or of other purchaser makes it impracticable to proceed with the
solicitation by such Agent of offers to purchase Securities from the Operating
Partnership or the purchase by such Agent of Securities from the Operating
Partnership as principal, as the case may be, on the terms and in the manner
contemplated in the Prospectus as amended or supplemented at the Solicitation
Time or at the time such offer to purchase was made;
(b) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, the relevant Agent or Agents shall have received
a certificate or certificates signed by an executive officer of the Company
in its individual capacity and in its capacity as general partner of the
Operating Partnership, dated the Commencement Date or Time of Delivery, as the
case may be, to the effect set forth in Sections 6(a)(i) and 6(a)(ii) above and
to the further effect that (1) the representations and warranties of the
18
<PAGE> 19
Company and the Operating Partnership contained herein are true and correct in
all material respects on and as of the Commencement Date or Time of Delivery, as
the case may be, as if made on and as of such date, (2) the Company and the
Operating Partnership have complied with all agreements and all conditions on
their part to be performed or satisfied hereunder or under the applicable Terms
Agreement or other agreement at or prior to the Commencement Date or Time of
Delivery, as the case may be, and (3) there shall not have been, since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the REIT Entities considered
as one enterprise, whether or not arising in the ordinary course of business.
(c) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, Davis Polk & Wardwell, New York, New York,
counsel for the Operating Partnership, shall have furnished to the relevant
Agent or Agents their written opinion, dated the Commencement Date or Time of
Delivery, as the case may be, in form and substance satisfactory to such Agent
or Agents, to the effect that:
(i) The Operating Partnership has been duly formed and is
validly existing as a limited partnership in good standing under the laws of the
State of Delaware. Based solely on certificates of public officials, such
counsel confirms that the Operating Partnership is qualified to do business in
the State of California;
(ii) The Operating Partnership has the power and authority
to own, lease and operate its property and to conduct its business as described
in the Prospectus;
(iii) To the best of such counsel's knowledge, based
solely on certificates of public officials, such counsel confirms that the
Company is qualified to do business in the State of California. Based on a
certificate of an officer of the Company and to the best of such counsel's
knowledge, other than the Operating Partnership, the Company has no Significant
Subsidiaries;
(iv) the Indenture has been duly qualified under the TIA
and, assuming due authorization, execution and delivery by the Company in its
capacity as general partner of the Operating Partnership, is a valid and binding
agreement of the Operating Partnership, enforceable in accordance with its terms
except as (a) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (b) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability;
(v) assuming due authorization by the Company in its
capacity as general partner of the Operating Partnership, the Securities, when
executed and authenticated in accordance with the terms of the Indenture and
delivered to and paid for by any purchaser of Securities sold through an Agent
as agent or any Agent as principal pursuant to any Terms Agreement or other
agreement, will be entitled to the benefits of the Indenture and will be valid
and binding obligations of the Operating Partnership, enforceable in accordance
with their respective terms except as (a) the
19
<PAGE> 20
enforceability thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (b) rights of acceleration, if any,
and the availability of equitable remedies may be limited by equitable
principles of general applicability;
(vi) Assuming due authorization, execution and delivery by
the Company in its individual capacity and its capacity as general partner of
the Operating Partnership, the execution and delivery by the Operating
Partnership and the Company and the performance by the Operating Partnership and
the Company of their respective obligations, under, as the case may be, the
Indenture, the Securities, this Agreement and any applicable Terms Agreement
will not contravene (1) the certificates of limited partnership of the Operating
Partnership and the Property Partnership, the OP Agreement or the Property
Partnership Agreement, or (2) any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which any of the Operating
Partnership or its Subsidiaries is a party or by which any of them or their
respective properties is bound that is material to the Company and its
Subsidiaries, taken as a whole, or (3) any provision of New York or federal law
or the Delaware Revised Uniform Limited Partnership Act, or (4) to the best
knowledge of such counsel any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of its
Subsidiaries (it being understood that such counsel expresses no opinion as to
any order, rule or regulation of the United States Department of Housing and
Urban Development ("HUD"), except, with respect to clauses (2), (3) and (4), for
a contravention which would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, or business affairs of, the Company and
its Subsidiaries, taken as a whole; no consent, approval, authorization or order
of or qualification with, any New York or federal governmental body or agency
(it being understood that such counsel expresses no opinion as to any consent,
approval, authorization or order of or qualification with, HUD) is required for
the performance by the Operating Partnership and the Company of its obligations
under, as the case may be, the Indenture, the Securities, this Agreement and any
applicable Terms Agreement, except such as may be required by the securities,
Blue Sky or real estate syndication laws of the various states in connection
with the offer and sale of the Securities and except no opinion need be made
with respect to agreements and instruments referred to in clause (2) above.
(vii) The statements (A) in the Prospectus under the
captions "Description of the Debt Securities", "Description of the Notes", "Plan
of Distribution" and "Supplemental Plan of Distribution", (B) in the
Registration Statement under Item 15, (C) "Item 3 - Legal Proceedings" of Part I
of the Operating Partnership's most recently filed annual report on Form 10-K
and "Item 1 - Legal Proceedings" of Part II of the Operating Partnership's
quarterly reports on Form 10-Q filed since such Form 10-K incorporated by
reference in the Registration Statement in each case insofar as such statements
constitute summaries of the legal matters, documents or proceedings referred to
therein fairly present the information called for with respect to such legal
matters, documents and proceedings and fairly summarize the matters referred to
therein. Although the discussion set forth in the Prospectus under the heading
"Certain Federal Income Tax Consequences" does not purport to discuss all
possible United States Federal income tax consequences of the purchase,
ownership, and disposition of the Securities, in our opinion such discussion
constitutes, in all material respects,
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a fair and accurate summary of the United States Federal income tax consequences
referred to therein, subject to the qualifications stated therein;
(viii) Such counsel does not know of any legal or
governmental proceedings pending or threatened to which any of the REIT Entities
or any of the Properties is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or of any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed or
incorporated by reference as exhibits to the Registration Statement that are not
described, filed or incorporated by reference as required;
(ix) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the Securities Act;
any required filing of the Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the best
of our knowledge, no stop order suspending the effectiveness of the Registration
Statement or any Rule 462(b) Registration Statement has been issued under the
Securities Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission;
(x) Assuming due authorization, execution and delivery of
this Agreement and any applicable Terms Agreement by the Company, in its
individual capacity and in its capacity as general partner of the Operating
Partnership, this Agreement and such Terms Agreement has been duly authorized,
executed and delivered by the Operating Partnership.
(xi) such counsel (A) is of the opinion that each document
incorporated by reference in the Registration Statement and the Prospectus as
amended or supplemented (except for the financial statements and other financial
and statistical data included or incorporated by reference therein, as to which
such counsel need not express any opinion) comply when so filed as to form in
all material respects with the Exchange Act, and the applicable rules and
regulations of the Commission thereunder, (B) has no reason to believe that
(except for the financial statements and other financial and statistical data
included or incorporated by reference therein as to which such counsel need not
express any opinion and except for that part of the Registration Statement that
constitutes the Form T-1 heretofore referred to) each part of the Registration
Statement, when such part became effective or as of the date of the Distribution
Agreement or any applicable Terms Agreement contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading, (C) is of the
opinion that the Registration Statement, including any Rule 462(b) Registration
Statement, and the Prospectus and any amendments and supplements thereto (except
for the financial statements and other financial and statistical data included
or incorporated therein as to which such counsel need not express any opinion)
complied as to form in all material respects with the requirements of the
Securities Act and the TIA and (D) has no reason to believe that (except for the
financial statements and other financial and statistical data included or
incorporated by reference therein as to which such counsel need not express any
opinion) the Registration Statement and the Prospectus, as amended or
supplemented, if applicable, as of the date such opinion is delivered contains
any untrue statement
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of a material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading; provided that in the case of an opinion delivered on the
Commencement Date or pursuant to Section 4(i), the opinion and belief set forth
in clauses (C) and (D) above shall be deemed not to cover information concerning
an offering of particular Securities to the extent such information will be set
forth in a supplement to the Basic Prospectus;
(xii) The Operating Partnership is not and upon issuance
and sale of the Securities as contemplated by this Agreement and any applicable
Terms Agreement and the application of the net proceeds therefrom as described
in the Prospectus will not be, an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.
In giving its opinion, such counsel may rely (i) as to all
matters of fact, to the extent it deems proper, upon certificates and written
statements of officers, directors, partners and employees of and accountants for
each of the Company, the Operating Partnership and the Subsidiaries (ii) as to
matters of Maryland law, on the opinion of Piper & Marbury, L.L.P., Baltimore,
Maryland, which opinion shall be in form and substance reasonably satisfactory
to counsel for the Agents, and (iii) as to the good standing and qualification
of the Operating Partnership and the Subsidiaries to do business in any state or
jurisdiction, upon certificates of appropriate public officials or opinions of
counsel in such jurisdictions. Counsel need express no opinion with respect to
the requirements of, or compliance with, any state securities or "Blue Sky" or
real estate syndication laws. With respect to the matters to be covered in
Section 6(c)(xi) above, counsel, may state their opinion and belief is based
upon their participation in the preparation of the Registration Statement and
the Prospectus and any amendment or supplement thereto (other than the documents
incorporated by reference therein) and review and discussion of the contents
thereof (including the documents incorporated by reference therein) but is
without independent check or verification except as specified.
(d) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, an opinion of Piper & Marbury L.L.P., special
Maryland counsel for the Company, shall have furnished to the relevant Agent or
Agents their written opinion, dated the Commencement Date as Time of Delivery,
as the case may be, in form and substance satisfactory to such Agent or Agents
to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland and has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus;
(ii) This Agreement and any applicable Terms Agreement has
been duly authorized, executed and delivered by the Company in its individual
capacity and in its capacity as general partner of the Operating Partnership;
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<PAGE> 23
(iii) The Indenture has been duly authorized, executed and
delivered by the Company in its capacity as general partner of the Operating
Partnership;
(iv) The Securities have been duly authorized by the
Company in its capacity as general partner of the Operating Partnership;
(v) The execution, delivery and performance by the
Company, in its individual capacity and in its capacity as general partner of
the Operating Partnership, of this Agreement, any applicable Terms Agreement,
the Indenture and the Securities and the performance by the Company of its
obligations under this Agreement and any applicable Terms Agreement do not and
will not contravene any provision of applicable Maryland law or the charter or
by-laws of the Company, and no consent, approval, authorization or order of, or
qualification with, any governmental body or agency of the State of Maryland is
required for the performance by the Company of its obligations under this
Agreement, any applicable Terms Agreement,(excluding the securities or Blue Sky
laws of the State of Maryland, as to which such counsel need not express any
opinion);
(vi) The OP Agreement has been duly authorized, executed
and delivered by the Company in its individual capacity. The execution, delivery
and performance of the OP Partnership Agreement by the Company in its individual
capacity does not and will not contravene any provision of applicable Maryland
law or the charter or by-laws of the Company, and no consent, approval,
authorization or order of, or qualification with, any governmental body or
agency of the State of Maryland is required for the performance by the Company
of its obligations under the OP Partnership Agreement (excluding the securities
or Blue Sky laws of the State of Maryland, as to which such counsel need not
express any opinion).
In rendering such opinion, such counsel may rely as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials.
(e) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable Terms Agreement or other agreement, at the
corresponding Time of Delivery, of Skadden, Arps, Slate, Meagher & Flom LLP,
counsel for the Agents, shall have furnished to the relevant Agent or Agents
their written opinion, dated the Commencement Date or Time of Delivery as the
case may be, in form and substance satisfactory to such Agent or Agents with
respect to the validity of the Indenture, the Securities, the Registration
Statement, the Prospectus as amended or supplemented and other related matters
as such Agent or Agents may reasonably request, and in each case, such counsel
shall have received such papers and information as they may reasonably request
to enable them to pass upon such matters.
(f) On the Commencement Date, and in the case of a purchase of
Securities by an Agent as principal pursuant to a Terms Agreement or otherwise,
if called for by the applicable
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<PAGE> 24
Terms Agreement or other agreement, at the corresponding Time of Delivery, the
independent certified public accountants who have certified the financial
statements included or incorporated by reference in the Registration Statement
and Prospectus, as then amended or supplemented, shall have furnished to the
relevant Agent or Agents a letter, dated the Commencement Date or Time of
Delivery, as the case may be, in form and substance satisfactory to such Agent
or Agents a letter, dated the Commencement Date or Time of Delivery, as the case
may be, in form and substance satisfactory to such Agent or Agents, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information relating to the contained in or incorporated by
reference in the Registration Statement and the Prospectus, as then amended or
supplemented.
(g) On the Commencement Date and at each Time of Delivery, the
Operating Partnership and the Company, in it is capacity as sole general partner
of Operating Partnership shall have furnished to the relevant Agent or Agents
such further certificates, information and documents as such Agent or Agents may
reasonably request.
(h) On the Commencement Date, the Securities shall be rated at
least Ba1 by Moody's Investor Service, BBB- by Standard & Poors Rating Group, a
division of McGraw Hill, Inc. and BBB by Fitch Investors Service L.P. and the
Operating Partnership shall have delivered to the Agents letters, dated as of
such date, from each such rating organization, or other evidence satisfactory to
the Agents, confirming that the Securities have such ratings.
7. Indemnification and Contribution. (a) The Operating Partnership
and the Company, jointly and severally, agree to indemnify and hold harmless
each Agent and each person, if any, who controls such Agent within the meaning
of either Section 15 of the Securities Act or Section 20 of the Exchange Act,
and each affiliate of any Agent which assists such Agent in the distribution of
the Securities from and against any and all losses, claims, damages and
liabilities (including without limitation the legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof
or the Prospectus (as amended or supplemented if the Operating Partnership shall
have furnished any amendments or supplements thereto) or any preliminary
prospectus or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Agent furnished to the Operating Partnership and/or the Company
in writing by such Agent expressly for use therein; provided, however, that the
foregoing indemnity with respect to any preliminary prospectus shall not inure
to the benefit of any Agent (or to the benefit of the person controlling such
Agent or to the affiliate of such Agent) from whom the person asserting any such
losses, claims, damages or liabilities purchased Securities, if a copy of the
Prospectus (as then amended or supplemented if the Operating Partnership shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Agent to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale
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<PAGE> 25
of the Securities to such person, and if the Prospectus (as so amended or
supplemented) would have cured the defect giving rise to such losses, claims,
damages or liabilities, unless such failure is the result of noncompliance by
the Operating Partnership with Section 4(c).
(b) Each Agent agrees, severally and not jointly, to indemnify
and hold harmless the Operating Partnership and the Company and the Company's
directors, its officers who sign the Registration Statement, each person who
controls the Operating Partnership or the Company within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Operating Partnership and the Company to
each Agent, but only with reference to information relating to such Agent
furnished to the Operating Partnership or the Company in writing by such Agent
expressly for use in the Registration Statement or any amendment thereof, the
Prospectus or any amendment or supplement thereto, or any preliminary
prospectus. For purposes of this Section 7 and Section 1(a)(i), the only written
information furnished by the Agents to the Operating Partnership expressly for
use in the Registration Statement and the Prospectus is (a) the names of the
Agents on the cover page of the Prospectus specifically relating to the
Securities, (b) the information regarding stabilization on the inside front
cover page of the Prospectus specifically relating to the Securities, and (c)
the information the second sentence of the first paragraph, the last two
sentences of the second paragraph, the last two sentences of the sixth
paragraph, the first sentence of the eighth paragraph and the ninth paragraph
under the caption "Supplemental Plan of Distribution" in the Prospectus.
(c) If any suit, action, proceeding (including any governmental
or regulatory investigation), claim or demand shall be brought or asserted
against any person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such person (the "Indemnified Person")
shall promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, any
Indemnified Person shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Person
unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It is
understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Agents, each
affiliate of any Agent which assists such Agent in the distribution of the
Securities and such control persons of the Agents shall be designated in writing
by J.P. Morgan Securities Inc. or, if J.P. Morgan Securities Inc. is not an
Indemnified Party by the Agents that are Indemnified Parties and
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<PAGE> 26
any such separate firm for the Operating Partnership, the Company, the directors
of the Company or the officers of the Company who sign the Registration
Statement and such control persons of the Operating Partnership, the Company or
authorized representatives shall be designated in writing by the Operating
Partnership. The Indemnifying Person shall not be liable for any settlement of
any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested an
Indemnifying Person to reimburse the Indemnified Person for fees and expenses of
counsel as contemplated by this paragraph, the Indemnifying Person agrees that
it shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such Indemnifying Person of the aforesaid request and (ii) such
Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraphs (a) and (b)
of this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to herein in
connection with any offering of Securities, then each Indemnifying Person under
such paragraph, in lieu of indemnifying such Indemnified Person thereunder,
shall contribute to the amount paid or payable by such Indemnified Person as a
result of such losses, claims, damages or liabilities (i) in such proportion as
is appropriate to reflect the relative benefits received by the Operating
Partnership on the one hand and each Agents on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Operating Partnership and the Company on the one hand and the
Agents on the other in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Operating
Partnership and the Company on the one hand and the Agents on the other shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of such Securities (before deducting expenses) received by the
Operating Partnership and the total discounts and the commissions received by
each Agent in respect thereof bear to the aggregate public offering price of the
Securities. The relative fault of the Operating Partnership and the Company on
the one hand and the Agents 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 Operating Partnership or the Company on the one hand
or such Agents on the other and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
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The Company, the Operating Partnership and each Agent agrees that
it would not be just and equitable if contribution pursuant to this Subsection
(d) were determined by pro rata allocation (even if all Agents were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to in this Subsection (d).
The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages or liabilities referred to above in this Section 7 shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, in no event shall an Agent be required to
contribute any amount in excess of the amount by which the total price at which
the Securities referred to in this Subsection 7(d) that were sold by or through
such Agent exceeds the amount of any damages that such Agent 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 obligation of each Agent to contribute pursuant to this
Subsection (d) is several (in the proportion that the principal amount of the
Securities the sale of which by or through such Agent gave rise to such losses,
claims, damages or liabilities bears the aggregate principal amount of the
Securities the sale of which by or through any Agent gave rise to such losses,
claims, damages or liabilities) and is not joint.
(e) The remedies provided for in this Section 7 are not exclusive
and shall not limit any rights or remedies which may otherwise be available to
an Indemnified Party at law or equity.
(f) The indemnity and contribution agreements contained in this
Section 7 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above and the
representations, warranties and covenants of the Operating Partnership and the
Company set forth in this Agreement shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of any Agent or any person controlling any
Agent or by or on behalf of the Company, its officers or directors or any person
controlling the Company, the Operating Partnership, its officers or partners or
any other person controlling the Operating Partnership and (iii) acceptance of
and payment for any of the Securities.
8. Termination. (a) This Agreement may be terminated at any time
(i) by the Operating Partnership with respect to any or all of the Agents or
(ii) by any Agent with respect to itself only, in each case upon the giving of
written notice of such termination to each other party hereto. Any Terms
Agreement shall be subject to termination in the absolute discretion of the
Agent or Agents that are parties thereto on the terms set forth or incorporated
by reference therein and immediately upon the occurrence of any of the events
set forth in Sections 6(a)(ii), 6(a)(iii) or 6(a)(iv) of this Agreement
occurring on or after the date of such Terms Agreement. The termination
of this Agreement shall not require termination of any agreement by an Agent to
purchase Securities as principal (whether pursuant to a Terms Agreement or
otherwise) and the termination of such an
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<PAGE> 28
agreement shall not require termination of this Agreement. In the event this
Agreement is terminated with respect to any Agent, (x) this Agreement shall
remain in full force and effect with respect to any Agent as to which such
termination has not occurred, (y) this Agreement shall remain in full force and
effect with respect to the rights and obligations of any party which have
previously accrued or which relate to Securities which are already issued,
agreed to be issued or the subject of a pending offer at the time of such
termination and (z) in any event, the provisions of the fourth paragraph of
Section 2(a), Section 2(c), the last sentence of Section 4(d) and Sections 4(f),
4(g), 5, 7, 9, 10, 13, and 16 shall survive; provided that if at the time of
termination an offer to purchase Securities has been accepted by the Operating
Partnership but the time of delivery to the purchaser or its agent of such
Securities has not yet occurred, the provisions of Sections 2(b), 2(d), 4(a)
through 4(e), 4(h) through 4(k) and 6 shall also survive. If any Terms Agreement
is terminated, the provisions of Sections 5, 7, 9, 10, 13, and 16 (which shall
have been incorporated by reference in such Terms Agreement) shall survive.
(b) If this Agreement or any Terms Agreement shall be terminated
by an Agent or Agents because of any failure or refusal of the part of the
Operating Partnership to comply with the terms or to fulfill any of the
conditions of this Agreement or any Terms Agreement or if for any reason the
Operating Partnership shall be unable to perform its obligations under this
Agreement or any Terms Agreement or any condition of any Agent's obligations
cannot be fulfilled, the Operating Partnership agrees to reimburse each Agent or
such Agents as have so terminated this Agreement with respect to themselves,
severally, for all out-of-pocket expenses (including the fees and expenses of
their counsel) reasonably incurred by such Agent or Agents in connection with
this Agreement or the offering of Securities.
9. Position of the Agents. Each Agent, in soliciting offers to
purchase Securities from the Operating Partnership and in performing the other
obligations of such Agent hereunder (other than in respect of any purchase by an
Agent as principal, pursuant to a Terms Agreement or otherwise), is acting
solely as agent for the Operating Partnership and not as principal and does not
assume any obligation towards or relationship of agency or trust with any
purchaser of Securities. Each Agent will make reasonable efforts to assist the
Operating Partnership in obtaining performance by each purchaser whose offer to
purchase Securities from the Operating Partnership was solicited by such Agent
and has been accepted by the Operating Partnership, but such Agent shall not
have any liability to the Operating Partnership in the event such purchase is
not consummated for any reason. If the Operating Partnership shall default on
its obligation to deliver Securities to a purchaser whose offer it has accepted,
the Operating Partnership shall (i) hold the relevant Agent harmless against any
losses, claims, damages or liabilities arising from or as a result of such
default by the Operating Partnership and (ii) notwithstanding such default, pay
to the Agent that solicited such offer any commission to which it would be
entitled in connection with such sale.
10. Representations and Indemnities to Survive. The respective
indemnities and contribution agreements, representations, warranties, and other
statements of the Operating Partnership and the Company, its respective officers
and the Agents set forth in or made pursuant to this Agreement or any agreement
by an Agent to purchase Securities as principal shall remain in
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full force and effect regardless of any termination of this Agreement or any
such agreement, any investigation made by or on behalf of any Agent or any
controlling person of any Agent, or the Operating Partnership, or any officer or
director or any controlling person of the Operating Partnership or the Company,
and shall survive each delivery of and payment for any of the Securities.
11. Notices. Except as otherwise specifically provided herein or in
the Administrative Procedures, all statements, requests, notices and advices
hereunder shall be in writing and effective only on receipt, and will be
delivered by hand, by mail (postage prepaid), by telegram (charges prepaid) or
by telex. Communications to the Agents will be sent, respectively, to:
J.P. Morgan Securities Inc.
60 Wall Street,
New York, N.Y. 10260,
Attention: Medium-Term Note Department,
Telecopy Number: (212) 648-5909;
Goldman, Sachs & Co.,
Karen Robertson, Medium-Term Note Desk,
85 Broad Street,
New York, New York 10004,
Telecopy Number: (212) 357-4451;
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
Merrill Lynch World Headquarters, North Tower, World Financial Center,
10th Floor,
New York, New York 10281-1310,
Telecopy Number: (212) 449-2234;
Morgan Stanley & Co. Incorporated,
1585 Broadway, 2nd Floor,
New York, New York 10036,
Attention: Manager: Continuously Offered Products,
Telecopy Number: (212) 761-0780;
Skadden, Arps, Slate Meagher & Flom LLP,
300 S. Grand Avenue, Suite 3400,
Los Angeles, California 90071,
Attention Gregg A. Noel, Esq.
Telecopy Number: (213) 687-5600.
Communications to the Operating Partnership and the Company, will be sent to
them at
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c/o Irvine Apartment Communities, Inc.,
550 Newport Center Drive, Suite 300,
Newport Beach, California 92660,
Attention: James E. Mead,
Telecopy Number: (714) 720-5532).
12. Acknowledgment. The Operating Partnership, the Company and each
of the Agents acknowledges that Skadden, Arps, Slate, Meagher & Flom LLP, which
is acting as counsel to the Agents in connection with the offer and sale of the
Securities, also acts as counsel from time to time to certain affiliates of the
Operating Partnership and the Company in connection with unrelated matters. The
Operating Partnership, the Company and each of the Agents consent to Skadden
Arps, Slate Meagher & Flom LLP so acting as counsel to the Agents.
13. Successors. This Agreement and any Terms Agreement shall be
binding upon, and inure solely to the benefit of, each Agent the Operating
Partnership and the Company and their respective successors and the officers,
directors and controlling persons referred to in Section 7 and (to the extent
expressly provided in Section 6) the purchasers of Securities, and no other
person shall acquire or have any right or obligation under or by virtue of this
Agreement or any Terms Agreement.
14. Amendments. This Agreement may be amended or supplemented if, but
only if, such amendment or supplement is in writing and is signed by the
Operating Partnership, the Company and each Agent; provided, however, that the
Operating Partnership and the Company may from time to time, on prior written
notice to the Agents but without the consent of any Agent, amend this Agreement
to add as a party hereto one or more additional firms registered under the
Exchange Act, whereupon each such firm shall become an Agent hereunder on the
same terms and conditions as the other Agents that are parties hereto. The
Agents shall sign any amendment or supplement the sole effect of which is to the
addition of any such firm as an Agent under this Agreement.
15. Business Day. Time shall be of the essence in this Agreement and
any Terms Agreement. As used herein, the term "business day" shall mean any day
which is not a Saturday or Sunday or legal holiday or a day on which banking
institutions in The City of New York City or The City of Los Angeles are
required or authorized by law, regulation or executive order to close; provided,
however, that, with respect to Notes as to which LIBOR is an applicable Interest
Rate Basis, such day is also a London Business Day (as defined below). "London
Business Day" means any day on which dealings in United States dollars are
transacted in the London interbank market.
16. APPLICABLE LAW. THIS AGREEMENT AND ANY TERMS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF.
30
<PAGE> 31
17. Counterparts. This Agreement and any Terms Agreement may be
signed in counterparts, each of which shall be an original, and all of which
together shall constitute one and the same instrument.
18. Headings. The headings of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part of this Agreement.
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<PAGE> 32
If the foregoing is in accordance with your understanding, please
sign and return to us 11 counterparts hereof, whereupon this letter and the
acceptance by each of you thereof shall constitute a binding agreement between
the Operating Partnership, the Company and each of you in accordance with its
terms.
Very truly yours,
IRVINE APARTMENT COMMUNITIES, L.P.,
a Delaware limited partnership
By: Irvine Apartment Communities , Inc.,
a Maryland corporation,
its sole general partner
By: /s/ JAMES E. MEAD
-------------------------------
Name: James E. Mead
Title: Senior Vice President, Chief Financial
Officer and Secretary
IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation
By: /s/ JAMES E. MEAD
-------------------------------
Name: James E. Mead
Title: Senior Vice President, Chief Financial
Officer and Secretary
<PAGE> 33
Accepted in New York, New York, as of
the date first above written
J.P. MORGAN SECURITIES, INC.
By: /s/ PATRICIA LUNKA
--------------------------------
Name: Patricia Lunka
Title: Vice President
MERRILL, LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ VICTORIA K. COLLISON
-------------------------------
Name: Victoria K. Collison
Title: Vice President
GOLDMAN, SACHS & CO.
By: /s/ GOLDMAN SACHS & CO.
-------------------------------
Name:
Title:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ RON D. STURZENEGGER
-------------------------------
Name: Ron D. Sturzenegger
Title: Principal
<PAGE> 34
Exhibit A
IRVINE APARTMENT COMMUNITIES, L.P.
MEDIUM TERM NOTES, SERIES A
TERMS AGREEMENT
___________, 199__
Irvine Apartment Communities, L.P.
550 Newport Center Drive
Suite 300
Newport Beach, California 92660
Attention: ____________________
Re: Distribution Agreement dated as of
April __ , 1998 (the "Distribution Agreement")
The undersigned agrees to purchase your Medium-Term Notes, Series A
having the following terms:
Principal Amount:_________________________________
Original Issue Date:______________________________
Settlement Date, Time and Place:__________________
Maturity Date:____________________________________
Purchase Price: ______% of Principal Amount, plus accrued interest,
if any, from Settlement Date
Price to Public:______% of Principal Amount, plus accrued interest,
if any, from Settlement Date
<PAGE> 35
Redemption Date (Dates): _____________, commencing
Initial Redemption Price:
Annual Redemption Price decrease:
Repayment Date (Dates):
Repayment Price:
Initial accrual period OID:
Original Yield to Maturity
(For Fixed Rate Notes)
Interest Rate:_______________________
Applicability of modified payment upon acceleration:
If yes, state issue price:
Amortization schedule:
(For Floating Rate Notes)
Initial Interest Rate:____________________
Interest Rate Basis: CD Rate, the CMT Rate, the Commercial Paper
Rate, the Eleventh District Cost of Funds Rate, the Federal Funds
Rate, LIBOR, the Prime Rate or the Treasury Rate.
Index Maturity (30, 60, 90 days, 6 months, 1 year,
other):______________________
Interest Reset Period (monthly, quarterly,
semiannually, annually): _________________
Interest Payment Period (monthly, quarterly,
semiannually, annually):_________________
Spread: ____________________ points (+/-)
Spread Multiplier: ___________%
Maximum Interest Rate:________%
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<PAGE> 36
Minimum Interest Rate:________%
Initial Interest Reset Date:__________________
Interest Reset Dates:__________________
Interest Determination Dates:__________
Interest Payment Dates:________________
Calculation Agent: U.S. Bank Trust National Association with offices in
New York.
Other terms of Securities:
Provisions relating to default, if any:
The provisions of Sections 1, 2(b), 2(d), 4 through 7, 10, 11,
13 and 16 of the Distribution Agreement and the related definitions are
incorporated by reference herein and shall be deemed to have the same
force and effect as if set forth in full herein.
[This Agreement is subject to termination in our absolute
discretion on the terms incorporated by reference herein. If this
Agreement is so terminated, the provisions set forth in the last
sentence of Section 8 of the Distribution Agreement shall survive for
the purposes of this Agreement.]
The certificate referred to in Section 4(k) of the
Distribution Agreement, the opinion referred to in Section 4(i) of the
Distribution Agreement and the accountants' letter referred to in
Section 4(j) of the Distribution Agreement will be required.
[Agent]
By:______________________
(Title)
3
<PAGE> 37
Accepted:
IRVINE APARTMENT COMMUNITIES, L.P.
A Delaware limited partnership
By: IRVINE APARTMENT COMMUNITIES, INC.,
A Maryland corporation
By ________________________________
Name:
Title:
IRVINE APARTMENT COMMUNITIES, INC.,
A Maryland corporation, its sole general partner
By ________________________________
Name:
Title:
4
<PAGE> 38
EXHIBIT B
ADMINISTRATIVE PROCEDURES
The Medium-Term Notes, Series A Due Nine Months or More from Date of
Issue (the "Notes") are to be offered on a continuing basis by Irvine Apartment
Communities, L.P. (the "Issuer"). J. P. Morgan Securities Inc., Goldman, Sachs &
Co., Merrill Lynch & Co., Merrill Lynch, Pierce Fenner & Smith Incorporated, and
Morgan Stanley & Co. Incorporated, as agents (each an "Agent" and, collectively,
the "Agents"), have each agreed to use its reasonable efforts to solicit offers
to purchase the Notes. The Issuer reserves the right to sell Notes directly or
indirectly on its own behalf to investors. No Agent will be obligated to, but
may from time to time, purchase Notes as principal for its own account. The
Notes are being sold pursuant to a Distribution Agreement dated April __, 1998
(the "Agency Agreement"), between the Issuer and each of the Agents, and will be
issued pursuant to an indenture dated as of October 1, 1997 and all indentures
supplemental thereto, including Supplemental Indenture No. 2 dated as of April
__, 1998 between the Issuer and U.S. Bank Trust National Association formerly
known as First Trust of California, National Association, as trustee
(collectively with any paying agent, registrar, transfer agent and
authenticating agent appointed pursuant to the Indenture, the "Trustee") with
respect to the Notes. Capitalized terms used herein and not defined herein shall
have the meanings ascribed to such terms in the Agency Agreement. The Notes have
been registered under the Securities Act of 1933 (the "Act").
Each Note will be represented by a Global Security (as defined in the
Indenture), such Global Security, for purposes hereof a global note (a "Global
Note") registered in the name of a nominee of The Depository Trust Company, as
Depositary ("DTC") (a "Book-Entry Note"), or a certificate issued in definitive
form (a "Certificated Note"). It is currently contemplated that both Notes that
bear interest at a fixed rate (a "Fixed Rate Note") and Notes that bear interest
at a variable rate (a "Floating Rate Note") and that are denominated and payable
in U.S. dollars may be issued as Book-Entry Notes.
Administrative procedures and specific terms of the offering are
explained below. The Issuer will advise each Agent in writing of those persons
handling administrative responsibilities with whom the Agent is to communicate
regarding offers to purchase Notes and the details of their delivery.
Administrative procedures may be modified from time to time as reflected in the
applicable Pricing Supplement (as defined below) or elsewhere.
<PAGE> 39
PART I: ADMINISTRATIVE PROCEDURES FOR CERTIFICATED
NOTES AND GENERALLY APPLICABLE
ADMINISTRATIVE PROCEDURES
ISSUE/
AUTHENTICATION DATE: Each Note shall be dated as of the date of its
authentication by the Trustee. Each Note will also
bear an original issue date (the "Issue Date") which,
with respect to any Note (or portion thereof), shall
mean the date of its original issuance (i.e., the
settlement date) and shall be specified therein. The
issue date will remain the same for all Notes
subsequently issued upon transfer, exchange or
substitution of an original Note regardless of their
dates of authentication.
MATURITIES: Each Note shall mature on a Business Day, selected
by the purchaser and agreed to by the Issuer, which
shall be nine months or more from the date of issue.
PRICE TO PUBLIC: Each Note shall be issued at 100% of principal
amount unless otherwise specified in a supplement
to the Prospectus (a "Pricing Supplement").
DENOMINATIONS: The denominations of the Notes shall be $1,000 and
integral multiples of $1,000 in excess thereof.
REGISTRATION: Notes shall be issued only in fully registered form.
MINIMUM PURCHASE: The minimum aggregate amount of Notes
denominated and payable in U.S. dollars which may
be offered to any purchaser will be $1,000.
INTEREST: GENERAL. Each Note shall bear interest in
accordance with its terms, as described in the
Prospectus Supplement (as defined in the Agency
Agreement), as supplemented by the applicable
Pricing Supplement.
CALCULATION
OF INTEREST: Interest on Fixed Rate Notes and interest rates
on Floating Rate Notes will be determined as set forth in
the form of Notes. With respect to Floating Rate Notes,
the Calculation Agent shall determine the interest rate
for each Interest Reset Date and communicate such interest
rate to the Issuer, and the
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<PAGE> 40
Issuer will promptly notify the Trustee and the Paying
Agent of each such determination.
PAYMENTS OF INTEREST
AND PRINCIPAL: All interest payments (excluding interest payments
made at maturity or upon earlier redemption or
repayment) will be made by check mailed to the
person entitled thereto at the address of such holder
appearing on the security register for the Notes on
the applicable Record Date, or at the option of the
Issuer, by wire transfer to an account maintained by
such person with a bank located in the United
States; provided, however, that if a holder of one or
more Notes of like tenor and terms with an
aggregate principal amount equal to or greater than
U.S. $10,000,000 shall designate in writing to the
Paying Agent at its corporate trust office in The City
of New York on or prior to the Regular Record
Date relating to the Interest Payment Date an
appropriate account with a bank, the Paying Agent
will, subject to applicable laws and regulations and
until it receives notice to the contrary, make such
payment and all succeeding payments to such person
by wire transfer to the designated account. If a
payment cannot be made by wire transfer because
the information received by the Paying Agent is
incomplete, a notice will be mailed to the holder at
its registered address requesting such information.
Upon presentation of the relevant Note, the Trustee
(or any duly appointed Paying Agent) will pay in
immediately available funds the principal amount of
such Note at maturity and accrued interest, if any,
due at maturity; provided that the Note is presented
to the Trustee (or any such Paying Agent) to make
payments in accordance with its normal procedures.
The Issuer will provide the Trustee (and any such
Paying Agent) with funds available for such purpose.
Notes presented to the Trustee at maturity for
payment will be canceled and destroyed by the
Trustee and a certificate of destruction will be
delivered to the Company. On the fifth Business Day
(as defined below) immediately preceding each
interest payment date, the Trustee will furnish to the
Issuer a statement showing the total amount of the
interest payments to be made on such interest
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<PAGE> 41
payment date. The Trustee will provide monthly to the
Issuer a list of the principal and interest to be paid on
Notes maturing in the next succeeding six months. The
Trustee will assume responsibility for withholding taxes
on interest paid as required by law.
ACCEPTANCE OF OFFERS: Each Agent will promptly advise the Issuer of
each reasonable offer to purchase Notes received by it,
other than those rejected by the Agent. Each Agent may, in
its discretion reasonably exercised, without notice to the
Issuer, reject any offer received by it, in whole or in
part. The Issuer will have the sole right to accept offers
to purchase Notes and may reject any such offer, in whole
or in part. If the Issuer rejects an offer, the Issuer
will promptly notify the applicable Agent.
SETTLEMENT: All offers accepted by the Issuer will be settled on
the third Business Day next succeeding the date of
acceptance unless otherwise agreed by any
purchaser, the applicable Agent and the Issuer. The
settlement date shall be specified upon receipt of an
offer. Prior to 3:00 p.m., New York City time, on
the business day prior to the settlement date, the
Issuer will instruct the Trustee to authenticate and
deliver the Notes pursuant to the terms communicated by
the Presenting Agent as defined below pursuant to the next
succeeding section no later than 2:15 p.m., New York City
time, on that day.
DETAILS FOR
SETTLEMENT: For each offer accepted by the Issuer, the Agent
who presented the offer (the "PRESENTING AGENT")
shall communicate to the Issuer, Attention: Arun
Paul or Scott G. Newnam (Fax No.: (714) 720-
5532) who will provide a copy to the Trustee,
Attention: Money Market Group (Fax No.: (212)
809-5459) by facsimile transmission or other
acceptable means the following information (the
"PURCHASE INFORMATION"):
1. Exact name in which the Note or Notes are to be
registered ("REGISTERED OWNER").
2. Exact address of registered owner.
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<PAGE> 42
3. Taxpayer identification number of registered owner.
4. Principal amount of each Note to be delivered to the
registered owner.
5. In the case of a Fixed Rate Note, the interest rate
or, in the case of a Floating Rate Note, the interest
rate formula, the Initial Interest Rate (if known at
such time), Index Maturity, Interest Reset Period,
Interest Reset Dates, Spread or Spread Multiplier (if
any), minimum interest rate (if any) and maximum
interest rate (if any).
6. Interest Payment Period and Interest Payment Dates.
7. Maturity Date of Notes.
8. Issue Price of Notes.
9. Settlement date for Notes.
10. Presenting Agent's commission (to be paid in the form
of a discount from the proceeds remitted to the Issuer
upon settlement).
11. Redemption provisions, if any.
12. Repayment provisions, if any.
13. Original issue discount provisions, if any.
The issue date of, and the settlement date for, Notes
will be the same. Before accepting any offer to
purchase Notes to be settled in less than three days,
the Issuer shall verify that the Trustee will have
adequate time to prepare and authenticate the Notes.
Prior to preparing the Notes for delivery, the Trustee
will confirm the Purchase Information by telephone
with the Presenting Agent and the Issuer.
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<PAGE> 43
CONFIRMATION: For each accepted offer, the Presenting Agent will
issue a confirmation, in writing, telephonically or
through any other commonly used method of
communication to the purchaser and a confirmation
to the Issuer, Attention: Arun Paul or Scott G.
Newnam (Fax No.: (714) 720-5532).
NOTE DELIVERIES AND
CASH PAYMENT: Upon the receipt of appropriate documentation and
instructions from the Issuer and verification thereof, the
Trustee will cause the Notes to be prepared and
authenticated and hold the Notes for delivery against
payment.
The Trustee will deliver the Notes, in accordance with
instructions from the Issuer, to the Presenting Agent, as
the Issuer's agent, for the benefit of the purchaser only
against payment in immediately available funds in an
amount equal to the face amount of the Notes less the
Presenting Agent's commission plus any premium or less any
discount provided, however, that the Trustee may deliver
Notes to the Presenting Agent against receipt therefor
and, later the same day, receipt of such funds in such
amount. Upon receipt of such payment, the Trustee shall
pay promptly an amount equal thereto to the Issuer in
immediately available funds by wire transfer to the
account of the Issuer maintained at Wells Fargo Bank,
Account Number 4643-103732.
The Presenting Agent, as the Issuer's agent, will deliver
the Notes (with the written confirmation provided for
above) to the purchaser thereof against payment by such
purchaser in immediately available funds. Delivery of any
confirmation or Note will be made in compliance with
"Delivery of Prospectus" below.
FAILS: In the event that a purchaser shall fail to accept
delivery of and make payment for a Note on the settlement
date, the Presenting Agent will notify the Trustee and the
Issuer, by telephone, confirmed in writing. If the Note
has been delivered to the Presenting Agent, as the
Issuer's agent, the
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<PAGE> 44
Presenting Agent shall return such Note to the Trustee. If
funds have been advanced for the purchase of such Note,
the Trustee will, immediately upon receipt of such Note
contact the Issuer (to the attention of Arun Paul or Scott
G. Newnam (Fax No.: (714) 720-5532) advising the Issuer of
such failure. At such time, the Issuer will refund the
payment previously made by the Presenting Agent in
immediately available funds. Such payments will be made on
the settlement date, if possible, and in any event not
later than the business day following the settlement date.
If such failure shall have occurred for any reason other
than the failure of the Presenting Agent to provide the
Purchase Information to the Issuer or to provide a
confirmation to the purchaser, the Issuer will reimburse
the Presenting Agent on an equitable basis for its loss of
the use of funds during the period when they were credited
to the account of the Issuer.
Immediately upon receipt of the Note in respect of which
the failure occurred, the Trustee will cause the Security
Registrar to make appropriate entries to reflect the fact
that the Note was never issued and will destroy the Note.
REDEMPTION AND
REPAYMENT: Except as otherwise specified in the applicable Pricing
Supplement and on the Notes, the Notes will not be
redeemable or subject to repayment prior to their Stated
Maturity Date.
Upon presentation of each Note at the Stated Maturity
Date, the Paying Agent will pay the principal amount
thereof, together with accrued interest. Such payment
shall be made in immediately available funds in U.S.
dollars, provided that the Note is presented to the Paying
Agent in time for such Paying Agent to make payment in
such funds in accordance with its normal procedures. The
Issuer will provide the Paying Agent with funds available
for immediate use for such purpose. Notes presented at the
Stated Maturity Date will be delivered to the Paying Agent
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<PAGE> 45
for cancellation as provided in the Indenture. The Paying
Agent shall dispose of the canceled notes and, upon
request by the Issuer, deliver a certificate of
disposition to the Issuer and the Trustee.
MATURITY: Upon presentation of each Note at the Stated Maturity
Date, the Paying Agent will pay the principal amount
thereof, together with accrued interest. Such payment
shall be made in immediately available funds in U.S.
dollars, provided that the Note is presented to the Paying
Agent in time for such Paying Agent to make payments in
such funds in accordance with its normal procedures. The
Issuer will provide the Paying Agent with funds available
for immediate use for such purpose. Notes presented at the
Stated Maturity Date will be delivered to the Paying Agent
for cancellation as provided in the Indenture. The Paying
Agent shall dispose of the cancelled notes and, upon
request by the Issuer, deliver a certificate of
disposition to the Issuer and the Trustee.
PROCEDURE FOR
RATE CHANGES: The Issuer and each Agent will discuss from time to
time the price of, and the rates to be borne by, the
Notes that may be sold as a result of the solicitation
of offers by the Agents. Once an Agent has
recorded any indication of interest in Notes upon
certain terms, and communicated with the Issuer, if
the Issuer plans to accept an offer to purchase Notes
upon such terms, it will prepare a Pricing
Supplement to the Prospectus, as then amended or
supplemented, reflecting the terms of such Notes
and will arrange to transmit such Pricing Supplement
to the Commission for filing in accordance with and
within the time prescribed by the applicable
paragraph of Rule 424(b) under the Act. The Issuer
will supply at least two copies of the Prospectus as
then amended or supplemented, and bearing such
Pricing Supplement, to the Presenting Agent. No
settlements with respect to Notes upon such terms
may occur prior to such transmitting and the
applicable Agent will not, prior to such transmitting,
mail confirmations to customers who have offered to
purchase Notes upon
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<PAGE> 46
such terms. After such transmitting, sales, mailing of
confirmations and settlements may occur with respect to
Notes upon such terms, subject to the provisions of
"Delivery of Prospectus" below.
Outdated Pricing Supplements and copies of the Prospectus
to which they are attached (other than those retained for
files), will be destroyed.
SUSPENSION OF
SOLICITATION;
AMENDMENT OR
SUPPLEMENT: As provided in the Agency Agreement, the Issuer may
suspend solicitation of purchases at any time and, upon
receipt of notice from the Issuer, each Agent will, as
promptly as practicable, but in no event later than one
business day following such notice, suspend solicitation
until such time as the Issuer has advised them that
solicitation of purchases may be resumed.
Each Agent which receives the notice from the Issuer
contemplated by Section 2(a) of the Agency Agreement will
promptly suspend solicitation and will only resume
solicitation as provided in the Agency Agreement. If the
Issuer decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes, it will
promptly advise each Agent and their counsel and will
furnish each Agent and their counsel with the proposed
amendment or supplement in accordance with the terms of
the Agency Agreement. The Issuer will promptly file or
mail to the Commission for filing such amendment or
supplement, provide each Agent and their counsel with
copies of any such amendment or supplement, confirm to
each Agent and their counsel that such amendment or
supplement has been filed with the Commission and advise
each Agent and their counsel that solicitation may be
resumed. Any such suspension shall not affect the Issuer's
obligations under the Agency Agreement; and in the event
that at the time the Issuer suspends solicitation of
purchases there shall be any offers already accepted by
the Issuer outstanding for settlement, the Issuer will
have the sole responsibility for fulfilling such
obligations;
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<PAGE> 47
each applicable Agent will make reasonable efforts to
assist the Issuer to fulfill such obligations, but no
Agent will be obligated to fulfill such obligations. The
Issuer will in addition promptly advise each Agent and the
Trustee if such offers are not to be settled and if copies
of the Prospectus as in effect at the time of the
suspension may not be delivered in connection with the
settlement of such offers.
DELIVERY OF
PROSPECTUS: A copy of the Prospectus, as most recently amended or
supplemented on the date of delivery thereof (except as
provided below), must be delivered to a purchaser by the
applicable Agent prior to or together with the earlier of
delivery of (i) the written confirmation provided for
above, and (ii) any Note purchased by such purchaser at
the following respective addresses, as applicable:
Transaction Execution Group, J.P. Morgan Securities Inc.,
60 Wall Street, New York, N.Y. 10260, Telecopy Number
(212) 648-5151; Goldman, Sachs & Co., Karen Robertson,
Medium-Term Note Desk, 85 Broad Street, New York, New York
10004, Telecopy Number (212) 357-4451; Merrill Lynch &
Co., Merrill Lynch World Headquarters, North Tower, World
Financial Center, 10th Floor, New York, New York
10281-1310, Telecopy Number: (212) 449-2234; Morgan
Stanley & Co. Incorporated, 1585 Broadway, 2nd Floor, New
York, New York 10036, Attention: Manager: Continuously
Offered Products, Telecopy Number: (212) 761-0780. The
Issuer shall ensure that the Presenting Agent receives
copies of the Prospectus and each amendment or supplement
thereto (including appropriate Pricing Supplements) in
such quantities and within such time limits as will enable
the Presenting Agent to deliver such confirmation or Note
to a purchaser as contemplated by these procedures and in
compliance with the preceding sentence. The Issuer shall
use its reasonable best efforts to send any applicable
pricing supplement by telecopy or overnight express (for
delivery by the close of business on the applicable trade
date, but in no event later than 11:00 a.m. New York City
time, on the Business Day following the applicable trade
date) to the applicable Agent. If, since the date of
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<PAGE> 48
acceptance of a purchaser's offer, the Prospectus shall
have been supplemented solely to reflect any sale of Notes
on terms different from those agreed to between the Issuer
and such purchaser or a change in posted rates not
applicable to such purchaser, such purchaser shall not
receive the Prospectus as supplemented by such new
supplement, but shall receive the Prospectus as
supplemented to reflect the terms of the Notes being
purchased by such purchaser and otherwise as most recently
amended or supplemented on the date of delivery of the
Prospectus.
AUTHENTICITY OF
SIGNATURES: The Issuer will cause the Trustee to furnish each Agent
from time to time with the specimen signatures of each of
the Trustee's officers, employees or agents who have been
authorized by the Trustee to authenticate Notes, but no
Agent will have any obligation or liability to the Issuer
or the Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the Issuer
or the Trustee on any Note.
ADVERTISING COST: The Issuer will determine with each Agent the amount of
advertising that may be appropriate in offering the Notes.
BUSINESS DAY: "Business Day" means any day other than a
Saturday or Sunday that is neither a legal holiday
nor a day on which banking institutions in The City
of New York or The City of Los Angeles are
authorized or required by law, regulation or
executive order to close; provided, however, that,
with respect to Notes as to which LIBOR is an
applicable Interest Rate Basis, such day is also a
London Business Day (as defined below). "London
Business Day" means any day on which dealings in
United States dollars are transacted in the London
interbank market.
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<PAGE> 49
PART II: ADMINISTRATIVE PROCEDURES FOR GLOBAL NOTE METHOD OF BOOK-ENTRY NOTES
The following explains the administrative procedures for the Global Note
method of the DTC book-entry system. Any reference to "Book-Entry Notes" in this
Part II refers to the Global Note method. Certain generally applicable
administrative procedures are set forth in Part I above (See
"Issue/Authentication Date", "Price to Public", "Minimum Purchase",
"Authenticity of Signatures", "Advertising Cost", and "Business Day"). In
connection with the qualification of the Book-Entry Notes for eligibility in the
book-entry system maintained by DTC, the Trustee will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representations (the "Letter")
from the Issuer and the Trustee to DTC dated as of the date hereof, and a
Medium-Term Note Certificate Agreement between the Trustee and DTC and its
obligations as a participant in DTC, including DTC's Same-Day Funds Settlement
System ("SDFS"). Both Fixed and Floating Rate Notes denominated and payable in
U.S. dollars may be issued in book-entry form.
ISSUANCE: On any date of settlement (as defined under "Settlement"
below) for one or more Book-Entry Notes, the Issuer will
issue a single global security in fully registered form
without coupons (a "Global Note") representing up to
$200,000,000 principal amount of all such Notes that have
the same Stated Maturity, redemption provisions, if any,
repayment provisions, if any, Interest Payment Dates,
Original Issue Date, original issue discount provisions,
if any, and, in the case of Fixed Rate Notes, interest
rate, or in the case of Floating Rate Notes, interest rate
formula, initial interest rate, Index Maturity, Interest
Reset Period, Interest Reset Dates, Spread or Spread
Multiplier (if any), minimum interest rate (if any) and
maximum interest rate (if any) (all of the foregoing are
collectively referred to as the "Terms"). Each Global Note
will be dated and issued as of the date of its
authentication by the Trustee. Each Global Note will bear
an "Issue Date", which will be (i) with respect to an
original Global Note (or any portion thereof), its
original issue date, and (ii) following a consolidation of
Global Notes, the most recent Interest Payment Date to
which interest has been paid or duly provided for on the
predecessor Global Notes, regardless of the date of
authentication of such subsequently issued
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<PAGE> 50
Global Note. Each Book-Entry Note will be deemed to have
been dated and issued as of the settlement date, which
date shall be the Original Issue Date. No Global Note will
represent any Certificated Note.
IDENTIFICATION
NUMBERS: The Issuer has arranged with the CUSIP Service Bureau of
Standard & Poor's Corporation (the "CUSIP Service Bureau")
for the reservation of a series of CUSIP numbers
consisting of approximately 900 CUSIP numbers relating to
Book-Entry Notes. The Trustee, the Issuer and DTC have
obtained from the CUSIP Service Bureau a written list of
such reserved CUSIP numbers. The Trustee will assign CUSIP
numbers to Global Notes as described below under
Settlement Procedure "B". DTC will notify the CUSIP
Service Bureau periodically of the CUSIP numbers that the
Trustee has assigned to Global Notes. The Trustee will
notify the Issuer at any time when fewer than 100 of the
reserved CUSIP numbers remain unassigned to Global Notes,
and, if it deems necessary, the Issuer will reserve
additional CUSIP numbers for assignment to Global Notes
representing Book-Entry Notes. Upon obtaining such
additional CUSIP numbers, the Issuer shall deliver a list
of such additional CUSIP numbers to the Trustee and DTC.
REGISTRATION: Each Global Note will be issued only in fully registered
form without coupons. Each Global Note will be registered
in the name of Cede & Co., as nominee for DTC, on the
Securities Register maintained under the Indenture. The
beneficial owner of a Book-Entry Note (or one or more
indirect participants in DTC designated by such owner)
will designate one or more participants in DTC (with
respect to such Note, the "Participants") to act as agent
or agents for such owner in connection with the book-entry
system maintained by DTC, and DTC will record in
book-entry form, in accordance with instructions provided
by such Participants, a credit balance with respect to
such Note in the account of such Participants. The
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<PAGE> 51
ownership interest of such beneficial owner in such Note
will be recorded through the records of such Participants
or through the separate records of such Participants and
one or more indirect participants in DTC.
TRANSFERS: Transfers of a Book-Entry Note will be accomplished by
book entries made by DTC and, in turn, by Participants
(and, in certain cases, one or more indirect participants
in DTC) acting on behalf of beneficial transferors and
transferees of such Note.
EXCHANGES: The Trustee may deliver to DTC and the CUSIP Service
Bureau at any time a written notice of consolidation (a
copy of which shall be attached to the Global Note
resulting from such consolidation) specifying (i) the
CUSIP numbers set forth on two or more outstanding Global
Notes that represent Book-Entry Notes having the same
Terms and for which interest has been paid to the same
date, (ii) a date, occurring at least thirty days after
such written notice is delivered and at least thirty days
before the next Interest Payment Date for such Book-Entry
Notes, on which such Global Notes shall be exchanged for a
single replacement Global Note and (iii) a new CUSIP
number to be assigned to such replacement Global Note.
Upon receipt of such a notice, DTC will send to its
Participants (including the Trustee) a written
reorganization notice to the effect that such exchange
will occur on such date. Prior to the specified exchange
date, the Trustee will deliver to the CUSIP Service Bureau
a written notice setting forth such exchange date and the
new CUSIP number and stating that, as of such exchange
date, the CUSIP numbers of the Global Notes to be
exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global Notes
for a single Global Note bearing the new CUSIP number and
a new Original Issue Date and the CUSIP numbers of the
exchanged Global Notes will, in accordance with CUSIP
Service Bureau procedures, be canceled and not immediately
reassigned. Notwithstanding the foregoing, if the Global
Notes to be exchanged
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exceed $200,000,000 in aggregate principal amount, one
Global Note will be authenticated and issued to represent
each $200,000,000 of principal amount of the exchanged
Global Notes and an additional Global Note will be
authenticated and issued to represent any remaining
principal amount of such Global Notes (see
"Denominations" below).
MATURITIES: Each Book-Entry Note will mature on a Business Day nine
months or more from the settlement date for such Note.
NOTICE OF
REPAYMENT TERMS: With respect to each Book-Entry Note that is repayable at
the option of the Holder the Trustee will furnish DTC on
the settlement date pertaining to such Book-Entry Note a
notice setting forth the terms of such repayment option.
Such terms shall include the start date and end dates of
the first exercise period, the purchase date following
such exercise period, the frequency that such exercise
periods occur (i.e., quarterly, semiannually, annually,
etc.) and if the repayment option expires before maturity,
the same information (except frequency) concerning the
last exercise period. It is understood that the exercise
period shall be at least 15 calendar days long and that
the purchase date shall be at least 7 calendar days after
the last day of the exercise period.
REDEMPTION AND
REPAYMENT: The Trustee will comply with the terms of the Letter with
regard to redemptions and repayments of the Notes. If a
Global Note is to be redeemed or repaid in part, the
Trustee will exchange such Global Note for two Global
Notes, one of which shall represent the portion of the
Global Note being redeemed or repaid and shall be canceled
immediately after issuance and the other of which shall
represent the remaining portion of such Global Note and
shall bear the CUSIP number of the surrendered Global
Note.
DENOMINATIONS: Book-Entry Notes will be issued in principal
amounts of $1,000 or any amount in excess thereof
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<PAGE> 53
that is an integral multiple of $1,000. Global Notes will
be denominated in principal amounts not in excess of
$200,000,000. If one or more Book-Entry Notes having an
aggregate principal amount in excess of $200,000,000
would, but not for the preceding sentence, be represented
by a single Global Note, then one Global Note will be
issued to represent each $200,000,000 principal amount of
such Book-Entry Note or Notes and an additional Global
Note will be issued to represent any remain ing principal
amount of such Book-Entry Note or Notes. In such a case,
each of the Global Notes representing such Book-Entry Note
or Notes shall be assigned the same CUSIP number.
INTEREST: GENERAL. Interest on each Book-Entry Note will begin to
accrue from the Original Issue Date of the Global Note
representing such Note or from the most recent date to
which interest has been paid, as the case may be, in
accordance with the terms of the Note, as described in the
Prospectus Supplement (as defined in the Agency
Agreement), as supplemented by the applicable Pricing
Supplement. Standard & Poor's Corporation will use the
information received in the pending deposit message
described under the Settlement Procedure "C" below in
order to include the amount of any interest payable and
certain other information regarding the related Global
Note in the appropriate weekly bond report published by
Standard & Poor's Corporation.
NOTICE OF INTEREST PAYMENT AND REGULAR RECORD DATES. On
the first Business Day of January, April, July and October
of each year, the Trustee will deliver to the Issuer and
DTC a written list of Regular Record Dates and Interest
Payment Dates that will occur with respect to Book-Entry
Notes during the six-month period beginning on such first
Business Day. Promptly after each Interest Determination
Date or Calculation Date, as applicable (as defined in or
pursuant to the applicable Note) for Floating Rate Notes,
the Issuer, upon receiving notice thereof, will notify
Standard & Poor's Corporation of the interest rate
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<PAGE> 54
determined on such Interest Determination Date or
Calculation Date, as applicable.
CALCULATION OF
INTEREST: Interest on Fixed Rate Book-Entry Notes (including
interest for partial periods) and interest rates on
Floating Rate Book-Entry Notes will be determined as set
forth in the form of Notes. With respect to Floating Rate
Book-Entry Notes, the Calculation Agent shall determine
the interest for each Interest Reset Date and communicate
such interest rate to the Issuer and the Issuer will
promptly notify the Trustee and the Paying Agent of each
such determination.
PAYMENTS OF
PRINCIPAL AND
INTEREST: PAYMENTS OF INTEREST ONLY. Promptly after each Regular
Record Date, the Trustee will deliver to the Issuer and
DTC a written notice specifying by CUSIP number the amount
of interest to be paid on each Global Note on the
following Interest Payment Date (other than an Interest
Payment Date coinciding with maturity) and the total of
such amounts. The Issuer will confirm with the Trustee the
amount payable on each Global Note on such Interest
Payment Date. DTC will confirm the amount payable on each
Global Note on such Interest Payment Date by reference to
the daily or weekly bond reports published by Standard &
Poor's Corporation. The Issuer will pay to the Trustee, as
paying agent, the total amount of interest due on such
Interest Payment Date (other than at maturity), and the
Trustee will pay such amount to DTC at the times and in
the manner set forth below under "Manner of Payment".
PAYMENTS AT MATURITY. On or about the first Business Day
of each month, the Trustee will deliver to the Issuer and
DTC a written list of principal and interest to be paid on
each Global Note maturing either at Stated Maturity or on
a Redemption or Repayment Date in the following month. The
Issuer, the Trustee and DTC will confirm the amounts of
such principal and interest payments with respect to each
such Global Note on
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<PAGE> 55
or about the fifth Business Day preceding the maturity of
such Global Note. The Issuer will pay to the Trustee, as
paying agent, the principal amount of such Global Note,
together with interest due at such maturity. The Trustee
will pay such amounts to DTC at the times and in the
manner set forth below under "Manner of Payment". Promptly
after payment to DTC of the principal and interest due at
the maturity of such Global Note, the Trustee will cancel
and destroy such Global Note in accordance with the terms
of the Indenture and deliver a certificate of destruction
to the Issuer.
MANNER OF PAYMENT. The total amount of any principal and
interest due on Global Notes on any Interest Payment Date
or at maturity shall be paid by the Issuer to the Trustee
in funds available for use by the Trustee as of 9:30 A.M.
(New York City time), or as soon as practicable thereafter
on such date. The Issuer will confirm instructions
regarding payment in writing to the Trustee. Prior to
10:00 A.M. (New York City time) on each Maturity Date or
as soon as possible thereafter, following receipt of such
funds from the Issuer, the Trustee will pay by separate
wire transfer (using Fedwire message entry instructions in
a form previously specified by DTC) to an account at the
Federal Reserve Bank of New York previously specified by
DTC, in funds available for immediate use by DTC, each
payment of principal (together with interest thereon) due
on Global Notes on any Maturity Date. On each Interest
Payment Date, interest payments shall be made to DTC in
same-day funds in accordance with existing arrangements
between the Trustee and DTC. Thereafter, on each such
date, DTC will pay, in accordance with its SDFS operating
procedures then in effect, such amounts in funds available
for immediate use to the respective Participants in whose
names the Book-Entry Notes represented by such Global
Notes are recorded in the book-entry system maintained by
DTC. Neither the Issuer nor the Trustee shall have any
direct responsibility or liability for the payment by DTC
to such Participants of the principal of and interest on
the Book-Entry Notes.
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<PAGE> 56
WITHHOLDING TAXES. The amount of any taxes required under
applicable law to be withheld from any interest payment on
a Book-Entry Note will be determined and withheld by the
Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly
to the beneficial owner of such Note.
ACCEPTANCE OF
OFFERS: Each Agent will promptly advise the Issuer of each
reasonable offer to purchase Notes received by it,
other than those rejected by the Agent. Each Agent
may, in its discretion reasonably exercised, without
notice to the Issuer, reject any offer received by it, in
whole or in part. The Issuer will have the sole right
to accept offers to purchase Notes and may reject
any such offer, in whole or in part. If the Issuer
rejects an offer, the Issuer will promptly notify the
applicable Agent.
SETTLEMENT: The receipt by the Issuer of immediately available funds
in payment for a Book-Entry Note and the authentication
and issuance of the Global Note or Global Notes
representing such Note shall constitute "settlement" with
respect to such Note. All orders accepted by the Issuer
will be settled on the third Business Day from the date of
the sale pursuant to the timetable for settlement set
forth below unless the Issuer and the purchaser agree to
settlement on another day which shall be no earlier than
the next Business Day.
SETTLEMENT
PROCEDURES: Settlement Procedures with regard to each Book- Entry Note
sold by the Issuer through an Agent as agent, shall be as
follows:
A. For each offer accepted by the Issuer, the Presenting
Agent shall communicate to the Issuer, Attention: Arun
Paul (Fax No.: (714) 720-5532) who will provide a copy
to the Trustee, Attention: Geovanni Barris (Fax No.:
(212) 809-5459) by facsimile transmission or other
acceptable means, the information set forth below:
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<PAGE> 57
1. Principal amount.
2. Maturity Date of Notes.
3. In the case of a Fixed Rate Book-Entry Note, the
interest rate or, in the case of a Floating Rate
Book-Entry Note, the interest rate formula, the
Initial Interest Rate (if known at such time),
Index Maturity, Interest Reset Period, Interest
Reset Dates, Spread or Spread Multiplier (if
any), minimum interest rate (if any) and maximum
interest rate (if any).
4. Interest Payment Period and Interest Payment
Dates.
5. Redemption provisions, if any.
6. Repayment provisions, if any.
7. Settlement date (Original Issue Date).
8. Price to public of the Note (expressed as a
percentage).
9. The Agent's commission (to be paid in the form of
a discount from the proceeds remitted to the
Issuer upon settlement).
10. Original issue discount provisions, if any.
11. Net proceeds to the Issuer.
B. The Trustee will confirm the information set forth in
Settlement Procedure "A" above by telephone with the
applicable Agent and the Issuer.
C. The Trustee will assign a CUSIP number to the Global
Note representing such Note and
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<PAGE> 58
will telephone the Issuer and advise the Issuer of
such CUSIP number. The Trustee will enter a pending
deposit message through DTC's Participant Terminal
System, providing the following settlement information
to DTC (which shall route such information to Standard
& Poor's Corporation) and the Presenting Agent:
1. The applicable information set forth in
Settlement Procedure "A".
2. Identification as a Fixed Rate Book-Entry Note
or a Floating Rate Book-Entry Note.
3. Initial Interest Payment Date for such Note,
number of days by which such date succeeds the
related DTC Record Date (which, in the case of
Floating Rate Notes which reset daily or weekly
shall be the date five calendar days immediately
preceding the applicable Interest Payment Date
and in the case of all other Notes shall be the
Regular Record Date as defined in the Note), the
amount of interest payable on such Interest
Payment Date per $1,000 principal amount of Notes
at Maturity, and amount of interest payable per
$1,000 principal amount of Notes in the case of
Fixed Rate Notes.
4. CUSIP number of the Global Note representing such
Note.
5. Whether such Global Note will represent any other
Book-Entry Note (to the extent known at such
time).
D. To the extent the Issuer has not already done so, the
Issuer will deliver to the Trustee a Pricing
Supplement in a form that has been approved by the
Issuer and the applicable
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Agent. The Issuer will also deliver to the Trustee a
Global Note representing such Note.
E. The Trustee will complete and authenticate the Global
Note representing such Note.
F. DTC will credit such Note to the Trustee's participant
account at DTC.
G. The Trustee will enter an SDFS deliver order through
DTC's Participant Terminal System instructing DTC to
(i) debit such Note to the Trustee's participant
account and credit such Note to such Agent's
participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement
account for an amount equal to the price of such Note
less such Agent's commission. The entry of such a
deliver order shall constitute a representation and
warranty by the Trustee to DTC that (i) the Global
Note representing such Book-Entry Note has been
executed, delivered and authenticated and (ii) the
Trustee is holding such Global Note pursuant to the
relevant Medium-Term Note Certificate Agreement
between the Trustee and DTC.
H. The applicable Agent will enter an SDFS deliver order
through DTC's Participant Terminal System instructing
DTC (I) to debit such Note to such Agent's participant
account and credit such Note to the participant
accounts of the Participants with respect to such Note
and (ii) to debit the settlement accounts of such
Participants and credit the settlement account of such
Agent for an amount equal to the price of such Note.
I. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "G" and "H"
will be settled in
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<PAGE> 60
accordance with SDFS operating procedures in effect on
the settlement date.
J. The Trustee, upon confirming receipt of such funds in
accordance with Settlement Procedure "G", will wire
transfer to the account of the Issuer maintained at
Wells Fargo Bank, Account Number 4643-103732, in funds
available for immediate use, the amount transferred to
the Trustee in accordance with Settlement Procedure
"G".
K. The applicable Agent will confirm the purchase of such
Note to the purchaser either by transmitting to the
Participants with respect to such Note a confirmation
order or orders through DTC's institutional delivery
system or by mailing a written confirmation to such
purchaser.
SETTLEMENT
PROCEDURES
TIMETABLE: For orders of Book-Entry Notes solicited by an Agent, as
agent, and accepted by the Issuer for settlement on the
first Business Day after the sale date, Settlement
Procedures "A" through "K" set forth above shall be
completed as soon as possible but not later than the
respective times (New York City time) set forth below:
SETTLEMENT PROCEDURE TIME
A 11:00 a.m. on the sale date
B 12:00 noon on the sale date
C 2:00 p.m. on the sale date
D 3:00 p.m. on the day before
settlement
E 9:00 a.m. on settlement date
F 10:00 a.m. on settlement date
G-H 2:00 p.m. on settlement date
I 4:45 p.m. on settlement date
J-K 5:00 p.m. on settlement date
If a sale is to be settled two Business Days after the
sale date, Settlement Procedures "A", "B" and "C"
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shall be completed as soon as practicable but not later
than 11:00 a.m., 12:00 noon and 2:00 p.m., as the case may
be, on the first Business Day after the sale date.
If a sale is to be settled more than two Business Days
after the sale date, Settlement Procedure "A" shall be
completed as soon as practicable but no later than 11:00
a.m. on the first Business Day after the sale date and
Settlement Procedures "B" and "C" shall be completed as
soon as practicable but no later than 12:00 noon and 2:00
p.m., as the case may be, on the second Business Day
before the settlement date. If the initial interest rate
for a Floating Rate Book-Entry Note has not been
determined at the time that Settlement Procedure "A" is
completed, Settlement Procedures "B" and "C" shall be
completed as soon as such rate has been determined but not
later than 12:00 noon and 2:00 p.m., respectively, on the
Business Day before the settlement date. Settlement
Procedure "I" is subject to extension in accordance with
any extension of Fedwire closing deadlines and in the
other events specified in the SDFS operating procedures in
effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled or
canceled, the Trustee, upon receipt of notice from the
Issuer, will deliver to DTC, through DTC's Participant
Terminal System, a cancellation message to such effect by
no later than 2:00 p.m. on the Business Day immediately
preceding the scheduled settlement date.
FAILURE TO SETTLE: If an Agent or the Trustee fails to enter an SDFS deliver
order with respect to a Book-Entry Note pursuant to
Settlement Procedure "G", the Trustee may deliver to DTC,
through DTC's Participant Terminal System, as soon as
practicable, a withdrawal message instructing DTC to debit
such Note to the Trustee's participant account. DTC will
process the withdrawal message, provided that the
Trustee's participant account contains a principal amount
of the Global Note representing such Note that is at least
equal to the principal amount to be
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<PAGE> 62
debited. If a withdrawal message is processed with respect
to all the Book-Entry Notes represented by a Global Note,
the Trustee will mark such Global Note "canceled", make
appropriate entries in its records and send such canceled
Global Note to the Issuer. The CUSIP number assigned to
such Global Note shall, in accordance with CUSIP Service
Bureau procedures, be canceled and not immediately
reassigned. If a withdrawal message is processed with
respect to one or more, but not all, of the Book-Entry
Notes represented by a Global Note, the Trustee will
exchange such Global Note for two Global Notes, one of
which shall represent such Book-Entry Note or Notes and
shall be canceled immediately after issuance and the other
of which shall represent the remaining Book-Entry Notes
previously represented by the surrendered Global Note and
shall bear the CUSIP number of the surrendered Global
Note.
If the purchase price for any Book-Entry Note is not
timely paid to the Participants with respect to such Note
by the beneficial purchaser thereof (or a person,
including an indirect participant in DTC, acting on behalf
of such purchaser), such Participants and, in turn, the
Presenting Agent may enter SDFS deliver orders through
DTC's Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures "G" and "H",
respectively. Thereafter, the Trustee will deliver the
withdrawal message and take the applicable related actions
described in the preceding paragraph. If such failure
shall have occurred for any reason other than the failure
of the Presenting Agent to provide the Purchase
Information to the Issuer or to provide a confirmation to
the purchaser, the Issuer will reimburse the Presenting
Agent on an equitable basis for its loss of the use of
funds during the period when they were credited to the
account of the Issuer.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Book-Entry Note, DTC may take any
actions in accordance with its SDFS operating procedures
then in effect. In the event of
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<PAGE> 63
a failure to settle with respect to one or more, but not
all, of the Book-Entry Notes to have been represented by a
Global Note, the Trustee will provide, in accordance with
Settlement Procedures "D" and "E", for the authentication
and issuance of a Global Note representing the other
Book-Entry Notes to have been represented by such Global
Note and will make appropriate entries in its records.
PROCEDURE FOR RATE
CHANGES: The Issuer and each Agent will discuss from time to time
the price of, and the rates to be borne by the Notes that
may be sold as a result of the solicitation of offers by
such Agent. Once an Agent has recorded any indication of
interest in Notes upon certain terms, and communicated
with the Issuer, if the Issuer plans to accept an offer to
purchase Notes upon such terms, it will prepare a Pricing
Supplement to the Prospectus, as then amended or
supplemented, reflecting the terms of such Notes and will
arrange to transmit such Pricing Supplement to the
Commission for filing in accordance with and within the
time prescribed by the applicable paragraph of Rule 424(b)
under the Act. The Issuer will supply at least two copies
of the Prospectus as then amended or supplemented, and
bearing such Pricing Supplement, to the Presenting Agent.
No settlements with respect to Notes upon such terms may
occur prior to such transmitting and the applicable Agent
will not, prior to such transmitting, mail confirmations
to customers who have, offered to purchase Notes upon such
terms. After such transmitting, sales, mailing of
confirmations and settlements may occur with respect to
Notes upon such terms, subject to the provisions of
"Delivery of Prospectus" below.
Outdated Stickers, and copies of the Prospectus to which
they are attached (other than those retained for files),
will be destroyed.
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<PAGE> 64
SUSPENSION OF
SOLICITATION;
AMENDMENT OR
SUPPLEMENT: As provided in the Agency Agreement, the Issuer may
suspend solicitation of purchases at any time, and, upon
receipt of notice from the Issuer, each Agent will as
promptly as practicable, but in no event later than one
Business Day following such notice, suspend solicitation
until such time as the Issuer has advised it that
solicitation of purchases may be resumed.
Each Agent which receives the notice from the Issuer
contemplated by Section 2(a) of the Agency Agreement, will
promptly suspend solicitation and will only resume
solicitation as provided in the Agency Agreement. If the
Issuer decides to amend or supplement the Registration
Statement or the Prospectus relating to the Notes, it will
promptly advise each Agent and their counsel and will
furnish each Agent and their counsel with the proposed
amendment or supplement in accordance with the terms of
the Agency Agreement. The Issuer will promptly file or
mail to the Commission for filing such amendment or
supplement, provide each Agent and their counsel with
copies of any such amendment or supplement, confirm to
each Agent and their counsel that such amendment or
supplement has been filed with the Commission and advise
each Agent and their counsel that solicitation may be
resumed. Any such suspension shall not affect the Issuer's
obligations under the Agency Agreement; and in the event
that at the time the Issuer suspends solicitation of
purchases there shall be any offers already accepted by
the Issuer outstanding for settlement, the Issuer will
have the sole responsibility for fulfilling such
obligations; each applicable Agent will make reasonable
efforts to assist the Issuer to fulfill such obligations,
but no Agent will be obligated to fulfill such
obligations. The Issuer will in addition promptly advise
each Agent and the Trustee if such offers are not to be
settled and if copies of the Prospectus as in effect at
the time of the suspension may not be delivered in
connection with the settlement of such offers.
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<PAGE> 65
DELIVERY OF
PROSPECTUS: A copy of the Prospectus, as most recently amended or
supplemented on the date of delivery thereof (except as
provided below), must be delivered to a purchaser by the
applicable Agent prior to or together with the earlier of
delivery of (i) the written confirmation provided for
above, and (ii) any Note purchased by such purchaser at
the following respective addresses, as applicable:
Transaction Execution Group, J.P. Morgan Securities Inc.,
60 Wall Street, New York, N.Y. 10260, Telecopy Number
(212) 648-5151; Goldman, Sachs & Co., Karen Robertson,
Medium-Term Note Desk, 85 Broad Street, New York, New York
10004, Telecopy Number (212) 357-4451; Merrill Lynch &
Co., Merrill Lynch World Headquarters, North Tower, World
Financial Center, 10th Floor, New York, New York
10281-1310, Telecopy Number: (212) 449-2234; Morgan
Stanley & Co. Incorporated, 1585 Broadway, 2nd Floor, New
York, New York 10036, Attention: Manager: Continuously
Offered Products, Telecopy Number: (212) 761-0780.
The Issuer shall ensure that the Presenting Agent receives copies of the
Prospectus and each amendment or supplement thereto (including appropriate
Pricing Supplements) in such quantities and within such time limits as will
enable the Presenting Agent to deliver such confirmation or Note to a purchaser
as contemplated by these procedures and in compliance with the preceding
sentence. The Issuer shall use its reasonable best efforts to send any
applicable pricing supplement by telecopy or overnight express (for delivery by
the close of business on the applicable trade date, but in no event later than
11:00 a.m. New York City time, on the Business Day following the applicable
trade date) to the applicable Agent. If, since the date of acceptance of a
purchaser's offer, the Prospectus shall have been supplemented solely to reflect
any sale of Notes on terms different from those agreed to between the Issuer and
such purchaser or a change in posted rates not applicable to such purchaser,
such purchaser shall not receive the Prospectus as supplemented by such new
supplement, but shall receive the Prospectus as supplemented to reflect the
terms of the Notes being purchased by such purchaser and otherwise as most
recently amended or supplemented on the date of delivery of the Prospectus.
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<PAGE> 1
EXHIBIT 4.1
OFFICERS' CERTIFICATE
---------------------
The undersigned, William H. McFarland and James E. Mead, do hereby certify
that they are President and Chief Executive Officer and Senior Vice President,
Chief Financial Officer and Secretary, respectively, of Irvine Apartment
Communities, Inc., a Maryland corporation (the "Company"), which is sole
general partner of Irvine Apartment Communities, L.P., a Delaware limited
partnership (the "Operating Partnership").
Reference is made to that certain Distribution Agreement, dated April 9,
1998 (the "Distribution Agreement"), by and among the Operating Partnership,
the Company and J.P. Morgan Securities Inc., Goldman, Sachs & Co., Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan
Stanley & Co. Incorporated, relating to the sale of up to $250,000,000
aggregate initial offering price of Medium-Term Notes, Series A Due Nine Months
or More from Date of Issue (the "Notes"). Capitalized terms defined in the
Distribution Agreement and not otherwise defined herein are used herein as
therein defined.
The undersigned hereby further certify, pursuant to Section 6(b) of the
Distribution Agreement, in their capacities as officers of the Company and in
the name and on behalf of the Company, in its individual capacity and in its
capacity as the sole general partner of the Operating Partnership, that:
1. Since the respective dates as of which information is given in the
Prospectus, there has not been any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the REIT Entities considered as one enterprise whether or not
arising in the ordinary course of business;
2. The Registration Statement has become effective under the Securities
Act; the Prospectus with respect to the Notes will be filed with the Commission
pursuant to Rule 424(b) under the Securities Act within the applicable time
period prescribed for such filing by the rules and regulations under the
Securities Act; no stop order suspending the effectiveness of the Registration
Statement is in effect and no proceeding for that purpose has been commenced or
is pending before or threatened by the Commission to the knowledge, after due
inquiry, of the Operating Partnership and all requests for additional
information on the part of the Commission have been complied with;
<PAGE> 2
3. The representations and warranties of the Operating Partnership and
the Company contained in Section 1 of the Distribution Agreement are true and
correct in all material respects on and as of the time and date of this
Officers' Certificate (the "Program Commencement Date") as if made on the
Program Commencement Date;
4. The Company and the Operating Partnership have performed or complied
with all agreements and all conditions on their part to be performed or
satisfied under the Distribution Agreement at or prior to the Program
Commencement Date;
5. There has been no downgrading, nor has any notice been given of (A)
downgrading or withdrawal, (B) any intended or potential downgrading or
withdrawal or (C) any surveillance, review or possible change that does not
indicate an improvement, in the rating accorded any securities of or guaranteed
by the Operating Partnership or any Subsidiary by any "nationally recognized
statistical rating organization", as such term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act; and
6. Davis Polk & Wardwell, Piper & Marbury LLP and Skadden, Arps, Slate,
Meagher & Flom LLP are each entitled to rely upon this Officer's Certificate in
connection with the opinions given by such firms pursuant to Section 6(c), 6(d)
and 6(e), respectively, of the Distribution Agreement.
2
<PAGE> 3
IN WITNESS WHEREOF, the undersigned have hereunto signed their names this
9th day of April, 1998.
/s/ William H. McFarland
-------------------------------------
William H. McFarland
President and Chief Executive Officer
/s/ James E. Mead
-------------------------------------
James E. Mead
Senior Vice President, Chief
Financial Officer and Secretary
<PAGE> 4
EXHIBIT A
SUPPLEMENTAL COVENANTS, EVENTS OF DEFAULT
AND RELATED DEFINITIONS APPLICABLE TO THE
MEDIUM TERM NOTES, SERIES A OF
IRVINE APARTMENT COMMUNITIES, L.P.
Pursuant to resolutions duly adopted by the Board of Directors of Irvine
Apartment Communities, Inc. (the "Company"), in its individual capacity and in
its capacity as sole general partner of Irvine Apartment Communities, L.P. (the
"Operating Partnership"), dated April 25, 1997 and February 6, 1998, and in
connection with the issuance by the Operating Partnership of the series of
Securities (as defined in the Indenture) designated as "Medium-Term Notes,
Series A Due Nine Months or More from Date of Issue" (the "Notes"), the
Operating Partnership covenants and agrees that the following provisions will be
applicable to the Notes. Capitalized terms used but not defined herein shall
have the respective meanings assigned to them in the Indenture.
SECTION 1. Limitations on Incurrence of Indebtedness. The Operating
Partnership will not, and will not permit any Subsidiary (as defined below) to,
incur any Indebtedness (as defined below), if, immediately after giving effect
to the incurrence of such additional Indebtedness and the application of the
proceeds thereof, the aggregate principal amount of all outstanding Indebtedness
of the Operating Partnership and its Subsidiaries on a consolidated basis
determined in accordance with GAAP (as defined below) is greater than 60% of the
sum of (without duplication) the Total Assets (as defined below) of the
Operating Partnership and its Subsidiaries as of the end of the most recently
completed calendar quarter of the Operating Partnership for which financial
information is available prior to the incurrence of such additional Indebtedness
and the purchase price or cost of any real estate assets or mortgages receivable
acquired or developed, and the amount of any securities offering proceeds
received (to the extent that such proceeds were not used to acquire real estate
assets or mortgages receivable, to develop real estate assets or to reduce
Indebtedness), by the Operating Partnership or any Subsidiary since the end of
such calendar quarter, including those proceeds obtained in connection with the
incurrence of such additional Indebtedness.
(b) The Operating Partnership will not, and will not permit any
Subsidiary to, incur any Indebtedness secured by any Encumbrance (as defined
below) upon any of the property of the Operating Partnership or any Subsidiary
if, immediately after giving effect to the incurrence of such additional
Indebtedness and the application of the proceeds thereof, the aggregate
principal amount of all outstanding Indebtedness of the Operating Partnership
and its Subsidiaries on a
<PAGE> 5
consolidated basis which is secured by any Encumbrance on property of the
Operating Partnership or any Subsidiary is greater than 40% of the sum of
(without duplication) (i) the Total Assets of the Operating Partnership and its
Subsidiaries as of the end of the most recently completed calendar quarter of
the Operating Partnership for which financial information is available prior to
the incurrence of such additional Indebtedness and (ii) the purchase price or
cost of any real estate assets or mortgages receivable acquired or developed,
and the amount of any securities offering proceeds received (to the extent that
such proceeds were not used to acquire real estate assets or mortgages
receivable, to develop real estate assets or to reduce Indebtedness), by the
Operating Partnership or any Subsidiary since the end of such calendar quarter,
including those proceeds obtained in connection with the incurrence of such
additional Indebtedness.
(c) The Operating Partnership and its Subsidiaries may not at any time
own Total Unencumbered Assets (as defined below) equal to less than 150% of the
aggregate outstanding principal amount of the Unsecured Indebtedness (as defined
below) of the Operating Partnership and its Subsidiaries on a consolidated
basis.
(d) The Operating Partnership will not, and will not permit any
Subsidiary to, incur any Indebtedness if the ratio of Consolidated Income
Available for Debt Service (as defined below) to the Annual Service Charge (as
defined below) for the four consecutive fiscal quarters most recently ended
prior to the date on which such additional Indebtedness is to be incurred shall
have been less than 1.5:1 on a pro forma basis after giving effect thereto and
to the application of the proceeds therefrom, and calculated on the assumption
that (i) such Indebtedness and any other Indebtedness incurred by the Operating
Partnership and its Subsidiaries since the first day of such four-quarter period
and the application of the proceeds therefrom, including to refinance other
Indebtedness, had occurred at the beginning of such period; (ii) the repayment
or retirement of any other Indebtedness by the Operating Partnership and its
Subsidiaries since the first day of such four-quarter period had been repaid or
retired at the beginning of such period (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average daily balance of such Indebtedness
during such period); (iii) in the case of Acquired Indebtedness (as defined
below) or Indebtedness incurred in connection with any acquisition since the
first day of such four-quarter period, the related acquisition had occurred as
of the first day of such period with the appropriate adjustments with respect to
such acquisition being included in such pro forma calculation; in the case of
any acquisition or disposition by the Operating Partnership or its Subsidiaries
of any asset or group of assets since the first day of such four-quarter period,
whether by merger, stock purchase or sale, or asset purchase or sale, such
acquisition or disposition or any related repayment of
2
<PAGE> 6
Indebtedness had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition or disposition being
included in such pro forma calculation; and Consolidated Interest Expense (as
defined below) attributable to any Indebtedness (whether existing or being
incurred) computed on a pro forma basis and bearing a floating interest rate
shall be computed as if the rate in effect on the date of computation (taking
into account if such Person or any of its Subsidiaries is a party to an interest
rate agreement or other interest protection agreement applicable to such
floating rate Indebtedness if such agreement shall remain in effect for the
twelve month period after the date of the transaction giving rise to the need to
calculate the ratio of Consolidated Income Available for Debt Service to Annual
Service Charge) had been the applicable rate for the entire period.
(e) For the purposes of determining any particular amount of
Indebtedness under this Section 1, guarantees of, liens securing, or letters of
credit that support, in each case, Indebtedness otherwise included in the
determination of such particular amount of Indebtedness, shall not be included.
In addition, the amount of Indebtedness issued at a price that is less than the
principal amount thereof shall be equal to the amount of the liability in
respect thereof determined in accordance with GAAP.
SECTION 2. Provision of Financial Information. Whether or not the
Operating Partnership is subject to Section 13 or 15(d) of the Exchange Act (as
defined below), the Operating Partnership will, to the extent permitted under
the Exchange Act, file with the Securities and Exchange Commission (the
"Commission") the annual reports, quarterly reports and other documents which
the Operating Partnership would have been required to file with the Commission
pursuant to such Section 13 and 15(d) of the Exchange Act if the Operating
Partnership were so subject, such documents to be filed with the Commission on
or prior to the respective dates (the "Required Filing Dates") by which the
Operating Partnership would have been required so to file such documents if the
Operating Partnership were so subject. The Operating Partnership will also in
any event (x) within 15 days of each Required Filing Date if the Operating
Partnership is not then subject to such Section 13 or 15(d) of the Exchange Act,
(i) transmit by mail to all Holders of Notes, as their names and addresses
appear in the Security Register, without cost to such Holders, copies of the
annual reports and quarterly reports that the Operating Partnership would have
been required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Operating Partnership were subject to such Sections, and
(ii) file with the Trustee copies of the annual reports, quarterly reports and
other documents that the Operating Partnership would have been required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if the
Operating Partnership were subject to such Sections and (y) if filing such
documents by the Operating Partnership
3
<PAGE> 7
with the Commission is not permitted under the Exchange Act, promptly upon
written request and payment of the reasonable cost of duplication and delivery,
supply copies of such documents to any prospective Holder.
SECTION 3. Waiver of Certain Covenants. The Operating Partnership may
omit in any particular instance to comply with the provisions of Sections 1 and
2 hereof and with any other term, provision or condition with respect to the
Notes (except any such term, provision or condition which could not be amended
without the consent of all Holders of the Notes), if before or after the time
for such compliance the Holders of at least a majority in principal amount of
all the outstanding Notes either waive such compliance in such instance or
generally waive compliance with such covenant or condition. Except to the extent
so expressly waived, and until such waiver shall become effective, the
obligations of the Operating Partnership and the duties of the Trustee in
respect of any such term, provision or condition shall remain in full force and
effect.
SECTION 4. Defeasance. The provisions of Article 9 of the Indenture
relating to defeasance and covenant defeasance shall be applicable to the Notes.
The provisions of Section 9.03 of the Indenture shall apply to the covenants set
forth in Sections 1 and 2 hereof and to those covenants specified in Section
9.03 of the Indenture.
SECTION 5. Events of Default. The provisions of Article 4 of the
Indenture relating to "Events of Default," will apply to the Notes. In addition
to the Events of Default set forth in Section 4.01 of the Indenture, the
following shall constitute Events of Default with respect to the Notes: (a)
default under any Indebtedness other than Non-Recourse Indebtedness of the
Operating Partnership (or of any Subsidiary, the repayment of which the
Operating Partnership has guaranteed or for which the Operating Partnership is
directly responsible or liable as obligor or guarantor), having an aggregate
principal amount outstanding of at least $10,000,000, whether such indebtedness
now exists or shall hereafter be created, which default shall have resulted in
such indebtedness becoming or being declared due and payable prior to the date
on which it would otherwise have become due and payable, without such
indebtedness having been discharged, or such acceleration having been rescinded
or annulled, within a period of 10 days after there shall have been given
written notice, by registered or certified mail, to the Operating Partnership by
the Trustee or to the Operating Partnership and the Trustee by the Holders of at
least 25% in aggregate principal amount of the Outstanding Notes a written
notice specifying such default and requiring the Operating Partnership to cause
such indebtedness to be discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" under the
Indenture and (b) the entry by a court of competent jurisdiction of one or more
judgments, orders or decrees against the Operating
4
<PAGE> 8
Partnership or any Subsidiary in an aggregate amount (excluding amounts covered
by insurance) in excess of $10,000,000 and such judgments, orders or decrees
remain undischarged, unstayed and unsatisfied in an aggregate amount (excluding
amounts covered by insurance) in excess of $10,000,000 for a period of 30
consecutive days.
SECTION 6. Certain Definitions. As used herein:
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at
the time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, including (without
duplication) Indebtedness incurred in connection with, or in contemplation of,
such Person becoming a Subsidiary or such acquisition. Acquired Indebtedness
shall be deemed to be incurred on the date of the related acquisition of assets
from any Person, whether by merger or otherwise, or the date the acquired Person
becomes a Subsidiary.
"Annual Service Charge" for any period means the sum of Consolidated
Interest Expense for such period of the Operating Partnership and its
Subsidiaries and the amount of dividends which are payable in cash during such
period in respect of any Disqualified Stock.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banks in the City of New York, New
York or the City of Los Angeles, California are authorized or required by law,
regulation or executive order to close; provided, however, that, with respect to
Notes as to which LIBOR is an applicable Interest Rate Basis, such day is also a
London Business Day (as defined below). "London Business Day" means any day on
which dealings in the United States dollars are transacted in the London
interbank market.
"Capital Stock" means, with respect to any Person, any capital stock
(including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for capital stock),
warrants or options to purchase any thereof.
"Common L.P. Units" means the common limited partner interests in the
Operating Partnership.
"Common Stock of the Company" means, the common stock, par value $.01
per share, of Irvine Apartment Communities, Inc., a Maryland corporation and the
sole general partner of the Operating Partnership.
5
<PAGE> 9
"Consolidated Income Available for Debt Service" for any period means
Earnings from Operations of the Operating Partnership and its Subsidiaries plus
amounts which have been deducted, and minus amounts which have been added, for
the following (without duplication): (i) Consolidated Interest Expense of the
Operating Partnership and its Subsidiaries, (ii) provision for taxes of the
Operating Partnership and its Subsidiaries based on income, (iii) provisions for
gains and losses on properties and property depreciation and amortization, (iv)
the effect of any noncash charge resulting from a change in accounting
principles in determining Earnings from Operations for such period and (v)
amortization of deferred charges.
"Consolidated Interest Expense" for any period means, without
duplication, all interest (including the interest component of rentals on
capitalized leases, letter of credit fees, commitment fees and other like
financial charges) and all amortization of debt discount on Indebtedness
(including, without limitation, payment-in-kind, zero coupon and other like
securities), but excluding legal fees, title insurance charges, and other
out-of-pocket fees and expenses incurred in connection with the issuance of
Indebtedness and the amortization of any such debt issuance costs that are
capitalized, all determined on a consolidated basis in accordance with GAAP.
"Disqualified Stock" means, with respect to any Person, any Capital
Stock of such Person which by the terms of such Capital Stock (or by the terms
of any security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for Indebtedness
or Disqualified Stock or (iii) is redeemable at the option of the holder
thereof, in whole or in part (other than Capital Stock which is redeemable
solely in exchange for Capital Stock which is not Disqualified Stock or the
redemption price of which may, at the option of such Person, be paid in Capital
Stock which is not Disqualified Stock), in each case on or prior to the last
Stated Maturity of then outstanding Notes. For purposes of this definition, it
is expressly understood that the Common L.P. Units shall not constitute
Disqualified Stock.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items and property
valuation losses, net as reflected in the financial statements of the Operating
Partnership and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
6
<PAGE> 10
"Encumbrance" means any mortgage, lien, charge, pledge, encumbrance or
security interest of any kind.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder by the Commission.
"GAAP" means generally accepted accounting principles in the United
States as in effect on April 9, 1998, consistently applied.
"Indebtedness" of the Operating Partnership or any Subsidiary means any
indebtedness of the Operating Partnership or any Subsidiary, whether or not
contingent, in respect of (a) borrowed money or evidenced by bonds, notes,
debentures or similar instruments whether or not such indebtedness is secured by
any Encumbrance existing on property owned by the Operating Partnership or any
Subsidiary, (b) indebtedness for borrowed money of a Person other than the
Operating Partnership or a Subsidiary which is secured by any Encumbrance
existing on property owned by the Operating Partnership or any Subsidiary, to
the extent of the lesser of (x) the amount of indebtedness so secured and (y)
the fair market value of the property subject to such Encumbrance, (c) the
reimbursement obligations, contingent or otherwise, in connection with any
letters of credit actually issued or amounts representing the balance deferred
and unpaid of the purchase price of any property or services, except any such
balance that constitutes an accrued expense or trade payable, and all
conditional sale obligations or obligations under any title retention agreement,
(d) the principal amount of all obligations of the Operating Partnership or any
Subsidiary with respect to redemption, repayment or other repurchase of any
Disqualified Stock or (e) any lease of property by the Operating Partnership or
any Subsidiary as lessee which is reflected on the Operating Partnership's
consolidated balance sheet as a capitalized lease in accordance with GAAP, to
the extent, in the case of items of indebtedness under (a) through (c) above,
that any such items (other than letters of credit) would appear as a liability
on the Operating Partnership's consolidated balance sheet in accordance with
GAAP, and also includes, to the extent not otherwise included, any obligation by
the Operating Partnership or any Subsidiary to be liable for, or to pay, as
obligor, guarantor or otherwise (other than for purposes of collection in the
ordinary course of business), Indebtedness of another Person (other than the
Operating Partnership or any Subsidiary) (it being understood that Indebtedness
shall be deemed to be incurred by the Operating Partnership or any Subsidiary
whenever the Operating Partnership or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof). For purposes of this
definition, Indebtedness (i) shall not include obligations of any Person (x)
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently drawn against insufficient funds in
the ordinary course of business, provided that such
7
<PAGE> 11
obligations are extinguished within two Business Days of their incurrence unless
covered by any overdraft line and (y) resulting from the endorsement of
negotiable instruments for collection in the ordinary course of business and
consistent with past business practices; (ii) which provides that an amount less
than the principal amount thereof shall be due upon any declaration of
acceleration thereof shall be deemed to be incurred or outstanding in an amount
equal to the accreted value thereof at the date of determination determined in
accordance with GAAP; and (iii) shall not include obligations under performance
bonds, performance guarantees, surety bonds and appeal bonds, stand-by letters
of credit or similar obligations, incurred in the ordinary course of business
and on ordinary business terms (to the extent the foregoing items are not drawn
upon, or if drawn, such items are repaid within three Business Days).
"Non-Recourse Indebtedness" means Indebtedness with respect to which
recourse is limited to (i) specific assets related to a particular Property or
group of Properties subject to an Encumbrance securing such Indebtedness or (ii)
any Subsidiary (provided that if a Subsidiary is a partnership, there is no
recourse to the Operating Partnership as a general partner of such partnership);
provided, however, that personal recourse of the Operating Partnership for any
such Indebtedness for fraud, misrepresentation, misapplication of cash, waste,
environmental claims and liabilities and other circumstances customarily
excluded by institutional lenders from exculpation provisions and/or included in
separate indemnification agreements in non-recourse financing of real estate
shall not, by itself, prevent such Indebtedness from being characterized as
Non-Recourse Indebtedness.
"Property" means, with respect to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
by such Person.
"Stated Maturity" has the meaning specified in the Notes.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which a majority of (a) the voting power of the voting equity
securities or (b) the outstanding equity or partnership interests of which are
owned, directly or indirectly, by such Person. For the purposes of this
definition, "voting equity securities" means equity securities having voting
power for the election of directors, whether at all times or only so long as no
senior class of security has such voting power by reason of any contingency.
"Total Assets" as of any date means the sum of (i) $1,941,205,606, (ii)
the purchase price or cost of any real estate assets or mortgages receivable
acquired (including the value at the time of such acquisition, of any Common
L.P. Units or
8
<PAGE> 12
shares of Common Stock of the Company issued in connection therewith) or the
cost of any real estate assets developed after June 30, 1997 by the Operating
Partnership or any Subsidiary, and (iii) cash and restricted cash on the
Operating Partnership's balance sheet; provided, however, that Total Assets
shall be reduced by the amount of the proceeds of any real estate assets
disposed of, or mortgages receivable written off as non-collectible, after June
30, 1997 by the Operating Partnership or any Subsidiary.
"Total Unencumbered Assets" means the sum of (i) those Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money (excluding
infrastructure assessment bonds) and (ii) all other assets of the Operating
Partnership and its Subsidiaries not subject to an Encumbrance for borrowed
money, determined in accordance with GAAP (but excluding accounts receivable and
intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost
(original cost plus capital improvements) of real estate assets of the Operating
Partnership and its Subsidiaries on such date, before depreciation and
amortization, determined on a consolidated basis in accordance with GAAP.
"Unsecured Indebtedness" means Indebtedness which is not secured by any
Encumbrance upon any of the Properties of the Operating Partnership or any
Subsidiary.
9
<PAGE> 1
EXHIBIT 4.2
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY, AS
DEPOSITARY, OR A NOMINEE OF THE DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(2)
REGISTERED CUSIP NO.: REGISTERED PRINCIPAL AMOUNT: $
No. FXR-___ _____________________________
IRVINE APARTMENT COMMUNITIES, L.P
MEDIUM-TERM NOTE, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(Fixed Rate)
ORIGINAL ISSUE DATE: STATED MATURITY DATE: INTEREST RATE: %
INTEREST PAYMENT INTEREST PAYMENT DATE(S) DEFAULT RATE: %
RECORD DATE(S) [ ] ______ AND ______
[ ] ______ AND ______ [ ] Other:
- --------
(1) This paragraph applies to global Notes only.
(2) This paragraph applies to global Notes only.
<PAGE> 2
<TABLE>
<S> <C> <C>
INITIAL REDEMPTION DATE: INITIAL REDEMPTION ANNUAL REDEMPTION
PERCENTAGE: % PERCENTAGE REDUCTION:
%
OPTIONAL REPAYMENT [ ] CHECK IF AN ORIGINAL
DATE(S): ISSUE DISCOUNT NOTE
Issue P%ice: %
REPAYMENT PRICE: %
AUTHORIZED ADDENDUM ATTACHED: OTHER/ADDITIONAL
DENOMINATION [ ] Yes PROVISIONS:
[ ] $1,000 and integral multiples [ ] No
thereof
[ ] Other:
</TABLE>
Irvine Apartment Communities, L.P., a limited partnership duly organized
and existing under the laws of Delaware (hereinafter referred to as the
"Operating Partnership," which term includes any successor entity under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ______________________, or registered assigns, the principal sum of
______________________, on the Stated Maturity Date specified above (or any
Redemption Date or Repayment Date, each as defined on the reverse hereof) (each
such Stated Maturity Date, Redemption Date or Repayment Date being hereinafter
referred to as the "Maturity Date" with respect to the principal repayable on
such date) and to pay interest thereon, at the Interest Rate per annum specified
above, until the principal hereof is paid or duly made available for payment,
and (to the extent that the payment of such interest shall be legally
enforceable) at the Default Rate per annum specified above on any overdue
principal, premium and/or interest, including any overdue sinking fund or
redemption payment. The Operating Partnership will pay interest in arrears on
each Interest Payment Date, if any, specified above (each, an "Interest Payment
Date"), commencing with the first Interest Payment Date next succeeding the
Original Issue Date specified above, and on the Maturity Date; provided,
however, that if the Original Issue Date occurs between a Record Date (as
defined below) and the next succeeding Interest Payment Date, interest payments
will commence on the second Interest Payment Date next succeeding the Original
Issue Date to the holder of this Note on the Record Date with respect to such
second Interest Payment Date. Interest on this Note will be computed on the
basis of a 360-day year of twelve 30-day months.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the record date (as specified herein)
immediately preceding such Interest Payment Date, or if no such record date is
specified herein, the fifteenth calendar day (whether or not a Business Day, as
2
<PAGE> 3
defined below) immediately preceding such Interest Payment Date (in either case,
the "Record Date"); provided, however, that interest payable on the Maturity
Date will be payable to the person to whom the principal hereof and premium, if
any, hereon shall be payable. Any such interest not so punctually paid or duly
provided for ("Defaulted Interest") will forthwith cease to be payable to the
holder on any Record Date, and shall be paid to the person in whose name this
Note is registered at the close of business on a special record date (the
"Special Record Date") for the payment of such Defaulted Interest to be fixed by
the Trustee hereinafter referred to, notice whereof shall be given to the holder
of this Note by the Trustee not more than 15 days and not less than 10 days
prior to such Special Record Date or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which this Note may be listed, and upon such notice as may be required by such
exchange, all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date or any prior date on which the principal or an
installment of principal of this Note becomes due and payable, whether by the
declaration of acceleration or otherwise, will be made in immediately available
funds upon presentation and surrender of this Note (and, with respect to any
applicable repayment of this Note, upon presentation and surrender of this Note
and a duly completed election form as contemplated on the reverse hereof) at the
office or agency maintained by the Operating Partnership for that purpose in the
Borough of Manhattan, The City of New York, currently the office of the Paying
Agent located at U.S. Bank Trust National Association, 100 Wall Street, New
York, New York 10005, or at such other paying agency in the Borough of
Manhattan, The City of New York, as the Operating Partnership may determine.
Payment of interest due on any Interest Payment Date other than the Maturity
Date will be made at the aforementioned office or agency maintained by the
Operating Partnership or, at the option of the Operating Partnership, by check
mailed to the address of the person entitled thereto as such address shall
appear in the Security Register maintained by or on behalf of the Trustee or, at
the option of the Company, by wire transfer to an account maintained by such
person with a bank located in the United States; provided, however, that a
holder of U.S.$10,000,000 or more in aggregate principal amount of Notes
(whether having identical or different terms and provisions) will be entitled to
receive interest payments on any Interest Payment Date other than the Maturity
Date by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the Paying Agent not less
than 15 calendar days prior to such Interest Payment Date. Any such wire
transfer instructions received by the Paying Agent shall remain in effect until
revoked by such holder.
If any Interest Payment Date or the Maturity Date falls on a day that is
not a Business Day, the required payment of principal, premium, if any, and/or
interest shall be made on the next succeeding Business Day with the same force
and effect as if made on the date such payment was due, and no interest shall
accrue with respect to such payment for the period from and after such Interest
Payment Date or the Maturity Date, as the case may be, to the date of such
payment on the next succeeding Business Day.
3
<PAGE> 4
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in The City of New York or the City of Los Angeles are authorized or required by
law, regulation or executive order to close.
The Operating Partnership is obligated to make payments of principal,
premium, if any, and interest in respect of this Note in such coin or currency
of the United States as at the time of such payment is legal tender for the
payment of public or private debts.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above on the face hereof, in
the Addendum hereto, which further provisions shall have the same force and
effect as if set forth on the face hereof.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply to this Note, this Note shall be subject to
the terms set forth in such Addendum or such "Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by the
Trustee or its Authenticating Agent or Agents, by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
4
<PAGE> 5
IN WITNESS WHEREOF, Irvine Apartment Communities, L.P. has caused this
Note to be duly executed under its seal.
Dated:
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities, Inc.
its sole general partner
By: ________________________________
Name:
Title:
(SEAL)
Attest:
_________________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.
Dated:
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By: U.S. BANK TRUST NATIONAL
ASSOCIATION, as Authenticating Agent
By ___________________________________
Authorized Signatory
5
<PAGE> 6
(REVERSE OF NOTE)
IRVINE APARTMENT COMMUNITIES, L.P.
MEDIUM-TERM NOTE, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(Fixed Rate)
This Note is one of a duly authorized series of Securities of the
Operating Partnership issued and to be issued under an Indenture, dated as of
October 1, 1997, as amended, modified or supplemented from time to time (the
"Indenture"), between the Operating Partnership and First Trust of California,
National Association, as trustee (the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Operating
Partnership, the Trustee and the holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Note is one of the series of Securities designated as "Medium-Term Notes, Series
A Due Nine Months or More from Date of Issue" (the "Notes"). All terms used but
not defined in this Note or in an Addendum hereto shall have the meanings
assigned to such terms in the Indenture or on the face hereof, as the case may
be.
This Note is issuable only in registered form without coupons in minimum
denominations of U.S. $1,000 and integral multiples thereof or the minimum
Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Operating
Partnership on any date on and after the Initial Redemption Date, if any,
specified on the face hereof, in whole or from time to time in part in
increments of U.S. $1,000 or the minimum Authorized Denomination (provided that
any remaining principal amount hereof shall be at least U S. $1,000 or such
minimum Authorized Denomination), at the Redemption Price (as defined below),
together with unpaid interest accrued thereon to the date fixed for redemption
(each, a "Redemption Date"), on notice given not more than 60 nor less than 30
calendar days prior to the Redemption Date and in accordance with the provisions
of the Indenture. The "Redemption Price" shall initially be the Initial
Redemption Percentage specified on the face hereof multiplied by the unpaid
principal amount of this Note to be redeemed. The Initial Redemption Percentage
shall decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof until the
Redemption Price is 100% of the unpaid principal amount to be redeemed. In the
event of redemption of this Note in part only, a new Note of like tenor for the
unredeemed portion hereof and otherwise having the same terms
6
<PAGE> 7
as this Note shall be issued in the name of the holder hereof upon the
presentation and surrender hereof.
This Note will be subject to repayment by the Operating Partnership at
the option of the holder hereof on the Optional Repayment Date(s), if any,
specified on the face hereof, in whole or in part in increments of U.S. $1,000
or the minimum Authorized Denomination (provided that any remaining principal
amount hereof shall be at least U.S. $1,000 or such minimum Authorized
Denomination), at a repayment price equal to 100% of the unpaid principal amount
to be repaid, together with unpaid interest accrued thereon to the date fixed
for repayment (each, a "Repayment Date"). For this Note to be repaid, the Paying
Agent must receive at its office in the Borough of Manhattan, The City of New
York, referred to on the face hereof, at least 30 days but not more than 60 days
prior to the Repayment Date (i) this Note and the form hereon entitled "Option
to Elect Repayment" duly completed or (ii) a telegram, telex, facsimile
transmission, or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States setting forth the name of the holder hereof, the
principal amount of this Note, the principal amount of this Note to be repaid,
the certificate number or a description of the tenor and terms of this Note, a
statement that the option to elect repayment is being exercised thereby, and a
guarantee that this Note, together with the form hereon entitled "Option to
Elect Repayment" duly completed, will be received by the Paying Agent not later
than the third Business Day after the date of such telegram, telex, facsimile
transmission or letter, provided that such telegram, telex, facsimile
transmission or letter shall only be effective if this Note and duly completed
form are received by the Paying Agent by such third Business Day. Exercise of
such repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If this Note is an Original Issue Discount Note as specified on the face
hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity of this Note will be equal to
the sum of (i) the Issue Price specified on the face hereof (increased by any
accruals of the Discount, as defined below) and, in the event of any redemption
of this Note (if applicable), multiplied by the Initial Redemption Percentage
(as adjusted by the Annual Redemption Percentage Reduction, if applicable) and
(ii) any unpaid interest on this Note accrued from the Original Issue Date to
the Redemption Date, Repayment Date or date of acceleration of maturity, as the
case may be. The difference between the Issue Price and 100% of the principal
amount of this Note is referred to herein as the "Discount."
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued using a constant yield method. The
constant yield will be calculated using a 30-day month, 360-day year convention,
a compounding period that, except for the Initial Period (as defined below),
corresponds to the shortest period between Interest Payment Dates (with ratable
accruals within a compounding period), a coupon rate equal to the initial coupon
rate applicable to this Note and an assumption that the maturity of this Note
will not be
7
<PAGE> 8
accelerated. If the period from the Original Issue Date to the initial Interest
Payment Date (the "Initial Period") is shorter than the compounding period for
this Note, a proportionate amount of the yield for an entire compounding period
will be accrued. If the Initial Period is longer than the compounding period,
then such period will be divided into a regular compounding period and a short
period, with the short period being treated as provided in the preceding
sentence.
If an Event of Default, as defined in the Indenture, with respect to the
Notes shall occur and be continuing, the principal of the Notes may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of the Notes or (ii) certain restrictive covenants and
related defaults and Events of Default with respect to the Notes, in each case
upon compliance with certain conditions set forth therein, which provisions
apply to the Notes.
As provided in and subject to the provisions of the Indenture, the
holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such holder shall have previously given
written notice to the Trustee of a continuing Event of Default with respect to
the Notes, the holders of not less than 25% in aggregate principal amount of the
Notes at that time outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity and the Trustee shall not have received from
the holders of a majority in aggregate principal amount of Notes at the time
outstanding a direction inconsistent with such request, and the Trustee shall
have failed to institute any such proceedings, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the holder of this Note for the enforcement of any payment of
principal or premium, if any, hereof or any interest on or after the respective
due dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Operating Partnership and the rights of the holders of the Securities of each
series to be affected under the Indenture at any time by the Operating
Partnership and the Trustee with the consent of the holders of not less than a
majority in principal amount of the outstanding Securities of each series of
Securities then outstanding and affected thereby. The Indenture also contains
provisions permitting the holders of specified percentages in principal amount
of the Securities of such series at the time outstanding, on behalf of the
holders of all such Securities of such series, to waive compliance by the
Operating Partnership with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the holder of this Note shall be conclusive and binding upon such holder and
upon all future holders of this Note and other Notes issued upon the
registration of transfer hereof or in exchange heretofore or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Note.
8
<PAGE> 9
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Operating Partnership,
which is absolute and unconditional, to pay principal, premium, if any, and
interest in respect of this Note at the times, places and rate or formula, and
in the coin or currency herein prescribed.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer of this Note is registrable in the Security
Register of the Operating Partnership upon surrender of this Note for
registration of transfer at the office or agency of the Operating Partnership in
any place where the principal hereof and any premium or interest hereon are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Operating Partnership and the Registrar, duly executed
by the holder hereof or by his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer or
exchange, but the Operating Partnership may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Operating Partnership, the Trustee and any agent of the Operating Partnership or
the Trustee may treat the holder in whose name this Note is registered as the
owner thereof for all purposes whether or not this Note be overdue, and neither
the Operating Partnership, the Trustee nor any such agent shall be affected by
notice to the contrary.
This Note and all documents, agreements, understandings and arrangements
relating to any transaction contemplated hereby or thereby have been executed or
entered into by the undersigned in his/her capacity as an officer of the sole
general partner of the operating Partnership which has been formed as a Delaware
limited partnership, and not individually, and neither the general partner,
officers, employees or limited partners of the Operating Partnership shall be
bound or have any personal liability hereunder or thereunder. The holder of this
Note by accepting this Note waives and releases all such liability. This waiver
and release are part of the consideration for the issue of this Note. Each party
hereto shall look solely to the assets of the Operating Partnership for
satisfaction of any liability of the Operating Partnership in respect of this
Note and all documents, agreements, understandings and arrangements relating to
any transaction contemplated hereby or thereby and will not seek recourse or
commence any action against any general partner, officer, employee or limited
partner of the Operating Partnership or any of their personal assets for the
performance or payment of any obligation hereunder or
9
<PAGE> 10
thereunder. The foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to its
principles of conflicts of laws.
10
<PAGE> 11
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian_______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants in common Act_____________________
(State)
Additional abbreviations may also be used though not in the above list.
-----------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------ --------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- --------------------------------------------------------------------------------
this Note and all rights thereunder hereby irrevocably constituting and
appointing
- --------------------------------------------------------------------------------
Attorney to transfer this Note on the books of the Registrar, with full power of
substitution in the premises.
Dated: ______________________ ______________________________
-------------------------------------
Notice:-The signature(s) on this
Assignment must correspond with
the name(s) as written upon the
face of this Note in every
particular, without alteration or
enlargement or any change whatsoever.
11
<PAGE> 12
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Operating Partnership to repay this Note (or portion hereof specified below)
pursuant to its terms at a price equal to 100% of the principal amount to be
repaid, together with unpaid interest accrued hereon to the Repayment Date, to
the undersigned, at
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its
corporate trust office in the Borough of Manhattan, The City of New York,
currently located at U.S. Bank Trust National Association, 100 Wall Street, New
York, New York 10005, this Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or the
minimum Authorized Denomination specified on the face hereof)) which the holder
elects to have repaid and specify the denomination or denominations (which shall
be an Authorized Denomination) of the Notes to be issued to the holder for the
portion of this Note not being repaid (in the absence of any such specification,
one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $_____________ _____________________________
Notice: The signature(s) on this Option
to Elect Repayment must correspond with
the name(s) as written upon the face of
Date: __________________ this Note in every particular, without
alteration or enlargement or any change
whatsoever.
12
<PAGE> 1
EXHIBIT 4.3
[FACE OF NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") (55 WATER STREET, NEW YORK, NEW YORK) TO THE
ISSUER HEREOF OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE TO THE DEPOSITARY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.(1)
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY, AS
DEPOSITARY OR A NOMINEE OF THE DEPOSITARY. UNLESS AND UNTIL IT IS EXCHANGED IN
WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM, THIS NOTE MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY.(2)
- --------
(1) This paragraph applies to global Notes only.
(2) This paragraph applies to global Notes only.
<PAGE> 2
REGISTERED CUSIP No.: REGISTERED PRINCIPAL AMOUNT:
No. FLR--_____ _______________________________________
IRVINE APARTMENT COMMUNITIES, L.P.
MEDIUM-TERM NOTE, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(Floating Rate)
<TABLE>
<S> <C> <C>
INTEREST RATE BASIS ORIGINAL ISSUE DATE: STATED MATURITY DATE:
OR BASES:
IF LIBOR: IF CMT RATE:
[ ] LIBOR Reuters Designated CMT Telerate Page:
Page: If Telerate Page 7052:
[ ] Weekly Average
[ ] LIBOR Telerate [ ] Monthly Average
Page: Designated CMT Maturity Index:
INDEX MATURITY: INITIAL INTEREST RATE: % INTEREST PAYMENT
RECORD DATE(S):
INTEREST PAYMENT SPREAD (PLUS OR MINUS): SPREAD MULTIPLIER:
DATES(S):
INITIAL INTEREST RESET MINIMUM INTEREST MAXIMUM INTEREST
DATE: RATE: % RATE: %
INTEREST RESET DATE(S): INITIAL REDEMPTION DATE: INITIAL REDEMPTION
PERCENTAGE: %
ANNUAL REDEMPTION OPTIONAL REPAYMENT CALCULATION AGENT:
PERCENT REDUCTION DATE(S):
REPAYMENT PRICE: %
INTEREST CATEGORY: DAY COUNT CONVENTION:
[ ] Regular Floating Rate Note [ ] 30/360 for the period
[ ] Floating Rate/Fixed Rate Note from to
Fixed Rate Commencement Date: [ ] Actual/360 for the period
Fixed Interest Rate: % from to
[ ] Inverse Floating Rate Note [ ] Actual/Actual for the period
Fixed-Interest Rate: % from to
[ ] Original Issue Discount Note
Issue Price: %
[ ] Applicable Interest Rate Basis:
AUTHORIZED DENOMINATION:
[ ] $1,000 and integral multiples
thereof
[ ] Other
</TABLE>
2
<PAGE> 3
AMORTIZING SECURITY: DEFAULT RATE: %
[ ] Yes
[ ] No
AMORTIZATION FORMULA: ADDENDUM ATTACHED:
[ ] Yes
[ ] No
AMORTIZATION PAYMENT DATE(S): OTHER/ADDITIONAL PROVISIONS:
3
<PAGE> 4
IRVINE APARTMENT COMMUNITIES, L.P., a limited partnership duly organized
and existing under the laws of Delaware (hereinafter referred to, as the
"Operating Partnership," which term includes any successor entity under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ______________________, or registered assigns, the principal sum of
______________________, on the Stated Maturity Date specified above (or any
Redemption Date or Repayment Date, each as defined on the reverse hereof) (each
such Stated Maturity Date, Redemption Date or Repayment Date being hereinafter
referred to as the "Maturity Date" with respect to the principal repayable on
such date) and to pay interest thereon, at a rate per annum equal to the Initial
Interest Rate specified above until the Initial Interest Reset Date specified
above and thereafter at a rate determined in accordance with the provisions
specified above and on the reverse hereof or in an Addendum hereto with respect
to one or more Interest Rate Bases specified above until the principal hereof is
paid or duly made available for payment, and (to the extent that the payment of
such interest shall be legally enforceable) at the Default Rate per annum
specified above on any overdue principal, premium and/or interest, including any
overdue sinking fund or redemption payment. The Operating Partnership will pay
interest in arrears on each Interest Payment Date, if any, specified above
(each, an "Interest Payment Date"), commencing with the first Interest Payment
Date next succeeding the Original Issue Date specified above, and on the
Maturity Date; provided, however, that if the Original Issue Date occurs between
a Record Date (as defined below) and the next succeeding Interest Payment Date,
interest payments will commence on the second Interest Payment Date next
succeeding the Original Issue Date to the holder of this Note on the Record Date
with respect to such second Interest Payment Date.
Interest on this Note will accrue from, and including, the immediately
preceding Interest Payment Date to which interest has been paid or duly provided
for (or from, and including, the Original Issue Date if no interest has been
paid or duly provided for) to, but excluding, the applicable Interest Payment
Date or the Maturity Date, as the case may be (each, an "Interest Period"). The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, subject to certain exceptions described herein, be paid to
the person in whose name this Note (or one or more predecessor Notes) is
registered at the close of business on the record date (as specified herein)
immediately preceding such Interest Payment Date, or if no such record date is
specified herein, the fifteenth calendar day (whether or not a Business Day, as
defined on the reverse hereof) immediately preceding such Interest Payment Date
(in either case, the "Record Date"); provided, however, that interest payable on
the Maturity Date will be payable to the person to whom the principal hereof and
premium, if any, hereon shall be payable. Any such interest not so punctually
paid or duly provided for ("Defaulted Interest") will forthwith cease to be
payable to the holder on any Record Date, and shall be paid to the person in
whose name this Note is registered at the close of business on a special record
date (the "Special Record Date") for the payment of such Defaulted Interest to
be fixed by the Trustee hereinafter referred to, notice whereof shall be given
to the holder of this Note by the Trustee not more than 15 days and not less
than 10 days prior to such Special Record Date or may be paid at any time in
4
<PAGE> 5
any other lawful manner not inconsistent with the requirements of any securities
exchange on which this Note may be listed, and upon such notice as may be
required by such exchange, all as more fully provided for in the Indenture.
Payment of principal, premium, if any, and interest in respect of this
Note due on the Maturity Date, or any prior date on which the principal or an
installment of principal of this Note becomes due and payable, whether by the
declaration of acceleration or otherwise, will be made in immediately available
funds upon presentation and surrender of this Note (and, with respect to any
applicable repayment of this Note, upon presentation and surrender of this Note
and a duly completed election form as contemplated on the reverse hereof) at the
office or agency maintained by the operating Partnership for that purpose in the
Borough of Manhattan, The City of New York, currently the office of the Paying
Agent located at U.S. Bank Trust National Association, 100 Wall Street, New
York, New York 10005, or at such other paying agency in the Borough of
Manhattan, The City of New York, as the Operating Partnership may determine.
Payment of interest due on any Interest Payment Date other than the Maturity
Date will be made at the aforementioned office or agency maintained by the
Operating Partnership or, at the option of the Operating Partnership, by check
mailed to the address of the person entitled thereto as such address shall
appear in the Security Register maintained by or on behalf of the Trustee or, at
the option of the Company, by wire transfer to an account maintained by such
person with a bank located in the United States; provided, however, that a
holder of U.S. $10,000,000 or more in aggregate principal amount of Notes
(whether having identical or different terms and provisions) will be entitled to
receive interest payments on any Interest Payment Date other than the Maturity
Date by wire transfer of immediately available funds if appropriate wire
transfer instructions have been received in writing by the Paying Agent not less
than 15 calendar days prior to such Interest Payment Date. Any such wire
transfer instructions received by the Paying Agent shall remain in effect until
revoked by such holder.
If any Interest Payment Date other than the Maturity Date would
otherwise be a day that is not a Business Day, such Interest Payment Date shall
be postponed to the next succeeding Business Day, except that if LIBOR is an
applicable Interest Rate Basis and such Business Day falls in the next
succeeding calendar month, such Interest Payment Date shall be the immediately
preceding Business Day. If the Maturity Date falls on a day that is not a
Business Day, the required payment of principal, premium, if any, and interest
shall be made on the next succeeding Business Day with the same force and effect
as if made on the date such payment was due, and no interest shall accrue with
respect to such payment for the period from and after the Maturity Date to the
date of such payment on the next succeeding Business Day.
As used herein, "Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in The City of New York or the City of Los Angeles are authorized or required by
law, regulation or executive order to close, provided, however, that if LIBOR is
an applicable Interest Rate Basis, such day is also a London Business Day (as
defined below). "London Business Day" means any day on which dealings in United
States dollars are transacted in the London interbank market.
5
<PAGE> 6
The Operating Partnership is obligated to make payments of principal,
premium, if any, and interest in respect of this Note in such coin or currency
of the United Sates as at the time of payment is legal tender for payment of
public or private debts.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and, if so specified above on the face hereof, in
the Addendum hereto, which further provisions shall have the same force and
effect as if set forth on the face hereof.
Notwithstanding any provisions to the contrary contained herein, if the
face of this Note specifies that an Addendum is attached hereto or that
"Other/Additional Provisions" apply to this Note, this Note shall be subject to
the terms set forth in such Addendum or such "Other/Additional Provisions."
Unless the Certificate of Authentication hereon has been executed by the
Trustee or its Authenticating Agent or Agents, by manual signature, this Note
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
6
<PAGE> 7
IN WITNESS WHEREOF, IRVINE APARTMENT COMMUNITIES, L.P. has caused
this Note to be duly executed under its seal.
Dated:
IRVINE APARTMENT COMMUNITIES, L.P.
BY: Irvine Apartment Communities, Inc.
its sole general partner
By: _________________________________
Name:
Title:
[SEAL]
Attest:
__________________________________
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the
series designated therein referred to
in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
Dated: By: U.S. BANK TRUST NATIONAL
ASSOCATION, as Authenticating Agent
By: _________________________________
Authorized Signatory
7
<PAGE> 8
(REVERSE OF NOTE)
MEDIUM-TERM NOTE, SERIES A
DUE NINE MONTHS OR MORE FROM DATE OF ISSUE
(Floating Rate)
This Note is one of a duly authorized series of Securities of the
Operating Partnership issued and to be issued under an Indenture, dated as of
October 1, 1997, as amended, modified or supplemented from time to time (the
"Indenture"), between the Operating Partnership and First Trust of California,
National Association, as trustee (the "Trustee", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Operating
Partnership, the Trustee and the holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Note is one of the series of Securities designated as "Medium-Term Notes, Series
A Due Nine Months or More from Date of Issue" (the "Notes"). All terms used but
not defined in this Note or in an Addendum hereto shall have the meanings
assigned to such terms in the Indenture or on the face hereof, as the case may
be.
This Note is issuable only in registered form without coupons in minimum
denominations of U.S. $1,000 and integral multiples thereof or the minimum
Authorized Denomination specified on the face hereof.
This Note will not be subject to any sinking fund and, unless otherwise
specified on the face hereof in accordance with the provisions of the following
two paragraphs, will not be redeemable or repayable prior to the Stated Maturity
Date.
This Note will be subject to redemption at the option of the Operating
Partnership on any date on and after the Initial Redemption Date, if any,
specified on the face hereof, in whole or from time to time in part in
increments of U.S. $1,000 or the minimum Authorized Denomination (provided that
any remaining principal amount hereof shall be at least U.S. $1,000 or such
minimum Authorized Denomination), at the Redemption Price (as defined below),
together with unpaid interest accrued thereon to the date fixed for redemption
(each, a "Redemption Date"), on notice given not more 60 than nor less than 30
calendar days prior to the Redemption Date and in accordance with the provisions
of the Indenture. The "Redemption Price" shall initially be the Initial
Redemption Percentage specified on the face hereof multiplied by the unpaid
principal amount of this Note to be redeemed. The Initial Redemption Percentage
shall decline at each anniversary of the Initial Redemption Date by the Annual
Redemption Percentage Reduction, if any, specified on the face hereof until the
Redemption Price is 100% of the unpaid principal amount to be redeemed. In the
event of redemption of this Note in part only, a new Note of like tenor for the
unredeemed portion hereof and otherwise having the same terms
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<PAGE> 9
as this Note shall be issued in the name of the holder hereof upon the
presentation and surrender hereof.
This Note will be subject to repayment by the Operating Partnership at
the option of the holder hereof on the Optional Repayment Date(s), if any,
specified on the face hereof, in whole or in part in increments of U.S. $1,000
or the minimum Authorized Denomination (provided that any remaining principal
amount hereof shall be at least U.S. $1,000 or such minimum Authorized
Denomination), at a repayment price equal to 100% of the unpaid principal amount
to be repaid, together with unpaid interest accrued thereon to the date fixed
for repayment (each, a "Repayment Date"). For this Note to be repaid, the Paying
Agent must receive at its office in the Borough of Manhattan, The City of New
York, referred to on the face hereof, at least 30 days but not more than 60 days
prior to the Repayment Date (i) this Note and the form hereon entitled "Option
to Elect Repayment" duly completed or (ii) a telegram, telex, facsimile
transmission, or a letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States setting forth the name of the holder hereof, the
principal amount of this Note, the principal amount of this Note to be repaid,
the certificate number or a description of the tenor and terms of this Note, a
statement that the option to elect repayment is being exercised thereby, and a
guarantee that this Note, together with the form hereon entitled "Option to
Elect Repayment" duly completed, will be received by the Paying Agent not later
than the third Business Day after the date of such telegram, telex, facsimile
transmission or letter, provided that such telegram, telex, facsimile
transmission or letter shall only be effective if this Note and duly completed
form are received by the Paying Agent by such third Business Day. Exercise of
such repayment option by the holder hereof will be irrevocable. In the event of
repayment of this Note in part only, a new Note of like tenor for the unrepaid
portion hereof and otherwise having the same terms as this Note shall be issued
in the name of the holder hereof upon the presentation and surrender hereof.
If this Note is an Original Issue Discount Note as specified on the face
hereof, the amount payable to the holder of this Note in the event of
redemption, repayment or acceleration of maturity of this Note will be equal to
the sum of (i) the Issue Price specified on the face hereof (increased by any
accruals of the Discount, as defined below) and, in the event of any redemption
of this Note (if applicable), multiplied by the Initial Redemption Percentage
(as adjusted by the Annual Redemption Percentage Reduction, if applicable) and
(ii) any unpaid interest on this Note accrued from the Original Issue Date to
the Redemption Date, Repayment Date or date of acceleration of maturity, as the
case may be. The difference between the Issue Price and 100% of the principal
amount of this Note is referred to herein as the "Discount."
For purposes of determining the amount of Discount that has accrued as
of any Redemption Date, Repayment Date or date of acceleration of maturity of
this Note, such Discount will be accrued using a constant yield method. The
constant yield will be calculated using a 30-day month, 360-day year convention,
a compounding period that, except for the Initial Period (as defined below),
corresponds to the shortest period between Interest Payment Dates (with ratable
accruals within a compounding period), a coupon rate equal to the initial coupon
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<PAGE> 10
rate applicable to this Note and an assumption that the maturity of this Note
will not be accelerated. If the period from the Original Issue Date to the
initial Interest Payment Date (the "Initial Period") is shorter than the
compounding period for this Note, a proportionate amount of the yield for an
entire compounding period will be accrued. If the Initial Period is longer than
the compounding period, then such period will be divided into a regular
compounding period and a short period, with the short period being treated as
provided in the preceding sentence.
The interest rate borne by this Note will be determined, as follows:
(i) Unless the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note" or an "Inverse Floating
Rate Note" or as otherwise specified as Other/Additional Provisions on
the face hereof or in an Addendum hereto, this Note shall be designated
as a "Regular Floating Rate Note" and, except as set forth below or
specified on the face hereof or in an Addendum hereto, shall bear
interest at the rate determined by reference to the applicable Interest
Rate Basis or Bases (a) plus or minus the Spread, if any, and/or (b)
multiplied by the Spread Multiplier, if any, in each case as specified
on the face hereof. Commencing on the Initial Interest Reset Date, the
rate at which interest on this Note shall be payable shall be reset as
of each Interest Reset Date specified on the face hereof; provided,
however, that the interest rate in effect for the period, if any, from
the Original Issue Date to the Initial Interest Reset Date shall be the
Initial Interest Rate.
(ii) If the Interest Category of this Note is specified on the
face hereof as a "Floating Rate/Fixed Rate Note," then, except as set
forth below or specified on the face hereof or in an Addendum hereto,
this Note shall bear interest at the rate determined by reference to the
applicable Interest Rate Basis or Bases (a) plus or minus the Spread, if
any, and/or (b) multiplied by the Spread Multiplier, if any. Commencing
on the Initial Interest Reset Date, the rate at which interest on this
Note shall be payable shall be reset as of each Interest Reset Date;
provided, however, that (y) the interest rate in effect for the period,
if any, from the Original Issue Date to the Initial Interest Reset Date
shall be the Initial Interest Rate and (z) the interest rate in effect
for the period commencing on the Fixed Rate Commencement Date specified
on the face hereof to the Maturity Date shall be the Fixed Interest Rate
specified on the face hereof or, if no such Fixed Interest Rate is
specified, the interest rate in effect hereon on the day immediately
preceding the Fixed Rate Commencement Date.
(iii) If the Interest Category of this Note is specified on the
face hereof as an "Inverse Floating Rate Note", then, except as set
forth below or specified on the face hereof or in an Addendum hereto,
this Note shall bear interest at the Fixed Interest Rate minus the rate
determined by reference to the applicable Interest Rate Basis or Bases
(a) plus or minus the Spread, if any, and/or (b) multiplied by the
Spread Multiplier, if any; provided, however, that, unless otherwise
specified on the face hereof or in an Addendum hereto, the interest rate
hereon shall not be less than zero. Commencing on the Initial Interest
Reset Date, the rate at which interest on this Note shall be payable
shall be reset as of each Interest Reset Date; provided,
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<PAGE> 11
however, that the interest rate in effect for the period, if any, from
the Original Issue Date to the Initial Interest Reset Date shall be the
Initial Interest Rate.
Except as set forth above or specified on the face hereof or in an
Addendum hereto, the interest rate in effect on each day shall be (i) if such
day is an Interest Reset Date, the interest rate determined as of the Interest
Determination Date (as defined below) immediately preceding such Interest Reset
Date or (ii) if such day is not an Interest Reset Date, the interest rate
determined as of the Interest Determination Date immediately preceding the most
recent Interest Reset Date. If any Interest Reset Date would otherwise be a day
that is not a Business Day, such Interest Reset Date shall be postponed to the
next succeeding Business Day, except that if LIBOR is an applicable Interest
Rate Basis and such Business Day falls in the next succeeding calendar month,
such Interest Reset Date shall be the immediately preceding Business Day. In
addition, if the Treasury Rate is an applicable Interest Rate Basis and the
Interest Determination Date would otherwise fall on an Interest Reset Date, then
such Interest Reset Date will be postponed to the next succeeding Business Day.
The interest rate applicable to each Interest Reset Period commencing on
the related Interest Reset Date will be determined by the Calculation Agent as
of the applicable Interest Determination Date and will be calculated by the
Calculation Agent on or prior to the Calculation Date (as defined below), except
with respect to LIBOR and the Eleventh District Cost of Funds Rate, which will
be calculated on such Interest Determination Date. The "Interest Determination
Date" with respect to the CD Rate, the CMT Rate, the Commercial Paper Rate, the
Federal Funds Rate and the Prime Rate will be the second Business Day
immediately preceding the applicable Interest Reset Date; the "Interest
Determination Date" with respect to the Eleventh District Cost of Funds Rate
shall be the last business day of the month immediately preceding the applicable
Interest Reset Date on which the Federal Home Loan Bank of San Francisco (the
"FHLB of San Francisco") publishes the Index (as defined below); and the
"Interest Determination Date" with respect to LIBOR shall be the second London
Business Day immediately preceding the applicable Interest Reset Date. The
"Interest Determination Date", with respect to the Treasury Rate shall be the
day in the week in which the applicable Interest Reset Date falls on which day
Treasury Bills (as defined below) are normally auctioned (Treasury Bills are
normally sold at an auction held on Monday of each week, unless that day it a
legal holiday, in which case the auction is normally held on the following
Tuesday, except that such auction may be held on the preceding Friday);
provided, however, that if an auction is held on the Friday of the week
preceding the applicable Interest Reset Date, the "Interest Determination Date"
shall be such preceding Friday. If the interest rate of this Note is determined
with reference to two or more Interest Rate Bases specified on the face hereof,
the "Interest Determination Date" pertaining to this Note shall be the most
recent Business Day which is at least two Business Days prior to the applicable
Interest Reset Date on which each Interest Rate Basis is determinable. Each
Interest Rate Basis shall be determined as of such date, and the applicable
interest rate shall take effect on the applicable Interest Reset Date.
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<PAGE> 12
Unless otherwise specified on the face hereof or in an Addendum hereto,
the rate with respect to each Interest Rate Basis will be determined in
accordance with the following provisions.
CD Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CD Rate, the CD Rate shall be determined as of the applicable
Interest Determination Date (a "CD Rate Interest Determination Date") as the
rate on such date for negotiable United States dollar certificates of deposit
having the Index Maturity specified on the face hereof as published by the Board
of Governors of the Federal Reserve System in "Statistical Release H.15(519),
Selected Interest Rates" or any successor publication ("H.15(519)") under the
heading "CDs (Secondary Market)", or, if not published by 3:00 P.M., New York
City time, on the related Calculation Date, the rate on such CD Rate Interest
Determination Date for negotiable United States dollar certificates of deposit
of the Index Maturity as published by the Federal Reserve Bank of New York in
its daily statistical release "Composite 3:30 P.M. Quotations for United States
Government Securities" or any successor publication ("Composite Quotations")
under the heading "Certificates of Deposit." If such rate is not yet published
in either H.15(519) or Composite Quotations by 3:00 P.M., New York City time, on
the related Calculation Date, then the CD Rate on such CD Rate Interest
Determination Date will be calculated by the Calculation Agent specified on the
face hereof and will be the arithmetic mean of the secondary market offered
rates as of 10:00 A.M., New York City time, on such CD Rate Interest
Determination Date, of three leading nonbank dealers in negotiable United States
dollar certificates of deposit in The City of New York selected by the
Calculation Agent for negotiable United States dollar certificates of deposit of
major United States money center banks in the market for negotiable United
States dollar certificates of deposit with a remaining maturity closest to the
Index Maturity in an amount that is representative for a single transaction in
that market at that time; provided, however, that if the dealers so selected by
the Calculation Agent are not quoting as mentioned in this sentence, the CD Rate
determined as of such CD Rate Interest Determination Date will be the CD Rate in
effect on such CD Rate Interest Determination Date.
CMT Rate. If an Interest Rate Basis for this Note is specified on the
face hereof as the CMT Rate, the CMT Rate shall be determined as of the
applicable Interest Determination Date (a "CMT Rate Interest Determination
Date") as the rate displayed on the Designated CMT Telerate Page (as defined
below) under the caption " . . . Treasury Constant Maturities . . . Federal
Reserve Board Release H.15 . . . Mondays Approximately 3:45 P.M.," under the
column for the Designated CMT Maturity Index (as defined below) for (i) if the
Designated CMT Telerate Page is 7055, the rate on such CMT Rate Interest
Determination Date and (ii) if the Designated CMT Telerate Page is 7052, the
weekly or monthly average, as specified on the face hereof, for the week or
month, as applicable, ended immediately preceding the week or month, as
applicable, in which the related CMT Rate Interest Determination Date occurs. If
such rate is no longer displayed on the relevant page or is not displayed by
3:00 P.M., New York City time, on the related Calculation Date, then the CMT
Rate for such CMT Rate Interest Determination Date will be such treasury
constant maturity rate for the Designated CMT Maturity Index as published in
H.15(519). If such rate is no longer published or is not published by 3:00 P.M.,
New York City
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<PAGE> 13
time, on the related Calculation Date, then the CMT Rate on such CMT Rate
Interest Determination Date will be such treasury constant maturity rate for the
Designated CMT Maturity Index (or other United States Treasury rate for the
Designated CMT Maturity Index) for the CMT Rate Interest Determination Date with
respect to such Interest Reset Date as may then be published by either the Board
of Governors of the Federal Reserve System or the United States Department of
the Treasury that the Calculation Agent determines to be comparable to the rate
formerly displayed on the Designated CMT Telerate Page and published in
H.15(519). If such information is not provided by 3:00 P.M., New York City time,
on the related Calculation Date, then the CMT Rate on the CMT Rate Interest
Determination Date will be calculated by the Calculation Agent and will be a
yield to maturity, based on the arithmetic mean of the secondary market closing
offer side prices as of approximately 3:30 P.M., New York City time, on such CMT
Rate Interest Determination Date reported, according to their written records,
by three leading primary United States government securities dealers (each, a
"Reference Dealer") in The City of New York selected by the Calculation Agent
(from five such Reference Dealers selected by the Calculation Agent and
eliminating the highest quotation (or, in the event of equality, one of the
highest) and the lowest quotation (or, in the event of equality, one of the
lowest)), for the most recently issued direct noncallable fixed rate obligations
of the United States ("Treasury Notes") with an original maturity of
approximately the Designated CMT Maturity Index and a remaining term to maturity
of not less than such Designated CMT Maturity Index minus one year. If the
Calculation Agent is unable to obtain three such Treasury Note quotations, the
CMT Rate on such CMT Rate Interest Determination Date will be calculated by the
Calculation Agent and will be a yield to maturity based on the arithmetic mean
of the secondary market offer side prices as of approximately 3:30 P.M., New
York City time, on such CMT Rate Interest Determination Date of three Reference
Dealers in The City of New York (from five such Reference Dealers selected by
the Calculation Agent and eliminating the highest quotation (or, in the event of
equality, one of the highest) and the lowest quotation (or, in the event of
equality, one of the lowest)), for Treasury Notes with an original maturity of
the number of years that is the next highest to the Designated CMT Maturity
Index and a remaining term to maturity closest to the Designated CMT Maturity
Index and in an amount of at least U.S.$100 million. If three or four (and not
five) of such Reference Dealers are quoting as described above, then the CMT
Rate will be based on the arithmetic mean of the offer prices obtained and
neither the highest nor the lowest of such quotes will be eliminated; provided,
however, that if fewer than three Reference Dealers selected by the Calculation
Agent are quoting as mentioned herein, the CMT Rate determined as of such CMT
Rate Interest Determination Date will be the CMT Rate in effect on such CMT Rate
Interest Determination Date. If two Treasury Notes with an original maturity as
described in the second preceding sentence have remaining terms to maturity
equally close to the Designated CMT Maturity Index, the Calculation Agent will
obtain quotations for the Treasury Note with the shorter remaining term to
maturity and will use such quotations to calculate the CMT Rate as set forth
above.
"Designated CMT Telerate Page" means the display on the Dow Jones
Telerate Service (or any successor service) on the page specified on the face
hereof (or any other page as may replace such page on that service (or any
successor service) for the purpose of displaying
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Treasury Constant Maturities as reported in H.15(519)). If no such page is
specified on the face hereof, the Designated CMT Telerate Page shall be 7052,
for the most recent week.
"Designated CMT Maturity Index" means the original period to maturity of
the United States Treasury securities (either one, two, three, five, seven, 10,
20 or 30 years) specified on the face hereof with respect to which the CMT Rate
will be calculated. If no such maturity is specified on the face hereof, the
Designated CMT Maturity Index shall be two years.
Commercial Paper Rate. If an Interest Rate Basis for this Note is
specified on the face hereof as the Commercial Paper Rate, the Commercial Paper
Rate shall be determined as of the applicable Interest Determination Date (a
"Commercial Paper Rate Interest Determination Date"), as the Money Market Yield
(as defined below) on such date of the rate for commercial paper having the
Index Maturity as published in H.15(519) under the heading "Commercial
Paper-NonFinancial." In the event that such rate is not published by 3:00 P.M.,
New York City time, on the related Calculation Date, then the Commercial Paper
Rate on such Commercial Paper Rate Interest Determination Date will be the Money
Market Yield of the rate for commercial paper having the Index Maturity as
published in Composite Quotations under the heading "Commercial Paper" (with an
Index Maturity of one month or three months being deemed to be equivalent to an
Index Maturity of 30 days or 90 days, respectively). If such rate is not yet
published in either H.15(519) or Composite Quotations by 3:00 P.M., New York
City time, on the related Calculation Date, then the Commercial Paper Rate on
such Commercial Paper Rate Interest Determination Date will be calculated by the
Calculation Agent and shall be the Money Market Yield of the arithmetic mean of
the offered rates at approximately 11:00 A.M., New York City time, on such
Commercial Paper Rate Interest Determination Date of three leading dealers of
commercial paper in The City of New York selected by the Calculation Agent for
commercial paper having the Index Maturity placed for an industrial issuer whose
bond rating is "AA," or the equivalent, from a nationally recognized statistical
rating organization; provided, however, that if the dealers so selected by the
Calculation Agent are not quoting as mentioned in this sentence, the Commercial
Paper Rate determined as of such Commercial Paper Rate Interest Determination
Date will be the Commercial Paper Rate in effect on such Commercial Paper Rate
Interest Determination Date.
"Money Market Yield" means a yield (expressed as a percentage)
calculated in accordance with the following formula:
Money Market Yield = D X 360 x 100
-------------
360 -- (D X M)
where "D" refers to the applicable per annum rate for commercial paper quoted on
a bank discount basis and expressed as a decimal, and "M" refers to the actual
number of days in the Interest Period for which interest is being calculated.
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Eleventh District Cost of Funds Rate. If an Interest Rate Basis for this
Note is specified on the face hereof as the Eleventh District Cost of Funds
Rate, the Eleventh District Cost of Funds Rate shall be determined as of the
applicable Interest Determination Date (an "Eleventh District Cost of Funds Rate
Interest Determination Date") as the rate equal to the monthly weighted average
cost of funds for the calendar month immediately preceding the month in which
such Eleventh District Cost of Funds Rate Interest Determination Date falls, as
set forth under the caption "llth District" on Telerate Page 7058 as of 11:00
A.M., San Francisco time, on such Eleventh District Cost of Funds Rate Interest
Determination Date. If such rate does not appear on Telerate Page 7058 on such
Eleventh District Cost of Funds Rate Interest Determination Date, then the
Eleventh District Cost of Funds Rate on such Eleventh District Cost of Funds
Rate Interest Determination Date shall be the monthly weighted average cost of
funds paid by member institutions of the Eleventh Federal Home Loan Bank
District that was most recently announced (the "Index") by the FHLB of San
Francisco as such cost of funds for the calendar month immediately preceding
such Eleventh District Cost of Funds Rate Interest Determination Date. If the
FHLB of San Francisco fails to announce the Index on or prior to such Eleventh
District Cost of Funds Rate Interest Determination Date for the calendar month
immediately preceding such Eleventh District Cost of Funds Rate Interest
Determination Date, the Eleventh District Cost of Funds Rate determined as of
such Eleventh District Cost of Funds Rate Interest Determination Date will be
the Eleventh District Cost of Funds Rate in effect on such Eleventh District
Cost of Funds Rate Interest Determination Date.
Federal Funds Rate. If an Interest Rate Basis for this Note is specified
on the face hereof at the Federal Funds Rate, the Federal Funds Rate shall be
determined as of the applicable Interest Determination Date (a "Federal Funds
Rate Interest Determination Date") as the rate on such date for United States
dollar federal funds as published in H.15(519) under the heading "Federal Funds
(Effective)" or, if not published by 3:00 P.M., New York City time, on the
Calculation Date, the rate on such Federal Funds Rate Interest Determination
Date as published in Composite Quotations under the heading "Federal
Funds/Effective Rate." If such rate is not published in either H.15(519) or
Composite Quotations by 3:00 P.M., New York City time, on the related
Calculation Date, then the Federal Funds Rate on such Federal Funds Interest
Determination Date shall be calculated by the Calculation Agent and will be the
arithmetic mean of the rates for the last transaction in overnight United States
dollar federal funds arranged by three leading brokers of federal funds
transactions in The City of New York selected by the Calculation Agent, prior to
9:00 A.M., New York City time, on such Federal Funds Rate Interest Determination
Date; provided, however, that if the brokers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Federal Funds Rate
determined as of such Federal Funds Rate Interest Determination Date will be the
Federal Funds Rate in effect on such Federal Funds Rate Interest Determination
Date.
LIBOR. If an Interest Rate Basis for this Note is specified on the face
hereof as LIBOR, LIBOR shall be determined by the Calculation Agent as of the
applicable Interest Determination Date (a "LIBOR Interest Determination Date")
in accordance with the following provisions:
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(i) if (a) "LIBOR Reuters" is specified on the face hereof, the
arithmetic mean of the offered rates (unless the Designated LIBOR Page (as
defined below) by its terms provides only for a single rate, in which case such
single rate will be used) for deposits in United States dollars having the Index
Maturity, commencing on the applicable Interest Reset Date, that appear (or, if
only a single rate is required as aforesaid, appears) on the Designated LIBOR
Page (as defined below) as of 11:00 A.M., London time, on such LIBOR Interest
Determination Date, or (b) "LIBOR Telerate" is specified on the face hereof, or
if neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof
as the method for calculating LIBOR, the rate for deposits in United States
dollars having the Index Maturity, commencing on such Interest Reset Date, that
appears on the Designated LIBOR Page as of 11:00 A.M., London time, on such
LIBOR Interest Determination Date. If fewer than two such offered rates appear,
or if no such rate appears, as applicable, LIBOR on such LIBOR Interest
Determination Date shall be determined in accordance with the provisions
described in clause (ii) below.
(ii) with respect to a LIBOR Interest Determination Date on which fewer
than two offered rates appear, or no rate appears, as the case may be, on the
Designated LIBOR Page as specified in clause (i) above, the Calculation Agent
shall request the principal London offices of each of four major reference banks
in the London interbank market, as selected by the Calculation Agent, to provide
the Calculation Agent with its offered quotation for deposits in United States
dollars for the period of the Index Maturity, commencing on the applicable
Interest Reset Date, to prime banks in the London interbank market at
approximately 11:00 A.M., London time, on such LIBOR Interest Determination Date
and in a principal amount that is representative for a single transaction in
United States dollars in such market at such time. If at least two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of such quotations. If fewer than two such
quotations are so provided, then LIBOR on such LIBOR Interest Determination Date
will be the arithmetic mean of the rates quoted at approximately 11:00 A.M., in
New York City, on such LIBOR Interest Determination Date by three major banks in
New York City selected by the Calculation Agent for loans in United States
dollars to leading European banks, having the Index Maturity and in a principal
amount that is representative for a single transaction in United States dollars
in such market at such time; provided, however, that if the banks so selected by
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR
determined as of such LIBOR Interest Determination Date shall be LIBOR in effect
on such LIBOR Interest Determination Date.
"Designated LIBOR Page" means (a) if "LIBOR Reuters" is specified on the
face hereof, the display on the Reuter Monitor Money Rates Service (or any
successor service) on the page specified on the face hereof (or any other page
as may replace such page on such service (or any successor service)), for the
purpose of displaying the London interbank rates of major banks for United
States dollars, or (b) if "LIBOR Telerate" is specified on the face hereof or
neither "LIBOR Reuters" nor "LIBOR Telerate" is specified on the face hereof as
the method for calculating LIBOR, the display on the Dow Jones Telerate Service
(or any successor service) on the page specified on the face hereof (or any
other page as may replace such page on such service
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<PAGE> 17
(or any successor service)), for the purpose of displaying the London interbank
rates of major banks for United States dollars.
Prime Rate. If an Interest Rate Basis for this Note is specified on the
face hereto as the Prime Rate, the Prime Rate shall be determined as of the
applicable Interest Determination Date (a "Prime Rate Interest Determination
Date") as the rate on such date as such rate is published in H.15(519) under the
heading "Bank Prime Loan." If such rate is not published prior to 3:00 P.M., New
York City time, on the related Calculation Date, then the Prime Rate shall be
the arithmetic mean of the rates of interest publicly announced by each bank
that appears on the Reuters Screen USPRIME1 Page (as defined below) as such
bank's prime rate or base lending rate as in effect for such Prime Rate Interest
Determination Date. If fewer than four such rates appear on the Reuters Screen
USPRIME1 Page for such Prime Rate Interest Determination Date, then the Prime
Rate shall be the arithmetic mean of the prime rates quoted on the basis of the
actual number of days in the year divided by a 360-day year as of the close of
business on such Prime Rate Interest Determination Date by four major money
center banks in The City of New York selected by the Calculation Agent. If fewer
than four such quotations are so provided, the Prime Rate shall be the
arithmetic mean of four prime rates quoted on the basis of the actual number of
days in the year divided by a 360-day year as of the close of business on such
Prime Rate Interest Determination Date as furnished in The City of New York by
the major money center banks, if any, that have provided such quotations and by
a reasonable number of substitute banks or trust companies to obtain four such
prime rate quotations, provided such substitute banks or trust companies are
organized and doing business under the laws of the United States, or any State
thereof, each having total equity capital of at least U.S. $500 million and
being subject to supervision or examination by Federal or State authority,
selected by the Calculation Agent to provide such rate or rates; provided,
however, that if the banks or trust companies so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Prime Rate determined
as of such Prime Rate Interest Determination Date will be the Prime Rate in
effect on such Prime Rate Interest Determination Date.
"Reuters Screen USPRIME1 Page" means the display designated as page
"USPRIME1" on the Reuter Monitor Money Rates Service (or any successor service)
or such other page as may replace the USPRIME1 page on such service (or any
successor service) for the purpose of displaying prime rates or base lending
rates of major United States banks.
Treasury Rate. If an Interest Rate Basis for this Note is specified on
the face hereof as the Treasury Rate, the Treasury Rate shall be determined as
of the applicable Interest Determination Date (a "Treasury Rate Interest
Determination Date") as the rate from the auction held on such Treasury Rate
Interest Determination Date (the "Auction") of direct obligations of the United
States ("Treasury Bills") having the Index Maturity, as such rate is published
in H.15(519) under the heading "Treasury bills-auction average (investment)" or,
if not published by 3:00 P.M., New York City time, on the related Calculation
Date, the auction average rate of such Treasury Bills (expressed as a bond
equivalent on the basis of a year of 365 or 366 days, as applicable, and applied
on a daily basis) as otherwise announced by the United States Department of the
17
<PAGE> 18
Treasury. In the event that the results of the Auction of Treasury Bills having
the Index Maturity are not reported as provided above by 3:00 P.M., New York
City time, on such Calculation Date, or if no such Auction is held, then the
Treasury Rate shall be calculated by the Calculation Agent and shall be a yield
to maturity (expressed as a bond equivalent on the basis of a year of or days,
as, applicable, and applied on a daily basis) of the arithmetic mean of the
secondary market bid rates, as of approximately 3:30 P.M., New York City time,
on such Treasury Rate Interest Determination Date, of three leading primary
United States government securities dealers selected by the Calculation Agent,
for the issue of Treasury Bills with a remaining maturity closest to the Index
Maturity; provided, however, that if the dealers so selected by the Calculation
Agent are not quoting as mentioned in this sentence, the Treasury Rate
determined as of such Treasury Rate Interest Determination Date will be the
Treasury Rate in effect on such Treasury Rate Interest Determination Date.
Notwithstanding the foregoing, the interest rate hereon shall not be
greater than the Maximum Interest Rate, if any, or less than the Minimum
Interest Rate, if any, in each case as specified on the face hereof. The
interest rate on this Note will in no event be higher than the maximum rate
permitted by New York law, as the same may be modified by United States law of
general application.
The "Calculation Date," if applicable, pertaining to any Interest
Determination Date shall be the earlier of (i) the tenth calendar day after such
Interest Determination Date or, if such day is not a Business Day, the next
succeeding Business Day or (ii) the Business Day immediately preceding the
applicable Interest Payment Date or the Maturity Date, as the case may be. At
the request of the Holder hereof, the Calculation Agent will provide to the
Holder hereof the interest rate hereon then in effect and, if determined, the
interest rate that will become effective as a result of a determination made for
the next succeeding Interest Reset Date.
Accrued interest hereon shall be an amount calculated by multiplying the
principal amount hereof by an accrued interest factor. Such accrued interest
factor shall be computed by adding the interest factor calculated for each day
in the applicable Interest Period. Unless otherwise specified as the Day Count
Convention on the face hereof, the interest factor for each such date shall be
computed by dividing the interest rate applicable to such day by 360 if the CD
Rate, the Commercial Paper Rate, the Eleventh District Cost of Funds Rate, the
Federal Funds Rate, LIBOR or the Prime Rate is an applicable Interest Rate Basis
or by the actual number of days in the year if the CMT Rate or the Treasury Rate
is an applicable Interest Rate Basis. Unless otherwise specified as the Day
Count Convention on the face hereof, the interest factor for this Note, if the
interest rate is calculated with reference to two or more Interest Rate Bases,
shall be calculated in each period in the same manner as if only one of the
applicable Interest Rate Bases specified on the face hereof applied.
18
<PAGE> 19
All percentages resulting from any calculation on this Note shall be
rounded to the nearest one hundred-thousandth of a percentage point, with five
one-millionths of a percentage point rounded upwards (e.g., 5.876545% (or
.05876545) would be rounded to 5.87655% (or .0587655)), and all amounts used in
or resulting from such calculation on this Note shall be rounded to the nearest
cent (with one-half cent being rounded upwards).
If an Event of Default, as defined in the Indenture, with respect to the
Notes shall occur and be continuing, the principal of the Notes may be declared
due and payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (i) the
entire indebtedness of the Notes or (ii) certain restrictive covenants and
related defaults and Events of Default with respect to the Notes, in each case
upon compliance with certain conditions set forth therein, which provisions
apply to the Notes.
As provided in and subject to the provisions of the Indenture, the
holder of this Note shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such holder shall have previously given
written notice to the Trustee of a continuing Event of Default with respect to
the Notes, the holders of not less than 25% in aggregate principal amount of the
Notes at the time outstanding shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default as Trustee and offered
the Trustee reasonable indemnity and the Trustee shall not have received from
the holders of a majority in aggregate principal amount of Notes at the time
outstanding a direction inconsistent with such request, and the Trustee shall
have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and offer of indemnity. The foregoing shall not apply to any
suit instituted by the holder of this Note for the enforcement of any payment of
principal or premium, if any, hereof or any interest on or after the respective
due dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Operating Partnership and the rights of the holders of the Securities of each
series to be affected under the Indenture at any time by the Operating
Partnership and the Trustee with the consent of the holders of not less than a
majority in principal amount of the outstanding Securities of each series of
Securities then outstanding and affected thereby. The Indenture also contains
provisions permitting the holders of specified percentages in principal amount
of the Securities of each series at the time outstanding, on behalf of the
holders of all such Securities of such series, to waive compliance by the
Operating Partnership with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the holder of this Note shall be conclusive and binding upon such holder and
upon all future holders of this Note and other Notes issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof, whether
or not notation of such consent or waiver is made upon this Note.
19
<PAGE> 20
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Operating Partnership,
which is absolute and unconditional, to pay principal, premium, if any, and
interest in respect of this Note at the times, places and rate or formula, and
in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, the transfer of this Note is registrable in the Security
Register of the Operating Partnership upon surrender of this Note for
registration of transfer at the office or agency of the Operating Partnership in
any place where the principal hereof and any premium or interest hereon are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Operating Partnership and the Security Registrar, duly
executed by the holder hereof or by his attorney duly authorized in writing, and
thereupon one or more new Notes, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein
and herein set forth, this Note is exchangeable for a like aggregate principal
amount of Notes of different authorized denominations but otherwise having the
same terms and conditions, as requested by the holder hereof surrendering the
same.
No service charge shall be made for any such registration of transfer or
exchange, but the Operating Partnership may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the
Operating Partnership, the Trustee and any agent of the Operating Partnership or
the Trustee may treat the holder in whose name this Note is registered as the
owner thereof for all purposes, whether or not this Note be overdue, and neither
the Operating Partnership, the Trustee nor any such agent shall be affected by
notice to the contrary.
This Note and all documents, agreements, understandings and arrangements
relating to any transaction contemplated hereby or thereby have been executed or
entered into by the undersigned in his/her capacity as an officer of the sole
general partner of the Operating Partnership which has been formed as a Delaware
limited partnership, and not individually, and neither the general partner,
officers, employees or limited partners of the Operating Partnership shall be
bound or have any personal liability hereunder or thereunder. The holder of this
Note by accepting this Note waives and releases all such liability. This waiver
and release are part of the consideration for the issue of this Note. Each party
hereto shall look solely to the assets of the Operating Partnership for
satisfaction of any liability of the Operating Partnership in respect of this
Note and all documents, agreements, understandings and arrangements relating to
any transaction contemplated hereby or thereby and will not seek recourse or
commence any action against any general partner, officer, employee or limited
partner of the Operating Partnership or any of their personal assets for the
performance or payment of any obligation hereunder or
20
<PAGE> 21
thereunder. The foregoing shall also apply to any future documents, agreements,
understandings, arrangements and transactions between the parties hereto.
The Indenture and this Note shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of laws.
21
<PAGE> 22
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this Note, shall be construed as though they were written out in full according
to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ______ Custodian_______
TEN ENT - as tenants by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors
survivorship and not as tenants in common Act_____________________
(State)
Additional abbreviations may also be used though not in the above list.
-----------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ------------------------------------ --------------------------------------
- --------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)
- --------------------------------------------------------------------------------
this Note and all rights thereunder hereby irrevocably constituting and
appointing
- --------------------------------------------------------------------------------
Attorney to transfer this Note on the books of the Registrar, with full power of
substitution in the premises.
Dated: ____________________ ______________________________
---------------------------------
Notice:- The signature(s) on this
Assignment must correspond with
the name(s) as written upon the
face of this Note in every
particular, without alteration or
enlargement or any change
whatsoever.
22
<PAGE> 23
OPTION TO ELECT REPAYMENT
The undersigned hereby irrevocably request(s) and instruct(s) the
Operating Partnership to repay this Note (or portion hereof specified below)
pursuant to its terms at a price equal to 100% of the principal amount to be
repaid, together with unpaid interest accrued hereon to the Repayment Date, to
the undersigned, at
- --------------------------------------------------------------------------------
(Please print or typewrite name and address of the undersigned)
For this Note to be repaid, the Paying Agent must receive at its
corporate trust office in the Borough of Manhattan, The City of New York,
currently located at U.S. Bank Trust National Association, 100 Wall Street, New
York, New York, 10005, this Note with this "Option to Elect Repayment" form duly
completed.
If less than the entire principal amount of this Note is to be repaid,
specify the portion hereof (which shall be increments of U.S.$1,000 (or the
minimum Authorized Denomination specified on the face hereof)) which the holder
elects to have repaid and specify the denomination or denominations (which shall
be an Authorized Denomination) of the Notes to be issued to the holder for the
portion of this Note not being repaid (in the absence of any such specification,
one such Note will be issued for the portion not being repaid).
Principal Amount
to be Repaid: $_____________ _____________________________
Notice: The signature(s) on this Option to
Elect Repayment must correspond with the
name(s) as written upon the face of this
Date: ___________________ Note in every particular, without
alteration or enlargement or any change
whatsoever.
23
<PAGE> 1
EXHIBIT 4.4
================================================================================
IRVINE APARTMENT COMMUNITIES, L.P.
and
U.S. BANK TRUST NATIONAL ASSOCIATION
Trustee
-----------------------------
SUPPLEMENTAL INDENTURE NO. 2
Dated as of April 9, 1998
Supplementing Indenture Dated as of October 1, 1997, as amended
-----------------------------
================================================================================
<PAGE> 2
SUPPLEMENTAL INDENTURE No. 2 dated as of April 9, 1998, between Irvine
Apartment Communities, L.P., a Delaware limited partnership (the "Issuer"), and
U.S. Bank Trust National Association, formerly known as First Trust of
California, National Association (the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Issuer has heretofore executed and delivered to the Trustee
that certain Indenture dated as of October 1, 1997 (the "Indenture") providing
for the issuance from time to time of its unsecured debentures, notes or other
evidences of indebtedness to be issued in one or more series (the "Securities")
up to such principal amount or amounts as may from time to time be authorized in
accordance with the Indenture; and
WHEREAS, the parties hereto desire to enter into this Supplemental
Indenture for the purpose of amending the terms of the Indenture, as permitted
in accordance with Section 7.01 of the Indenture, to provide for the appointment
of an Authenticating Agent (as defined herein) to authenticate Securities of a
series on behalf of the Trustee; and
NOW THEREFORE:
In consideration of the foregoing and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Issuer and the
Trustee mutually covenant and agree for the equal and proportionate benefit of
the respective holders from time to time of the Securities as follows:
SECTION 1. Section 1.01 of the Indenture is hereby amended to add the
following definition:
"AUTHENTICATING AGENT" means with respect to a series of Securities any
Person authorized pursuant to Section 5.12 to act on behalf of the Trustee to
authenticate the Securities of such series.
SECTION 2. Article 5 of the Indenture is hereby amended to add a new
Section 5.12 thereto to read in its entirety as follows:
"SECTION 5.12. Appointment of Authenticating Agent. The Issuer
may appoint, or the Trustee with the consent of the Issuer may appoint,
with respect to one or more series of Securities an Authenticating Agent
or Agents which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue and
upon exchange, registration of transfer, or partial redemption or
repayment
2
<PAGE> 3
thereof or pursuant to Section 2.09, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid
and obligatory for all purposes as if authenticated by the Trustee
hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the
Trustee's certificate of authentication, such reference shall be deemed
to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on
behalf of the Trustee by an Authenticating Agent. Each Authenticating
Agent shall be acceptable to the Issuer and shall at all times be a
Person organized and doing business under the laws of the United States
of America, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to
supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually,
pursuant to law or to the requirements of said supervising or examining
authority, then for the purposes of this Section, the combined capital
and surplus of such Authenticating Agent shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall
cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and
with the effect specified in this Section.
Any Person into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any person resulting
from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any Person succeeding to the
corporate agency or corporate trust business of an Authenticating Agent,
shall continue to be Authenticating Agent, provided such Person shall be
otherwise eligible under this Section without the execution or filing of
any paper or further act on the part of the Trustee or the
Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Issuer. The Trustee may at any
time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Issuer. Upon
receiving such a notice of resignation or upon such a termination, or in
case at any time such Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee may appoint
a successor Authenticating Agent which shall be acceptable to the
Issuer. Any successor Authenticating Agent upon acceptance of its
appointment under this Section shall become vested with all the rights,
powers and
3
<PAGE> 4
duties of its predecessor hereunder, with like effect as if originally
named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible to act as such under the provisions
of this Section.
Any Authenticating Agent by the acceptance of its appointment
shall be deemed to have represented to the Trustee and the Issuer that
it is eligible for appointment as Authenticating Agent under this
Section and to have agreed with the Trustee that it will perform and
carry out the duties of an Authenticating Agent as herein set forth,
including among other things the duties to authenticate Securities of
the applicable series when presented to it in connection with the
original issuance and with exchanges, registrations of transfer or
redemptions or repayments thereof or pursuant to Section 2.09; it will
keep and maintain, and furnish to the Trustee from time to time as
requested by the Trustee, appropriate records of all transactions
carried out by it as Authenticating Agent and will furnish the Trustee
such other information and reports as the Trustee may reasonably
require; and it will notify the Trustee promptly if it shall cease to be
eligible to act as Authenticating Agent in accordance with the
provisions of this Section. Any Authenticating Agent by the acceptance
of its appointment shall be deemed to have agreed with the Trustee to
indemnify the Trustee against any loss, liability or expense incurred by
the Trustee and to defend any claim asserted against the Trustee by
reason of any acts or failures to act of such Authenticating Agent, but
such Authenticating Agent shall have no liability for any action taken
by it in accordance with the specific written direction of the Trustee.
The Issuer agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services, and to reimburse it
for its reasonable expenses, under this Section.
If any appointment is made pursuant to this Section, the
Securities of the applicable series may have endorsed thereon, in
addition to or in lieu of the Trustee's certificate of authentication,
an alternative certificate of authentication in the following form:
4
<PAGE> 5
This is one of the Securities of the series designated herein and
referred to in the within-mentioned Indenture.
U.S. BANK TRUST NATIONAL
ASSOCIATION, as Trustee
By____________________________
As Authenticating Agent
By____________________________"
Authorized Signatory
SECTION 3. New York Law to Govern. This Supplemental Indenture shall be
deemed to be a contract under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of said State, except as
may otherwise be required by mandatory provisions of law.
SECTION 4. Counterparts. This Supplemental Indenture may be executed
in any number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 5. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
5
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed and attested, all as of the date first above
written.
IRVINE APARTMENT COMMUNITIES, L.P.
By: Irvine Apartment Communities, Inc.,
its sole general partner
By /s/ James E. Mead
---------------------------------------------
Name: James E. Mead
Title: Senior Vice President,
Chief Financial Officer and Secretary
Attest:
By /s/ SHAWN HOWIE
----------------------------------
Name: Shawn Howie
Title: Vice President, Corporate
Finance and Controller
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee
By /s/ Ingrid Soderholm
---------------------------------------------
Name: Ingrid Soderholm
Title: Trust Officer
Attest:
By /s/ Linda Verstuyft
-----------------------------
Name: Linda Verstuyft
Title: Vice President
6
