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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
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
c/o ▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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 ("▇▇▇▇▇").
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 ▇▇▇▇▇▇
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.
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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:
COMMISSION PERCENTAGE
OF AGGREGATE PRINCIPAL
RANGE OF MATURITIES AMOUNT OF SECURITIES SOLD
------------------- -------------------------
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
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
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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 ▇▇▇▇▇▇▇ &
▇▇▇▇, 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
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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
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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
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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 ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ 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
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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
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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
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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
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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, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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
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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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(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, ▇▇▇▇▇▇▇ & ▇▇▇▇ 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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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 ▇▇▇▇▇'▇ 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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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 ▇.▇. ▇▇▇▇▇▇ Securities Inc. or, if ▇.▇. ▇▇▇▇▇▇ Securities Inc. is not an
Indemnified Party by the Agents that are Indemnified Parties and
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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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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:
▇.▇. ▇▇▇▇▇▇ Securities Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇.▇. 10260,
Attention: Medium-Term Note Department,
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇;
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Medium-Term Note Desk,
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇;
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters, North Tower, World Financial Center,
10th Floor,
New York, New York 10281-1310,
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇;
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated,
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Manager: Continuously Offered Products,
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇;
Skadden, Arps, Slate ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇.
Communications to the Operating Partnership and the Company, will be sent to
them at
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c/o Irvine Apartment Communities, Inc.,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇,
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇).
12. Acknowledgment. The Operating Partnership, the Company and each
of the Agents acknowledges that ▇▇▇▇▇▇▇, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ 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 ▇▇▇▇▇▇▇
▇▇▇▇, Slate ▇▇▇▇▇▇▇ & ▇▇▇▇ 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
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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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/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President, Chief Financial
Officer and Secretary
IRVINE APARTMENT COMMUNITIES, INC.,
a Maryland corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President, Chief Financial
Officer and Secretary
33
Accepted in New York, New York, as of
the date first above written
▇.▇. ▇▇▇▇▇▇ SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Vice President
MERRILL, ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇, ▇▇▇▇▇ & CO.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
-------------------------------
Name:
Title:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: Principal
34
Exhibit A
IRVINE APARTMENT COMMUNITIES, L.P.
MEDIUM TERM NOTES, SERIES A
TERMS AGREEMENT
___________, 199__
Irvine Apartment Communities, L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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
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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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)
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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
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"). ▇. ▇. ▇▇▇▇▇▇ Securities Inc., ▇▇▇▇▇▇▇, ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & 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.
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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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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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: ▇▇▇▇
▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (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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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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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: ▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇ ▇.
▇▇▇▇▇▇ (Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇).
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 ▇▇▇▇▇ 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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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 ▇▇▇▇ ▇▇▇▇ or ▇▇▇▇▇
▇. ▇▇▇▇▇▇ (Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇) 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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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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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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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, ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. 10260, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇; ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Medium-Term Note Desk, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters, North Tower, World
Financial Center, 10th Floor, New York, New York
10281-1310, Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇; ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager: Continuously
Offered Products, Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇. 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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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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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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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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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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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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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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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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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: ▇▇▇▇
▇▇▇▇ (Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇) who will provide a copy
to the Trustee, Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (Fax No.:
(▇▇▇) ▇▇▇-▇▇▇▇) by facsimile transmission or other
acceptable means, the information set forth below:
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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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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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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
▇▇▇▇▇ 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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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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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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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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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, ▇.▇. ▇▇▇▇▇▇ Securities Inc.,
▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. 10260, Telecopy Number
(▇▇▇) ▇▇▇-▇▇▇▇; ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co., ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Medium-Term Note Desk, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, Telecopy Number (▇▇▇) ▇▇▇-▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., ▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters, North Tower, World
Financial Center, 10th Floor, New York, New York
10281-1310, Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇; ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Manager: Continuously
Offered Products, Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇.
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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