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EXHIBIT 4.2
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XXXXXXX OPERATING LIMITED PARTNERSHIP
TO
[NAME OF TRUSTEE]
Trustee
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Indenture
Dated as of , 1997
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Subordinated Debt Securities
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[EXPLANATORY NOTE. The text of this form of Indenture relating to
Subordinated Debt Securities ("Subordinated Debt Indenture") is identical to the
text of the form of Indenture relating to Senior Debt Securities attached as the
next preceding Exhibit ("Senior Debt Indenture"), except as set forth herein.]
A. The first recital of the Subordinated Debt Indenture reads as follows:
The Partnership deems it necessary to issue from time to time for its
lawful purposes subordinated debt securities (hereinafter called the
"Securities") evidencing its unsecured and subordinated indebtedness, and has
duly authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of the Securities, to be issued in one or more Series
as provided in this Indenture.
B. The Subordinated Debt Indenture includes at the appropriate
alphabetical place the following additional definition in Section 101:
"Senior Indebtedness" means Indebtedness of the Partnership, whether
outstanding on the date of this Indenture or thereafter created, incurred,
assumed or guaranteed by the Partnership, other than the following: (1) any
Indebtedness as to which, in the instrument evidencing such Indebtedness or
pursuant to which such Indebtedness was issued, it is expressly provided that
such Indebtedness is subordinate in right of payment to all Indebtedness of the
Partnership not expressly subordinated to such Indebtedness; (2) any
Indebtedness which by its terms refers explicitly to the Securities and states
that such Indebtedness shall not be senior, shall be pari passu or shall be
subordinated in right of payment to the Securities; and (3) with respect to any
series of Securities, any Indebtedness of the Partnership evidenced by
Securities of the same or of another series. Notwithstanding anything to the
contrary in the foregoing, Senior Indebtedness shall not include: (a)
Indebtedness of or amounts owed by the Partnership for compensation to
employees, or for goods, materials or services purchased in the ordinary course
of business, or (b) Indebtedness of the Partnership to a Subsidiary of the
Partnership.
C. The Subordinated Debt Indenture includes the following ARTICLE SIXTEEN:
ARTICLE SIXTEEN - SUBORDINATION OF SECURITIES
SECTION 1601. Agreement to Subordinate. Notwithstanding anything in this
Indenture to the contrary (other than Article Four of this Indenture), the
Company covenants and agrees, and each Holder of a Security, by his acceptance
thereof, likewise covenants and agrees, that, to the extent and in the manner
hereinafter set forth in this Article, the Indebtedness represented by the
Securities and the payment of any Obligations with respect to each and all of
the Securities
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are hereby expressly made subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness.
SECTION 1602. Payment Over of Proceeds upon Dissolution, Etc. In the event
of (a) any insolvency or bankruptcy case or Proceeding, or any receivership,
liquidation, reorganization or other similar case or Proceeding in connection
therewith, relative to the Company or to its creditors, as such, or to its
assets, or (b) any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or (c) any assignment for the benefit of creditors or any other
marshaling of assets and liabilities of the Company, then and in any such event
specified in (a), (b) or (c) above (each such event, if any, herein sometimes
referred to as a "Proceeding")
(1) the holders of Senior Indebtedness shall first be entitled to
receive payment in full of all Obligations due or to become due on or in
respect of all Senior Indebtedness, or provision shall be made for such
payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Indebtedness, before the Holders of the
Securities are entitled to receive any payment or distribution on account
of principal of or premium, if any, or interest on or other Obligations in
respect of the Securities or on account of any purchase, redemption or
other acquisition of Securities by the Company or any Subsidiary
(individually and collectively, a "Securities Payment"), and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (other than Capital
Stock or securities of the Company as reorganized or readjusted, or
securities of the Company or any other corporation provided for by a plan
of reorganization or readjustment, the payment of which is subordinate, at
least to the extent provided in this Article Sixteen with respect to the
Securities, to the payment in full, without diminution or modification by
such plan, of all Senior Indebtedness), to which the Holders would be
entitled except for the provisions of this Article Sixteen, shall be paid
by the liquidating trustee or agent or other person making such a payment
or distribution, directly to the holders of Senior Indebtedness) (or their
representative(s) or trustee(s) acting on their behalf), ratably according
to the aggregate amounts remaining unpaid on account of the principal of
or interest on and other amounts due on the Senior Indebtedness held or
represented by each, to the extent necessary to make payment in full of
all Senior Indebtedness remaining unpaid, after giving effect to any
concurrent payment or distribution to the holders of such Senior
Indebtedness.
In the event that, notwithstanding the foregoing provisions of this
Section
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1601, the Trustee or the Holder of any Security shall have received any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities (other than Capital Stock or securities of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinate, at least to the extent provided in this Article
with respect to the Securities, to the payment in full, without diminution or
modification by such plan, of Senior Indebtedness), before all Senior
Indebtedness is paid in full or payment thereof provided for in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, such payment or distribution shall be held in trust for the
benefit of, and be paid over to, the holders of the Senior Indebtedness
remaining unpaid (or their representative(s) or trustee(s) acting on their
behalf), ratably as aforesaid, for application to the payment of such Senior
Indebtedness until such Senior Indebtedness shall have been paid in full, after
giving effect to any concurrent payment or distribution to the holders of such
Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
conveyance or transfer of all or substantially all of its properties and assets
as an entirety to another Person upon the terms and conditions set forth in
Article Eight shall not be deemed a Proceeding for the purposes of this Section
1602 if the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance or transfer such properties
and assets as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article Eight.
SECTION 1603. No Payment When Senior Indebtedness in Default. Anything in
this Indenture to the contrary notwithstanding, no payment on account of
principal of or redemption of, interest on or other amounts due on the
Securities, and no redemption, purchase, or other acquisition of the Securities,
shall be made by or on behalf of the Company (i) unless full payment of amounts
then due for principal and interest and of all other obligations then due on all
Senior Indebtedness has been made or duly provided for pursuant to the terms of
the instrument governing such Senior Indebtedness, (ii) if, at the time of such
payment, redemption, purchase or other acquisition, or immediately after giving
effect thereto, there shall exist under any Senior Indebtedness, or any
agreement pursuant to which any Senior Indebtedness is issued, any default,
which default shall not have been cured or waived and which default shall have
resulted in the full amount of such Senior Indebtedness being declared due and
payable or (iii) if, at the time of such payment, redemption, purchase or other
acquisition, the Trustee shall have received written notice from the holder or
holders of any Senior Indebtedness or their representative or representatives (a
"Payment Blockage Notice") that there
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exists under such Senior Indebtedness, or any agreement pursuant to which such
Senior Indebtedness is issued, any default, which default shall not have been
cured or waived, permitting the holders thereof to declare the full amount of
such Senior Indebtedness due and payable, but only for the period (the "Payment
Blockage Period") commencing on the date of receipt of the Payment Blockage
Notice and ending (unless earlier terminated by notice given to the Trustee by
the Holders of such Senior Indebtedness) on the earlier of (A) the date on which
such event of default shall have been cured or waived or (B) 180 days from the
receipt of the Payment Blockage Notice. Upon termination of a Payment Blockage
Period, payments on account of principal of or interest on the Securities and
redemptions, purchases or other acquisitions may be made by or on behalf of the
Company. Notwithstanding anything herein to the contrary, (A) only one Payment
Blockage Notice may be given during any period of 360 consecutive days with
respect to the same event of default and any other events of default on the same
issue of Senior Indebtedness existing and known to the person giving such notice
at the time of such notice and (B) no new Payment Blockage Period may be
commenced by the holder or holders of the same issue of Senior Indebtedness or
their representative or representatives during any period of 360 consecutive
days unless all events of default which were the object of the immediately
preceding Payment Blockage Notice, and any other event of default on the same
issue of Senior Indebtedness existing and known to the person giving such notice
at the time of such notice, have been cured or waived.
In the event that, notwithstanding the provisions of this Section 1603,
payments are made by or on behalf of the Company in contravention of the
provisions of this Section 1603, such payments shall be held by the Trustee, any
Paying Agent or the Holders, as applicable, in trust for the benefit of, and
shall be paid over to and delivered to, the holders of Senior Indebtedness or
their representative or the trustee under the indenture or other agreement (if
any), pursuant to which any instruments evidencing any Senior Indebtedness may
have been issued, as their respective interests may appear, for application to
the payment of all Senior Indebtedness remaining unpaid to the extent necessary
to pay all Senior Indebtedness in full in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
The provisions of this Section shall not apply to any payment with respect
to which Section 1602 would be applicable.
SECTION 1604. Reliance by Senior Indebtedness on Subordination Provisions.
Each Holder of any Security by his acceptance thereof acknowledges and agrees
that the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration for each holder of any Senior Indebtedness,
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whether such Senior Indebtedness was created or acquired before or after the
issuance of the Securities, to acquire and continue to hold, or to continue to
hold, such Senior Indebtedness, and such holder of Senior Indebtedness shall be
deemed conclusively to have relied on such subordination provisions in acquiring
and continuing to hold or in continuing to hold such Senior Indebtedness.
SECTION 1605. Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Obligations due or to become due on or in
respect of Senior Indebtedness, or the provision for such payment in cash or
cash equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the extent of
the payments or distributions made to the holders of such Senior Indebtedness
pursuant to the provisions of this Article Sixteen to the rights of the holders
of such Senior Indebtedness to receive payments and distributions of cash,
property and securities applicable to the Senior Indebtedness until the
principal of and premium, if any, and interest on the Securities shall be paid
in full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Indebtedness of any cash, property or securities to which
the Holders of the Securities or the Trustee would be entitled except for the
provisions of this Article Sixteen, and no payments over pursuant to the
provisions of this Article Sixteen to the holders of Senior Indebtedness by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders of the
Securities, be deemed to be a payment or distribution by the Company to or on
account of the Senior Indebtedness.
SECTION 1606. Provisions Solely to Define Relative Rights. The provisions
of this Article Sixteen are and are intended solely for the purpose of defining
the relative rights of the Holders of the Securities on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article Sixteen of the holders of Senior Indebtedness, is intended to
rank equally with all other general obligations of the Company), to pay to the
Holders of the Securities the principal of and premium, if any, and interest on
the Securities as and when the same shall become due and payable in accordance
with their terms; or (b) affect the relative rights against the Company of the
Holders of the Securities and creditors of the Company other than the holders of
Senior Indebtedness; or (c) prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the
holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
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SECTION 1607. Trustee to Effectuate Subordination. Each Holder of a
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate, as
between the Holders of the Securities and the holders of Senior Indebtedness,
the subordination provided in this Article Sixteen and appoints the Trustee his
attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding up or liquidation or reorganization under any applicable
bankruptcy law of the Company (whether in bankruptcy, insolvency or receivership
Proceedings or otherwise), the timely filing of a claim for the unpaid balance
of such Holder's Securities in the form required in such Proceedings and the
causing of such claim to be approved. If the Trustee does not file a claim or
proof of debt in the form required in such Proceedings prior to 30 days before
the expiration of the time to file such claims or proofs, then the holders of
Senior Indebtedness, jointly, or their representatives shall have the right to
file an appropriate claim for and on behalf of the Holders and to demand, xxx
for, collect, receive and receipt for the payments and distributions in respect
of the Securities which are required to be paid or delivered to the holders of
Senior Indebtedness as provided in this Article Sixteen and to take all such
other action in the name of the Holders or otherwise, as such holder of Senior
Indebtedness or representative thereof may determine to be necessary or
appropriate for the enforcement of the provisions of this Article Sixteen.
SECTION 1608. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder or any representative or trustee
therefor, or by any non-compliance by the Company with the terms, provisions and
covenants of this Indenture, regardless of any knowledge thereof any such holder
may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article Sixteen or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of Senior
Indebtedness and settle or
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compromise Senior Indebtedness (which, to the extent so settled and compromised,
shall be deemed to have been paid in full for all purposes hereof); (iv) apply
any amounts received to any liability of the Company owing to holders of Senior
Indebtedness; and (v) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 1609. Notice to Trustee. The Company shall give prompt written
notice to the Trustee of any default or event of default with respect to any
Senior Indebtedness or of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article Sixteen. Notwithstanding the provisions of
this Article Sixteen or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would prohibit
the making of any payment to or by the Trustee in respect of the Securities,
unless and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Indebtedness or from any representative or trustee
acting on their behalf; and, prior to the receipt of any such written notice,
the Trustee, subject to the provisions of Section 612, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section at least
three Business Days prior to the date upon which by the terms hereof any money
may become payable for any purpose (including, without limitation, the payment
of the principal of and premium, if any, or interest on any Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it within three Business Days
prior to such date. Nothing contained in this Article Sixteen or any other
Article of this Indenture or in any of the Securities shall prevent (a) the
Company, at any time except during the pendency of any Proceeding, or under the
conditions described in Section 1603, from making payments at any time in
respect of the Securities, or (b) the application by the Trustee of any money
deposited with it hereunder to the payment of or on account of the Securities,
or the retention thereof by any Holder, if the Trustee did not have notice, as
provided in this Section 1609, that such payment would have been prohibited by
the provisions of this Article Sixteen.
Subject to the provisions of Section 612, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Senior Indebtedness (or a representative or trustee therefor)
to establish that such notice has been given by a holder of Senior Indebtedness
(or a trustee therefor). In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as a
holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article
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Sixteen, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article Sixteen, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 1610. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article Sixteen, the Trustee, subject to the provisions of Section 612, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which any Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
SECTION 1611. Trustee Not Fiduciary for Holders of Senior Indebtedness.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness. Nothing contained in this Article Sixteen or elsewhere in
this Indenture, or in any of the Securities, shall prevent the application by
the Trustee of any moneys which were deposited with it hereunder, prior to its
receipt of written notice of facts which would prohibit such application, for
the purpose of the payment of or on account of the principal of or interest on,
the Securities unless, prior to the date on which such application is made by
the Trustee, the Trustee shall be charged with notice under Section 1609 hereof
of the facts which would prohibit the making of such application.
SECTION 1612. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article Sixteen with respect to
any Senior Indebtedness which may at any time be held by it, to the same extent
as any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder. Nothing in this Article
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 606.
SECTION 1613. Article Applicable to Paying Agents. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article Sixteen
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shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully
for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee; provided, however, that
Section 1612 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
D. EXHIBIT A to the Subordinated Debt Indenture differs from EXHIBIT A to
the Senior Debt Indenture in the following respects:
1. The caption of Exhibit A reads:
FORM OF REDEEMABLE OR NON-REDEEMABLE SUBORDINATED SECURITY.
2. The following paragraph is included in the terms set forth on the
Reverse of the Security:
This Security is subordinated to the prior payment in full in cash
of Senior Indebtedness to the extent set forth in Article Sixteen of the
Indenture.
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