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EXHIBIT 4.2
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AVALON BAY COMMUNITIES, INC.
ISSUER
to
STATE STREET BANK AND TRUST COMPANY
TRUSTEE
-------------------------
Second Supplemental Indenture
Dated as of July 7, 1998
-------------------------
$100,000,000
of
6.50% Senior Notes due 2003
$150,000,000
of
6.80% Senior Notes due 2006
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SECOND SUPPLEMENTAL INDENTURE, dated as of July 7, 1998 (the
"Supplemental Indenture"), between AVALON BAY COMMUNITIES, INC., a corporation
duly organized and existing under the laws of the State of Maryland (formerly
known as Bay Apartment Communities, Inc. and hereinafter called the "Company"),
and STATE STREET BANK AND TRUST COMPANY, a trust company organized and existing
under the laws of The Commonwealth of Massachusetts, as Trustee (herein called
the "Trustee").
RECITALS OF THE COMPANY
The Company has heretofore delivered to the Trustee an Indenture dated
as of January 16, 1998 (the "Senior Indenture"), and a First Supplemental
Indenture dated as of January 20, 1998, copies of which have been filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
as exhibits to the Company's Registration Statement on Form S-3, as amended
(File No. 333-41511), providing for the issuance from time to time of Senior
Debt Securities of the Company (the "Securities").
Section 301 of the Senior Indenture provides for various matters with
respect to any series of Securities issued under the Senior Indenture to be
established in an indenture supplemental to the Senior Indenture.
Section 901(7) of the Senior Indenture provides for the Company and the
Trustee to enter into an indenture supplemental to the Senior Indenture to
establish the form or terms of Securities of any series as provided by Sections
201 and 301 of the Senior Indenture.
The Board of Directors of the Company has duly adopted resolutions
authorizing the Company to execute and deliver this Supplemental Indenture.
All the conditions and requirements necessary to make this Supplemental
Indenture, when duly executed and delivered, a valid and binding agreement in
accordance with its terms and for the purposes herein expressed, have been
performed and fulfilled.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of each of
the series of Securities provided for herein by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Notes (as herein defined) or for either thereof, as follows:
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ARTICLE ONE - RELATION TO SENIOR INDENTURE; DEFINITIONS.
SECTION 1.1. RELATION TO SENIOR INDENTURE. This Supplemental
Indenture constitutes an integral part of the Senior Indenture.
SECTION 1.2. DEFINITIONS. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided for or unless the context
otherwise requires:
(1) Capitalized terms used but not defined herein shall have
the respective meanings assigned to them in the Senior Indenture;
(2) All references herein to Articles and Sections, unless
otherwise specified, refer to the corresponding Articles and Sections of this
Supplemental Indenture; and
(3) In the event that any of the following definitions differs
from its respective definition set forth in the Senior Indenture, the definition
set forth herein shall control.
"Acquired Indebtedness" means Indebtedness of a Person (i)
existing at the time such Person becomes a Subsidiary or (ii) assumed in
connection with the acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Subsidiary or such acquisition. Acquired Indebtedness shall be
deemed to be incurred on the date of the related acquisition of assets from any
Person or the date the acquired Person becomes a Subsidiary.
"Annual Service Charge" for any period means the maximum
amount which is payable during such period for interest on, and original issue
discount of, Indebtedness of the Company and its Subsidiaries and the amount of
dividends which are payable during such period in respect of any Disqualified
Stock.
"Business Day" means any day, other than a Saturday or Sunday,
that is neither a legal holiday nor a day on which banking institutions in the
City of New York or in the City of Chicago are authorized or required by law,
regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any capital
stock (including preferred stock), shares, interests, participations or other
ownership interests (however designated) of such Person and any rights (other
than debt securities convertible into or exchangeable for corporate stock),
warrants or options to purchase any thereof.
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"Consolidated Income Available for Debt Service" for any
period means Earnings from Operations of the Company and its Subsidiaries, plus
amounts which have been deducted, and minus amounts which have been added, for
the following (without duplication): (i) interest on Indebtedness of the Company
and its Subsidiaries, (ii) provision for taxes of the Company and its
Subsidiaries based on income, (iii) amortization of debt discount and other
deferred financing costs, (iv) provisions for gains and losses on properties and
property depreciation and amortization, (v) the effect of any noncash charge
resulting from a change in accounting principles in determining Earnings from
Operations for such period and (vi) amortization of deferred charges.
"Corporate Trust Office" means the office of the Trustee at
which, at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Two International
Place, Boston, Massachusetts 02110 and, for purposes of the Place of Payment
provisions of Sections 305 and 1002 of the Senior Indenture, is located at the
office of State Street Bank and Trust Company, N.A., 61 Broadway, New York, New
York 10005.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock of such Person which by the terms of such Capital Stock (or by the
terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise (i)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise (other than Capital Stock which is redeemable solely in exchange for
common stock), (ii) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part (other than Capital Stock which is
redeemable solely in exchange for Capital Stock which is not Disqualified
Stock), in each case on or prior to the Stated Maturity of the Notes.
"Earnings from Operations" for any period means net earnings
excluding gains and losses on sales of investments, extraordinary items, and
property valuation losses, net as reflected in the financial statements of the
Company and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or
security interest of any kind.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder by the Commission.
"GAAP" means generally accepted accounting principles as used
in the United States applied on a consistent basis as in effect from time to
time; provided that solely for purposes of any calculation required by the
financial covenants contained
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herein, "GAAP" shall mean generally accepted accounting principles as used in
the United States on the date hereof, applied on a consistent basis.
"Indebtedness" of the Company or any Subsidiary means, without
duplication, any indebtedness of the Company or any Subsidiary, whether or not
contingent, in respect of (i) borrowed money or evidenced by bonds, notes,
debentures or similar instruments, (ii) indebtedness for borrowed money secured
by any Encumbrance existing on property owned by the Company or any Subsidiary,
(iii) the reimbursement obligations, contingent or otherwise, in connection with
any letters of credit actually issued (other than letters of credit issued to
provide credit enhancement or support with respect to other indebtedness of the
Company or any Subsidiary otherwise reflected as Indebtedness hereunder) or
amounts representing the balance deferred and unpaid of the purchase price of
any property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Company or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, (v) any lease of
property by the Company or any Subsidiary as lessee which is reflected on the
Company's consolidated balance sheet as a capitalized lease in accordance with
GAAP, or (vi) interest rate swaps, caps or similar agreements and foreign
exchange contracts, currency swaps or similar agreements, to the extent, in the
case of items of indebtedness under (i) through (iii) above, that any such items
(other than letters of credit) would appear as a liability on the Company's
consolidated balance sheet in accordance with GAAP, and also includes, to the
extent not otherwise included, any obligation by the Company or any Subsidiary
to be liable for, or to pay, as obligor, guarantor or otherwise (other than for
purposes of collection in the ordinary course of business), Indebtedness of
another Person (other than the Company or any Subsidiary) (it being understood
that Indebtedness shall be deemed to be incurred by the Company or any
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Make-Whole Amount" means, in connection with any optional
redemption or accelerated payment of any 2003 Note or 2006 Note, the excess, if
any, of (i) the aggregate present value as of the date of such redemption or
accelerated payment of each dollar of principal being redeemed or paid and the
amount of interest (exclusive of interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of such dollar if
such redemption or accelerated payment had not been made, determined by
discounting, on a semi-annual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date such
notice of Redemption is given or declaration of acceleration is made) from the
respective dates on which such principal and interest would have been payable if
such redemption or accelerated payment had not been made, over (ii) the
aggregate principal amount of the Notes being redeemed or paid.
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"Notes" has the meaning specified in Section 2.1 hereof.
"Reinvestment Rate" means .25% (twenty-five one hundredths of
one percent) plus the arithmetic mean of the yields under the respective
headings "This Week" and "Last Week" published in the Statistical Release under
the caption "Treasury Constant Maturities" for the maturity (rounded to the
nearest month) corresponding to the remaining life to maturity, as of the
payment date of the principal being redeemed or paid. If no maturity exactly
corresponds to such maturity, yields for the two published maturities most
closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For such purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designated
"H.15(519)" or any successor publication which is published weekly by the
Federal Reserve System and which establishes yields on actively traded United
States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination of the
Make-Whole Amount, then such other reasonably comparable index which shall be
designated by the Company.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership or other entity of which a
majority of (i) the voting power of the voting equity securities or (ii) the
outstanding equity interests are owned, directly or indirectly, by such Person.
For the purposes of this definition, "voting equity securities" means equity
securities having voting power for the election of directors, whether at all
times or only so long as no senior class of security has such voting power by
reason of any contingency.
"Total Assets" as of any date means the sum of (i) the
Undepreciated Real Estate Assets and (ii) all other assets of the Company and
its Subsidiaries determined in accordance with GAAP (but excluding accounts
receivable and intangibles).
"Total Unencumbered Assets" means the sum of (i) those
Undepreciated Real Estate Assets not subject to an Encumbrance for borrowed
money and (ii) all other assets of the Company and its Subsidiaries not subject
to an Encumbrance for borrowed money, determined in accordance with GAAP (but
excluding accounts receivable and intangibles).
"2003 Notes" has the meaning specified in Section 2.1 hereof.
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"2006 Notes" has the meaning specified in Section 2.1 hereof.
"Undepreciated Real Estate Assets" as of any date means the
cost (original cost plus capital improvements) of real estate assets of the
Company and its Subsidiaries on such date, before depreciation and amortization,
determined on a consolidated basis in accordance with GAAP.
"Unsecured Indebtedness" means Indebtedness which is not
secured by any Encumbrance upon any of the properties of the Company or any
Subsidiary.
ARTICLE TWO - THE SERIES OF NOTES.
The following provisions of this Article Two are made pursuant to
Section 301 of the Senior Indenture in order to establish and set forth the
terms of the series of Securities described in Section 2.1.
SECTION 2.1. TITLE OF THE SECURITIES. There shall be a series of
Securities designated the "6.50% Senior Notes due 2003" (the "2003 Notes") and a
series of Securities designated the 6.80% Senior Notes due 2006" (the "2006
Notes" and, together with the 2003 Notes, the "Notes").
SECTION 2.2. LIMITATION ON AGGREGATE PRINCIPAL AMOUNT.
(1) The aggregate principal amount of the 2003 Notes shall be
limited to $100,000,000, and, except as provided in this Section and in Section
306 of the Senior Indenture, the Company shall not execute and the Trustee shall
not authenticate or deliver 2003 Notes in excess of such aggregate principal
amount.
(2) The aggregate principal amount of the 2006 Notes shall be
limited to $150,000,000, and, except as provided in this Section and in Section
306 of the Senior Indenture, the Company shall not execute and the Trustee shall
not authenticate or deliver 2006 Notes in excess of such aggregate principal
amount.
Nothing contained in this Section 2.2 or elsewhere in this Supplemental
Indenture, or in the Notes, is intended to or shall limit execution by the
Company or authentication or delivery by the Trustee of Notes under the
circumstances contemplated by Sections 303, 304, 305, 306, 906, 1107 and 1305 of
the Senior Indenture.
SECTION 2.3. INTEREST AND INTEREST RATES; MATURITY DATE OF NOTES.
The 2003 Notes will bear interest at a rate of 6.50% per annum and the 2006
Notes will bear interest at a rate of 6.80% per annum, in each case from July 7,
1998 or from the
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immediately preceding Interest Payment Date to which interest has been paid or
duly provided for, payable semi-annually in arrears on January 15 and July 15 of
each year, commencing January 15, 1999 (each, an "Interest Payment Date"), to
the Person in whose name such Note is registered at the close of business on
December 31 or June 30 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date (each, a "Regular Record Date"). Interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months. The interest so payable on any Note which is not punctually paid or duly
provided for on any Interest Payment Date shall forthwith cease to be payable to
the Person in whose name such Note is registered on the relevant Regular Record
Date, and such defaulted interest shall instead be payable to the Person in
whose name such Note is registered on the Special Record Date or other specified
date determined in accordance with the Senior Indenture.
If any Interest Payment Date or Maturity falls on a day that is not a
Business Day, the required payment shall be made on the next Business Day as if
it were made on the date such payment was due and no interest shall accrue on
the amount so payable for the period from and after such Interest Payment Date
or Maturity, as the case may be.
The 2003 Notes will mature on July 15, 2003 and the 2006 Notes will
mature on July 15, 2006.
SECTION 2.4. LIMITATIONS ON INCURRENCE OF INDEBTEDNESS.
(1) The Company will not, and will not permit any Subsidiary
to, incur any Indebtedness if, immediately after giving effect to the incurrence
of such additional Indebtedness and the application of the proceeds thereof, the
aggregate principal amount of all outstanding Indebtedness of the Company and
its Subsidiaries on a consolidated basis determined in accordance with GAAP is
greater than 60% of the sum of (without duplication) (i) the Total Assets of the
Company and its Subsidiaries as of the end of the calendar quarter covered in
the Company's Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as
the case may be, most recently filed with the Commission (or, if such filing is
not permitted under the Exchange Act, with the Trustee) prior to the incurrence
of such additional Indebtedness and (ii) the purchase price of any real estate
assets or mortgages receivable acquired, and the amount of any securities
offering proceeds received (to the extent that such proceeds were not used to
acquire real estate assets or mortgages receivable or used to reduce
Indebtedness), by the Company or any Subsidiary since the end of such calendar
quarter, including those proceeds obtained in connection with the incurrence of
such additional Indebtedness.
(2) In addition to the limitation set forth in subsection (1)
of this Section 2.4, the Company will not, and will not permit any Subsidiary
to, incur any
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Indebtedness if the ratio of Consolidated Income Available for Debt Service to
the Annual Service Charge for the four consecutive fiscal quarters most recently
ended prior to the date on which such additional Indebtedness is to be incurred
shall have been less than 1.5:1, on a pro forma basis after giving effect
thereto and to the application of the proceeds therefrom, and calculated on the
assumption that (i) such Indebtedness and any other Indebtedness incurred by the
Company and its Subsidiaries since the first day of such four-quarter period and
the application of the proceeds therefrom, including to refinance other
Indebtedness, had occurred at the beginning of such period; (ii) the repayment
or retirement of any other Indebtedness by the Company and its Subsidiaries
since the first day of such four-quarter period had been repaid or retired at
the beginning of such period (except that, in making such computation, the
amount of Indebtedness under any revolving credit facility shall be computed
based upon the average daily balance of such Indebtedness during such period);
(iii) in the case of Acquired Indebtedness or Indebtedness incurred in
connection with any acquisition since the first day of such four-quarter period,
the related acquisition had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition being included in such
pro forma calculation; and (iv) in the case of any acquisition or disposition by
the Company or its Subsidiaries of any asset or group of assets since the first
day of such four-quarter period, whether by merger, stock purchase or sale, or
asset purchase or sale, such acquisition or disposition or any related repayment
of Indebtedness had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition or disposition being
included in such pro forma calculation.
(3) In addition to the limitations set forth in subsections
(1) and (2) of this Section 2.4, the Company will not, and will not permit any
Subsidiary to, incur any Indebtedness secured by any Encumbrance upon any of the
property of the Company or any Subsidiary if, immediately after giving effect to
the incurrence of such additional Indebtedness and the application of the
proceeds thereof, the aggregate principal amount of all outstanding Indebtedness
of the Company and its Subsidiaries on a consolidated basis which is secured by
any Encumbrance on property of the Company or any Subsidiary is greater than 40%
of the sum of (without duplication) (i) the Total Assets of the Company and its
Subsidiaries as of the end of the calendar quarter covered in the Company's
Annual Report on Form 10-K or Quarterly Report on Form 10-Q, as the case may be,
most recently filed with the Commission (or, if such filing is not permitted
under the Exchange Act, with the Trustee) prior to the incurrence of such
additional Indebtedness and (ii) the purchase price of any real estate assets or
mortgages receivable acquired, and the amount of any securities offering
proceeds received (to the extent that such proceeds were not used to acquire
real estate assets or mortgages receivable or used to reduce Indebtedness), by
the Company or any Subsidiary since the end of such calendar quarter, including
those proceeds obtained in connection with the incurrence of such additional
Indebtedness.
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(4) The Company and its Subsidiaries may not at any time own
Total Unencumbered Assets equal to less than 150% of the aggregate outstanding
principal amount of the Unsecured Indebtedness of the Company and its
Subsidiaries on a consolidated basis.
(5) For purposes of this Section 2.4, Indebtedness shall be
deemed to be "incurred" by the Company or a Subsidiary whenever the Company or
such Subsidiary shall create, assume, guarantee or otherwise become liable in
respect thereof.
SECTION 2.5. REDEMPTION. The Notes may be redeemed at any time at
the option of the Company, in whole or in part, at a redemption price equal to
the sum of (i) the principal amount of the Notes being redeemed plus accrued
interest thereon to the Redemption Date and (ii) the Make-Whole Amount, if any,
with respect to such Notes (the "Redemption Price").
SECTION 2.6. PLACES OF PAYMENT. The Places of Payment where the
Notes may be presented or surrendered for payment, where the Notes may be
surrendered for registration of transfer or exchange and where notices and
demands to and upon the Company in respect of the Notes and the Senior Indenture
may be served shall be in (i) the Borough of Manhattan, The City of New York,
New York, and the office or agency for such purpose shall initially be located
at the office of State Street Bank and Trust Company, 61 Broadway, New York, New
York 10005, and (ii) the City of Boston, Massachusetts and the office or agency
for such purpose shall initially be located at the Corporate Trust Office.
SECTION 2.7. METHOD OF PAYMENT. Payment of the principal of and
interest on the Notes will be made at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
(which shall initially be an office or agency of the Trustee), in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company, payments of principal and interest on the Notes (other
than payments of principal and interest due at Maturity) may be made (i) by
check mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto located within the United States.
SECTION 2.8. CURRENCY. Principal and interest on the Notes shall
be payable in U.S. dollars.
SECTION 2.9. REGISTERED SECURITIES; GLOBAL FORM. The Notes shall
be issuable and transferable in fully registered form as Registered Securities,
without coupons. The 2003 Notes and the 2006 Notes shall be issued in the form
of one or
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more permanent Global Securities. The depository for the Notes shall be The
Depository Trust Company ("DTC"). The Notes shall not be issuable in definitive
form except as provided in Section 305 of the Senior Indenture.
SECTION 2.10. FORM OF NOTES. The 2003 Notes shall be substantially
in the form attached hereto as EXHIBIT A. The 2006 Notes shall be substantially
in the form attached hereto as EXHIBIT B.
SECTION 2.11. REGISTRAR AND PAYING AGENT. The Trustee shall
initially serve as Registrar and Paying Agent for the Notes.
SECTION 2.12. DEFEASANCE. The provisions of Sections 1402 and 1403
of the Senior Indenture, together with the other provisions of Article Fourteen
of the Senior Indenture, shall be applicable to the Notes. The provisions of
Section 1403 of the Senior Indenture shall apply to the covenants set forth in
Sections 2.4 and 2.15 of this Supplemental Indenture and to those covenants
specified in Section 1403 of the Senior Indenture.
SECTION 2.13. EVENTS OF DEFAULT. The provisions of clause (5) of
Section 501 of the Senior Indenture as applicable with respect to the Notes
shall be deemed to be amended and restated in their entirety to read as follows:
(5) default under any bond, debenture, note, mortgage,
indenture or instrument under which there may be issued or by which there may be
secured or evidenced any indebtedness for money borrowed by the Company (or by
any Subsidiary, the repayment of which the Company has guaranteed or for which
the Company is directly responsible or liable as obligor or guarantor), having
an aggregate principal amount outstanding of at least $10,000,000, whether such
indebtedness now exists or shall hereafter be created, which default shall have
resulted in such indebtedness becoming or being declared due and payable prior
to the date on which it would otherwise have become due and payable, without
such indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there shall have been
given written notice, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities of that series a written notice
specifying such default and requiring the Company to cause such indebtedness to
be discharged or cause such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder; provided, however, that
such a default on indebtedness which constitutes tax-exempt financing having an
aggregate principal amount outstanding not exceeding $25,000,000 that results
solely from a failure of an entity providing credit support for such
indebtedness to honor a demand for payment on a letter of credit shall not
constitute an Event of Default.
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SECTION 2.14. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
The provisions of the first paragraph of Section 502 of the Senior Indenture as
applicable with respect to the notes shall be deemed to be amended and restated
in their entirety to read as follows:
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such case
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
Securities of that series are Original Issue Discount Securities or Indexed
Securities, such portion of the principal as may be specified in the terms
thereof) of, and the Make-Whole Amount, if any, on, all the Securities of that
series to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by the Holders), and upon any such declaration such
principal or specified portion thereof shall become immediately due and payable.
If an Event of Default with respect to the Securities of any series set forth in
Section 501(6) of the Senior Indenture occurs and is continuing, then in every
such case all the Securities of that series shall become immediately due and
payable, without notice to the Company, at the principal amount thereof (or, if
any Securities are Original Issue Discount Securities or Indexed Securities,
such portion of the principal as may be specified in the terms thereof) plus
accrued interest to the date the Securities of that series are paid, plus the
Make-Whole Amount, if any, on the Securities of that series.
SECTION 2.15. PROVISION OF FINANCIAL INFORMATION. Whether or not
the Company is subject to Section 13 or 15(d) of the Exchange Act, the Company
will, to the extent permitted under the Exchange Act, file with the Commission
the annual reports, quarterly reports and other documents which the Company
would have been required to file with the Commission pursuant to such Section 13
or 15(d) if the Company were so subject, such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates") by
which the Company would have been required so to file such documents if the
Company were so subject.
The Company will also in any event (x) within 15 days of each Required
Filing Date (i) if the Company is not then subject to Section 13 or 15(d) of the
Exchange Act, transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders, copies of the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act if the Company were subject to such Sections and (ii) file
with the Trustee copies of annual reports, quarterly reports and other documents
which the Company is required to file with the Commission or would have been
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act if the Company were subject to such Sections and (y) supply,
promptly upon written request and payment of the reasonable cost of duplication
and delivery, copies of such documents to any prospective Holder.
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The Trustee shall not be required to examine any of the reports and
other documents filed therewith pursuant to the provisions of this Section 2.15
or Section 7.03 of the Senior Indenture in order to determine whether the
Company is in compliance with the provisions of Section 2.4 of this Supplemental
Indenture.
SECTION 2.16. WAIVER OF CERTAIN COVENANTS. Notwithstanding the
provisions of Section 1009 of the Senior Indenture, the Company may omit in any
particular instance to comply with any term, provision or condition set forth in
Sections 1004 to 1008, inclusive, of the Senior Indenture, with Sections 2.4 and
2.15 of this Supplemental Indenture and with any other term, provision or
condition with respect to the Notes (except any such term, provision or
condition which could not be amended without the consent of all Holders of the
Notes or such series thereof, as applicable), if before or after the time for
such compliance the Holders of at least a majority in principal amount of all
outstanding Notes, by Act of such Holders, either waive such compliance in such
instance or generally waive compliance with such covenant or condition. Except
to the extent so expressly waived, and until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in respect of any
such term, provision or condition shall remain in full force and effect.
ARTICLE THREE - MISCELLANEOUS PROVISIONS.
SECTION 3.1. RATIFICATION OF SENIOR INDENTURE. Except as expressly
modified or amended hereby, the Senior Indenture continues in full force and
effect and is in all respects confirmed and preserved.
SECTION 3.2. GOVERNING LAW. This Supplemental Indenture and the
Notes shall be governed by and construed in accordance with the laws of the
State of New York. This Supplemental Indenture is subject to the provisions of
the Trust Indenture Act of 1939, as amended, and shall, to the extent
applicable, be governed by such provisions.
SECTION 3.3. COUNTERPARTS. This Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
[Remainder of Page Intentionally Left Blank.]
14
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first written above.
AVALON BAY COMMUNITIES, INC.
By: /s/ Richard L. Michaux
----------------------------------------
Name: Richard L. Michaux
Title: Chief Executive Officer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: /s/ Robert J. Dunn
----------------------------------------
Name: Robert J. Dunn
Title: Vice President
15
EXHIBIT A TO SUPPLEMENTAL INDENTURE
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW
YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITORY OR ITS NOMINEE.
AVALON BAY COMMUNITIES, INC.
6.50% SENIOR NOTE DUE 2003
Registered No. 1 CUSIP No.: 053373 AA 4
PRINCIPAL AMOUNT $100,000,000
AVALON BAY COMMUNITIES, INC., a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of $100,000,000
on July 15, 2003 and to pay interest on the outstanding principal amount thereon
from July 7, 1998, or from the immediately preceding Interest Payment Date to
which interest has been paid or duly provided for, semi-annually in arrears on
January 15 and July 15 in each year, commencing January 15, 1999, at the rate of
6.50% per annum, until the entire principal hereof is paid or made
16
available for payment. The interest so payable and punctually paid or duly
provided for on any Interest Payment Date will, as provided in the Indenture, be
paid to the Holder in whose name this Security is registered at the close of
business on the Regular Record Date for such interest which shall be December 31
or June 30 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date. Any such interest not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date, and may either be paid to the Holder in whose name this Security is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to the Holder of this Security not more than 15 days and not less than 10
days prior to such Special Record Date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which this Security may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. Payment of the
principal of and interest on this Security will be made at the office or agency
maintained for that purpose in the City of New York, New York, or elsewhere as
provided in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; PROVIDED, HOWEVER, that at the option of the Company payments of
principal and interest on the Notes (other than payments of principal and
interest due at Maturity) may be made (i) by check mailed to the address of the
Holder entitled thereto as such address shall appear in the Security Register or
(ii) by wire transfer to an account of the Holder entitled thereto located
within the United States.
Securities of this series are one of a duly authorized issue of
securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of January 16, 1998,
as supplemented by the First Supplemental Indenture, dated as of January 20,
1998, and the Second Supplemental Indenture, dated as of July 7, 1998 (as so
supplemented, herein called the "Indenture"), between the Company and State
Street Bank and Trust Company (herein called the "Trustee," which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are authenticated and delivered. This Security is one of
the series designated in the first page hereof, limited in aggregate principal
amount to $100,000,000.
Securities of this series may be redeemed at any time at the option of
the Company, in whole or in part, upon notice of not more than 60 nor less than
30 days prior to the Redemption Date, at a redemption price equal to the sum of
(i) the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
17
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to the Securities shall occur and be
continuing, the principal of the Securities may be declared due and payable in
the manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
written notice to the Trustee of a continuing Event of Default with respect to
the Securities, the Holders of not less than 25% in principal amount of the
Securities of this series at the time outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
the Securities of this series at the time outstanding a direction inconsistent
with such request, and shall have failed to institute any such proceeding, for
60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any interest on or
after the respective due dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of all
outstanding Securities. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each
series at the time outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and
18
unconditional, to pay the principal of (and Make-Whole Amount, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any Place of Payment where the principal of
(and Make-Whole Amount, if any) and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in this Security, or because of any indebtedness
evidenced hereby or thereby, shall be had against any promoter, as such, or
against any past, present or future shareholder, officer or director, as such,
of the Company or of any successor, either directly or through the Company or
any successor, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Security by the Holder thereof and as part of the
consideration for the issue of the Securities of this series.
All capitalized terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
19
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
20
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
21
IN WITNESS WHEREOF, AVALON BAY COMMUNITIES, INC. has caused this
instrument to be duly executed under its corporate seal.
Dated:
AVALON BAY COMMUNITIES, INC.
By:
----------------------------------------
Name: Richard L. Michaux
Title: Chief Executive Officer
[Corporate Seal]
Attest:
- ---------------------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------------------
Name: Robert J. Dunn
Title: Vice President
22
================================================================================
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
- -------------------------------
- ------------------------------- ...............................................
................................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
................................................................................
the within Security of Avalon Bay Communities, Inc. and hereby does irrevocably
constitute and appoint
....................................................................... Attorney
to transfer said Security on the books of the within-named Company with full
power of substitution in the premises.
Dated: ................... ...................................................
...................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular, without
alteration or enlargement or any change whatever.
================================================================================
23
EXHIBIT B TO SUPPLEMENTAL INDENTURE
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 55 WATER STREET, NEW
YORK, NEW YORK, TO THE COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN
THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A NOMINEE OF
DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED
IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A
NOMINEE OF DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR
DEPOSITORY OR ITS NOMINEE.
AVALON BAY COMMUNITIES, INC.
6.80% SENIOR NOTE DUE 2006
Registered No. 1 CUSIP No.: 053373 AB 2
PRINCIPAL AMOUNT $150,000,000
AVALON BAY COMMUNITIES, INC., a corporation duly organized and existing
under the laws of the State of Maryland (herein referred to as the "Company"
which term shall include any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, upon presentation, the principal sum of $150,000,000
on July 15, 2006 and to pay interest on the outstanding principal amount thereon
from July 7, 1998, or from the immediately preceding Interest Payment Date to
which interest has been paid or duly provided for,
24
semi-annually in arrears on January 15 and July 15 in each year, commencing
January 15, 1999, at the rate of 6.80% per annum, until the entire principal
hereof is paid or made available for payment. The interest so payable and
punctually paid or duly provided for on any Interest Payment Date will, as
provided in the Indenture, be paid to the Holder in whose name this Security is
registered at the close of business on the Regular Record Date for such interest
which shall be December 31 or June 30 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date, and may either be paid to the Holder in
whose name this Security is registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of this Security not more
than 15 days and not less than 10 days prior to such Special Record Date, or may
be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which this Security may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. Payment of the principal of and interest on this
Security will be made at the office or agency maintained for that purpose in the
City of New York, New York, or elsewhere as provided in the Indenture, in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts; provided, however, that at
the option of the Company payments of principal and interest on the Notes (other
than payments of principal and interest due at Maturity) may be made (i) by
check mailed to the address of the Holder entitled thereto as such address shall
appear in the Security Register or (ii) by wire transfer to an account of the
Holder entitled thereto located within the United States.
Securities of this series are one of a duly authorized issue of
securities of the Company (herein called the "Securities"), issued and to be
issued in one or more series under an Indenture, dated as of January 16, 1998,
as supplemented by the First Supplemental Indenture, dated as of January 20,
1998, and the Second Supplemental Indenture, dated as of July 7, 1998 (as so
supplemented, herein called the "Indenture"), between the Company and State
Street Bank and Trust Company (herein called the "Trustee," which term includes
any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are authenticated and delivered. This Security is one of
the series designated in the first page hereof, limited in aggregate principal
amount to $150,000,000.
Securities of this series may be redeemed at any time at the option of
the Company, in whole or in part, upon notice of not more than 60 nor less than
30 days prior to the Redemption Date, at a redemption price equal to the sum of
(i) the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
25
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Company, in each case, upon compliance by the Company with certain conditions
set forth in the Indenture, which provisions apply to this Security.
If an Event of Default with respect to the Securities shall occur and
be continuing, the principal of the Securities may be declared due and payable
in the manner and with the effect provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
written notice to the Trustee of a continuing Event of Default with respect to
the Securities, the Holders of not less than 25% in principal amount of the
Securities of this series at the time outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
the Securities of this series at the time outstanding a direction inconsistent
with such request, and shall have failed to institute any such proceeding, for
60 days after receipt of such notice, request and offer of indemnity. The
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof or any interest on or
after the respective due dates expressed herein.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of not less than a majority in principal amount of all
outstanding Securities. The Indenture also contains provisions permitting the
Holders of specified percentages in principal amount of the Securities of each
series at the time outstanding, on behalf of the Holders of all Securities of
such series, to waive compliance by the Company with certain provisions of the
Indenture and certain past defaults under the Indenture and their consequences.
Any such consent or waiver by the Holder of this Security shall be conclusive
and binding upon such Holder and upon all future Holders of this Security and of
any Security issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and Make-Whole Amount,
if any) and interest on this Security at the times, place and rate, and in the
coin or currency, herein prescribed.
26
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any Place of Payment where the principal of
(and Make-Whole Amount, if any) and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by the
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or in this Security, or because of any indebtedness
evidenced hereby or thereby, shall be had against any promoter, as such, or
against any past, present or future shareholder, officer or director, as such,
of the Company or of any successor, either directly or through the Company or
any successor, under any rule of law, statute or constitutional provision or by
the enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of this Security by the Holder thereof and as part of the
consideration for the issue of the Securities of this series.
All capitalized terms used in this Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES, INCLUDING THIS SECURITY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
27
Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures, the Company has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of such
Securities. No representation is made as to the correctness or accuracy of such
CUSIP numbers as printed on the Securities, and reliance may be placed only on
the other identification numbers printed hereon.
Unless the certificate of authentication hereon has been executed by or
on behalf of the Trustee by manual signature, this Security shall not be
entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
28
IN WITNESS WHEREOF, AVALON BAY COMMUNITIES, INC. has caused
this instrument to be duly executed under its corporate seal.
Dated:
AVALON BAY COMMUNITIES, INC.
By:
----------------------------------------
Name: Richard L. Michaux
Title: Chief Executive Officer
[Corporate Seal]
Attest:
- -------------------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:
----------------------------------------
Name: Robert J. Dunn
Title: Vice President
29
================================================================================
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
- -------------------------------
- ------------------------------- ...............................................
................................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
................................................................................
the within Security of Avalon Bay Communities, Inc. and hereby does irrevocably
constitute and appoint
....................................................................... Attorney
to transfer said Security on the books of the within-named Company with full
power of substitution in the premises.
Dated: ................... ...................................................
...................................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular, without
alteration or enlargement or any change whatever.
================================================================================