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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) December 30, 1997
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HOMESTEAD VILLAGE INCORPORATED
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(Exact Name of Registrant as Specified in its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation)
1-12269 74-2770966
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(Commission File Number) (I.R.S. Employer Identification No.)
2100 RiverEdge Parkway, Atlanta, Georgia 30328
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(Address of Principal Executive Offices) (Zip Code)
(770) 303-2200
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(Registrant's Telephone Number, Including Area Code)
Not applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On December 30, 1997, the Registrant announced the commencement of a rights
offering of 6,951,227 shares of its common stock at $15 per share to
shareholders of record on December 29, 1997. Unless extended, the rights
offering will expire on January 15, 1998. This announcement, the placement
agent agreement with Security Capital Markets Group Incorporated and the
subscription agency agreement with BankBoston, N.A. are filed as exhibits hereto
and are hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
(c) Exhibits.
99.1 Press Release dated December 30, 1997.
99.2 Form of Subscription Agency Agreement dated December 29, 1997
between Homestead Village Incorporated and BankBoston, N.A.
99.3 Form of Placement Agent Agreement dated December 29, 1997
between Homestead Village Incorporated and Security Capital
Markets Group Incorporated.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SECURITY CAPITAL GROUP INCORPORATED
Dated: January 8, 1998 By: /s/ Jeffrey A. Klopf
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Jeffrey A. Klopf
Secretary
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EXHIBIT 99.1
[Homestead Logo]
FOR IMMEDIATE RELEASE Contact: K. Scott Canon (800) 201-9455
Gerard de Gunzburg (212) 838-9292
HOMESTEAD VILLAGE ANNOUNCES 6,951,227 SHARE RIGHTS OFFERING
AT $15 PER SHARE
ATLANTA -- (December 30, 1997) -- Homestead Village Incorporated (AMEX: HSD)
announced today that it has priced its $104.3 million rights offering of
6,951,227 shares, previously announced on December 17, 1997, at $15 per share.
The proceeds of the offering will be used to repay borrowings under Homestead's
credit facilities, and for the acquisition of sites and development of
additional extended-stay lodging properties.
Homestead's common shareholders of record on December 29, 1997, will receive a
dividend of one right for each share of common stock they own. Four rights will
be required to purchase one share of Homestead common stock in the rights
offering. Homestead shareholders who exercise all of their rights may
oversubscribe for additional shares of common stock that have not been purchased
by other shareholders in the rights offering. Rights certificates and
prospectuses will be mailed to shareholders on or about December 31, 1997. The
rights offering will expire on January 15, 1998. Rights are transferable and are
expected to trade on the American Stock Exchange under the symbol "HSD.RT". A
copy of the prospectus supplement and accompanying prospectus relating to the
rights offering may be obtained from Security Capital Markets Group
Incorporated, 11 South LaSalle Street, Chicago, IL 60603.
Homestead's largest shareholder, Security Capital Group Incorporated, has agreed
to exercise its rights in full for the base amount of 4,520,007 shares and may
seek to acquire additional shares under the oversubscription privilege or
through the exercise of rights it may acquire from others.
Homestead is committed to creating significant shareholder value by becoming the
leading developer, owner and operator of moderately priced, extended-stay
lodging properties throughout the United States. Homestead's strategic focus is
on the corporate business traveler. Homestead has developed a proprietary
operating system aimed at ensuring its customers a consistent, high-quality,
uniform lodging experience. Homestead's development program targets infill
locations proximate to major business centers and convenient to services
desired by its customers. Homestead seeks to build a national brand recognized
and valued by its major corporate customers by concentrating on delivering high-
quality service and product in desirable locations.
# # #
These securities may not be sold nor may offers to buy be accepted prior to
delivery of a final prospectus. This press release shall not constitute an
offer to sell or the solicitation of an offer to buy nor shall there be any sale
of these securities in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such state.
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EXHIBIT 99.2
FORM OF
SUBSCRIPTION AGENCY AGREEMENT
This SUBSCRIPTION AGENCY AGREEMENT (this "Agreement") is entered into as of
this 29th day of December, 1997 among Homestead Village Incorporated, a Maryland
corporation ("Homestead"), BankBoston, N.A., as subscription agent (the
"Subscription Agent"), and The First National Bank of Boston, as transfer agent
and registrar.
WHEREAS, Homestead has caused a Registration Statement on Form S-3 (File
No. 333-37803) (the "Registration Statement") to be filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), relating to the sale of up to $300,0000,000 of shares of
common stock, par value $.01 per share (the "Shares"), of Homestead;
WHEREAS, Homestead has caused the prospectus (the "Prospectus") contained
in the Registration Statement to be prepared and filed with the Commission under
the Act and will cause a prospectus supplement (together with the prospectus,
the "Prospectus") relating to a distribution by Homestead of transferable
subscription rights (the "Rights") and the sale of newly issued Shares upon the
exercise of such Rights or otherwise (the "Rights Offering");
WHEREAS, the Rights will be distributed to holders of record of Shares as
of the close of business on December 29, 1997 (the "Record Date"), at a ratio of
one Right for each Share held on the Record Date;
WHEREAS, Rights holders will be entitled to purchase one Share at a price
of $_____(the "Subscription Price") for every four Rights held; and
WHEREAS, Homestead has authorized the issuance of an aggregate number of
authorized and unissued or treasury Shares (the "Underlying Shares") equal to
one-fourth of the aggregate bumber of Rights to be distributed pursuant to the
Rights Offering as well as _________ additional Shares which may be sold to
cover excess oversubscriptions or to third parties (the "Additional Shares");
and
WHEREAS, Homestead desires the Subscription Agent and the transfer agent
and registrar to act on its behalf in connection with the Rights Offering as set
forth herein, and the Subscription Agent and the transfer agent and registrar
are willing so to act;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
SECTION 1. Appointment of Subscription Agent. Homestead hereby appoints the
Subscription Agent to act as agent for Homestead in accordance with the
instructions set forth in this Agreement, and the Subscription Agent hereby
accepts such appointment. Homestead may from time to time appoint such co-
subscription agents as it may deem necessary or desirable.
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SECTION 2. Issuance of Securities.
(a) Homestead has authorized the issuance of the Rights and, following the
Record Date, will issue such Rights to holders of record of Shares as of the
close of business on the Record Date at a ratio of one Right for each Share held
on the Record Date. The Subscription Agent shall provide the transfer agent and
registrar such assistance as Homestead may require in order to effect the
distribution of the Rights to holders of record of Shares as of the close of
business on the Record Date, including assistance in determining the number of
Rights to be distributed to each such record holder and assistance in
distributing the Rights Certificates (as defined below) evidencing the Rights
and all other ancillary documents.
(b) Homestead has authorized the issuance of and will hold in reserve the
Underlying Shares, and upon the valid exercise of Rights, Homestead will issue
Underlying Shares to validly exercising Rights holders as set forth in the
Prospectus.
(c) Homestead has authorized the issuance of and will hold in reserve the
Additional Shares, and if Homestead determines, in its sole and absolute
discretion, to accept subscriptions for Additional Shares, it will issue
Additional Shares upon the receipt of valid subscriptions therefor as set forth
in the Prospectus.
SECTION 3. Subscription Right; Rights Certificates.
(a) Each holder of Rights, upon the valid exercise thereof pursuant to
Section 7 hereof, is entitled to purchase from Homestead one Share at the
Subscription Price for every four Rights held.
(b) The Rights shall be evidenced by certificates (the "Rights
Certificates"). The Rights Certificates (and the form of election to exercise or
transfer Rights to be printed on the reverse thereof) shall be substantially in
the form attached as Exhibit A hereto. The Rights Certificates shall be fully
transferable.
SECTION 4. Signature and Registration.
(a) The Rights Certificates shall be executed on behalf of Homestead by a
Co-Chairman and by its Secretary by facsimile signature. Any Rights Certificate
may be signed on behalf of Homestead by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper officer of Homestead
to sign such Rights Certificate, even if at the date of the execution of this
Agreement or the date of the actual issuance of such Rights Certificate, any
such person is not such an officer.
(b) The transfer agent and registrar will keep or cause to be kept, at its
office designated for such purpose, books for registration and transfer of the
Rights issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights and the number of Rights evidenced by each
outstanding Rights Certificate.
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SECTION 5. Division, Combination and Exchange of Rights Certificates; Lost,
Stolen, Destroyed or Mutilated Rights Certificates.
(a) Subject to the provisions of Section 9 hereof, any Rights Certificate,
or any two or more Rights Certificates, may be divided, combined or exchanged
for any number of Rights Certificates or for a single Rights Certificate of
different denomination; provided, however, that the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates so issued shall not
exceed the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered in exchange therefor. Notwithstanding the
preceding sentence, a bank, trust company, securities dealer or broker holding
Shares on the Record Date for more than one beneficial owner may, by submitting
a written request prior to 5:00 p.m., Eastern Standard Time, on January 8, 1998
and upon proper showing to the Subscription Agent, exchange its Rights
Certificate to obtain Rights Certificates for the number of Rights which each
such beneficial owner would have been entitled to receive pursuant to Section
2(a) hereof had each such beneficial owner been the holder of record of such
beneficial owner's Shares on the Record Date; provided, however, that Homestead
reserves the right to refuse to issue any such Rights Certificate or Rights
Certificates if such issuance would be inconsistent with the principle that each
beneficial owner's holding will be rounded up to the nearest whole Right. No
Rights Certificates evidencing fractional Rights will be issued upon division,
combination or exchange of other Rights Certificates, and any instructions to
divide, combine or exchange Rights Certificates which would result in the
issuance of Rights Certificates evidencing fractional Rights shall be rejected.
(b) Any holder desiring to divide, combine or exchange any Rights
Certificate or Rights Certificates shall make such requests in writing to the
Subscription Agent, and shall surrender the Rights Certificate or Rights
Certificates to be divided, combined or exchanged to the Subscription Agent.
Thereupon the Subscription Agent shall deliver to the person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
In all cases of transfer by an attorney-in-fact, the original power of attorney,
duly approved, or a copy thereof, duly certified, shall be deposited and remain
with the Subscription Agent. In all cases of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority satisfactory to the Subscription Agent shall be
produced and may be required to be deposited and to remain with the Subscription
Agent in its discretion. Homestead may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
division, combination or exchange of Rights Certificates.
(c) Upon receipt by Homestead and the Subscription Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
and/or security satisfactory to them, which may be in the form of an open
penalty bond, and reimbursement to Homestead and the Subscription Agent of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Rights Certificate if mutilated, the transfer agent and registrar will make
and deliver a new Rights Certificate of like denomination to the Subscription
Agent for delivery to the registered
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owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
If required by Homestead or the Subscription Agent an indemnity bond must be
sufficient in the judgment of both to protect Homestead, the Subscription Agent
or any agent thereof from any loss which any of them may suffer if a Rights
Certificate is replaced.
SECTION 6. Subsequent Issuance of Rights Certificates. Subsequent to their
original issuance, no Rights Certificates shall be issued except: (a) Rights
Certificates issued upon any transfer, division, combination or exchange of
Rights pursuant to Section 5(a), 5(b) or 10 hereof, (b) Rights Certificates
issued in replacement of lost, stolen, destroyed or mutilated Rights
Certificates pursuant to Section 5(c) hereof and (c) Rights Certificates issued
pursuant to Section 7(h) hereof upon the partial exercise of any Rights
Certificate to evidence the unexercised portion of such Rights Certificate.
SECTION 7. Exercise of Rights; Exercise Price; Expiration Date.
(a) The holder of any Rights Certificate may exercise some or all of the
Rights evidenced thereby (but not in amounts other than four Rights or integral
multiples thereof) by delivering to the Subscription Agent, prior to 5:00 p.m.,
Eastern Standard Time, on January 15, 1998 (the "Expiration Date"), the properly
completed and duly executed Rights Certificate, together with payment of the
full Subscription Price for each Share subscribed for pursuant to the exercise
of such Rights. In the case of holders of Rights that are held of record through
The Depository Trust Company ("DTC"), such Rights may be exercised by
instructing DTC to transfer Rights from the DTC account of such holder to the
DTC account of the Subscription Agent, together with payment of the Subscription
Price for each Share subscribed for pursuant to the exercise of such Rights.
Alternatively, the holder of any Rights Certificate may exercise the Rights
evidenced thereby by effecting compliance with the procedures for guaranteed
delivery set forth in Section 7(b) hereof.
(b) If, prior to 5:00 p.m., Eastern Standard Time, on the Expiration Date,
the Subscription Agent has received a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form distributed with the
Rights Certificates specifying the name of the holder of Rights and the number
of Shares subscribed for (stating separately the number of Shares subscribed for
pursuant to the exercise of Rights and the number of Shares subscribed for
pursuant to the Oversubscription Privilege (as defined below)) and guaranteeing
that the properly completed and duly executed Rights Certificate and payment of
the full Subscription Price for each Share subscribed for will be delivered to
the Subscription Agent within three business days after the Expiration Date,
such subscription may be accepted; however, the Subscription Agent shall
withhold the certificates for the Shares until receipt of the properly completed
and duly executed Rights Certificate and payment of such amount within such time
period. The Notice of Guaranteed Delivery must be guaranteed by a commercial
bank or a trust company having an office, branch or agency in the United States,
or by a member of a Stock Transfer Association approved medallion program such
as STAMP, SEMP or MSP (an "Eligible Institution").
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(c) The Rights shall expire at 5:00 p.m., Eastern Standard Time, on the
Expiration Date.
(d) The Subscription Price shall be payable in United States currency (i)
by personal check, cashier's check, bank draft or money order drawn on a bank
located in the United States payable to "Homestead Rights Offering" or (ii) by
wire transfer of funds to the account maintained by the Subscription Agent for
such purpose at BankBoston, N.A., ABA No. 011000390. The Subscription Price
shall be deemed to have been received by the Subscription Agent only upon (i)
clearance of any personal check, (ii) receipt by the Subscription Agent of any
cashier's check, bank draft or money order or (iii) receipt of good funds in the
Subscription Agent's account designated above, in payment of the Subscription
Price.
(e) If an exercising Rights holder has not indicated the number of Rights
being exercised, or if the Subscription Price payment forwarded by such holder
to the Subscription Agent is not sufficient to purchase the number of Shares
subscribed for, the Rights holder will be deemed to have exercised the maximum
number of whole Rights which may be exercised for the Subscription Price
delivered to the Subscription Agent and, to the extent that the Subscription
Price payment delivered by an exercising Rights holder exceeds the Subscription
Price multiplied by the maximum number of whole Rights which may be exercised
(such excess being the "Subscription Excess"), the Subscription Agent, as soon
as practicable after such exercise of Rights, shall mail to such Rights holder
the Subscription Excess paid by such holder without interest or deduction.
(f) A holder of Shares on the Record Date who validly exercises all of such
holder's Rights will have the further right (the "Oversubscription Privilege")
to oversubscribe for additional Shares, at the Subscription Price, to the extent
(i) all of the Underlying Shares have not been purchased through the exercise of
Rights or otherwise or (ii) Homestead determines, in its sole and absolute
discretion, to accept subscriptions for the Additional Shares pursuant to the
Oversubscription Privilege. Holders of Shares so entitled to exercise the
Oversubscription Privilege may oversubscribe for as many additional Shares as
desired (subject to the maximum number of Underlying Shares and Additional
Shares that Homestead has determined to accept subscriptions for pursuant to the
Oversubscription Privilege) in the manner set forth in this Section 7. If the
demand for Shares pursuant to the Oversubscription Privilege exceeds the number
of Shares available, holders of Shares on the Record Date shall participate in
the Oversubscription Privilege (up to, but not exceeding, the number of Shares
oversubscribed for by each such holder) pro rata based upon the number of Rights
exercised by each such person (without regard to the number of Shares
oversubscribed for by each such person under the Oversubscription Privilege),
with fractional Shares adjusted in any manner Homestead deems appropriate.
(g) The Subscription Agent shall pay to, credit to the account of, or
otherwise transfer to, Homestead all funds received by the Subscription Agent in
payment of the Subscription Price for Shares subscribed for pursuant to the
exercise of Rights as soon as practicable after the receipt of all required
documents and payment in full of the Subscription Price and pursuant to
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the Oversubscription Privilege as soon as practicable following the Expiration
Date and any funds received pursuant to the Oversubscription Privilege or from
subscribers as provided in Section 8(b) which are not used to purchase Shares
shall be returned to the appropriate subscriber. If the Rights Offering is
withdrawn or terminated for any reason, the Subscription Agent will return to
each subscriber all funds received from such subscriber without interest. No
interest will be paid on funds returned due to the proration of
oversubscriptions (either pursuant to the Oversubscription Privilege or the sale
to third-party purchasers of Shares for which subscriptions are not received or
accepted) or otherwise. Any interest accumulated on funds held pending
proration of oversubscriptions (either pursuant to the Oversubscription
Privilege or the sale to third-party purchasers of Shares for which
subscriptions are not received or accepted) or otherwise, shall be paid to the
Company.
(h) In case the holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing the number
of Rights remaining unexercised shall be issued by the Subscription Agent to the
registered holder of such Rights Certificate or to his duly authorized assigns,
subject to the provisions of Section 9 hereof.
(i) The Subscription Agent is authorized to accept Rights Certificates
(other than Rights Certificates delivered in accordance with the procedure for
guaranteed delivery set forth in Section 7(b)), or transfers of Rights to its
account at DTC, received prior to 5:00 p.m., Eastern Standard Time, on the
Expiration Date.
(j) Once a holder of Rights has exercised a Right, such exercise may not be
revoked.
(k) Unless a Rights Certificate (i) provides that the Shares to be issued
pursuant to the exercise of Rights represented thereby are to be registered in
the name and delivered to the holder of such Rights or (ii) is submitted for the
account of an Eligible Institution, signatures on such Rights Certificate must
be guaranteed by an Eligible Institution.
SECTION 8. Delivery of Share Certificates.
(a) As soon as practicable after the receipt of all required documents and
payment in full of the Subscription Price, the Subscription Agent shall deliver
to each exercising Rights holder certificates representing the Shares purchased
pursuant to the exercise of Rights. As soon as practicable after the Expiration
Date and the receipt of all required documents and payment in full of the
Subscription Price, the Subscription Agent shall deliver to each exercising
Rights holder certificates representing the Shares purchased pursuant to the
Oversubscription Privilege.
(b) In the event that Homestead or Security Capital Markets Group
Incorporated, a Delaware corporation ("Capital Markets Group"), place with
third-party purchasers any of the Underlying Shares not subscribed for pursuant
to the exercise of Rights or the Oversubscription Privilege or any of the
Additional Shares, Homestead and Capital Markets Group will give the
Subscription Agent not less than forty-eight hours' notice in writing as to the
number of Shares which are to be issued, together with a list of the names and
denominations in which certificates
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for such Shares are to be issued. As soon as practicable thereafter, the
Subscription Agent shall deliver to each such third-party purchaser certificates
representing such Shares.
SECTION 9. Fractional Rights and Shares.
(a) Homestead shall not issue fractions of Rights nor shall the
Subscription Agent distribute Rights Certificates which evidence fractional
Rights. All questions as to the validity and eligibility of any rounding of
fractional Rights shall be determined by Homestead in its sole discretion, which
determinations shall be final and binding.
(b) Homestead shall not issue fractional Shares to exercising Rights
holders upon the exercise of Rights. Homestead may adjust for fractional Shares
resulting from the exercise of the Oversubscription Privilege in any manner it
deems appropriate.
SECTION 10. Transfer of Rights. Any holder may transfer (a) all of the
Rights evidenced by a Rights Certificate by properly endorsing the Rights
Certificate for transfer in accordance with the instructions accompanying the
Rights Certificate or (b) part of the Rights evidenced by a Rights Certificate
(but not fractional Rights) by delivering to the Subscription Agent such Rights
Certificate properly endorsed for transfer, with instructions to register the
Rights to be transferred in the name of the transferee (and to issue a new
Rights Certificate to the transferee evidencing such transferred Rights), and
with signatures guaranteed by an Eligible Institution. In such event, the
Subscription Agent shall issue a new Rights Certificate evidencing the balance
of the Rights to the holder or, if so instructed, to an additional transferee.
SECTION 11. Foreign Shareholders. The Subscription Agent shall not mail
Rights Certificates to holders of Shares whose addresses are outside the United
States, Mexico and the province of Ontario, Canada. The Subscription Agent shall
hold such Rights Certificates for the account of such holders and upon notice
from such holders shall sell the Rights, if feasible, on their behalf. If no
instructions have been received prior to 10:00 a.m., Eastern Standard Time, on
the fifth business day immediately preceding the Expiration Date, the
Subscription Agent shall sell such Rights, if feasible, and shall remit the net
proceeds, if any, to such holders promptly following the Expiration Date. If
such Rights can be sold, sales of such Rights will be deemed to have been
effected at the weighted-average price received by the Subscription Agent for
the sale of all Rights sold by the Subscription Agent on that day pursuant to
this Section 11, less any applicable brokerage commissions, taxes and other
expenses, provided that Homestead shall pay the fees of the Subscription Agent
in respect of such sales. In connection therewith, the Subscription Agent agrees
that it (a) is acting solely on behalf and for the benefit of such holders who
wish to sell their Rights and not as agent, or on behalf, of Homestead, (b)
shall not accept any instructions from Homestead with respect to the timing of
such sales, (c) shall effect all such sales in accordance with applicable law
and (d) shall not effect any such sales in a manner that would cause a material
adverse change in the market for the Rights.
SECTION 12. Reports. The Subscription Agent shall notify both Homestead and
its designated representatives by telephone as requested during the period
commencing with the
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mailing of Rights Certificates and ending on the Expiration Date (and in the
case of guaranteed deliveries pursuant to Section 7(b), the period ending three
business days after the Expiration Date), which notice shall thereafter be
confirmed in writing, of: (a) the number of Rights exercised on the day of such
request, (b) the number of Shares subscribed for pursuant to the exercise of
Rights and the number of such Shares for which payment has been received on such
day, (c) the number of Shares subscribed for pursuant to the Oversubscription
Privilege on such day, (d) the number of Shares subject to guaranteed delivery
pursuant to Section 7(b) on such day, (e) the number of Rights for which
defective exercises have been received on such day, (f) the number of Shares for
which subscription forms have been received from third-party purchasers as
contemplated by Section 8(b) on such day and (g) cumulative totals derived from
the information set forth in clauses (a) through (f) above. At or before 5:00
p.m., Eastern Standard Time, on the first business day following the Expiration
Date, the Subscription Agent shall certify in writing to Homestead the
cumulative totals through the Expiration Date derived from the information set
forth in clauses (a) through (f) above. The Subscription Agent shall also
maintain and update a listing of holders who have fully or partially exercised
their Rights, holders who have transferred their Rights and their transferees
and holders who have not exercised their Rights. The Subscription Agent shall
provide Homestead or its designated representatives with the information
compiled pursuant to this Section 12 as any of them shall request. The
Subscription Agent hereby represents, warrants and agrees that the information
contained in each notification referred to in this Section 12 shall be accurate
in all material respects.
SECTION 13. Future Instructions and Interpretation.
(a) All questions as to the timeliness, validity, form and eligibility of
any exercise of Rights will be determined by Homestead, which determinations
shall be final and binding. Homestead in its sole discretion may waive any
defect or irregularity, permit a defect or irregularity to be corrected within
such time as it may determine or reject the purported exercise of any Right.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as Homestead
determines in its sole discretion. Neither Homestead nor the Subscription Agent
shall be under any duty to give notification of any defect or irregularity in
connection with the submission of Rights Certificates or incur any liability for
failure to give such notification.
(b) The Subscription Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
authorized officer of Homestead and to apply to such officers for advice or
instructions in connection with its duties and it shall not be liable for any
action taken or omitted by it in good faith in accordance with the instructions
of any such officer.
SECTION 14. Payment of Taxes. Homestead covenants and agrees that it will
pay when due and payable all documentary, stamp and other taxes, if any, which
may be payable in respect of the issuance or delivery of any Rights or Shares;
provided, however, that Homestead shall not be liable for any tax liability
arising out of any transaction which results in, or is
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deemed to be, an exchange of Rights or Shares or a constructive dividend with
respect to the Rights or Shares; and provided, further, that Homestead shall not
be required to pay any tax or other governmental charge which may be payable in
respect of any transfer involved in the transfer or delivery of any Rights
Certificate or the issuance or delivery of certificates for Shares in a name
other than that of the registered holder of the Rights Certificate evidencing
the Rights exercised or transferred, and the Subscription Agent shall not
register any such transfer or issue any such certificate until such tax or
governmental charge, if required, shall have been paid.
SECTION 15. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, division, combination,
exchange or transfer shall be canceled by the Subscription Agent, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. Homestead shall deliver to the Subscription Agent for
cancellation, and the Subscription Agent shall cancel, any other Rights
Certificate purchased or acquired by Homestead otherwise than upon the exercise
thereof. The Subscription Agent shall deliver all canceled Rights Certificates
to Homestead, or shall, at the written request of Homestead, destroy such
canceled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to Homestead.
SECTION 16. Right of Action. All rights of action in respect of this
Agreement are vested in Homestead and the respective registered holders of the
Rights Certificates, and any registered holder of any Rights Certificate,
without the consent of the Subscription Agent or the holder of any other Rights
Certificate, may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against Homestead to
enforce, or otherwise act in respect of, his or her right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement.
SECTION 17. Concerning the Subscription Agent; Indemnification.
(a) Homestead agrees to pay to the Subscription Agent compensation in
accordance with the schedule of fees attached hereto as Exhibit B for all
services rendered by it hereunder and, from time to time, on demand of the
Subscription Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder.
(b) Homestead also agrees to indemnify and hold the Subscription Agent
harmless against any losses, claims, damages, liabilities, costs or expenses
(including reasonable fees and disbursements of legal counsel) which the
Subscription Agent may incur or become subject to arising from or out of any
claim or liability resulting from actions taken as Subscription Agent pursuant
to this Agreement; provided, however, that such covenant and agreement does not
extend to, and the Subscription Agent shall not be indemnified or held harmless
with respect to, losses, claims, damages, liabilities, costs or expenses
incurred or suffered by the Subscription Agent as a result, or arising out, of
the Subscription Agent's negligence, misconduct, bad faith or breach of this
Agreement. In connection therewith: (i) in no case shall Homestead be liable
with respect to any claim against the Subscription Agent unless the Subscription
Agent shall have
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notified Homestead in writing of the assertion of such claim against it or of
any action commenced against it with respect to such claim, promptly after the
Subscription Agent shall have notice of a claim or shall have been served with
the summons or other legal process giving information as to the nature and basis
of the claim; (ii) Homestead shall be entitled to participate at its own expense
in the defense of any suit brought to enforce any such claim and, if Homestead
so elects, it shall assume the defense of any such suit, in which event
Homestead shall not be liable for the fees and expenses of any additional
counsel that the Subscription Agent may retain, so long as Homestead shall
retain counsel reasonably satisfactory to the Subscription Agent, in the
exercise of the Subscription Agent's reasonable judgment, to defend such suit;
and (iii) the Subscription Agent agrees not to settle any litigation in
connection with any claim or liability with respect to which it may seek
indemnification from Homestead without the prior written consent of Homestead.
(c) The Subscription Agent shall be protected and shall incur no liability
for or in respect of any action taken or omitted by it without negligence,
misconduct, bad faith or breach of this Agreement in connection with its
administration of this Agreement in reliance upon any document reasonably
believed by it to be genuine and to be executed and, where necessary,
acknowledged or guaranteed by the proper person or persons.
(d) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Subscription Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Subscription Agent has been advised of the likelihood of
such loss or damage and regardless of the form of action.
SECTION 18. Merger or Consolidation of Subscription Agent. Any corporation
into which the Subscription Agent or any successor Subscription Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Subscription Agent or any successor
Subscription Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Subscription Agent or any
successor Subscription Agent, shall be the successor to the Subscription Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
SECTION 19. Duties of Subscription Agent. The Subscription Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which Homestead and the holders of Rights Certificates
by their acceptance thereof shall be bound:
(a) The Subscription Agent may consult with legal counsel (who may be, but
is not required to be, legal counsel for Homestead), and the advice or opinion
of such counsel shall be full and complete authorization and protection to the
Subscription Agent as to any action taken or omitted by it in good faith and in
accordance with such advice or opinion.
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(b) Whenever in the performance of its duties under this Agreement the
Subscription Agent shall deem it necessary or desirable that any fact or matter
be proved or established by Homestead prior to taking or omitting to take any
action hereunder, such fact or matter (unless other evidence in respect thereof
is specifically prescribed herein) may be deemed to be conclusively proved and
established by a certificate signed by a Co-Chairman, or Vice President
(including any Senior Vice President) and by the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of Homestead and delivered
to the Subscription Agent; and such certificate shall be full authorization to
the Subscription Agent for any action taken or omitted in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Subscription Agent shall be liable hereunder only for its own
negligence, misconduct or bad faith.
(d) The Subscription Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same, and all such statements and
recitals are and shall be deemed to have been made by Homestead only.
(e) The Subscription Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution and delivery hereof by the Subscription Agent) or in respect
of the validity or execution of any Rights Certificate; nor shall it be
responsible for any breach by Homestead of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Shares to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any Shares will, when
issued, be duly authorized, validly issued, fully paid and nonassessable.
(f) Homestead agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the
Subscription Agent for the carrying out or performing by the Subscription Agent
of the provisions of this Agreement.
(g) Nothing herein shall preclude the Subscription Agent from acting in any
other capacity for Homestead.
(h) The Subscription Agent shall comply with the information and backup
withholding requirements of the Internal Revenue Code of 1986, as amended (the
"Code"), including, without limitation, where appropriate, on a timely basis,
filing with the Internal Revenue Service and furnishing to holders of Rights
duly completed Forms 1099B. The Subscription Agent shall also collect and duly
preserve Forms W-8 and W-9 and other forms or information necessary to comply
with the backup withholding requirements of the Code. The Subscription Agent
shall
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have no obligation to furnish distributees of Rights with Forms 1099DIV or to
withhold any taxes with respect to the distribution of Rights.
(i) The Subscription Agent shall withhold from payments made to record
owners amounts sufficient to comply with the backup withholding requirements of
the Code. For purposes of backup withholding that may be applicable in respect
of Rights distributed to record owners other than foreign holders, the
Subscription Agent shall withhold and sell Rights on behalf of such record
owners in amounts necessary to satisfy such backup withholding requirements.
SECTION 20. Notices. All notices and other communications provided for or
permitted hereunder shall be made by hand delivery, prepaid first-class mail, or
telecopier:
(a) if to Homestead, to:
Homestead Village Incorporated
2100 RiverEdge Parkway
Atlanta, Georgia 30328
Attention: Robert C. Aldworth
Telecopier: (770) 303-0019
(b) if to the Subscription Agent, to:
BankBoston, N.A.
150 Royall Street
Canton, Massachusetts 02021
Attention: Michael Cullinane
Telecopier: (617) 575-2233
(c) if to a registered holder, at the address shown on the share
register of Homestead.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; three business days
after being deposited in the mail, postage prepaid, if mailed as aforesaid; and
when receipt is acknowledged, if telecopied.
SECTION 21. Supplements and Amendments. Homestead and the Subscription
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to cure any ambiguity or
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provision contained herein, or to make any other
provisions in regard to matters or questions arising hereunder which Homestead
and the Subscription Agent may deem necessary or desirable and which shall not
adversely affect the interests of the holders of the Rights Certificates.
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SECTION 22. Successors. All the covenants and provisions of this Agreement
by or for the benefit of Homestead or the Subscription Agent shall bind and
inure to the benefit of their respective successors and assigns hereunder.
SECTION 23. Termination. This Agreement shall terminate at 5:00 p.m.,
Eastern Standard Time, on the thirtieth day following the Expiration Date. Upon
termination of this Agreement, and provided that all subscriptions for Shares
accepted prior to such termination are issued and delivered by Homestead,
Homestead shall be discharged from all obligations under this Agreement except
for its obligation to the Subscription Agent under Section 17 hereof and except
with respect to the obligation of Homestead to provide instructions and
directions to the Subscription Agent as provided in this Agreement.
SECTION 24. Governing Law. This Agreement and each Rights Certificate shall
be deemed to be a contract made under the laws of the Commonwealth of
Massachusetts and for all purposes shall be construed in accordance with the
internal laws of such Commonwealth.
SECTION 25. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than Homestead, the
Subscription Agent and the holders of the Rights Certificates any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of Homestead, the Subscription Agent and
the holders of the Rights Certificates.
SECTION 26. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
SECTION 27. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date first above written.
HOMESTEAD VILLAGE INCORPORATED
By:_________________________________
Robert C. Aldworth
Senior Vice President and Chief Financial Officer
BANKBOSTON, N.A., Subscription Agent
By:_________________________________
Name:_______________________________
Title:______________________________
BANKBOSTON, N.A., transfer agent and registrar
By:_________________________________
Name:_______________________________
Title:______________________________
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EXHIBIT 99.3
FORM OF
PLACEMENT AGENT AGREEMENT
December 29, 1997
Security Capital Markets Group Incorporated
11 South LaSalle Street
Chicago, Illinois 60603
Dear Sirs:
Homestead Village Incorporated, a Maryland corporation ("Homestead"), is
issuing as a dividend, at no cost, to each of its shareholders the right (a
"Right") to subscribe for and purchase shares of common stock, par value $.01
per share ("Shares"), of Homestead. The issuance of such Rights and the offering
of such underlying Shares by Homestead is herein referred to as the "Rights
Offering." A holder of Rights who validly exercises all of such holder's Rights
will have the further right to oversubscribe for additional Shares, to the
extent that all of the Shares offered in the Rights Offering are not purchased
by the exercise of Rights (the "Oversubscription Privilege"). Simultaneously
with the Rights Offering, Security Capital Markets Group Incorporated (the
"Agent"), will act as a placement agent for Homestead and seek third-party
investors to acquire Shares offered in the Rights Offering that are not sold
through the exercise of Rights or the Oversubscription Privilege (the
"Unsubscribed Shares") or additional shares, which Homestead may offer in its
sole discretion (the "Additional Shares"). The Agent is a subsidiary of
Security Capital Group Incorporated ("Security Capital"), Homestead's largest
shareholder.
Homestead 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 (File No. 333-37803) on Form S-3 relating to the sale of up to
$300,000,000 of Shares. The registration statement as amended to the date of
this Agreement is hereinafter referred to as the "Registration Statement" and
the related prospectus supplement and the accompanying prospectus in the form
first used to confirm sales of the Shares in the Rights Offering are hereinafter
referred to as the "Prospectus."
ARTICLE I
EMPLOYMENT OF THE AGENT
In reliance upon the representations and warranties and subject to the
terms and conditions of this Agreement:
Section 1.1. Best Efforts. Homestead employs the Agent as Homestead's
exclusive agent to sell for Homestead's account the Unsubscribed Shares and
Additional Shares, if any, on a cash basis only, at the offering price as set
forth in the Prospectus. The Agent agrees to use its best efforts, as agent for
Homestead, to sell the Unsubscribed Shares and Additional Shares, if any,
<PAGE>
subject to the terms and conditions set forth in this Agreement and in the
Prospectus. The Agent shall deliver to prospective purchasers of Unsubscribed
Shares and Additional Shares the Prospectus and any other materials the Agent
deems appropriate. It is understood between the parties that there is no firm
commitment by the Agent to purchase any or all of the Shares.
Section 1.2. Compensation. Upon consummation of the Rights Offering and
the sale of the Shares thereunder (the "Closing"), Homestead shall pay to the
Agent a fee of 1% of the gross proceeds raised in the Rights Offering, the
Oversubscription Privilege and the sale of Unsubscribed Shares and Additional
Shares, for the Agent's services in assisting Homestead in the Rights Offering.
Section 1.3. Expenses. In addition to the fee described in Section 1.2
hereof, Homestead will pay, whether or not the transactions contemplated
hereunder are consummated or this Agreement is prevented from becoming effective
or is terminated, all of the Agent's reasonable costs and expenses, including
fees of counsel, incident to the performance of the Agent's obligations under
this Agreement; provided, however, that, if this Agreement is terminated prior
to the Closing, the Agent shall only be reimbursed for its actual accountable
out-of-pocket costs and expenses..
Section 1.4. Obligations Not Exclusive. Homestead agrees that the
obligations of the Agent under this Agreement: (a) shall not preclude the Agent
from contemporaneously participating in, acting as placement agent for, or
underwriting the offering of securities of other issuers; (b) shall not impose
any obligation on the Agent to require its registered representatives, some or
all of whom may be independent contractors, to offer and sell the Shares; and
(c) shall require the Agent to make an effort to find purchasers for the
Unsubscribed Shares and Additional Shares only to the extent the Agent is
motivated to do so by the compensation and other provisions of this Agreement.
Section 1.5. Offering Solely As Agent. In offering the Unsubscribed Shares
and Additional Shares for sale, the Agent shall offer them solely as an agent
for Homestead, and such offer shall be made upon the terms and subject to the
conditions set forth in this Agreement and the Prospectus. The Agent shall
commence making such offer as an agent for Homestead as soon after the date
hereof as it in its sole discretion may deem advisable; provided, however, that
if the Agent does not commence such offering within ten business days after the
date hereof, it shall so advise Homestead.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF HOMESTEAD
In order to induce the Agent to enter into this Agreement, Homestead hereby
represents and warrants to and agrees with the Agent as follows:
Section 2.1. Registration Statement and Prospectus. 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 Homestead, threatened by the Commission; and the Registration
Statement and the 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 do not and will
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not, as of the applicable effective date as to the Registration Statement and
any amendment thereto and as of the date of the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or, in the case of the
Prospectus, necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and the Prospectus, as
amended or supplemented at the date of the Closing (the "Closing Date"), if
applicable, will not contain an untrue statement of a material fact or omit to
state a material fact 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 statements or
omissions in the Registration Statement or the Prospectus made in reliance upon
and in conformity with written information furnished to Homestead through the
Agent or by or on behalf of the Agent specifically for use therein.
Section 2.2. Financial Statements. The financial statements of Homestead
together with related schedules and notes incorporated by reference into the
Registration Statement and the Prospectus present fairly the financial position
of Homestead and the results of its operations and the changes in its financial
position at the respective dates and for the respective periods for which they
apply; such financial statements have been prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved except as otherwise stated therein.
Section 2.3. Independent Public Accountant. Ernst & Young LLP and KPMG
Peat Marwick LLP, each of which has certified or shall certify certain of the
financial statements incorporated by reference into the Registration Statement
and the Prospectus, are each independent certified public accountants within the
meaning of the Securities Act.
Section 2.4. No Material Adverse Change. Except as described in the
Registration Statement or the Prospectus, subsequent to the dates as of which
information is given in the Registration Statement and the Prospectus and as of
the date hereof, (a) there shall not have been any material adverse change in
the condition (financial or other), properties or business of Homestead; (b)
Homestead shall not have entered into any material transaction other than in the
ordinary course of business; (c) Homestead shall not have incurred any material
obligations, contingent or otherwise, other than in the ordinary course of
business; (d) there shall not have been any change in the capital stock or long-
term debt (except current payments) of Homestead and (e) Homestead shall not
have paid or declared any dividends or other distributions on its capital stock,
other than regular periodic dividends.
Section 2.5. Organization and Standing. Homestead is duly organized and is
validly existing as a corporation in good standing under the laws of the State
of Maryland, with full power and authority to own its properties and conduct its
business as described in the Prospectus, and is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
business conducted by it or the location of the properties owned or leased by it
makes such qualification necessary. Homestead holds all material licenses,
certificates and permits from governmental authorities necessary for the conduct
of its business as described in the Prospectus.
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Section 2.6. No Violation. Homestead is not in violation of its Charter,
its Bylaws or other governing documents, nor is it in default in the performance
of any obligation, agreement or condition contained in any license, contract,
indenture, mortgage, deed of trust, lease or loan agreement or in any bond,
debenture, note or any other evidence of indebtedness to which it is a party or
by which it is bound, except where such default does not materially adversely
affect the condition (financial or other), properties or business of Homestead.
The performance of this Agreement and the consummation of the transactions
herein contemplated will not conflict with Homestead's Charter, Bylaws or other
governing documents of Homestead, or result in a breach of, or default under,
any agreement, indenture, mortgage, deed of trust, lease or other instrument to
which Homestead is a party or by which it is bound, or any law, rule, regulation
or decree of any court, governmental agency or body having jurisdiction over
Homestead or its properties or result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of Homestead, except as
any of the foregoing would not materially adversely affect the condition
(financial or other), properties or business of Homestead. Homestead is not in
violation of any law, rule, regulation or court decree to which it may be
subject nor has it failed to obtain any license, permit, franchise or other
governmental authorization necessary to the ownership of its property or to the
conduct of its business, which violation or failure is likely to have a material
adverse effect on the condition (financial or other), properties or business of
Homestead. Except as required by the Securities Act, the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the Commission as
promulgated thereunder (collectively, the "Exchange Act"), or applicable state
securities or blue sky laws, no consent, approval, authorization or order of any
court, governmental agency or body is required in connection with the
consummation of the transactions contemplated by this Agreement.
Section 2.7. Capitalization. The authorized, issued and outstanding
capitalization of Homestead is as described in the Prospectus and all of the
issued and outstanding Shares have been duly authorized and validly issued and
are fully paid and nonassessable.
Section 2.8. Legality of Shares. The Shares to be sold by Homestead in the
Rights Offering, including the Additional Shares, have been duly authorized and,
upon issuance and delivery and payment therefor in the manner described in the
Prospectus, will be validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus. No further
approval or authority of the shareholders or the Board of Directors of Homestead
will be required for the issuance and sale of the Shares as contemplated herein.
Except as described in the Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, or any restrictions upon the voting or
transfer of any Shares to be sold by Homestead pursuant to Homestead's Charter,
Bylaws or any agreement or other instrument to which Homestead is a party.
Neither the filing of the Registration Statement nor the offering or sale of the
Shares as contemplated in this Agreement gives rise to any rights, other than
those which have been waived or satisfied, for or relating to the registration
of any Shares.
Section 2.9. Authority. Homestead has full right, power and authority to
enter into this Agreement, and this Agreement has been duly authorized, executed
and delivered by Homestead and constitutes a valid and binding agreement of
Homestead enforceable against Homestead in accordance with its terms, except as
its enforceability may be limited by applicable bankruptcy,
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insolvency, reorganization or similar laws affecting the rights of creditors
generally and judicial limitations on the right of specific performance or by
general equitable principles, and except as enforceability of indemnification
provisions contained herein may be limited by federal securities laws.
Section 2.10. Property. Except as otherwise described in the Registration
Statement and the Prospectus, Homestead and it subsidiaries have good and
marketable title or good and indefeasible title (or such substantially
equivalent quality of title as provided by the applicable title insurance
policy), free and clear of all liens and encumbrances to all of the real
property described in the Registration Statement and the Prospectus as being
owned by it or its subsidiaries except liens and encumbrances which are not
material in the aggregate and do not materially interfere with the conduct of
the business of Homestead or its subsidiaries, and, except as otherwise
described in the Registration Statement and the Prospectus, has valid and
binding leases to the real property described in the Registration Statement and
the Prospectus as under lease to it or its subsidiaries with such exceptions as
do not materially interfere with the conduct of the business of Homestead or its
subsidiaries.
Section 2.11. No Litigation. Except as set forth in the Registration
Statement and the Prospectus, there are no actions, suits or proceedings pending
before or by any court, governmental agency or body or any arbitrator, which
might have a material adverse effect on the condition (financial or other),
properties or business of Homestead and, to the best of Homestead's knowledge,
no such action, suit or proceeding is contemplated.
Section 2.12. Price Manipulation. Homestead has not taken and will not
take, directly or indirectly, any action designed to cause or result in, or that
has constituted or that might reasonably be expected to constitute, the unlawful
stabilization or manipulation of the price of the Shares to facilitate the sale
or resale of the Shares.
Section 2.13. Finder. Homestead knows of no outstanding claims for
services in the nature of a finder's fee or origination fee with respect to the
sale of the Shares hereunder resulting from its acts for which the Agent may be
responsible.
Section 2.14. Exhibits. There are no contracts or other documents which
are required to be filed as exhibits to the Registration Statement by the
Securities Act which have not been so filed and each contract to which Homestead
is a party and to which reference is made in the Prospectus has been duly and
validly executed, is in full force and effect in all material respects in
accordance with its terms, and none of such contracts has been assigned by
Homestead. Homestead knows of no present situation or condition or fact which
would prevent compliance with the terms of such contracts, as amended to date.
Except as set forth in the Registration Statement and the Prospectus and except
for amendments or modifications of such contracts in the ordinary course of
business, Homestead has no intention of exercising any right which it may have
to cancel any of its obligations under any of such contracts and has no
knowledge that any other party to any of such contracts has any intention not to
render full performance under such contracts.
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Section 2.15. Tax Returns. Homestead has filed all federal and state tax
returns which are required to be filed by it and has paid all taxes shown on
such returns and on all assessments received by it to the extent such taxes have
become due. All taxes with respect to which Homestead is obligated have been
paid or adequate accruals have been set up to cover any such unpaid taxes.
ARTICLE III
COVENANTS OF HOMESTEAD
Homestead covenants and agrees with the Agent that:
Section 3.1. Delivery of Registration Statement and Prospectus. Homestead
will furnish to the Agent, from time to time and without charge, copies of the
Registration Statement (one of which will be signed and will include all
exhibits), each preliminary prospectus, the Prospectus and all amendments and
supplements to any of such documents, in each case as soon as available and in
such quantities as the Agent may from time to time reasonably request.
Section 3.2. Filing of Prospectus. Homestead will file the Prospectus in a
form approved by the Agent pursuant to, and within the period permitted by, Rule
424 under the Securities Act.
Section 3.3. Use of Prospectus. Homestead authorizes the Agent to use the
Prospectus as from time to time amended or supplemented in connection with the
offering and sale of the Shares and in accordance with the applicable provisions
of the Securities Act and applicable state securities or blue sky laws.
Section 3.4. Further Amendments and Supplements. If, during such period of
time as in the opinion of the Agent or its counsel a prospectus relating to the
Rights Offering is required to be delivered under the Securities Act, any event
occurs or any event known to Homestead relating to or affecting Homestead shall
occur as a result of which the Prospectus as then amended or supplemented would
contain an untrue statement of a material fact, or omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, or if it is necessary at any time to amend
or supplement the Prospectus to comply with the Securities Act, Homestead will
forthwith notify the Agent thereof and prepare and file with the Commission such
further amendment to the Registration Statement or supplement or amendment to
the Prospectus as may be required and furnish and deliver to the Agent, at the
cost of Homestead, a reasonable number of copies of the amended or supplemented
Prospectus which as so amended or supplemented will not contain an untrue
statement of a material fact or omit to state a material fact necessary to make
the Prospectus not misleading in light of the circumstances when it is delivered
to a purchaser or prospective purchaser, and which will comply in all respects
with the Securities Act; and in the event the Agent is required to deliver a
prospectus 90 days or more after the Closing Date, upon request will prepare
promptly such prospectus or prospectuses as may be necessary to permit
compliance with the requirements of Section 10 of the Securities Act.
Section 3.5. Objection of Agent to Amendments or Supplements. After the
date hereof, Homestead will not at any time file any amendment or supplement to
the Registration Statement or the Prospectus unless and until a copy of such
amendment or supplement has been previously
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furnished to the Agent within a reasonable time period prior to the proposed
filing thereof, or to which the Agent or counsel for the Agent has reasonably
objected, in writing, on the ground that such amendment or supplement is not in
compliance with the Securities Act.
Section 3.6. Events Relating to Registration Statement and Prospectus. For
so long as the delivery of a prospectus is required in connection with the
offering or sale of the Shares, Homestead will promptly advise the Agent (a)
when any amendment to the Registration Statement shall have become effective and
when any amendment or supplement to the Prospectus shall be filed with the
Commission, (b) when the Commission shall make a request or suggestion for any
amendment to the Registration Statement or the Prospectus or for additional
information and the nature and substance thereof, (c) of the issuance by the
Commission of an order suspending the effectiveness of the Registration
Statement pursuant to Section 8 of the Securities Act or of the initiation or
notice of intended initiation of any actions or proceedings for that purpose,
(d) of the happening of any event which in the judgment of Homestead makes any
material statement in the Registration Statement or the Prospectus untrue or
which requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading and (e) of the
refusal to qualify or the suspension of the qualification of the Shares for
offering or sale in any jurisdiction, or of the initiation or notice of intended
initiation of any actions or proceedings for any of such purposes. Homestead
will use every reasonable effort to prevent the issuance of any such order, to
prevent any such refusal to qualify or any such suspension, and to obtain as
soon as possible a lifting of any such order, the reversal of any such refusal
or the termination of any such suspension.
Section 3.7. Preparation and Filing of Amendments and Supplements.
Homestead will prepare and file promptly with the Commission, upon request of
the Agent, such amendments or supplements to the Registration Statement or the
Prospectus, in form satisfactory to counsel for Homestead, as in the opinion of
counsel to the Agent and counsel to Homestead may be necessary in connection
with the offering or distribution of the Shares and will use its best efforts to
cause the same to become effective as promptly as possible.
Section 3.8. Blue Sky Qualification. Homestead will, when and as requested
by the Agent, use reasonable efforts to qualify the Rights Offering, including
the sale of Additional Shares, or such part thereof as the Agent may determine
for sale under the state securities or blue sky laws of such states as the Agent
may reasonably request, and to continue such qualification in effect so long as
required for purposes of the distribution of the Shares; provided, however, that
Homestead shall not be obligated to (a) file any general consent to service of
process, (b) qualify as a foreign business in any jurisdiction in which it is
not so qualified or (c) take any action that would subject it to income taxation
in any such jurisdiction. The blue sky work shall be undertaken by counsel
selected by Homestead and shall be at Homestead's expense.
Section 3.9. Reports and Financial Statements. Homestead will file on a
timely basis all reports and any definitive proxy or information statements
required to be filed by Homestead 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 Shares.
Homestead at its own expense will prepare and give and will continue to give
such financial statements and
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other information to and as may be required by the Commission, or the proper
public bodies of the states in which the Shares may be qualified.
Section 3.10. Earning Statement. Homestead will make generally available
to its security holders as soon as practicable, but in any event not later than
eighteen months after the effective date of the Registration Statement (as
defined in Rule 158(c) under the Securities Act), an earning statement of
Homestead and its subsidiaries (which need not be audited) complying with
Section 11(a) of the Securities Act (including, at Homestead's option, Rule 158
under the Securities Act).
Section 3.11. Reports and Financial Statements to the Agent. During the
period of five years from the effective date of the Registration Statement,
Homestead shall make available to the Agent copies of all periodic and special
reports furnished to the security holders of Homestead and of all information,
documents and current, quarterly or annual reports filed by Homestead with the
Commission. Upon request in writing from the Agent, Homestead shall furnish to
the Agent such other information as may reasonably be requested and which may be
properly disclosed to the Agent with respect to the property, business and
operations of Homestead and its subsidiaries, if any.
Section 3.12. Expenses Paid by Homestead. Homestead will pay, whether or
not the transactions contemplated hereunder are consummated or this Agreement is
prevented from becoming effective or is terminated, all costs and expenses
incident to the performance of its obligations under this Agreement, including,
without limitation, all costs and expenses (a) incident to the preparation,
issuance and delivery of the Shares, (b) incident to the preparation, printing
and filing under the Securities Act of the Registration Statement, the
Prospectus and any preliminary prospectus (including in each case all exhibits,
amendments and supplements thereto), (c) incurred in connection with the
registration or qualification and determination of eligibility for investment of
the Shares under the laws of such jurisdictions as the Agent may designate and
(d) in connection with the photocopying and delivery of this Agreement and the
furnishing to the Agent of copies of the Registration Statement and the
Prospectus, including mailing and shipping, as herein provided.
Section 3.13. Post-Effective Availability of Prospectus. For so long as a
prospectus is required to be delivered under the Securities Act, Homestead will
comply, at its own expense, with all requirements imposed upon it by the
Securities Act, as in effect from time to time, and by any order of the
Commission, so far as necessary to permit the continuance of sales or dealings
in the Shares.
Section 3.14. Application of Proceeds. Homestead will apply the net
proceeds from the sale of the Shares substantially in the manner set forth in
the Registration Statement and the Prospectus.
Section 3.15. Cooperation with Agent's Due Diligence. Homestead will
cooperate with the Agent in such investigation as the Agent may make or cause to
be made of all the properties, business and operations of Homestead in
connection with the purchase and public offering of the Shares, and Homestead
will make available to the Agent in connection therewith such information in its
possession as the Agent may reasonably request.
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Section 3.16. Compliance with Conditions Precedent. Homestead will use all
reasonable efforts to comply or cause to be complied with the conditions
precedent to the several obligations of the Agent in Article V hereof.
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
Section 4.1. Indemnification by Homestead. Homestead will indemnify and
hold harmless the Agent, each of the Agent's directors and officers, and each
person, if any, who controls the Agent within the meaning of the Securities Act
against any loss, claim, damage or liability, joint or several, to which the
Agent or any such controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (a) an untrue statement or
alleged untrue statement made by Homestead in Article II hereof or (b) an untrue
statement or alleged untrue statement of a material fact contained (i) in the
Registration Statement or any preliminary prospectus or the Prospectus or any
amendment or supplement thereto or (ii) in any blue sky application or other
document executed by Homestead specifically for that purpose or based upon
written information furnished by Homestead filed in any state or other
jurisdiction in order to qualify any or all of the Shares under the securities
laws thereof (any such application, document or information being hereinafter
called a "Blue Sky Application") or (c) the omission or alleged omission to
state in the Registration Statement or any preliminary prospectus or the
Prospectus or any amendment or supplement thereto or in any Blue Sky Application
a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse the Agent and each such
controlling person for any legal or other expenses reasonably incurred by the
Agent or such controlling person in connection with investigating or defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action; provided, however, that Homestead will not
be liable in any such case to the extent, but only to the extent, that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to Homestead
through the Agent or by or on behalf of the Agent specifically for use in the
preparation of the Registration Statement or any such preliminary prospectus or
the Prospectus or any such amendment or supplement thereto or any such Blue Sky
Application; and provided, further, that the foregoing indemnification
obligation is subject to the condition that, insofar as it relates to any untrue
statement, alleged untrue statement, omission or alleged omission made in any
preliminary prospectus but eliminated or remedied in the Prospectus, such
indemnification obligation shall not inure to the benefit of the Agent from whom
the person asserting any loss, claim, damage or liability purchased the Shares
which are the subject thereof (or to the benefit of any person who controls the
Agent), if a copy of the Prospectus was not sent or given to such person with or
prior to the written confirmation of the sale of such Shares to such person.
This indemnification obligation is in addition to any liability which Homestead
may otherwise have and shall survive the delivery of and payment for the
Unsubscribed Shares and Additional Shares.
Section 4.2. Indemnification by Agent. The Agent will indemnify and hold
harmless Homestead, each of Homestead's directors, each of Homestead's officers
who has signed the Registration Statement, and each person, if any, who controls
Homestead within the meaning of the
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Securities Act, against any loss, claim, damage or liability to which Homestead
or any such director, officer or controlling person may become subject, under
the Securities Act or otherwise, insofar as such loss, claim, damage or
liability (or action in respect thereof) arises out of or is based upon (a) an
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement or any preliminary prospectus or the Prospectus or any
amendment or supplement thereto or in any Blue Sky Application or (b) the
omission or alleged omission to state in the Registration Statement or any
preliminary prospectus or the Prospectus or any amendment or supplement thereto
or in any Blue Sky Application a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to Homestead through the Agent or by or on behalf of the Agent
specifically for use in the preparation of the Registration Statement or any
such preliminary prospectus or the Prospectus or any such amendment or
supplement thereto or any such Blue Sky Application; and will reimburse any
legal or other expenses reasonably incurred by Homestead or any such director or
officer or controlling person in connection with investigating or defending
against or appearing as a third-party witness in connection with any such loss,
claim, damage, liability or action. This indemnification obligation is in
addition to any liability which the Agent may otherwise have and shall survive
the delivery of and payment for the Unsubscribed Shares and Additional Shares.
Section 4.3. Notice. Promptly after receipt by an indemnified party under
this Article IV of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party under this Article IV, notify in writing the indemnifying party of the
commencement thereof within a reasonable time thereafter; the omission so to
notify the indemnifying party will relieve it from any liability under this
Article IV as to the particular item for which indemnification is then being
sought, but not from any other liability which it may have to any indemnified
party. In case any such action, suit or proceeding is brought against any
indemnified party, and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly and with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel who shall be
reasonably satisfactory to the indemnified party, and after notice from the
indemnifying party to the indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to the indemnified
party under this Article IV for any legal or other expenses subsequently
incurred by the indemnified party in connection with the defense thereof other
than reasonable costs of investigation; provided, however, that if, in the
judgment of the indemnified party, it is advisable for the indemnified party and
its controlling person to be represented by separate counsel, the indemnified
party shall have the right to employ separate counsel to represent the
indemnified party and such controlling person, in which event the reasonable
fees and expenses of such separate counsel shall be borne by the indemnifying
party.
Section 4.4. Contribution. In order to provide for just and equitable
contribution in any case in which Homestead or the Agent (or any of their
respective directors or officers or any person who controls either of them
within the meaning of the Securities Act) makes claim for indemnification
pursuant to this Article IV but it is judicially determined (by entry of a final
judgment or decree by a court of competent jurisdiction and the expiration of
time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case,
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notwithstanding the fact that the provisions of this Article IV provide for
indemnification in such case, then, and in each such case, (a) Homestead and
each person who controls Homestead, in the aggregate, and (b) the Agent, shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from all others) in such proportion so that
the Agent is responsible for the portion represented by the percentage that the
fee received by the Agent pursuant to Section 1.2 hereof bears to the aggregate
public offering price for all Shares offered by Homestead in the Rights
Offering, including the sale of Additional Shares, and Homestead and its
controlling persons, in the aggregate, are responsible for the remaining
portion; provided, however, that if such allocation is not permitted by
applicable law then the relative fault of Homestead and the Agent in connection
with the statements or omissions which resulted in such damages and other
relevant equitable considerations shall also be taken into account. The relative
fault shall be determined by reference to, among other things, whether in the
case of an untrue statement of a material fact or the omission to state a
material fact, such statement or omission relates to information supplied by
Homestead or by the Agent and the parties' relative intent, knowledge, access to
the information and opportunity to correct or prevent such untrue statements or
omissions. Homestead and the Agent agree that it would not be just and equitable
if the respective obligations of Homestead and the Agent to contribute pursuant
to this Section 4.4 were to be determined by pro rata or per capita allocation
of the aggregate damages (even if the Agent and its controlling person in the
aggregate 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 the first sentence of this Section 4.4. For purposes of this Section 4.4,
the term "damages" shall include any legal or other expenses reasonably incurred
by the indemnified party in connection with investigating or defending against
or appearing as a third-party witness in any action or claim that is the subject
of the contribution provisions of this Section 4.4. Notwithstanding the
provisions of this Section 4.4, the Agent and its controlling person in the
aggregate shall not be required to contribute any amount in excess of the amount
by which the total price of the Unsubscribed Shares and Additional Shares sold
by it exceeds the amount of any damages that the Agent and its controlling
person in the aggregate have otherwise been required to pay by reason of such
untrue statement or omission. No person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent
misrepresentation.
The foregoing contribution agreement shall in no way affect the
contribution liabilities of any person having liability under Section 11 of the
Securities Act other than Homestead and the Agent and persons controlling
Homestead or the Agent.
Promptly after receipt by any party to this Agreement of notice of the
commencement of any action, suit or proceeding, such person will, if a claim for
contribution in respect thereof is to be made against another party, notify the
contributing party of the commencement thereof within a reasonable time
thereafter; but the omission so to notify the contributing party will not
relieve the contributing party from any liability which it may have to any party
other than for contribution. Any notice given pursuant to any other Section of
this Article IV shall be deemed to be the like notice hereunder. In case any
such action, suit or proceeding is brought against any party, and such person
notifies a contributing party of the commencement thereof, the contributing
party will be entitled to participate therein with the notifying party and any
other contributing party similarly notified.
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ARTICLE V
CONDITIONS OF THE AGENT'S OBLIGATIONS
The Agent's obligations hereunder shall be subject to the accuracy of the
representations and warranties on the part of Homestead herein contained, to the
performance by Homestead of all of its agreements herein contained, to the
fulfillment of or compliance by Homestead with all covenants and conditions
hereof, and to the following additional conditions:
Section 5.1. Filing of Prospectus. The Prospectus shall have been filed
with the Commission pursuant to Rule 424 under the Securities Act within the
permitted time period, no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceeding for that purpose
shall have been initiated or threatened by the Commission or be pending and all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the Agent.
Section 5.2. Accuracy of Prospectus. As of the Closing Date, Homestead
shall not have disclosed in writing to the Agent that the Registration Statement
or the Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of counsel to Homestead, is material,
or omits to state a fact which, in the opinion of such counsel, is material and
is required to be stated therein, or is necessary to make the statements therein
not misleading.
Section 5.3. Casualty and Other Calamity. Between the date hereof and the
Closing Date, Homestead shall not have sustained any loss on account of fire,
explosion, flood, accident, calamity or any other cause, of such character as
materially adversely affects the condition (financial or other), properties or
business of Homestead, whether or not such loss is covered by insurance.
Section 5.4. Litigation and Other Proceedings. Between the date hereof and
the Closing Date, there shall be no litigation instituted or threatened against
Homestead and there shall be no proceeding instituted or threatened against
Homestead before or by any federal or state commission, regulatory body or
administrative agency or other governmental body, domestic or foreign, wherein
an unfavorable ruling, decision or finding would materially adversely affect the
condition (financial or other), properties or business of Homestead.
Section 5.5. Lack of Material Change. Except as described in the
Registration Statement and the Prospectus, subsequent to the date of the last
audited balance sheet included in the Registration Statement and the Prospectus
and prior to the Closing Date, (a) Homestead shall have conducted its business
in the usual and ordinary manner as the same was being conducted on the date of
such last audited balance sheet; (b) there shall not have been any material
adverse change in the condition (financial or other), properties or business of
Homestead; (c) Homestead shall not have entered into any material transaction
other than in the ordinary course of business; (d) Homestead shall not have
incurred any material obligations, contingent or otherwise, other than in the
ordinary course of business; (e) there shall not have been any change in the
capital stock or long-term debt (except current payments) of Homestead, other
than the sales of Shares in the Rights Offering, including Additional Shares;
and (f) Homestead shall not have paid or declared any
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dividends or other distributions on the Shares, other than regular periodic
dividends and the distribution of the Rights.
Section 5.6. Opinion of Counsel. The Agent shall have received an opinion
of Mayer, Brown & Platt as to the due organization and existence of Homestead
and to the effect that the Shares, when issued, will be duly authorized, validly
issued, fully paid and nonassessable, and as to such other matters as may be
reasonably requested by the Agent. In addition to the foregoing opinions such
counsel shall state that, in the course of its representation of Homestead, such
counsel has no reason to believe that, as of its effective date, the
Registration Statement (other than the financial statements and related
schedules and other financial information included therein, as to which such
counsel need express no opinion) 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 not misleading or that, as of its date,
the Prospectus (other than the financial statements and related schedules and
other financial information included therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading or that, as of the
Closing Date, either the Registration Statement or the Prospectus (other than
the financial statements and related schedules and other financial information
included therein, as to which such counsel need express no opinion) contains an
untrue statement of a material fact or omits to state a material fact necessary
to make the statements therein, in light of the circumstances under which they
were make, not misleading.
Section 5.7. Blue Sky Qualifications. The Rights Offering, including the
sale of Additional Shares, shall be qualified in such states as the Agent may
reasonably request pursuant to Section 3.8 hereof, and each such qualification
shall be in effect and not subject to any stop order or other proceeding on the
date of this Agreement.
Section 5.8. Approval of Agent's Counsel. All opinions, letters,
certificates and evidence mentioned above or elsewhere in this Agreement shall
be deemed to be in compliance with the provisions hereof only if they are in
form and substance satisfactory to counsel to the Agent, whose approval shall
not be unreasonably withheld. The suggested form of such documents shall be
provided to counsel to the Agent upon request.
Section 5.9. Officers' Certificates. Any certificate signed by an officer
of Homestead and delivered to the Agent or to counsel to the Agent will be
deemed a representation and warranty by Homestead to the Agent as to the
statements made therein.
ARTICLE VI
TERMINATION
Section 6.1. Termination Because of Non-Compliance. This Agreement may be
terminated by the Agent by notice to Homestead in the event that Homestead shall
have failed or been unable to comply with any of the terms, conditions or
provisions of this Agreement on the part of Homestead to be performed, complied
with or fulfilled (including but not limited to those specified in Articles I,
II, III and V hereof) within the respective times herein provided for, unless
compliance
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therewith or performance or satisfaction thereof shall have been expressly
waived by the Agent in writing.
Section 6.2. Market Out Termination. This Agreement may be terminated by
the Agent by notice to Homestead at any time if, in the reasonable judgment of
the Agent, payment for and delivery of the Unsubscribed Shares or Additional
Shares is rendered impracticable or inadvisable because (a) additional material
governmental restrictions not in force and effect on the date hereof shall have
been imposed upon trading in securities generally, or minimum or maximum prices
shall have been generally established on the American Stock Exchange, or trading
in securities generally on such Exchange shall have been suspended, or a general
moratorium shall have been established by federal or state authorities or (b) a
war involving the United States or other national calamity shall have occurred
or (c) substantial and material changes in the condition of the market (either
generally or with respect to the sale of the Shares subject to the Rights
Offering) beyond normal fluctuations are such that it would be undesirable,
impracticable or inadvisable to proceed with this Agreement or with the Rights
Offering or the sale of Additional Shares or (d) of any matter materially
adversely affecting Homestead.
Section 6.3. Homestead's Right to Terminate. In the event any action or
proceeding of the type referred to in Section 7.2 hereof shall be instituted or
threatened against the Agent at any time prior to the date hereof, or in the
event there shall be filed by or against the Agent in any court pursuant to any
federal, state, local or municipal statute, a petition in bankruptcy or
insolvency or for reorganization or for the appointment of a receiver or trustee
of the Agent's assets or if the Agent makes an assignment for the benefit of
creditors, Homestead shall have the right on three days' written notice to the
Agent to terminate this Agreement.
Section 6.4. Effect of Termination Hereunder. Any termination of this
Agreement pursuant to this Article VI shall be without liability of any
character (including, but not limited to, loss of anticipated profits or
consequential damages) on the part of any party hereto, except that Homestead
shall remain obligated to pay the costs and expenses provided to be paid by it
in Section 3.12 hereof and Homestead and the Agent shall be obligated to pay,
respectively, all losses, claims, damages or liabilities, joint or several,
under Article IV hereof.
ARTICLE VII
AGENT'S REPRESENTATIONS AND WARRANTIES
The Agent represents and warrants to and agrees with Homestead that:
Section 7.1. Registration as Broker-Dealer and Member of NASD. The Agent
is registered as a broker-dealer with the Commission and is registered as a
broker-dealer in each state within the United States in which it will offer the
Unsubscribed Shares and Additional Shares and is a member in good standing of
the National Association of Securities Dealers, Inc.
Section 7.2. No Pending Proceedings. There is not now pending or
threatened against the Agent any action or proceeding of which it has been
advised, in any court of competent jurisdiction,
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before the Commission or any state securities commission concerning its
activities as a broker or dealer, nor has the Agent been named as a "cause" in
any such action or proceeding.
Section 7.3. Delivery of Documents. The Agent will deliver a copy of the
Prospectus to each subscriber at or prior to such time as it is required under
the Securities Act to be delivered by the Agent to such person, and the Agent
will use supplemental sales material in connection with the sales of the
Unsubscribed Shares and Additional Shares (a) only as has been either prepared
or approved by Homestead and delivered to the Agent and (b) only in the manner
and in the jurisdictions authorized by Homestead.
Section 7.4. Distribution Sheets. Upon request, the Agent shall furnish to
Homestead after the Closing a breakdown by states of the number of Unsubscribed
Shares and Additional Shares sold in each state in which the Unsubscribed Shares
are offered.
ARTICLE VIII
NOTICES
Except as otherwise expressly provided in this Agreement:
Section 8.1. Notice to Homestead. Whenever notice is required by the
provisions of this Agreement to be given to Homestead, such notice shall be
given in writing addressed to Homestead as follows:
Homestead Village Incorporated
2100 RiverEdge Parkway
Atlanta, Georgia 30328
Attn: Robert C. Aldworth
Section 8.2. Notice to the Agent. Whenever notice is required by the
provisions of this Agreement to be given to the Agent, such notice shall be
given in writing addressed to the Agent as follows:
Security Capital Markets Group Incorporated
11 South LaSalle Street
Chicago, Illinois 60603
Attn: Donald E. Suter
ARTICLE IX
MISCELLANEOUS
Section 9.1. Benefit. This Agreement is made solely for the benefit of the
Agent, Homestead, their respective officers, directors and any controlling
person referred to in Section 15 of the Securities Act, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successor" or the term
"successors
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and assigns" as used in this Agreement shall not include any purchasers, as
such, of any of the Shares.
Section 9.2. Survival. The respective agreements, representations,
warranties, covenants and other statements of Homestead or its officers set
forth in or made pursuant to this Agreement and the indemnification agreements
of Homestead and the Agent contained in Article IV hereof shall survive and
remain in full force and effect, regardless of (a) any investigation made by or
on behalf of Homestead or the Agent or any officer or director thereof or any
controlling person of Homestead or of the Agent, (b) delivery of or payment for
the Unsubscribed Shares or Additional Shares or (c) the Closing, and any
successor of Homestead and the Agent or any controlling person, officer or
director thereof, as the case may be, shall be entitled to the benefits hereof.
Section 9.3. Governing Law. The validity, interpretation and construction
of this Agreement and of each part hereof will be governed by the laws of the
State of Maryland.
Section 9.4. Counterparts. This Agreement may be executed in any number of
counterparts, each of which may be deemed an original and all of which together
will constitute one and the same instrument.
Please confirm that the foregoing correctly sets forth the Agreement
between you and Homestead.
Very truly yours,
HOMESTEAD VILLAGE INCORPORATED
By:__________________________________
Robert C. Aldworth
Senior Vice President and Chief Financial Officer
We hereby confirm as of the date hereof that the above letter sets forth
the Agreement between Homestead and us.
SECURITY CAPITAL MARKETS GROUP INCORPORATED
By:__________________________________
Donald E. Suter
Managing Director
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