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As filed with the Securities and Exchange Commission on February 7, 1996.
===============================================================================
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): JANUARY 30, 1997
EXCEL REALTY TRUST, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND 1-12244 33-0160389
(State or Other Jurisdiction of (Commission File Number) (I.R.S. Employer
Incorporation) Identification No.)
16955 VIA DEL CAMPO, SUITE 110 92127
SAN DIEGO, CALIFORNIA (Zip Code)
(Address of Principal Executive Offices)
(619) 485-9400
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
================================================================================
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This Current Report on Form 8-K is filed by Excel Realty Trust, Inc., a
Maryland corporation, in connection with the matters described herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
The exhibits listed in the following index relate to the Registration
Statement (No. 33-59195) on Form S-3, as amended, of the Registrant and are
filed herewith for incorporation by reference in such Registration Statement.
(c) Exhibits.
1.01 Underwriting Agreement dated January 30, 1997 between Excel
Realty Trust, Inc. and Furman Selz LLC
1.02 Terms Agreement dated January 30, 1997 between Excel Realty
Trust, Inc. and Furman Selz LLC
4.01 Articles Supplementary classifying 4,600,000 shares of preferred
stock as 8 1/2% Series A Cumulative Convertible Preferred Stock
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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.
Date: February 7, 1997 EXCEL REALTY TRUST, INC.
By: /s/ Richard B. Muir
------------------------------
Richard B. Muir
Executive Vice President and
Secretary
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE
- ----------- ----
<S> <C> <C>
1.01 Underwriting Agreement dated January 30, 1997 between Excel
Realty Trust, Inc. and Furman Selz LLC 5
1.02 Terms Agreement dated January 30, 1997 between Excel Realty
Trust, Inc. and Furman Selz LLC 52
4.01 Articles Supplementary classifying 4,600,000 shares of
preferred stock as 8 1/2% Series A Cumulative Convertible
Preferred Stock 55
</TABLE>
<PAGE> 1
EXHIBIT 1.01
EXCEL REALTY TRUST, INC.
(a Maryland corporation)
Common Stock, Preferred Stock, Depositary Shares and Warrants
UNDERWRITING AGREEMENT
----------------------
January 30, 1997
FURMAN SELZ LLC
230 Park Avenue
New York, New York 10169
Dear Sirs:
Excel Realty Trust, Inc., a Maryland corporation (the "Company"),
proposes to issue and sell shares of Common Stock, $.01 par value (the "Common
Stock"), or warrants to purchase a number of shares of Common Stock (the
"Common Stock Warrants"), or both, or shares of Preferred Stock, $.01 par value
(the "Preferred Shares"), or warrants to purchase a number of Preferred Shares
(the "Preferred Share Warrants"), or both, or interests in Preferred Shares in
the form of depositary shares (the "Depositary Shares") represented by
depositary receipts (the "Depositary Receipts"), or warrants to purchase a
number of Depositary Shares (the "Depositary Share Warrants"), or both, from
time to time, in one or more offerings on terms to be determined at the time of
sale. The Common Stock Warrants, Preferred Share Warrants and Depositary Share
Warrants (collectively, the "Warrants") will be issued pursuant to one or more
Warrant Agreements (each, a "Warrant Agreement") between the Company and a
warrant agent specified therein (the "Warrant Agent"). Each series of
Preferred Shares may vary as to the specific number of shares, title, stated
value, liquidation preference, issuance price, ranking, dividend rate or rates
(or method of calculation), dividend payment dates, redemption provisions,
sinking fund requirements, conversion or exchange provisions and any other
variable terms as set forth in the applicable articles supplementary (each, the
"Articles Supplementary") relating to such Preferred Shares. As used herein,
"Securities" shall mean the Common Stock, the Common Stock Warrants, the
Preferred Shares, the Preferred Share Warrants, the Depositary Shares, the
Depositary Share Warrants and the Depositary Receipts; and "Warrant Securities"
shall mean the Common Stock, Preferred Shares and Depositary Shares issuable
upon exercise of the Warrants. As used herein, "you" and "your",
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unless the context otherwise requires, shall mean the parties to whom this
Agreement is addressed together with the other parties, if any, identified in
the applicable Terms Agreement (as defined herein) as additional co-managers
with respect to Underwritten Securities (as hereinafter defined) purchased
pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement (the "Terms Agreement") providing for the sale of
such Securities (the "Underwritten Securities") to, and the purchase and
offering thereof by, you and such other underwriters, if any, selected by you
as have authorized you to enter into such Terms Agreement on their behalf (the
"Underwriters", which term shall include you whether acting alone in the sale
of the Underwritten Securities or as a member of an underwriting syndicate and
any Underwriter substituted pursuant to Section 10 hereof). The Terms
Agreement relating to the offering of Underwritten Securities shall specify the
number of Underwritten Securities of each class or series to be initially
issued (the "Initial Underwritten Securities"), including the number of
Warrants, if any, whether the Initial Underwritten Securities shall be in the
form of Depositary Shares and the fractional amount of Preferred Shares
represented by each Depositary Share, the names of the Underwriters
participating in such offering (subject to substitution as provided in Section
10 hereof), the number of Initial Underwritten Securities which each such
Underwriter severally agrees to purchase, the names of such of you or such
other Underwriters acting as co-managers, if any, in connection with such
offering, the price at which the Initial Underwritten Securities are to be
purchased by the Underwriters from the Company, the initial public offering
price, if any, the time, date and place of delivery and payment, any delayed
delivery arrangements and any other variable terms of the Initial Underwritten
Securities (including, but not limited to, current ratings (in the case of
Preferred Shares and Depositary Shares only), designations, liquidation
preferences, conversion or exchange provisions, redemption provisions and
sinking fund requirements and the terms of the Warrant Securities and the
terms, prices and dates upon which such Warrant Securities may be purchased).
In addition, each Terms Agreement shall specify whether the Company has agreed
to grant to the Underwriters an option to purchase additional Underwritten
Securities to cover over-allotments, if any, and the number of Underwritten
Securities subject to such option (the "Option Securities"). As used herein,
the term "Underwritten Securities" shall include the Initial Underwritten
Securities and all or any portion of the Option Securities agreed to be
purchased by the Underwriters as provided herein, if any. The Terms Agreement,
which shall be substantially in the form of Exhibit A hereto, may take the form
of an exchange of any standard form of written telecommunication
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between you and the Company. Each offering of Underwritten Securities through
you or through an underwriting syndicate managed by you will be governed by
this Agreement, as supplemented by the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-59195) for the
registration of the Securities and Warrant Securities and certain of the
Company's debt securities, under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the
"1933 Act Regulations"), and the Company has filed such amendments thereto as
may have been required prior to the execution of the applicable Terms
Agreement. Such registration statement (as amended, if applicable) has been
declared effective by the Commission. Such registration statement and the
prospectus constituting a part thereof, in each case as supplemented by a
prospectus supplement relating to the offering of Underwritten Securities (the
"Prospectus Supplement"), including in each case all documents incorporated
therein by reference and the information, if any, deemed to be a part thereof
pursuant to Rule 430A(b) or Rule 434 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations"), as from time to
time amended or supplemented pursuant to the 1933 Act, the Securities Exchange
Act of 1934, as amended (the "1934 Act"), or otherwise, are collectively
referred to herein as the "Registration Statement" and the "Prospectus",
respectively; provided, however, that a Prospectus Supplement shall be deemed
to have supplemented the Prospectus only with respect to the offering of
Underwritten Securities to which it relates. All references in this Agreement
to financial statements and schedules and other information which is
"contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be; and all references in this
Agreement to amendments or supplements to the Registration Statement or the
Prospectus shall be deemed to mean and include the filing of any document under
the 1934 Act which is or is deemed to be incorporated by reference in the
Registration Statement or the Prospectus, as the case may be. If the Company
elects to rely on Rule 434 under the 1933 Act Regulations, all references to
the Prospectus shall be deemed to include, without limitation, the form of
prospectus and the abbreviated term sheet, taken together, provided to the
Underwriters by the Company in reliance on Rule 434 under the 1933 Act (the
"Rule 434 Prospectus"). If the Company files a registration statement to
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register a portion of the Securities and relies on Rule 462(b) for such
registration statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration statement
referred to above (No. 33-59195) and the Rule 462 Registration Statement, as
each such registration statement may be amended pursuant to the 1933 Act.
Section 1. Representations and Warranties.
(a) The Company represents and warrants to you, as of the date
hereof, and to you and each other Underwriter named in the applicable Terms
Agreement, as of the date thereof (in each case, a "Representation Date"), as
follows:
(i) The Registration Statement and the Prospectus, at
the time the Registration Statement became effective, complied, and as
of each Representation Date will comply, in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations; the
Registration Statement, at the time the Registration Statement became
effective, did not, and as of each Representation Date, will not,
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus, as of the date
hereof, does not, and as of each Representation Date will not, include
an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through you expressly for use in the Registration
Statement or Prospectus.
(ii) The accountants who certified the financial
statements and supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus are
independent public accountants as required by the 1933 Act and the
1933 Act Regulations; and there have been no disagreements with any
accountants or "reportable events" (as defined in Item 304 of
Regulation S-K promulgated by the Commission) required to be disclosed
in the Prospectus or elsewhere pursuant to such Item 304.
(iii) The historical financial statements of the Company
included or incorporated by reference in the
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Registration Statement and the Prospectus present fairly the financial
position of the Company and its consolidated subsidiaries, as at the
dates indicated and the results of operations for the periods
specified; except as otherwise stated in the Registration Statement
and the Prospectus, said financial statements have been prepared in
conformity with generally accepted accounting principles applied on a
consistent basis and comply with the applicable accounting
requirements of the 1933 Act (including, without limitation, Rule 3-14
of Regulation S-X promulgated by the Commission), and all adjustments
necessary for a fair presentation of the results for such periods have
been made; the supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the information required to be stated therein; and the selected
financial data (both historical and pro forma) included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with the related financial statements
presented therein.
(iv) The historical summaries of revenue and certain
operating expenses included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the revenue
and those operating expenses included in such summaries of the
properties related thereto for the periods specified in conformity
with generally accepted accounting principles; the pro forma
consolidated financial statements included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the pro forma financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
operations for the periods specified; and such pro forma financial
statements have been prepared in accordance with generally accepted
accounting principles applied on a basis consistent with the audited
financial statements of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, the
assumptions on which such pro forma financial statements have been
prepared are reasonable and are set forth in the notes thereto, and
such pro forma financial statements have been prepared, and the pro
forma adjustments set forth therein have been applied, in accordance
with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations (including, without limitation, Regulation S-X
promulgated by the Commission), and such pro forma adjustments have
been properly applied to the historical amounts in the compilation of
such statements.
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(v) Since the respective dates as of which information
is given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, (B) there have been no transactions
entered into by the Company or any of its subsidiaries other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for regular monthly or quarterly dividends
on the Company's Common Stock or dividends declared, paid or made in
accordance with the terms of any series of the Company's preferred
stock, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vi) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
the State of Maryland, with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its
obligations under this Agreement and the Terms Agreement; the Company
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify or to
be in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered
as one enterprise; and the Articles Supplementary relating to the
Preferred Shares or Depositary Shares, if applicable, will be in full
force and effect as of each Closing Time.
(vii) Each subsidiary (which term, as used in this
Agreement, includes corporations, limited and general partnerships,
joint ventures and other entities) of the Company has been duly
organized and is validly existing and in good standing under the laws
of the jurisdiction of its organization, has power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and is duly qualified to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so
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qualify or to be in good standing would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise; except as otherwise stated
in the Prospectus, all of the issued and outstanding capital stock of
or other ownership interests in each such subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and
are owned by the Company, directly or through subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, except for security interests granted in respect of
indebtedness of the Company or any of its subsidiaries and described
in the Prospectus and except that all of the partnership interests in
EH Properties, L.P. owned by the Company have been pledged as security
for borrowings under the Secured Revolving Credit Facility from The
First National Bank of Boston described in the Prospectus.
(viii) Each of the partnership and joint venture agreements
to which the Company or any of its subsidiaries is a party, and which
relates to real property described in the Prospectus, has been duly
authorized, executed and delivered by such applicable party and
constitutes the valid agreement thereof, enforceable in accordance
with its terms, except as limited by (a) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or remedies of
creditors or (b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be
brought; and the execution, delivery and performance of any of such
agreements by the Company or its subsidiaries, as applicable, did not,
at the time of execution and delivery, and does not constitute a
breach of, or default under, the charter or by-laws (or other
organizational documents) of such party or any material contract,
lease or other instrument to which such party is a party or by which
its properties may be bound or any law, administrative regulation or
administrative or court decree.
(ix) The authorized, issued and outstanding capital
stock of the Company is in all material respects as set forth in the
Prospectus under "Capitalization" (except for subsequent issuances, if
any, pursuant to reservations, agreements, employee benefit plans,
dividend reinvestment plans, employee and director stock option plans,
or upon the exercise of options, warrants or convertible debt
securities referred to in the Prospectus); and such shares of capital
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stock have been duly authorized and validly issued and are fully paid
and non-assessable and are not subject to preemptive or other similar
rights.
(x) The Underwritten Securities being sold pursuant to
this Agreement and the applicable Terms Agreement and, if applicable,
the deposit of the Preferred Shares in accordance with the provisions
of a Deposit Agreement (each, a "Deposit Agreement"), among the
Company, the financial institution specified therein (the
"Depositary") and the holders of the Depositary Receipts issued
thereunder, have, as of each Representation Date, been duly authorized
by the Company and such Underwritten Securities have been duly
authorized for issuance and sale pursuant to this Agreement and such
Terms Agreement and such Underwritten Securities, when issued and
delivered by the Company pursuant to this Agreement against payment of
the consideration set forth in such Terms Agreement or any Delayed
Delivery Contract (as hereinafter defined), will be validly issued,
fully paid and non-assessable, and the issuance of such Underwritten
Securities will not be subject to preemptive or other similar rights;
the Preferred Shares, if applicable, conform to the provisions of the
Articles Supplementary; and the Underwritten Securities being sold
pursuant to the applicable Terms Agreement conform in all material
respects to all statements relating thereto contained in the
Prospectus.
(xi) If applicable, the Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement
and the applicable Terms Agreement and countersigned by the Warrant
Agent as provided in the Warrant Agreement, will have been duly
executed, countersigned, issued and delivered and will constitute
valid and legally binding obligations of the Company entitled to the
benefits provided by the Warrant Agreement under which they are to be
issued; and the issuance of the Warrant Securities upon exercise of
the Warrants will not be subject to preemptive or other similar
rights; and the Warrants conform in all material respects to all
statements relating thereto contained in the Prospectus.
(xii) If applicable, the shares of Common Stock issuable
upon conversion of any of the Preferred Shares or the Depositary
Shares, or the exercise of the Warrant Securities, will have been duly
and validly authorized and reserved for issuance upon such conversion
or exercise of the Warrants, as the case may be, by all necessary
corporate action and such shares, when issued upon such conversion or
exercise, will be duly authorized and validly issued and
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will be fully paid and non-assessable, and the issuance of such shares
upon such conversion or exercise will not be subject to preemptive or
other similar rights; the shares of Common Stock issuable upon
conversion of any of the Preferred Shares or the Depositary Shares, or
the exercise of the Warrant Securities, conform in all material
respects to all statements relating thereto contained in the
Prospectus.
(xiii) The applicable Warrant Agreement, if any, and the
applicable Deposit Agreement, if any, will have been duly authorized,
executed and delivered by the Company prior to the issuance of the
related Underwritten Securities, and each constitutes a valid and
legally binding agreement of the Company enforceable in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law); and the Warrant Agreement, if any, and the Deposit
Agreement, if any, each conforms in all material respects to all
statements relating thereto contained in the Prospectus.
(xiv) If applicable, upon execution and delivery of the
Depositary Receipts pursuant to the terms of the Deposit Agreement,
the persons in whose names such Depositary Receipts are registered
will be entitled to the rights specified therein and in the Deposit
Agreement, except as enforcement of such rights may be limited by
bankruptcy, insolvency or other similar laws relating to or affecting
creditors' rights generally and by general equity principles
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(xv) Neither the Company nor any of its subsidiaries is
in violation of its charter or by-laws (or, in the case of
subsidiaries which are not corporations, other organizational
documents) or in default in the performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is
subject, except for any such violation or default that would not have
a material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; and the
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execution, delivery and performance of this Agreement, the applicable
Terms Agreement, the applicable Warrant Agreement, if any, or the
applicable Deposit Agreement, if any, and the consummation of the
transactions contemplated herein and therein and compliance by the
Company with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action, and will not conflict
with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any of its subsidiaries pursuant
to, any contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its subsidiaries is a
party or by which it or any of them may be bound, or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such action result in any violation of the charter
or by-laws of the Company or any applicable law, administrative
regulation or administrative or court decree.
(xvi) The Company has operated and intends to continue
to operate in such a manner as to qualify to be taxed as a "real
estate investment trust" under the Internal Revenue Code of 1986, as
amended (the "Code"), for the taxable year in which sales of the
Underwritten Securities are to occur.
(xvii) Neither the Company nor any of its subsidiaries is
an "investment company" within the meaning of the Investment Company
Act of 1940, as amended (the "1940 Act").
(xviii) There is no action, suit or proceeding before or
by any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company, threatened against or
affecting the Company or any of its subsidiaries which is required to
be disclosed in the Prospectus (other than as disclosed therein), or
which might result in any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as
one enterprise, or which might materially and adversely affect the
properties or assets thereof or which might materially and adversely
affect the consummation of this Agreement, the applicable Terms
Agreement, the applicable Warrant Agreement, if any, or the applicable
Deposit Agreement, if any, or the transactions contemplated herein or
therein; all pending legal or governmental proceedings to which the
Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is subject which
are not described in the Prospectus, including ordinary routine
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litigation incidental to the business, are, considered in the
aggregate, not material; and there are no contracts or documents of
the Company or any of its subsidiaries which are required to be filed
as exhibits to the Registration Statement by the 1933 Act or by the
1933 Act Regulations which have not been so filed.
(xix) The Company and its subsidiaries own or possess
any trademarks, service marks, trade names or copyrights required in
order to conduct their respective businesses as described in the
Prospectus, other than those the failure to possess or own would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise.
(xx) No authorization, approval, permit or consent of
any court or governmental authority or agency is necessary in
connection with the consummation by the Company of the transactions
contemplated by this Agreement, the applicable Terms Agreement, any
Warrant Agreement or any Deposit Agreement, except such as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities or real estate syndication laws.
(xxi) The Company and its subsidiaries possess such
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies necessary to conduct
their respective businesses as described in the Prospectus, other than
those the failure to possess or own would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, and neither the Company nor
any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and
its subsidiaries considered as one enterprise.
(xxii) The Company has full corporate power and authority
to enter into this Agreement, the applicable Terms Agreement and the
Delayed Delivery Contracts, if any, and this Agreement has been, and
as of each Representation Date, the applicable Terms Agreement and the
Delayed Delivery
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Contracts, if any, will have been, duly authorized, executed and
delivered by the Company.
(xxiii) The documents incorporated or deemed to be
incorporated by reference in the Prospectus, at the time they were or
hereafter are filed with the Commission, complied and will comply in
all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission under the 1934 Act (the "1934
Act Regulations"), and, when read together with the other information
in the Prospectus, at the time the Registration Statement became
effective and as of the applicable Representation Date or Closing Time
(as defined herein) or during the period specified in Section 3(f),
did not and will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(xxiv) There are no persons with registration or other
similar rights to have any securities registered pursuant to the
Registration Statement.
(xxv) Neither the Company nor any of its officers or
directors has taken nor will any of them take, directly or indirectly,
any action resulting in a violation of Rule 10b-6 under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), or designed to
cause or result in, or which has constituted or which reasonably might
be expected to constitute, the stabilization or manipulation of the
price of the Underwritten Securities, the Warrant Securities or shares
of Common Stock issuable upon conversion of any of the Preferred
Shares or the Depositary Shares or facilitation of the sale or resale
of the Underwritten Securities.
(xxvi) Except as otherwise disclosed in the Prospectus
and except as would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its subsidiaries considered
as one enterprise: (a) the Company and its subsidiaries have good and
marketable title in fee simple to all real property and improvements
described in the Prospectus and, at the Closing Time, the Company and
its subsidiaries will have good and marketable title in fee simple to
all real property and improvements as described in the Prospectus; (b)
all liens, charges, encumbrances, claims or restrictions on or
affecting the real property and improvements owned by the Company or
any
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of its subsidiaries which are required to be disclosed in the
Prospectus are disclosed therein; (c) neither the Company nor any of
its subsidiaries nor, to the knowledge of the Company, any lessee of
any portion of the real property or improvements owned by the Company
or any of its subsidiaries is in default under any of the leases
pursuant to which the Company or any of its subsidiaries leases such
real property or improvements, and the Company knows of no event
which, but for the passage of time or the giving of notice, or both,
would constitute a default under any of such leases, except such
defaults that would not, individually or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; (d) no tenant under
any of the leases pursuant to which the Company or any of its
subsidiaries leases any of its real property or improvements has an
option or right of first refusal to purchase the premises demised
under such lease, except that a tenant of the Galleria in Scottsdale,
Arizona holds a right of first refusal to purchase such property; (e)
all the real property and improvements owned by the Company and its
subsidiaries comply with all applicable codes and zoning laws and
regulations, except for such failures to comply that would not,
individually or in the aggregate, have a material adverse effect on
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise; and (f) the Company has no knowledge of
any pending or threatened condemnation, zoning change or other
proceeding or action that would in any manner affect the size of, use
of, improvements on, construction on, or access to any of the real
property or improvements owned by the Company or any of its
subsidiaries, except such proceedings or actions that would not,
individually or in the aggregate, have a material adverse effect on
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise.
(xxvii) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurances that
(a) transactions are executed in accordance with management's general
or specific authorizations; (b) transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain
accountability for assets; (c) access to assets is permitted only in
accordance with management's general or specific authorization; and
(d) the recorded accountability for
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<PAGE> 14
assets is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences. Neither
the Company nor any of its employees or agents has made any payment of
funds of the Company or received or retained any funds in violation of
any law, rule or regulation which payment, receipt or retention of
funds is of a character required to be disclosed in the Prospectus.
(xxviii) The Company and its subsidiaries have title
insurance on each of their respective properties, in each case in an
amount at least equal to (a) the cost of acquisition of such property
or (b) the cost of construction of the improvements located on such
property (measured at the time of such construction), except, in each
case, where the failure to maintain such title insurance would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise.
(xxix) Except as otherwise disclosed in the Prospectus,
the Company has no knowledge of: (a) the unlawful presence of any
hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, "Hazardous Materials") on any of the
properties owned by the Company or any of its subsidiaries, or (b) any
unlawful spills, releases, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring on or from any
such properties as a result of any construction on or operation and
use of such properties, which presence or occurrence would have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise; and in connection
with the construction on or operation and use of the properties owned
by the Company or its subsidiaries, the Company has no knowledge of
any material failure to comply with all applicable local, state and
federal environmental laws, regulations, ordinances and administrative
and judicial orders relating to the generation, recycling, reuse,
sale, storage, handling, transport and disposal of any Hazardous
Materials that could have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one
enterprise.
(b) Any certificate signed by any officer of the Company and
delivered to you or to counsel for the Underwriters in connection with the
offering of the Underwritten Securities shall
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<PAGE> 15
be deemed a representation and warranty by the Company to each Underwriter
participating in such offering as to the matters covered thereby on the date of
such certificate and, unless subsequently amended or supplemented, at each
Representation Date subsequent thereto.
Section 2. Purchase and Sale.
(a) The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
(b) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company may grant, if so provided in the applicable Terms Agreement relating to
the Initial Underwritten Securities, an option to the Underwriters named in
such Terms Agreement, severally and not jointly, to purchase up to the number
of Option Securities set forth therein at the same price per Option Security as
is applicable to the Initial Underwritten Securities. Such option, if granted,
will expire 30 days or such lesser number of days as may be specified in the
applicable Terms Agreement after the Representation Date relating to the
Initial Underwritten Securities, and may be exercised in whole or in part from
time to time only for the purpose of covering over-allotments which may be made
in connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option
Securities. Any such time and date of delivery (a "Date of Delivery") shall be
determined by you, but shall not be later than seven full business days and not
be earlier than two full business days after the exercise of said option,
unless otherwise agreed upon by you and the Company. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion
of the total number of Option Securities then being purchased which the number
of Initial Underwritten Securities each such Underwriter has severally agreed
to purchase as set forth in the applicable Terms Agreement bears to the total
number of Initial Underwritten Securities (except as otherwise provided in the
applicable Terms Agreement), subject to such adjustments as you in your
discretion shall make to eliminate any sales or purchases of fractional Initial
Underwritten Securities.
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<PAGE> 16
(c) Payment of the purchase price for, and delivery of, the
Underwritten Securities to be purchased by the Underwriters shall be made at
the office of Brown & Wood LLP, 58th Floor, One World Trade Center, New York,
New York 10048-0557, or at such other place as shall be agreed upon by you and
the Company, at 10:00 A.M., New York City time, on the third business day
(unless postponed in accordance with the provisions of Section 10) following
the date of the applicable Terms Agreement or, if pricing takes place after
4:30 p.m., New York City time on the date of the applicable Terms Agreement, on
the fourth business day (unless postponed in accordance with the provisions of
Section 10) following the date of the applicable Terms Agreement or at such
other time as shall be agreed upon by you and the Company (each such time and
date being referred to as a "Closing Time"). In addition, in the event that
any or all of the Option Securities are purchased by the Underwriters, payment
of the purchase price for, and delivery of certificates representing, such
Option Securities, shall be made at the above-mentioned offices of Brown & Wood
LLP, or at such other place as shall be agreed upon by you and the Company on
each Date of Delivery as specified in the notice from you to the Company.
Unless otherwise specified in the applicable Terms Agreement, payment shall be
made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company, against delivery to you for the respective
accounts of the Underwriters for the Underwritten Securities to be purchased by
them. The Underwritten Securities or, if applicable, Depositary Receipts
evidencing the Depositary Shares, shall be in such authorized denominations and
registered in such names as you may request in writing at least one business
day prior to the applicable Closing Time or Date of Delivery, as the case may
be. The Underwritten Securities, which may be in temporary form, will be made
available for examination and packaging by you on or before the first business
day prior to the Closing Time or Date of Delivery, as the case may be.
If authorized by the applicable Terms Agreement, the Underwriters
named therein may solicit offers to purchase Underwritten Securities from the
Company pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types
described in the Prospectus. At the Closing Time, the Company will enter into
Delayed Delivery
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<PAGE> 17
Contracts (for not less than the minimum number of Underwritten Securities per
Delayed Delivery Contract specified in the applicable Terms Agreement) with all
purchasers proposed by the Underwriters and previously approved by the Company
as provided below, but not for an aggregate number of Underwritten Securities
in excess of that specified in the applicable Terms Agreement. The
Underwriters will not have any responsibility for the validity or performance
of Delayed Delivery Contracts.
You shall submit to the Company, at least three business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter into Delayed Delivery Contracts and the
number of Underwritten Securities to be purchased by each of them, and the
Company will advise you, at least two business days prior to the Closing Time,
of the names of the institutions with which the making of Delayed Delivery
Contracts is approved by the Company and the number of Underwritten Securities
to be covered by each such Delayed Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be
reduced by the number of Underwritten Securities covered by Delayed Delivery
Contracts, as to each Underwriter as set forth in a written notice delivered by
you to the Company; provided, however, that the total number of Underwritten
Securities to be purchased by all Underwriters shall be the total number of
Underwritten Securities covered by the applicable Terms Agreement, less the
number of Underwritten Securities covered by Delayed Delivery Contracts.
SECTION 3. Covenants of the Company. The Company covenants with you,
and with each Underwriter participating in the offering of Underwritten
Securities, as follows:
(a) Immediately following the execution of the applicable Terms
Agreement, the Company will prepare a Prospectus Supplement setting forth the
number of Underwritten Securities covered thereby and their terms not otherwise
specified in the Prospectus pursuant to which the Underwritten Securities are
being issued, the names of the Underwriters participating in the offering and
the number of Underwritten Securities which each severally has agreed to
purchase, the names of the Underwriters acting as co-managers in connection
with the offering, the price at which the Underwritten Securities are to be
purchased by the Underwriters from the Company, the initial public offering
price, if any, the selling concession and reallowance, if any, any delayed
delivery arrangements, and such other information as you and the Company deem
appropriate in connection with the offering of the Underwritten Securities; and
the Company will, by the close of
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<PAGE> 18
business in New York on the business day immediately succeeding the date of the
applicable Terms Agreement, transmit copies of the Prospectus Supplement to the
Commission for filing pursuant to Rule 424(b) of the 1933 Act Regulations and
will furnish to the Underwriters named therein as many copies of the Prospectus
(including such Prospectus Supplement) as you shall reasonably request. If the
Company elects to rely on Rule 434 under the 1933 Act Regulations, the Company
will prepare an abbreviated term sheet that complies with the requirements of
Rule 434 under the 1933 Act Regulations and will provide the Underwriters with
copies of the form of Rule 434 Prospectus, in such number as the Underwriters
may reasonably request, and file or transmit for filing with the Commission the
form of Prospectus complying with Rule 434(c)(2) of the 1933 Act Regulations in
accordance with Rule 424(b) of the 1933 Act Regulations by the close of
business in New York on the business day immediately succeeding the date of the
applicable Terms Agreement.
(b) The Company will notify you immediately, and confirm such notice
in writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document
to be filed pursuant to the 1934 Act, (iii) the receipt of any comments from
the Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional information, and (v) the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose. The Company will make every
reasonable effort to prevent the issuance of any such stop order and, if any
stop order is issued, to obtain the lifting thereof at the earliest possible
moment.
(c) At any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement or any amendment or
supplement to the Prospectus, whether pursuant to the 1933 Act, 1934 Act or
otherwise, (including any revised Prospectus which the Company proposes for use
by the Underwriters in connection with an offering of Underwritten Securities
which differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
Prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations) and will furnish you with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or
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<PAGE> 19
preparation, as the case may be, and will not file or prepare any such
amendment or supplement or other documents in a form to which you or counsel
for the Underwriters shall reasonably object.
(d) The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as such Underwriter reasonably requests.
(e) The Company will furnish to each Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request for the purposes
contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations.
(f) If at any time when the Prospectus is required to be delivered
under the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities any event shall occur or condition exist as a result of which it is
necessary, in the opinion of counsel for the Underwriters or counsel for the
Company, to amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of either such counsel,
at any such time to amend or supplement the Registration Statement or the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, then the Company will promptly prepare and file with the
Commission such amendment or supplement, whether by filing documents pursuant
to the 1933 Act, the 1934 Act or otherwise, as may be necessary to correct such
untrue statement or omission or to make the Registration Statement and
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters a reasonable number of copies of such amendment or supplement.
(g) The Company will endeavor, in cooperation with the Underwriters,
to qualify the Underwritten Securities, the Warrant Securities, if any, and the
shares of Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, for offering and sale under the applicable
securities laws and real estate syndication laws of such states and other
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jurisdictions of the United States as you may designate. In each jurisdiction
in which the Underwritten Securities, the Warrant Securities, if any, and the
shares of Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, have been so qualified, the Company will file such
statements and reports as may be required by the laws of such jurisdiction to
continue such qualification in effect for so long as may be required for the
distribution of the Underwritten Securities and the Warrant Securities, if any;
provided, however, that the Company shall not be obligated to qualify as a
foreign corporation in any jurisdiction where it is not so qualified.
(h) With respect to each sale of Underwritten Securities, the Company
will make generally available to its security holders as soon as practicable,
but not later than 90 days after the close of the period covered thereby, an
earnings statement (in form complying with the provisions of Rule 158 of the
1933 Act Regulations) covering a twelve month period beginning not later than
the first day of the Company's fiscal quarter next following the "effective
date" (as defined in such Rule 158) of the Registration Statement.
(i) The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable year
in which sales of the Underwritten Securities are to occur.
(j) The Company, during the period when the Prospectus is required to
be delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
(k) The Company will not, during a period of 45 days from the date of
the applicable Terms Agreement, with respect to the Underwritten Securities
covered thereby, without your prior written consent, offer or sell, grant any
option for the sale of, or enter into any agreement to sell, any Securities of
the same class or series or ranking on a parity with such Underwritten
Securities (other than the Underwritten Securities which are to be sold
pursuant to such Terms Agreement) or, if such Terms Agreement relates to
Underwritten Securities that are convertible into Common Stock, any Common
Stock or any security convertible into Common Stock (except for Common Stock
issued pursuant to reservations, agreements, employee benefit plans, dividend
reinvestment plans, employee and director stock option plans or as partial or
full payment for properties acquired or to be acquired by the Company), except
for issuances pursuant to the exercise of stock options granted pursuant to the
Company's
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employee and director stock option plans, or issuances pursuant to the
Company's dividend reinvestment plan or pursuant to the Company's employee
benefit plans, or issuances pursuant to the exchange of limited partnership
units in Excel Realty Partners, L.P. and except as may be otherwise provided in
the applicable Terms Agreement.
(l) If the Preferred Shares or Depositary Shares are convertible into
shares of Common Stock or if Warrants are issued, the Company will reserve and
keep available at all times, free of preemptive or other similar rights, a
sufficient number of shares of Common Stock or Preferred Shares, as the case
may be, for the purpose of enabling the Company to satisfy any obligations to
issue such shares upon conversion of the Preferred Shares or the Depositary
Shares, as the case may be, or upon exercise of the Warrants.
(m) If the Preferred Shares or Depository Shares are convertible into
shares of Common Stock, the Company will use its best efforts to list the
shares of Common Stock issuable upon conversion of the Preferred Shares or
Depositary Shares on the New York Stock Exchange or such other national
exchange on which the Company's shares of Common Stock are then listed.
Section 4. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement or the
applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each amendment thereto, (ii)
the printing and filing of this Agreement and the applicable Terms Agreement,
(iii) the preparation, issuance and delivery of the Underwritten Securities to
the Underwriters and the Warrant Securities, if any, (iv) the fees and
disbursements of the Company's counsel and accountants, (v) the qualification
of the Underwritten Securities, the Warrant Securities, if any, and the shares
of Common Stock issuable upon conversion of the Preferred Shares or the
Depositary Shares, if any, under securities laws and real estate syndication
laws in accordance with the provisions of Section 3(g), including filing fees
and the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey, (vi)
the printing and delivery to the Underwriters of copies of the Registration
Statement as originally filed and of each amendment thereto, and of the
Prospectus and any amendments or supplements thereto, (vii) the printing and
delivery to the Underwriters of copies of the applicable Deposit Agreement, if
any, and the applicable Warrant Agreement, if any, (viii) any fees charged by
nationally recognized statistical rating organizations for the rating of the
Securities, (ix) the fees and expenses, if any, incurred with respect to the
listing of the
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Underwritten Securities, the Warrant Securities, if any, or the shares of
Common Stock issuable upon conversion of the Preferred Shares or the Depositary
Shares, if any, on any national securities exchange, and (x) the fees and
expenses, if any, incurred with respect to any filing with the National
Association of Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance
with the provisions of Section 5 or Section 9(b)(i), the Company shall
reimburse the Underwriters named in such Terms Agreement for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company herein contained, to the accuracy
of the statements of the Company's officers made in any certificate pursuant to
the provisions hereof, to the performance by the Company of all of its
covenants and other obligations hereunder, and to the following further
conditions:
(a) At Closing Time, (i) no stop order suspending the effectiveness
of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, (ii) if
Preferred Shares or Depositary Shares are being offered, the rating assigned by
any nationally recognized statistical rating organization to any preferred
stock of the Company as of the date of the applicable Terms Agreement shall not
have been lowered since such date nor shall any such rating organization have
publicly announced that it has placed any preferred stock of the Company on
what is commonly termed a "watch list" for possible downgrading, and (iii)
there shall not have come to your attention any facts that would cause you to
believe that the Prospectus, together with the applicable Prospectus
Supplement, at the time it was required to be delivered to purchasers of the
Underwritten Securities, included an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements
therein, in light of the circumstances existing at such time, not misleading.
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of
Latham & Watkins, counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
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(i) The applicable Warrant Agreement, if any, and
the applicable Deposit Agreement, if any, have been duly
executed and delivered by the Company, and (assuming due
authorization, execution and delivery by the Warrant Agent in
the case of the Warrant Agreement, and the Depositary, in the
case of the Deposit Agreement) each constitutes a valid and
legally binding agreement of the Company enforceable in
accordance with its terms; and the Warrant Agreement, if any,
and the Deposit Agreement, if any, each conforms in all
material respects to all statements relating thereto contained
in the Prospectus.
(ii) If applicable, upon execution and delivery of
the Depositary Receipts pursuant to the terms of the Deposit
Agreement, the persons in whose names such Depositary Receipts
are registered will be entitled to the rights specified
therein and in the Deposit Agreement, to the extent such
rights are governed by the laws of the State of New York.
(iii) Each of this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, has been
duly executed and delivered by the Company.
(iv) The Registration Statement is effective under
the 1933 Act and, to the best of their knowledge and
information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the
Commission.
(v) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein, as
of their respective effective or issue dates, comply as to
form in all material respects with the requirements for
registration statements on Form S-3 under the 1933 Act and the
1933 Act Regulations; if applicable, the Rule 434 Prospectus
conforms to the requirements of Rule 434 under the 1933 Act
Regulations; it being understood, however, that no opinion
need be rendered with respect to the financial statements,
schedules and other financial and statistical data included or
incorporated by reference in the Registration Statement or the
Prospectus; and it being understood, further, that in passing
upon the compliance as to form of the Registration Statement,
the Prospectus and the Rule 434 Prospectus, if
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applicable, such counsel may assume that the statements made
therein are correct and complete.
(vi) Each document filed pursuant to the 1934 Act
(other than the financial statements, schedules and other
financial and statistical data included therein, as to which
no opinion need be rendered) and incorporated or deemed to be
incorporated by reference in the Prospectus complied when so
filed as to form in all material respects with the 1934 Act
and the 1934 Act Regulations. In passing upon compliance as
to form of such documents, such counsel may assume that the
statements made therein are correct and complete.
(vii) No authorization, approval, permit or consent
of any court or governmental authority or agency is required
that has not been obtained in connection with the consummation
by the Company of the transactions contemplated by this
Agreement, the applicable Terms Agreement, the applicable
Deposit Agreement, if any, or the applicable Warrant
Agreement, if any, except such as may be required under the
1933 Act and state securities laws or real estate syndication
laws.
(viii) Neither the Company nor any of its
subsidiaries is required to be registered under the 1940 Act.
(ix) Each of the partnership agreements to which the
Company or any of its subsidiaries is a party, and which
relates to real property described in the Prospectus, has been
duly executed and delivered by such applicable party and
constitutes the valid agreement thereof, enforceable against
such party in accordance with its terms.
(x) Each subsidiary (which term, as used in such
opinion, shall be defined to include corporations, material
limited and general partnerships relating to real property
described in the Prospectus and other entities) of the Company
has been duly organized and is validly existing and in good
standing under the laws of the jurisdiction of its
organization, has power and authority to own, lease and
operate its properties and to conduct its business as
described in the Prospectus; except as otherwise stated in the
Prospectus, all of the issued and outstanding capital stock of
or limited partnership interests in each such subsidiary which
is a corporation or a limited partnership have been duly
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authorized and validly issued and are fully paid and
non-assessable.
(xi) Commencing with the Company's taxable year
beginning January 1, 1993, the Company has been organized in
conformity with the requirements for qualification as a "real
estate investment trust", and its method of operation will
enable it to meet the requirements for qualification and
taxation as a "real estate investment trust" under the Code,
provided that such counsel's opinion as to this matter may be
conditioned upon certain representations as to factual matters
made by the Company to such counsel as described therein.
(xii) The statements set forth (a) in the Prospectus
under the caption "Certain Federal Income Tax Considerations
to the Company of its REIT Election" and (b) in the Prospectus
Supplement under the caption "Certain Federal Income Tax
Considerations to Holders of Common Stock", to the extent such
statements constitute matters of law, summaries of legal
matters, or legal conclusions, have been reviewed by them and
are correct in all material respects.
(2) The favorable opinion, dated as of Closing Time, of
Ballard Spahr Andrews & Ingersoll, special Maryland counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Maryland.
(ii) The Company has corporate power to own, lease
and operate its current properties, to conduct its current
business substantially as described in the Prospectus and to
enter into and perform its obligations under this Agreement
and the applicable Terms Agreement.
(iii) The authorized, issued and outstanding
capital stock of the Company is in all material respects as
set forth in the Prospectus (as of the date set forth therein)
under "Capitalization" (except for subsequent issuances, if
any, pursuant to reservations, agreements, employee benefit
plans, dividend reinvestment plans, employee and director
stock option plans, or upon the exercise of options, warrants
or convertible debt securities referred to in the
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Prospectus) and such shares of stock have been duly authorized
and validly issued and are fully paid and non-assessable.
(iv) The Underwritten Securities being sold
pursuant to this Agreement and the applicable Terms Agreement
and, if applicable, the deposit of the Preferred Shares in
accordance with the provisions of a Deposit Agreement, have
been duly and validly authorized by all necessary corporate
action on the part of the Company and such Underwritten
Securities have been duly authorized for issuance and sale
pursuant to this Agreement and such Terms Agreement; and such
Underwritten Securities, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth in such Terms Agreement or any Delayed
Delivery Contract, will be validly issued, fully paid and
non-assessable, and the issuance of such Underwritten
Securities will not be subject to preemptive or other similar
rights arising under the Charter or Bylaws of the Company, or
under the Maryland General Corporation Law ("MGCL"); and the
Preferred Shares, if applicable, conform to the provisions of
the Articles Supplementary.
(v) If applicable, the Warrants have been duly
authorized and, when issued and delivered pursuant to this
Agreement and the applicable Terms Agreement and countersigned
by the Warrant Agent as provided in the Warrant Agreement,
will have been duly executed, issued and delivered and will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Warrant
Agreement under which they are to be issued, insofar as the
Warrants are governed by the MGCL and assuming the validity
and enforceability of such Warrant Agreement.
(vi) If applicable, the shares of Common Stock
issuable upon conversion of any of the Preferred Shares or
Depositary Shares, or the exercise of Warrant Securities, have
been duly and validly authorized and reserved for issuance
upon such conversion or exercise by all necessary corporate
action on the part of the Company and such shares, when issued
upon such conversion or exercise in accordance with the
charter of the Company, the Deposit Agreement, the Terms
Agreement, the Delayed Delivery Contract or the Warrant
Agreement, as the case may be, will be duly authorized and
validly issued and will be fully paid and non-assessable, and
the issuance of such shares upon such
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<PAGE> 27
conversion or exercise will not be subject to preemptive or
other similar rights arising under the Charter or Bylaws of
the Company, or under the MGCL;
(vii) The applicable Warrant Agreement, if any, and
the applicable Deposit Agreement, if any, have been duly
authorized by the Company, and the person(s) executing such
agreements on behalf of the Company have been duly authorized
to do so.
(viii) If applicable, upon execution and delivery of
the Depositary Receipts pursuant to the terms of the Deposit
Agreement, the persons in whose names such Depositary Receipts
are registered will be entitled to the rights specified
therein and in the Deposit Agreement, to the extent such
rights are governed by the laws of the State of Maryland and
assuming the validity and enforceability of the Deposit
Agreement.
(ix) The execution and delivery on behalf of the
Company of each of this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, has been
duly authorized by the Company, and the person(s) executing
each such agreement on behalf of the Company have been duly
authorized to do so.
(x) If applicable, the relative rights, preferences,
interests and powers of the Preferred Shares or Depositary
Shares, as the case may be, are as set forth in the Articles
Supplementary relating thereto, and all such provisions are
valid under the MGCL; and, as applicable, the form of
certificate used to evidence the Preferred Shares being
represented by the Depositary Shares and the form of
certificate used to evidence the related Depositary Receipts
are in due and proper form under the MGCL and comply with all
applicable statutory requirements under the MGCL.
(xi) The Underwritten Securities, the Warrant
Securities, and the shares of Common Stock issuable upon
conversion of the Preferred Shares or Depositary Shares, as
applicable, conform in all material respects to the
descriptions thereof contained in the Prospectus, insofar as
such descriptions relate to the Charter or Bylaws of the
Company or issues arising under the MGCL, and the form of
certificate used to evidence the Underwritten Securities, if
applicable, is in due and proper form and complies in all
material respects with all applicable statutory requirements
under the MGCL.
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<PAGE> 28
(xii) The execution and delivery by the Company of
each of the partnership agreements entered into by the
Maryland corporation subsequent to the organization of the
Company in the State of Maryland in May 1993 to which the
Company or any of its subsidiaries organized under the laws of
the State of Maryland is a party, and which relates to real
property described in the Prospectus, has been duly authorized
by such applicable party, and the person(s) executing each
such agreement on behalf of such applicable party have been
authorized to do so.
(3) The favorable opinion, dated as of Closing Time, of S.
Eric Ottesen, Esq., counsel for the Company, in form and substance
satisfactory for the Underwriters, to the effect that:
(i) To the best of his knowledge and information,
the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which the Company owns or leases real property, except
where the failure to so qualify or to be in good standing
would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise.
(ii) To the best of his knowledge and information,
there are no legal or governmental proceedings pending or
threatened against the Company or any of its subsidiaries
which are required to be disclosed in the Prospectus, other
than those disclosed therein, and all pending legal or
governmental proceedings to which the Company or any of its
subsidiaries is a party or of which any of the property or
assets of the Company or its subsidiaries is the subject which
are not described in the Prospectus, including ordinary
routine litigation incidental to the business, are, considered
in the aggregate, not material.
(iii) To the best of his knowledge and information,
there are no contracts, indentures, mortgages, loan
agreements, notes, leases or other instruments required to be
described or referred to in the Registration Statement or the
Prospectus or to be filed as exhibits thereto other than those
described or referred to therein or filed as exhibits thereto,
the descriptions thereof or references thereto are correct in
all material respects, and, to the best of his
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<PAGE> 29
knowledge and information, no default exists in the due
performance or observance of any material obligation,
agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other
instrument so described, referred to or filed which would have
a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(iv) To the best of his knowledge and information,
there are no persons with registration or other similar rights
to have any securities registered pursuant to the Registration
Statement.
(v) To the best of his knowledge and information,
the execution and delivery of this Agreement, the applicable
Terms Agreement, the applicable Deposit Agreement, if any, or
the applicable Warrant Agreement, if any, and the consummation
of the transactions contemplated herein and therein and
compliance by the Company with its obligations hereunder and
thereunder will not conflict with or constitute a breach of,
or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of
the Company or any of its subsidiaries pursuant to any
contract, indenture, mortgage, loan agreement, note, lease or
other instrument to which the Company or any of its
subsidiaries is a party or by which it or any of them may be
bound or to which any of the property or assets of the Company
or any of its subsidiaries is subject, nor will such action
result in violation of the provisions of the charter or
by-laws of the Company or any applicable law, administrative
regulation or administrative or court order or decree.
(vi) To the best of his knowledge and information,
except as otherwise stated in the Prospectus and except as
would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries
considered as one enterprise: (a) all of the issued and
outstanding capital stock of each corporate subsidiary of the
Company are owned by the Company, directly or through
subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity and (b)
all of the Company's ownership interests in each partnership
subsidiary of the Company are owned by the Company, directly
or through subsidiaries, free
29
<PAGE> 30
and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity, except that all of the
partnership interests in EH Properties, L.P. owned by the
Company have been pledged as security for borrowings under the
Secured Revolving Credit Facility from The First National Bank
of Boston described in the Prospectus.
(vii) The execution, delivery and performance of any
of the partnership agreements to which the Company or any of
its subsidiaries is a party, and which relates to real
property described in the Prospectus, did not, at the time of
execution and delivery, and does not constitute a breach of,
or default under, the charter or by-laws of the Company or any
of its subsidiaries, as applicable, or any material contract,
lease or other instrument to which such party is a party or by
which its properties may be bound or any law, administrative
regulation or administrative or court decree.
(viii) The Company and/or its respective
subsidiaries hold title to the properties and assets described
in the Prospectus, subject only to the liens and encumbrances
securing indebtedness reflected in the Prospectus and such
other liens, encumbrances and matters of record which do not
materially and adversely affect the value of such properties
and assets considered in the aggregate.
(ix) To the best of his knowledge and information,
each subsidiary (which term, as used in such opinion, shall be
defined to include corporations, material limited and general
partnerships and other entities) is duly qualified to transact
business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business,
except where the failure to so qualify would not have a
material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as
one enterprise.
(4) The favorable opinion, dated as of Closing Time, of Brown
& Wood LLP, counsel for the Underwriters, with respect to the matters
requested by the Underwriters.
(5) In giving their opinions required by subsections (b)(1),
(b)(3) and (b)(4), respectively, of this Section,
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<PAGE> 31
Latham & Watkins, S. Eric Ottesen, Esq. and Brown & WoodLLP shall each
additionally state that nothing has come to their attention that would
lead them to believe that the Registration Statement or any amendment
thereto, at the time it became effective or at the time an Annual
Report on Form 10-K was filed by the Company with the Commission
(whichever is later), or at the Representation Date, 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 the Prospectus or any amendment or
supplement thereto, at the Representation Date or at Closing Time,
included or includes an untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. In giving their opinions required by
subsections (b)(1), (b)(2), (b)(3) and (b)(4), respectively, of this
Section, Latham & Watkins, Ballard Spahr Andrews & Ingersoll, S. Eric
Ottesen, Esq. and Brown & WoodLLP may rely, (1) as to all matters of
fact, upon certificates and written statements of officers and
employees of and accountants for the Company and (2) with respect to
certain other matters, upon certificates of appropriate government
officials in such jurisdiction, and Brown & Wood LLP may additionally
rely, as to matters involving the laws of the State of Maryland, upon
the opinion of Ballard Spahr Andrews & Ingersoll (or other counsel
reasonably satisfactory to counsel for the Underwriters) in form and
substance satisfactory to counsel for the Underwriters.
(c) At Closing Time, there shall not have been, since the date of the
applicable Terms Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business; and you
shall have received a certificate of the Chief Executive Officer or a Vice
President of the Company and of the chief financial or chief accounting officer
of the Company, dated as of such Closing Time, to the effect that (i) there has
been no such material adverse change and (ii) the representations and
warranties in Section 1 are true and correct with the same force and effect as
though such Closing Time were a Representation Date. As used in this Section
5(c), the term "Prospectus" means the Prospectus in the form first used to
confirm sales of the Underwritten Securities.
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<PAGE> 32
(d) At the time of execution of the applicable Terms Agreement, you
shall have received a letter dated such date from Coopers & Lybrand LLP, in
form and substance satisfactory to you, to the effect that (i) they are
independent public accountants with respect to the Company and its subsidiaries
within the meaning of the 1933 Act and the 1933 Act Regulations thereunder;
(ii) it is their opinion that the consolidated financial statements and
financial statement schedules of the Company and its subsidiaries included or
incorporated by reference in the Registration Statement and the Prospectus and
audited by them and covered by their opinions therein comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations; (iii) they have performed limited procedures, not
constituting an audit, including a reading of the latest available unaudited
interim consolidated financial statements of the Company, a reading of the
minute books of the Company, inquiries of certain officials of the Company who
have responsibility for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, and on the basis
of such limited review and procedures, nothing has come to their attention
which causes them to believe (A) that any material modifications should be made
to the unaudited condensed financial statements of the Company and its
subsidiaries included in the Registration Statement for them to be in
conformity with generally accepted accounting principles or that such unaudited
financial statements do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the 1934 Act
Regulations, (B) the unaudited financial data of the Company in the
Registration Statement and the Prospectus under the caption "Selected Financial
Data" was not determined on a basis substantially consistent with that used in
determining the corresponding amounts in the audited financial statements
included or incorporated by reference in the Registration Statement and the
Prospectus, or (C) at a specified date not more than three days prior to the
date of the applicable Terms Agreement, there has been any change in the
capital stock of the Company or in the consolidated mortgages payable or notes
payable of the Company and its subsidiaries or any decrease in consolidated net
current assets or net assets of the Company, as compared with the amounts shown
in the most recent consolidated balance sheet included or incorporated by
reference in the Registration Statement and the Prospectus or, during the
period from the date of the most recent consolidated statement of operations
included or incorporated by reference in the Registration Statement and the
Prospectus to a specified date not more than three days prior to the date of
the applicable Terms Agreement, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated revenues, operating
income, funds from operations, net income or
32
<PAGE> 33
net income per share of the Company and its subsidiaries, except in all
instances for changes, increases or decreases which the Registration Statement
and the Prospectus disclose have occurred or may occur; and (iv) in addition to
the examination referred to in their opinion and the limited procedures
referred to in clause (iii) above, they have carried out certain specified
procedures, not constituting an audit, with respect to certain amounts,
percentages and financial information which are included or incorporated by
reference in the Registration Statement and Prospectus and which are specified
by you, and have found such amounts, percentages and financial information to
be in agreement with the relevant accounting, financial and other records of
the Company and its subsidiaries identified in such letter.
(e) At Closing Time, you shall have received a letter, dated as of
Closing Time, from Coopers & Lybrand LLP, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may require for the purpose
of enabling them to pass upon the issuance and sale of the Underwritten
Securities and the Warrant Securities, if any, as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Underwritten Securities and the Warrant
Securities, if any, as herein contemplated shall be satisfactory in form and
substance to you and counsel for the Underwriters.
(g) In the event that the Underwriters exercise their option provided
in a Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company contained herein and the statements in any certificates furnished by
the Company hereunder shall be true and correct as of each Date of Delivery
and, at the relevant Date of Delivery, you shall have received:
(1) A certificate, dated such Date of Delivery, of the Chief
Executive Officer or a Vice President of the Company and of the chief
financial or chief accounting officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section 5(c)
hereof remains true and correct as of such Date of Delivery.
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<PAGE> 34
(2) The favorable opinion of Latham & Watkins, counsel for
the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Sections 5(b)(1) and
5(b)(5) hereof.
(3) The favorable opinion of Ballard Spahr Andrews &
Ingersoll, special Maryland counsel for the Company, dated such Date
of Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b)(2) hereof.
(4) The favorable opinion of S. Eric Ottesen, Esq., counsel
for the Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Sections 5(b)(3) and
5(b)(5) hereof.
(5) The favorable opinion of Brown & Wood LLP, counsel for
the Underwriters, dated such Date of Delivery, relating to the Option
Securities to be purchased on such Date of Delivery and otherwise to
the same effect as the opinion required by Sections 5(b)(4) and
5(b)(5) hereof.
(6) A letter from Coopers & Lybrand LLP, in form and
substance satisfactory to you and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished
to you pursuant to Section 5(d) hereof, except that the "specified
date" in the letter furnished pursuant to this Section 5(h)(6) shall
be a date not more than three days prior to such Date of Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to the Company at any time at or prior to
the Closing Time, and such termination shall be without liability of any party
to any other party except as provided in Section 4 hereof.
Section 6. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material
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<PAGE> 35
fact contained in the Registration Statement (or any amendment
thereto), including the information deemed to be part of the
Registration Statement pursuant to Rule 430A(b) or Rule 434 of the
1933 Act Regulations, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out
of any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement thereto)
or the omission, or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
(3) against any and all expense whatsoever (including, the
fees and disbursements of counsel chosen by you) reasonably incurred
in investigating, preparing or defending against any litigation, or
any investigation or proceedings by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (1) or
(2) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) and the Prospectus (or any amendment or supplement thereto);
provided further, that with respect to any preliminary prospectus, such
indemnity shall not inure to the benefit of any Underwriter (or the benefit of
any person controlling such Underwriter) if the person asserting any such
losses, liabilities, claims, damages or expense purchased the Underwritten
Securities which are the subject thereof from such Underwriter and if such
person was not sent or given a copy of the Prospectus at or prior to
confirmation of the sale of such Underwritten Securities to such person in any
case where such
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<PAGE> 36
sending or giving is required by the 1933 Act and the untrue statement or
omission of a material fact contained in such preliminary prospectus was
corrected in the Prospectus and the Prospectus was delivered to such
Underwriter a reasonable amount of time prior to the date of delivery of such
confirmation.
(b) Each Underwriter severally agrees to indemnify and hold harmless
the Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act, against any and all loss, liability, claim,
damage and expense described in the indemnity contained in subsection (a) of
this Section, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration Statement (or
any amendment thereto) or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through you expressly for use in the
Registration Statement (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have otherwise than on account of this
indemnity agreement. An indemnifying party may participate at its own expense
in the defense of such action. If it so elects within a reasonable time after
receipt of such notice, an indemnifying party, jointly with any other
indemnifying parties receiving such notice, may assume the defense of such
action with counsel chosen by it and approved by the indemnified parties
defendant in such action, unless such indemnified parties reasonably object to
such assumption on the ground that there may be legal defenses available to
them which are different from or in addition to those available to such
indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying parties be liable for fees and
expenses of more than one counsel (in addition to any local counsel) separate
from their own counsel for all indemnified parties in connection with any one
action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances.
(d) For purposes of this Section 6, all references to the
Registration Statement, any preliminary prospectus or the Prospectus, or any
amendment or supplement to any of the
36
<PAGE> 37
foregoing, shall be deemed to include, without limitation, any electronically
transmitted copies thereof, including, without limitation, any copies filed
with the Commission pursuant to EDGAR.
Section 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the
Underwriters with respect to the offering of the Underwritten Securities shall
contribute to the aggregate losses, liabilities, claims, damages and expenses
of the nature contemplated by said indemnity agreement incurred by the Company
and one or more of the Underwriters in respect of such offering, as incurred,
in such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus in respect of such offering bears to the initial
public offering price appearing thereon and the Company is responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding the provisions of this Section
7, no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Underwritten Securities purchased
by it pursuant to the applicable Terms Agreement and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, each
person, if any, who controls an Underwriter within the meaning of Section 15 of
the 1933 Act shall have the same rights to contribution as such Underwriter,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as the Company.
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Section 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or the applicable Terms Agreement, or contained in certificates of
officers of the Company submitted pursuant hereto, shall remain operative and
in full force and effect, regardless of any termination of this Agreement or
the applicable Terms Agreement, or investigation made by or on behalf of any
Underwriter or any controlling person, or by or on behalf of the Company, and
shall survive delivery of and payment for the Underwritten Securities.
Section 9. Termination of Agreement. (a) This Agreement (excluding
the applicable Terms Agreement) may be terminated for any reason at any time by
the Company or by you upon the giving of 30 days' written notice of such
termination to the other party hereto.
(b) You may also terminate the applicable Terms Agreement, by notice
to the Company, at any time at or prior to the Closing Time (i) if there has
been, since the date of such Terms Agreement or since the respective dates as
of which information is given in the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or (ii)
if there has occurred any material adverse change in the financial markets in
the United States or elsewhere or any outbreak of hostilities or escalation
thereof or other calamity or crisis the effect of which is such as to make it,
in your judgment, impracticable to market the Underwritten Securities or
enforce contracts for the sale of the Underwritten Securities, or (iii) if
trading in any of the securities of the Company has been suspended or limited
by the Commission or the New York Stock Exchange, or if trading generally on
either the New York Stock Exchange or the American Stock Exchange has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices for securities have been required, by either of
said Exchanges or by order of the Commission or any other governmental
authority, or if a banking moratorium has been declared by either Federal, New
York or California authorities, or (iv) if Preferred Shares or Depositary
Shares are being offered and the rating assigned by any nationally recognized
statistical rating organization to any preferred stock of the Company as of the
date of the applicable Terms Agreement shall have been lowered since such date
or if any such rating organization shall have publicly announced that it has
placed any preferred stock of the Company on what is commonly termed a "watch
list" for possible downgrading. As used in this Section 9(b), the term
"Prospectus"
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means the Prospectus in the form first used to confirm sales of the
Underwritten Securities.
(c) In the event of any such termination, (x) the covenants set forth
in Section 3 with respect to any offering of Underwritten Securities shall
remain in effect so long as any Underwriter owns any such Underwritten
Securities purchased from the Company pursuant to the applicable Terms
Agreement and (y) the covenant set forth in Section 3(h) hereof, the provisions
of Section 4 hereof, the indemnity and contribution agreements set forth in
Sections 6 and 7 hereof, and the provisions of Sections 8 and 13 hereof shall
remain in effect.
Section 10. Default by One or More of the Underwriters. If one or
more of the Underwriters shall fail at the Closing Time to purchase the
Underwritten Securities which it or they are obligated to purchase under the
applicable Terms Agreement (the "Defaulted Securities"), then you shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase all,
but not less than all, of the Defaulted Securities in such amounts as may be
agreed upon and upon the terms herein set forth; if, however, you shall not
have completed such arrangements within such 24-hour period, then:
(a) if the total number of Defaulted Securities does not exceed 10%
of the total number of Underwritten Securities to be purchased pursuant to such
Terms Agreement, the non-defaulting Underwriters named in such Terms Agreement
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the total number of Defaulted Securities exceeds 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a
termination of the applicable Terms Agreement, either you or the Company shall
have the right to postpone the Closing Time for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
the Prospectus or in any other documents or arrangements.
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Section 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o Furman Selz LLC, 230 Park Avenue, New York,
New York 10169, attention of David B. Driscoll, Managing Director; and notices
to the Company shall be directed to it at 16955 Via Del Campo, Suite 110, San
Diego, California 92127, attention of Gary Sabin, President.
Section 12. Parties. This Agreement and the applicable Terms
Agreement shall each inure to the benefit of and be binding upon you and the
Company and any Underwriter who becomes a party to such Terms Agreement, and
their respective successors. Nothing expressed or mentioned in this Agreement
or the applicable Terms Agreement is intended or shall be construed to give any
person, firm or corporation, other than those referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or such Terms Agreement or any
provision herein or therein contained. This Agreement and the applicable Terms
Agreement and all conditions and provisions hereof and thereof are intended to
be for the sole and exclusive benefit of the parties hereto and thereto and
their respective successors and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Underwritten Securities
from any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
Section 13. Governing Law and Time. This Agreement and the
applicable Terms Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed in said State. Specified times of day refer to New York City time.
Section 14. Counterparts. This Agreement and the applicable Terms
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall constitute a single
instrument.
40
<PAGE> 41
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along with all counterparts will become binding
agreement between you and the Company in accordance with its terms.
Very truly yours,
EXCEL REALTY TRUST, INC.
By:
-------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first
above written:
FURMAN SELZ LLC
By:
--------------------------
Name:
Title:
41
<PAGE> 42
Exhibit A
EXCEL REALTY TRUST, INC.
(a Maryland Corporation)
[Title of Securities]
TERMS AGREEMENT
Dated: , 199_
To: Excel Realty Trust, Inc.
16955 Via Del Campo, Suite 110
San Diego, California 92127
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Representative") understand that Excel Realty Trust, Inc., a
Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its [Common Stock, $.01 par value (the "Common Stock")] [____________
Warrants (the "Common Stock Warrants") to purchase _________ shares of Common
Stock] [Preferred Stock, $.01 par value (the "Preferred Shares")]
[______________ Warrants (the "Preferred Share Warrants") to purchase
______________ Preferred Shares] [interests in Preferred Shares in the form of
depositary shares (the "Depositary Shares") represented by depositary receipts
(the "Depositary Receipts")] [______________ Warrants (the "Depositary Share
Warrants") to purchase _____________ Depositary Shares] (such [Common Stock]
[Common Stock Warrants] [Preferred Shares] [Preferred Share Warrants]
[Depositary Shares and Depositary Receipts] [Depositary Share Warrants] being
[collectively hereinafter] [also] referred to as the "Underwritten
Securities"). Subject to the terms and conditions set forth or incorporated by
reference herein, the underwriters named below (the "Underwriters") offer to
purchase, severally and not jointly, the respective numbers of [Initial
Underwritten Securities (as defined in the Underwriting Agreement referenced to
below)] [and] [Warrants] set forth below opposite their respective names, and a
proportionate share of Option Securities (as defined in the Underwriting
Agreement referred to below) to the extent any are purchased) at the purchase
price set forth below.
A-1
<PAGE> 43
<TABLE>
<CAPTION>
Number of Shares
of Initial Number of
Underwriter Underwritten Securities Warrants
- ----------- ----------------------- -----------
<S> <C> <C>
Total $ $
=========== ===========
</TABLE>
The Underwritten Securities shall have the following terms:
[COMMON STOCK] [PREFERRED SHARES] [DEPOSITARY SHARES]
Title of Securities:
Number of Shares:
[If applicable, fractional amount of Preferred Shares represented by each
Depositary Share:]
[Current Ratings:]
[Dividend Rate: [$ ] [ %], Payable:]
[Stated Value:]
[Liquidation Preference:]
[Ranking:]
Public offering price per share: $ [, plus accumulated dividends, if
any, from , 19 .]
Purchase price per share: $ [, plus accumulated dividends, if any,
from , 19 .]
[Conversion provisions:]
[Redemption provisions:]
[Sinking fund requirements:]
Number of Option Securities, if any, that may be purchased by the Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized]
[Date of Delivery:
Minimum Contract:
Maximum number of Shares:
Fee: ]
Additional co-managers, if any:
Other terms:
Closing date and location:
WARRANTS
Title of Warrants:
Number of Warrants to be issued:
Warrant Agent:
Issuable jointly with [other security]: [Yes] [No]
[Number of Warrants issued
with each share of
[other security:]
Date from which Warrants are exercisable:
Date on which Warrants expire:
Exercise price(s) of Warrants:
Initial public offering price: $
Purchase price: $
A-2
<PAGE> 44
Title of Warrant Securities:
Principal amount purchasable upon exercise of one Warrant:
Terms:
[Delayed Delivery Contracts: [authorized] [not authorized]
[Date of delivery:
Minimum contract:
Maximum aggregate principal amount:
Fee: %]
Other terms:
[Closing date and location:]]
All the provisions contained in the document attached as Annex A
hereto entitled "Excel Realty Trust, Inc. - Common Stock, Preferred Stock,
Depositary Shares and Warrants - Underwriting Agreement" are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. Terms defined in such document are used herein as
therein defined.
Please accept this offer no later than o'clock P.M. (New York City
time) on by signing a copy of this Terms Agreement in the space set
forth below and returning the signed copy to us.
Very truly yours,
FURMAN SELZ LLC
By _________________________
Name:
Title:
Acting on behalf of itself and
the other named Underwriters.
Accepted:
EXCEL REALTY TRUST, INC.
By _________________________
Name:
Title:
A-3
<PAGE> 45
Exhibit B
EXCEL REALTY TRUST, INC.
(a Maryland corporation)
[Title of Securities]
DELAYED DELIVERY CONTRACT
-------------------------
, 199_
Excel Realty Trust, Inc.
16955 Via Del Campo, Suite 110
San Diego, California 92127
Attention: Chairman of the Board of Directors
Dear Sirs:
The undersigned hereby agrees to purchase from Excel Realty Trust,
Inc. (the "Company"), and the Company agrees to sell to the undersigned on
__________, 19__ (the "Delivery Date"),
of the Company's [insert title of security] (the "Securities"), offered by the
Company's Prospectus dated __________, 19__, as supplemented by its Prospectus
Supplement dated ___________, 19__, receipt of which is hereby acknowledged at
a purchase price of [$__________] [and, $__________ per Warrant, respectively]
to the Delivery Date, and on the further terms and conditions set forth in this
contract.
Payment for the Securities which the undersigned has agreed to
purchase on the Delivery Date shall be made to the Company or its order by
certified or official bank check in New York Clearing House funds at the office
of
, on the Delivery Date, upon delivery to the
undersigned of the Securities to be purchased by the undersigned in definitive
form and in such denominations and registered in such names as the undersigned
may designate by written or telegraphic communication addressed to the Company
not less than five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date shall be subject only to the conditions
that (1) the purchase of Securities to be
B-1
<PAGE> 46
made by the undersigned shall not on the Delivery Date be prohibited under the
laws of the jurisdiction to which the undersigned is subject and (2) the
Company, on or before __________, 19__, shall have sold to the Underwriters of
the Securities (the "Underwriters") such principal amount of the Securities as
is to be sold to them pursuant to the Terms Agreement dated __________, 19__
between the Company and the Underwriters. The obligation of the undersigned to
take delivery of and make payment for Securities shall not be affected by the
failure of any purchaser to take delivery of and make payments for Securities
pursuant to other contracts similar to this contract. The undersigned
represents and warrants to you that its investment in the Securities is not, as
of the date hereof, prohibited under the laws of any jurisdiction to which the
undersigned is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice
to such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to
the Company that all necessary corporate action for the due execution and
delivery of this contract and the payment for and purchase of the Securities
has been taken by it and no further authorization or approval of any
governmental or other regulatory authority is required for such execution,
delivery, payment or purchase, and that, upon acceptance hereof by the Company
and mailing or delivery of a copy as provided below, this contract will
constitute a valid and binding agreement of the undersigned in accordance with
its terms.
This contract will inure to the benefit of and binding upon the
parties hereto and their respective successors, but will not be assignable by
either party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for a number of Securities in excess of ________ and that the
acceptance of any Delayed Delivery Contract is in the Company's sole discretion
and, without limiting the foregoing, need not be on a first-come, first-served
basis. If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance on a copy hereof and mail or deliver a
signed copy hereof to the undersigned at its address set forth below. This
will become a binding contract between the Company and the undersigned when
such copy is so mailed or delivered.
B-2
<PAGE> 47
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
_____________________________
(Name of Purchaser)
By___________________________
(Title)
_____________________________
_____________________________
(Address)
Accepted as of the date first above written.
EXCEL REALTY TRUST, INC.
By___________________________
(Title)
PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date may be discussed are as
follows: (Please print.)
Telephone No.
(including
Name Area Code)
---- -------------
B-3
<PAGE> 1
EXHIBIT 1.02
EXCEL REALTY TRUST, INC.
(a Maryland Corporation)
8 1/2% Series A Cumulative Convertible Preferred Stock
(Par Value $.01 per share)
TERMS AGREEMENT
---------------
Dated: January 30, 1997
To: Excel Realty Trust, Inc.
16955 Via Del Campo, Suite 110
San Diego, California 92127
Attention: Chairman of the Board of Directors
Dear Sirs:
We (the "Underwriter") understand that Excel Realty Trust, Inc., a
Maryland corporation (the "Company"), proposes to issue and sell the number of
shares of its 8 1/2% Series A Cumulative Convertible Preferred Stock, $.01 par
value (the "Preferred Shares") set forth below (such Preferred Shares being
also referred to herein as the "Underwritten Securities"). Subject to the
terms and conditions set forth or incorporated by reference herein, the
Underwriter offers to purchase the number of Initial Underwritten Securities
(as defined in the Underwriting Agreement referred to below) set forth below
and the Option Securities (as defined in the Underwriting Agreement referred to
below), to the extent any are purchased, at the purchase price set forth below.
<PAGE> 2
The Underwritten Securities shall have the following terms:
Title of Securities: 8 1/2% Series A Cumulative Convertible Preferred Stock
Number of Initial Underwritten Securities: 4,000,000
Current Ratings: None
Dividend Rate: The greater of $2.125 per annum or the cash dividends
(determined on each of the quarterly dividend payment dates referred to
herein) on the shares of the Company's common stock, par value $.01 per
share (the "Common Stock"), (or portion thereof), into which a Preferred
Share is convertible.
Dividend Payment Dates: January 15, April 15, July 15 and October 15,
commencing April 15, 1997 for the period from the date of issue.
Liquidation Preference: $25.00 per share
Ranking: Senior to the Common Stock with respect to the payment of dividends
and amounts payable upon liquidation, dissolution or winding up of the
Company.
Public offering price per share: $ 25.00, plus accrued dividends, if any, from
the date of original issuance.
Purchase price per share: $24.25
Conversion provisions: Convertible, in whole or in part, at the option of the
holder, at any time, unless previously redeemed, into shares of Common
Stock, at a conversion price of $26.06 per share of Common Stock (equivalent
to a conversion rate of .95933 of a share of Common Stock per Preferred
Share), subject to adjustment in certain circumstances (the "Conversion
Price").
Optional Redemption provisions: The Preferred Shares are not redeemable prior
to February 5, 2002. On and after February 5, 2002, the Preferred Shares
may be redeemed by the Company, in whole or in part, at the option of the
Company, (i) for such number of shares of Common Stock as equals the per
share liquidation preference of the Preferred Shares to be redeemed (without
regard to accumulated, accrued and unpaid dividends, which are to be paid in
cash) divided by the Conversion Price, or (ii) for cash at a redemption
price of $25.00 per share, plus any accumulated, accrued and unpaid
dividends.
Sinking fund requirements: None
Number of Option Securities, if any, that may be purchased by the Underwriter:
600,000
Additional co-managers, if any: None
Closing date and location: Wednesday, February 5, 1997, 9:00 A.M. at Brown &
Wood LLP, One World Trade Center, 57th Floor, New York, New York 10048
All the provisions contained in the document attached as Annex A
hereto entitled "Excel Realty Trust, Inc. - Common Stock, Preferred Stock,
Depositary Shares and Warrants - Underwriting Agreement" are hereby
incorporated by reference in their entirety herein and shall be deemed to be a
part of this Terms Agreement to the same extent as if such provisions had been
set forth in full herein. Terms defined in such document are used herein as
therein defined.
2
<PAGE> 3
Please accept this offer no later than 6:00 o'clock P.M. (New York
City time) on January 30, 1997 by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
FURMAN SELZ LLC
By _________________________
Name:
Title:
Accepted:
EXCEL REALTY TRUST, INC.
By _________________________
Name:
Title:
3
<PAGE> 1
EXHIBIT 4.01
EXCEL REALTY TRUST, INC.
ARTICLES SUPPLEMENTARY CLASSIFYING
4,600,000 SHARES OF PREFERRED STOCK AS
8 1/2% SERIES A CUMULATIVE CONVERTIBLE PREFERRED STOCK
Pursuant to Section 2-105 of the Maryland General Corporation
Law ("MGCL"), Excel Realty Trust, Inc., a corporation organized and existing
under the laws of the State of Maryland and having its principal office in the
State of Maryland located at c/o The Prentice Hall Corporation System,
Maryland, 11 East Chase Street, Baltimore City, Maryland 21202, hereby
certifies to the State Department of Assessments and Taxation of Maryland that:
FIRST: Under a power contained in Article V of the charter of
the Corporation (the "Charter"), and pursuant to the provisions of Section
2-105 of the MGCL, the Board of Directors of the Corporation by unanimous
written consents dated as of January 29, 1997, and February 3, 1997, adopted
resolutions classifying 4,600,000 shares of Preferred Stock of the Corporation
into a single series of Preferred Stock, to be designated as 8 1/2% Series A
Cumulative Convertible Preferred Stock, which resolution is as follows:
RESOLVED, that a series of Preferred Stock of this
Corporation, to be designated "8 1/2% Series A Cumulative Convertible Preferred
Stock", be and hereby is created to consist of 4,600,000 shares, the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of which are as follows:
Section 1. Number of Shares and Designation. This
series of Preferred Stock shall be designated as 8 1/2% Series A Cumulative
Convertible Preferred Stock (the "Series A Preferred Stock") and Four Million
Six Hundred Thousand (4,600,000) shall be the number of shares of such
Preferred Stock constituting such series, subject, however, to increase or
decrease upon further action of the Board of Directors in the future as
permitted by the Charter and applicable law.
Section 2. Definitions. For purposes of the Series A
Preferred Stock, the following terms shall have the meanings indicated:
"Act" shall mean the Securities Act of 1933, as amended.
"Affiliate" of a person means a person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or
is under common control with, the person specified.
<PAGE> 2
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to perform
any of its responsibilities with respect to the Series A Preferred Stock.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which state or federally chartered banking institutions in
New York, New York are not required to be open.
"Call Date" shall have the meaning set forth in paragraph (b)
of Section 5 hereof.
"Common Stock" shall mean the Common Stock, $.01 par value per
share, of the Corporation.
"Constituent Person" shall have the meaning set forth in
paragraph (e) of Section 7 hereof.
"Conversion Price" shall mean the conversion price per share
of Common Stock for which each share of Series A Preferred Stock is
convertible, as such Conversion Price may be adjusted pursuant to paragraph (d)
of Section 7 hereof. The initial conversion price shall be $26.06 (equivalent
to a conversion rate of .95933 shares of Common Stock for each share of Series
A Preferred Stock).
"Current Market Price" of publicly traded shares of Common
Stock or any other class or series of capital stock or other security of the
Corporation or of any similar security of any other issuer for any day shall
mean the last reported sales price, regular way on such day, or, if no sale
takes place on such day, the average of the reported closing, bid and asked
prices regular way on such day, in either case as reported on the New York
Stock Exchange ("NYSE") or, if such security is not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which
such security is listed or admitted for trading or, if not listed or admitted
for trading on any national securities exchange, on the National Market of the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or, if such security is not quoted on such National Market, the
average of the closing bid and asked prices on such day in the over-
the-counter market as reported by NASDAQ or, if bid and asked prices for such
security on such day shall not have been reported through NASDAQ, the average
of the bid and asked prices on such day as furnished by any NYSE member firm
regularly making a market in such security selected for such purpose by the
Chief Executive Officer or the Board of Directors or if any class or series of
securities are not publicly traded, the fair value of the shares of such class
as determined reasonably and in good faith by the Board of Directors of the
Corporation.
"Distribution" shall have the meaning set forth in paragraph
(d)(iii) of Section 7 hereof.
- 2 -
<PAGE> 3
"Dividend Payment Date" shall mean, with respect to each
Dividend Period, the fifteenth day of January, April, July and October, in each
year, commencing, on April 15, 1997; provided, however, that if any Dividend
Payment Date falls on any day other than a Business Day, the dividend payment
due on such Dividend Payment Date shall be paid on the Business Day immediately
following such Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods
commencing on January 1, April 1, July 1 and October 1 of each year and ending
on and including the day preceding the first day of the next succeeding
Dividend Period (other than the initial Dividend Period, which shall commence
on the Issue Date and end on and include March 31, 1997).
"Equity Stock" shall have the meaning set forth in the
Charter.
"Fair Market Value" shall mean the average of the daily
Current Market Prices of a share of Common Stock during five (5) consecutive
Trading Days selected by the Corporation commencing not more than twenty (20)
Trading Days before, and ending not later than, the earlier of the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. The term "'ex' date", when used with
respect to any issuance or distribution, means the first day on which the share
of Common Stock trades regular way, without the right to receive such issuance
or distribution, on the exchange or in the market, as the case may be, used to
determine that day's Current Market Price.
"Issue Date" shall mean February 5, 1997.
"Junior Stock" shall mean the Common Stock and any other class
or series of capital stock of the Corporation over which the shares of Series A
Preferred Stock have preference or priority in the payment of dividends or in
the distribution of assets on any liquidation, dissolution or winding up of the
Corporation.
"Non-Electing Share" shall have the meaning set forth in
paragraph (e) of Section 7 hereof.
"Parity Stock" shall have the meaning set forth in paragraph
(b) of Section 8 hereof.
"Person" shall mean any individual, firm, partnership,
corporation or other entity and shall include any successor (by merger or
otherwise) of such entity.
"Series A Preferred Stock" shall have the meaning set forth in
Section 1 hereof.
- 3 -
<PAGE> 4
"set apart for payment" shall be deemed to include, without
any action other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other distribution by the Board of
Directors, the allocation of funds to be so paid on any series or class of
capital stock of the Corporation.
"Trading Day", as to any securities, shall mean any day on
which such securities are traded on the NYSE or, if such securities are not
listed or admitted for trading on the NYSE, on the principal national
securities exchange on which such securities are listed or admitted or, if such
securities are not listed or admitted for trading on any national securities
exchange, on the National Market of NASDAQ or, if such securities are not
quoted on such National Market, in the securities market in which such
securities are traded.
"Transaction" shall have the meaning set forth in paragraph
(e) of Section 7 hereof.
"Transfer Agent" means The First National Bank of Boston or
such other entity with aggregate capital, surplus and undivided profits, as
shown on its last published report, of at least $50,000,000 as may be
designated by the Board of Directors or their designee as the transfer agent
for the Series A Preferred Stock.
"Voting Preferred Stock" shall have the meaning set forth in
Section 9 hereof.
Section 3. Dividends.
(a) The holders of Series A Preferred Stock shall
be entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for that purpose, cumulative dividends payable in
cash in an amount per share of Series A Preferred Stock equal to the greater of
(i) $2.1250 per annum or (ii) the cash dividends paid or payable on the number
of shares of Common Stock, or portion thereof, into which a share of Series A
Preferred Stock is convertible, in each case with appropriate proration for
partial quarters. The amount referred in clause (ii) of this paragraph (a)
with respect to each Dividend Period shall be determined as of the applicable
Dividend Payment Date by multiplying the number of shares of Common Stock, or
portion thereof calculated to the fifth decimal point, into which a share of
Series A Preferred Stock would be convertible at the opening of business on
such Dividend Payment Date (based on the Conversion Price then in effect) by
the quarterly cash dividend payable or paid for such Dividend Period in respect
of a share of Common Stock outstanding as of the record date for the payment of
dividends on the Common Stock with respect to such Dividend Period or, if
different, with respect to the most recent quarterly period for which dividends
with respect to the Common Stock have been declared. Such dividends shall be
cumulative from the Issue Date,
- 4 -
<PAGE> 5
whether or not in any Dividend Period or Periods such dividends shall be
declared or there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly in arrears on the
Dividend Payment Dates, commencing on the first Dividend Payment Date after the
Issue Date. Each such dividend shall be payable in arrears to the holders of
record of the Series A Preferred Stock, as they appear on the stock records of
the Corporation at the close of business on a record date which shall be not
more than 60 days prior to the applicable Dividend Payment Date and shall be
fixed by the Board of Directors to coincide with the record date for the
regular quarterly dividends, if any, payable with respect to the Common Stock.
Accumulated, accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular Dividend
Payment Date, to holders of record on such date, which date shall not precede
by more than 45 days the payment date thereof, as may be fixed by the Board of
Directors. The amount of accumulated, accrued and unpaid dividends on any
share of Series A Preferred Stock, or fraction thereof, at any date shall be
the amount of any dividends thereon calculated at the applicable rate to and
including such date, whether or not earned or declared, which have not been
paid in cash.
(b) The amount of dividends payable per share of Series A
Preferred Stock for each full Dividend Period shall, for purposes of clause (i)
of paragraph (a) of this Section 3, be computed by dividing the annual dividend
by four. The amount of dividends payable per share of Series A Preferred Stock
for the initial Dividend Period, or any other period shorter or longer than a
full Dividend Period, shall be computed ratably on the basis of twelve 30-day
months and a 360-day year. Holders of Series A Preferred Stock shall not be
entitled to any dividends, whether payable in cash, property or stock, in
excess of cumulative dividends, as herein provided, on the Series A Preferred
Stock. No interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Series A Preferred Stock
that may be in arrears.
(c) So long as any of the shares of Series A
Preferred Stock are outstanding, no dividends, except as described in the
immediately following sentence, shall be declared or paid or set apart for
payment by the Corporation or other distribution of cash or other property
declared or made directly or indirectly by the Corporation with respect to any
class or series of Parity Stock for any period unless dividends equal to the
full amount of accumulated, accrued and unpaid dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient for
the payment thereof have been or contemporaneously are set apart for such
payment on the Series A Preferred Stock for all Dividend Periods terminating on
or prior to the Dividend Payment Date with respect to such class or series of
Parity Stock. When dividends are not paid in full or a sum sufficient for such
payment is not set apart, as aforesaid, all dividends declared upon the Series
A Preferred Stock and all dividends declared upon any other class or series of
Parity Stock shall be declared ratably in
- 5 -
<PAGE> 6
proportion to the respective amounts of dividends accumulated, accrued and
unpaid on the Series A Preferred Stock and accumulated, accrued and unpaid on
such Parity Stock.
(d) So long as any of the shares of Series A
Preferred Stock are outstanding, no dividends (other than dividends or
distributions paid in shares of or options, warrants or rights to subscribe for
or purchase shares of Junior Stock) shall be declared or paid or set apart for
payment by the Corporation or other distribution of cash or other property
declared or made directly or indirectly by the Corporation with respect to any
shares of Junior Stock, nor shall any shares of Junior Stock be redeemed,
purchased or otherwise acquired (other than a redemption, purchase or other
acquisition of Common Stock made for purposes of an employee incentive or
benefit plan of the Corporation or any subsidiary, or as permitted under
Article VII of the Charter) for any consideration (or any moneys be paid to or
made available for a sinking fund for the redemption of any shares of any such
stock) directly or indirectly by the Corporation (except by conversion into or
exchange for Junior Stock), nor shall any other cash or other property
otherwise be paid or distributed to or for the benefit of any holder of shares
of Junior Stock in respect thereof, directly or indirectly, by the Corporation
unless in each case (i) the full cumulative dividends (including all
accumulated, accrued and unpaid dividends) on all outstanding shares of Series
A Preferred Stock and any other Parity Stock of the Corporation shall have been
paid or such dividends have been declared and set apart for payment for all
past Dividend Periods with respect to the Series A Preferred Stock and all past
dividend periods with respect to such Parity Stock and (ii) sufficient funds
shall have been paid or set apart for the payment of the full dividend for the
current Dividend Period with respect to the Series A Preferred Stock and the
current dividend period with respect to such Parity Stock.
(e) If, for any taxable year, the Corporation
elects to designate as "capital gain dividends" (as defined in Section 857 of
the Code) any portion (the "Capital Gains Amount") of the dividends paid or
made available for the year to holders of all classes of stock (the "Total
Dividends"), then the portion of the Capital Gains Amount that shall be
allocable to holders of the Series A Preferred Stock shall be the amount that
the total dividends paid or made available to the holders of the Class A
Preferred Stock for the year bears to the Total Dividends.
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the Corporation (whether capital or
surplus) shall be made to or set apart for the holders of Junior Stock, the
holders of shares of Series A Preferred Stock shall be entitled to receive
Twenty-Five Dollars ($25.00) per share of Series A Preferred Stock plus an
amount equal to all dividends (whether or not earned or declared) accumulated,
accrued and unpaid thereon to the date of final distribution to
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such holders; but such holders shall not be entitled to any further payment.
Until the holders of the Series A Preferred Stock have been paid the
liquidation preference in full, no payment will be made to any holder of Junior
Stock upon the liquidation, dissolution or winding up of the Corporation. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of
Series A Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class or
series of Parity Stock, then such assets, or the proceeds thereof, shall be
distributed among the holders of Series A Preferred Stock and any such other
Parity Stock ratably in the same proportion as the respective amounts that
would be payable on such Series A Preferred Stock and any such other Parity
Stock if all amounts payable thereon were paid in full. For the purposes of
this Section 4, (i) a consolidation or merger of the Corporation with one or
more corporations, (ii) a sale or transfer of all or substantially all of the
Corporation's assets, or (iii) a statutory share exchange shall not be deemed
to be a liquidation, dissolution or winding up, voluntary or involuntary, of
the Corporation.
(b) Subject to the rights of the holders of any
shares of Parity Stock, upon any liquidation, dissolution or winding up of the
Corporation, after payment shall have been made in full to the holders of
Series A Preferred Stock and any Parity Stock, as provided in this Section 4,
any other series or class or classes of Junior Stock shall, subject to the
respective terms thereof, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Series A Preferred Stock and
any Parity Stock shall not be entitled to share therein.
(c) In determining whether a distribution (other
than upon voluntary or involuntary liquidation) by dividend, redemption or
other acquisition of shares of stock of the Corporation or otherwise is
permitted under the MGCL, no effect shall be given to amounts that would be
needed, if the Corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of holders of
shares of stock of the Corporation whose preferential rights upon dissolution
are superior to those receiving the distribution.
Section 5. Redemption at the Option of the Corporation.
(a) Except as otherwise permitted under Article
VII of the Charter, shares of Series A Preferred Stock shall not be redeemable
by the Corporation prior to February 5, 2002. On and after February 5, 2002,
the Corporation, at its option, may redeem shares of Series A Preferred Stock,
in whole or from time to time in part, as set forth herein, subject to the
provisions described below:
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<PAGE> 8
(i) Shares of Series A Preferred Stock
may be redeemed, in whole, or in part, at the option of the
Corporation, at any time on or after February 5, 2002 by
issuing and delivering to each holder for each share of Series
A Preferred Stock to be redeemed such number of authorized but
previously unissued shares of Common Stock as equals the
liquidation preference (excluding any accumulated, accrued and
unpaid dividends, if any, to the Call Date (as defined in
paragraph (b) below), which are to be paid in cash, whether or
not earned or declared, as provided below) per share of Series
A Preferred Stock divided by the Conversion Price as in effect
as of the opening of business on the Call Date; or
(ii) Shares of Series A Preferred Stock
may be redeemed, in whole or in part, at the option of the
Corporation at any time on or after February 5, 2002 out of
funds legally available therefor at a redemption price payable
in cash equal to $25.00 per share of Series A Preferred Stock
(plus an amount equal to all accumulated, accrued and unpaid
dividends, if any, to the Call Date, whether or not earned or
declared, as provided below).
(b) Shares of Series A Preferred Stock shall be
redeemed by the Corporation on the date specified in the notice to holders
required under paragraph (d) of this Section 5 (the "Call Date"). The Call
Date shall be selected by the Corporation, shall be specified in the notice of
redemption and shall be not less than 30 days nor more than 60 days after the
date notice of redemption is sent by the Corporation. Upon any redemption of
shares of Series A Preferred Stock pursuant to paragraph (a)(i) or (a)(ii) of
this Section 5, the Corporation shall pay in cash to the holder of such shares
an amount equal to all accumulated, accrued and unpaid dividends, if any, to
the Call Date, whether or not earned or declared. Immediately prior to
authorizing any redemption of the Series A Preferred Stock, and as a condition
precedent for such redemption, the Company, by resolution of its Board of
Directors, shall declare a mandatory dividend on the Series A Preferred Stock
payable in cash on the Call Date in an amount equal to all accumulated, accrued
and unpaid dividends as of the Call Date on the Series A Preferred Stock to be
redeemed, which amount shall be added to the redemption price. If the Call
Date falls after a dividend payment record date and prior to the corresponding
Dividend Payment Date, then each holder of Series A Preferred Stock at the
close of business on such dividend payment record date shall be entitled to the
dividend payable on such shares on the corresponding Dividend Payment Date
notwithstanding the redemption of such shares prior to such Dividend Payment
Date. Except as provided above, the Corporation shall make no payment or
allowance for accumulated or accrued dividends on shares of Series A Preferred
Stock called for redemption or on the shares of Common Stock issued upon such
redemption.
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<PAGE> 9
(c) If full cumulative dividends on all
outstanding shares of Series A Preferred Stock and any other class or series of
Parity Stock of the Corporation have not been paid or declared and set apart
for payment, except as otherwise permitted under Article VII of the Charter, no
shares of Series A Preferred Stock may be redeemed unless all outstanding
shares of Series A Preferred Stock are simultaneously redeemed and neither the
Corporation nor any affiliate of the Corporation may purchase or acquire shares
of Series A Preferred Stock, otherwise than pursuant to a purchase or exchange
offer made on the same terms to all holders of shares of Series A Preferred
Stock.
(d) If the Corporation shall redeem shares of
Series A Preferred Stock pursuant to paragraph (a) of this Section 5, notice of
such redemption shall be given to each holder of record of the shares to be
redeemed. Such notice shall be provided by first class mail, postage prepaid,
at such holder's address as the same appears on the stock records of the
Corporation, or by publication in The Wall Street Journal or The New York
Times, or if neither such newspaper is then being published, any other daily
newspaper of national circulation not less than 35 nor more than 60 days prior
to the Call Date. If the Corporation elects to provide such notice by
publication, it shall also promptly mail notice of such redemption to the
holders of the shares of Series A Preferred Stock to be redeemed. Neither the
failure to mail any notice required by this paragraph (d), nor any defect
therein or in the mailing thereof, to any particular holder, shall affect the
sufficiency of the notice or the validity of the proceedings for redemption
with respect to the other holders. Any notice which was mailed in the manner
herein provided shall be conclusively presumed to have been duly given on the
date mailed whether or not the holder receives the notice. Each such mailed or
published notice shall state, as appropriate: (1) the Call Date; (2) the number
of shares of Series A Preferred Stock to be redeemed and, if fewer than all
such shares held by such holder are to be redeemed, the number of such shares
to be redeemed from such holder; (3) whether redemption will be for shares of
Common Stock pursuant to paragraph (a)(i) of this Section 5 or for cash
pursuant to paragraph (a)(ii) of this Section 5, and, if redemption will be for
Common Stock, the number of shares of Common Stock (or fraction of a share of
Common Stock) to be issued with respect to each share of Series A Preferred
Stock to be redeemed; (4) the place or places at which certificates for such
shares are to be surrendered for certificates representing shares of Common
Stock; (5) the then-current Conversion Price; and (6) that dividends on the
shares of Series A Preferred Stock to be redeemed shall cease to accrue on such
Call Date except as otherwise provided herein. Notice having been published or
mailed as aforesaid, from and after the Call Date (unless the Corporation shall
fail to issue and make available the number of shares of Common Stock and/or
amount of cash necessary to effect such redemption, including all accumulated,
accrued and unpaid dividends to the Call Date, whether or not earned or
declared), (i) except as otherwise provided herein, dividends on the shares of
Series A Preferred Stock so called for redemption shall cease to accumulate or
accrue on the shares of Series A
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<PAGE> 10
Preferred Stock called for redemption (except that, in the case of a Call Date
after a dividend record date and prior to the related Dividend Payment Date,
holders of Series A Preferred Stock on the dividend record date will be
entitled on such Dividend Payment Date to receive the dividend payable on such
shares), (ii) said shares shall no longer be deemed to be outstanding, and
(iii) all rights of the holders thereof as holders of Series A Preferred Stock
of the Corporation shall cease (except the rights to receive the shares of
Common Stock and/or cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so required
and to receive any dividends payable thereon). The Corporation's obligation to
provide shares of Common Stock and/or cash in accordance with the preceding
sentence shall be deemed fulfilled if, on or before the Call Date, the
Corporation shall deposit with a bank or trust company (which may be an
affiliate of the Corporation) that has an office in the Borough of Manhattan,
The City of New York, or in Los Angeles or San Diego, California, and that has,
or is an affiliate of a bank or trust company that has, a capital and surplus
of at least $50,000,000, such number of shares of Common Stock and such amount
of cash as is necessary for such redemption, in trust, with irrevocable
instructions that such shares of Common Stock and/or cash be applied to the
redemption of the shares of Series A Preferred Stock so called for redemption.
In the case of any redemption pursuant to paragraph (a)(i) of this Section 5,
at the close of business on the Call Date, each holder of shares of Series A
Preferred Stock to be redeemed (unless the Corporation defaults in the delivery
of the shares of Common Stock or cash payable on such Call Date) shall be
deemed to be the record holder of the number of shares of Common Stock into
which such shares of Series A Preferred Stock are to be converted at
redemption, regardless of whether such holder has surrendered the certificates
representing the shares of Series A Preferred Stock to be so redeemed. No
interest shall accrue for the benefit of the holders of shares of Series A
Preferred Stock to be redeemed on any cash so set aside by the Corporation.
Subject to applicable escheat laws, any such cash unclaimed at the end of two
years from the Call Date shall revert to the general funds of the Corporation,
after which reversion the holders of shares of Series A Preferred Stock so
called for redemption shall look only to the general funds of the Corporation
for the payment of such cash.
As promptly as practicable after the surrender in
accordance with said notice of the certificates for any such shares so redeemed
(properly endorsed or assigned for transfer, if the Corporation shall so
require and if the notice shall so state), such certificates shall be exchanged
for certificates representing shares of Common Stock and/or any cash (without
interest thereon) for which such shares have been redeemed in accordance with
such notice. If fewer than all the outstanding shares of Series A Preferred
Stock are to be redeemed, shares to be redeemed shall be selected by the
Corporation from outstanding shares of Series A Preferred Stock not previously
called for redemption by lot or, with respect to the number of shares of Series
A Preferred Stock held of record by each holder of such shares, pro rata (as
nearly
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<PAGE> 11
as may be) or by any other method as may be determined by the Board of
Directors in its discretion to be equitable. If fewer than all the shares of
Series A Preferred Stock represented by any certificate are redeemed, then a
new certificate representing the unredeemed shares shall be issued without cost
to the holders thereof.
(e) In the case of any redemption pursuant to
paragraph (a)(i) of this Section 5, no fractional shares of Common Stock or
scrip representing fractions of shares of Common Stock shall be issued upon
redemption of the shares of Series A Preferred Stock. Instead of any
fractional interest in a share of Common Stock that would otherwise be
deliverable upon redemption of shares of Series A Preferred Stock, the
Corporation shall pay to the holder of such share an amount in cash (computed
to the nearest cent) based upon the Current Market Price of the Common Stock on
the Trading Day immediately preceding the Call Date. If more than one share
shall be surrendered for redemption at one time by the same holder, the number
of full shares of Common Stock issuable upon redemption thereof shall be
computed or, the basis of the aggregate number of shares of Series A Preferred
Stock so surrendered.
(f) In the case of any redemption pursuant to
paragraph (a)(i) of this Section 5, the Corporation covenants that any shares
of Common Stock issued upon redemption of shares of Series A Preferred Stock
shall be validly issued, fully paid and non-assessable. The Corporation shall
use all commercially reasonable efforts to list, subject to official notice of
issuance, the shares of Common Stock required to be delivered upon any such
redemption of shares of Series A Preferred Stock, prior to such redemption,
upon each national securities exchange, if any, upon which the outstanding
shares of Common Stock are listed at the time of such delivery.
The Corporation shall take any action reasonably
necessary to ensure that any shares of Common Stock issued upon the redemption
of Series A Preferred Stock are freely transferable and not subject to any
resale restrictions under the Act, or any applicable state securities or blue
sky laws (other than any shares of Common Stock issued upon redemption of any
Series A Preferred Stock which are held by an "affiliate" (as defined in Rule
144 under the Act) of the Corporation).
Section 6. Stock To Be Retired. All shares of Series A
Preferred Stock which shall have been issued and reacquired in any manner by
the Corporation shall be restored to the status of authorized, but unissued
shares of Preferred Stock, without designation as to series. The Corporation
may also retire any unissued shares of Series A Preferred Stock, and such
shares shall then be restored to the status of authorized but unissued shares
of Preferred Stock, without designation as to series.
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Section 7. Conversion.
Holders of shares of Series A Preferred Stock shall have the
right to convert all or a portion of such shares into shares of Common Stock,
as follows:
(a) Subject to and upon compliance with the
provisions of this Section 7, a holder of shares of Series A Preferred Stock
shall have the right, at such holder's option, at anytime to convert such
shares, in whole or in part, into the number of fully paid and nonassessable
shares of authorized but previously unissued shares of Common Stock obtained by
dividing the aggregate liquidation preference (excluding any accumulated,
accrued and unpaid dividends) of such shares by the Conversion Price (as in
effect at the time and on the date provided for in the last clause of paragraph
(b) of this Section 7) by surrendering such shares to be converted, such
surrender to be made in the manner provided in paragraph (b) of this Section 7;
provided, however, that the right to convert shares of Series A Preferred Stock
called for redemption pursuant to Section 5 shall terminate at the close of
business on the Call Date fixed for such redemption, unless the Corporation
shall default in making payment of shares of Common Stock and/or cash payable
upon such redemption under Section 5 hereof.
(b) In order to exercise the conversion right,
the holder of each share of Series A Preferred Stock to be converted shall
surrender the certificate representing such share, duly endorsed or assigned to
the Corporation or in blank, at the office of the Transfer Agent, accompanied
by written notice to the Corporation that the holder thereof elects to convert
such share of Series A Preferred Stock. Unless the shares issuable on
conversion are to be issued in the same name as the name in which such share of
Series A Preferred Stock is registered, each share surrendered for conversion
shall be accompanied by instruments of transfer, in form satisfactory to the
Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).
Holders of shares of Series A Preferred Stock at the
close of business on a dividend payment record date shall be entitled to
receive the dividend payable on such shares on the corresponding Dividend
Payment Date notwithstanding the conversion thereof following such dividend
payment record date and prior to such Dividend Payment Date. However, shares
of Series A Preferred Stock surrendered for conversion during the period
between the close of business on any dividend payment record date and the
opening of business on the corresponding Dividend Payment Date (except shares
converted after the issuance of notice of redemption with respect to a Call
Date during such period, such shares of Series A Preferred Stock being entitled
to such dividend on the Dividend Payment Date) must be accompanied by payment
of an amount
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<PAGE> 13
equal to the dividend payable on such shares on such Dividend Payment Date. A
holder of shares of Series A Preferred Stock on a dividend payment record date
who (or whose transferee) tenders any such shares for conversion into shares of
Common Stock on such Dividend Payment Date will receive the dividend payable by
the Corporation on such shares of Series A Preferred Stock on such date, and
the converting holder need not include payment of the amount of such dividend
upon surrender of shares of Series A Preferred Stock for conversion. Except as
provided above, the Corporation shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends on
the shares of Common Stock issued upon such conversion.
As promptly as practicable after the surrender of
certificates for shares of Series A Preferred Stock as aforesaid, the
Corporation shall issue and shall deliver at such office to such holder, or
send on such holder's written order, a certificate or certificates for the
number of full shares of Common Stock issuable upon the conversion of such
shares of Series A Preferred Stock in accordance with provisions of this
Section 7, and any fractional interest in respect of a share of Common Stock
arising upon such conversion shall be settled as provided in paragraph (c) of
this Section 7.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the
certificates for shares of Series A Preferred Stock shall have been surrendered
and such notice received by the Corporation as aforesaid, and the person or
persons in whose name or names any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become the holder or holders of record of the shares represented thereby at
such time on such date and such conversion shall be at the Conversion Price in
effect at such time on such date unless the stock transfer books of the
Corporation shall be closed on that date, in which event such person or persons
shall be deemed to have become such holder or holders of record at the close of
business on the next succeeding day on which such stock transfer books are
open, but such conversion shall be at the Conversion Price in effect on the
date on which such shares shall have been surrendered and such notice received
by the Corporation.
(c) No fractional share of Common Stock or scrip
representing fractions of a share of Common Stock shall be issued upon
conversion of the shares of Series A Preferred Stock. Instead of any
fractional interest in a share of Common Stock that would otherwise be
deliverable upon the conversion of shares of Series A Preferred Stock, the
Corporation shall pay to the holder of such share an amount in cash based upon
the Current Market Price of the Common Stock on the Trading Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion at one time by the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be
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<PAGE> 14
computed on the basis of the aggregate number of shares of
Series A Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from
time to time as follows:
(i) If the Corporation shall after
the Issue Date (A) pay a dividend or make a distribution on
its capital stock in shares of Common Stock, (B) subdivide its
outstanding Common Stock into a greater number of shares, (C)
combine its outstanding Common Stock into a smaller number of
shares or (D) issue any shares of capital stock by
reclassification of its Common Stock, the Conversion Price in
effect at the opening of business on the day following the
date fixed for the determination of stockholders entitled to
receive such dividend or distribution or at the opening of
business on the day following the day on which such
subdivision, combination or reclassification becomes
effective, as the case may be, shall be adjusted so that the
holder of any share of Series A Preferred Stock thereafter
surrendered for conversion shall be entitled to receive the
number of shares of Common Stock (or fraction of a share of
Common Stock) that such holder would have owned or have been
entitled to receive after the happening of any of the events
described above had such share of Series A Preferred Stock
been converted immediately prior to the record date in the
case of a dividend or distribution or the effective date in
the case of a subdivision, combination or reclassification.
An adjustment made pursuant to this paragraph (d)(i) of this
Section 7 shall become effective immediately after the opening
of business on the day next following the record date (except
as provided in paragraph (h) below) in the case of a dividend
or distribution and shall become effective immediately after
the opening of business on the day next following the
effective date in the case of a subdivision, combination or
reclassification.
(ii) If the Corporation shall issue
after the Issue Date rights, options or warrants to all
holders of Common Stock entitling them (for a period expiring
within 45 days after the record date described below in this
paragraph (d)(ii) of this Section 7) to subscribe for or
purchase Common Stock at a price per share less than the Fair
Market Value per share of the Common Stock on the record date
for the determination of stockholders entitled to receive such
rights or warrants, then the Conversion Price in effect at the
opening of business on the day next following such record date
shall be adjusted to equal the price determined by multiplying
(A) the Conversion Price in effect immediately prior to the
opening of business on the day following the date fixed for
such determination by (B) a fraction, the numerator of which
shall be the sum of (X) the number of shares of
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<PAGE> 15
Common Stock outstanding on the close of business on the date
fixed for such determination and (Y) the number of shares that
the aggregate proceeds to the Corporation from the exercise of
such rights or warrants for Common Stock would purchase at
such Fair Market Value, and the denominator of which shall be
the sum of (XX) the number of shares of Common Stock
outstanding on the close of business on the date fixed for
such determination and (YY) the number of additional shares of
Common Stock offered for subscription or purchase pursuant to
such rights or warrants. Such adjustment shall become
effective immediately after the opening of business on the day
next following such record date (except as provided in
paragraph (h) below). In determining whether any rights or
warrants entitle the holders of Common Stock to subscribe for
or purchase Common Stock at less than such Fair Market Value,
there shall be taken into account any consideration received
by the Corporation upon issuance and upon exercise of such
rights or warrants, the value of such consideration, if other
than cash, to be determined in good faith by the Board of
Directors.
(iii) If the Corporation shall
distribute to all holders of its Common Stock any shares of
capital stock of the Corporation (other than Common Stock) or
evidence of its indebtedness or assets (including cash, but
excluding cash dividends or cash distributions out of current
or accumulated funds from operations (as determined by the
Board of Directors on a basis consistent with the policies and
practices adopted by the Corporation for reporting publicly
its results of operations and financial condition), and
excluding cash dividends which result in a payment of an equal
cash dividend to the holders of the Series A Preferred Stock
pursuant to subparagraph (ii) of Section 3(a) hereof) or
rights or warrants to subscribe for or purchase any of its
securities (excluding those rights and warrants issued to all
holders of Common Stock entitling them for a period expiring
within 45 days after the record date referred to in paragraph
(d)(ii) of this Section 7 above to subscribe for or purchase
Common Stock, which rights and warrants are referred to in and
treated under such paragraph (d)(ii) above) (any of the
foregoing being hereinafter in this paragraph (d)(iii) called
the "Distribution"), then in each such case the Conversion
Price shall be adjusted so that it shall equal the price
determined by multiplying (A) the Conversion Price in effect
immediately prior to the close of business on the date fixed
for the determination of stockholders entitled to receive such
Distribution by (B) a fraction, the numerator of which shall
be the Fair Market Value per share of Common Stock on the
record date mentioned below less the then fair market value
(as determined by the Board of Directors, whose determination
shall be
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<PAGE> 16
conclusive and described in a Board resolution), of the
portion of the capital stock or assets or evidences of
indebtedness so distributed or of such rights or warrants
applicable to one share of Common Stock, and the denominator
of which shall be the Fair Market Value per share of Common
Stock on the record date mentioned below. Such adjustment
shall become effective immediately at the opening of business
on the Business Day next following (except as provided in
paragraph (h) below) the record date for the determination of
stockholders entitled to receive such Distribution. For the
purposes of this paragraph (d)(iii), the distribution of a
right or warrant to subscribe or purchase any of the
Corporation's securities, which is distributed not only to the
holders of the Common Stock on the date fixed for the
determination of stockholders entitled to such Distribution of
such right or warrant, but also is distributed with shares of
Common Stock delivered to a Person converting shares of Series
A Preferred Stock after such determination date, shall not
require an adjustment of the Conversion Price pursuant to this
paragraph (d)(iii); provided that if on the date, if any, on
which a person converting shares of Series A Preferred Stock
such person would no longer be entitled to receive such right
or warrant with shares of Common Stock (other than as a result
of the termination of all such right or warrant), a
distribution of such rights or warrants shall be deemed to
have occurred and the Conversion Price shall be adjusted as
provided in this paragraph (d)(iii) and such day shall be
deemed to be "the date fixed for the determination of the
stockholders entitled to receive such distribution" and "the
record date" within the meaning of the two preceding
sentences.
(iv) No adjustment in the Conversion
Price shall be required unless such adjustment would require a
cumulative increase or decrease of at least 1% in such price;
provided, however, that any adjustments that by reason of this
paragraph (d)(iv) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment
until made; and provided, further, that any adjustment shall
be required and made in accordance with the provisions of this
Section 7 (other than this paragraph (d)(iv)) not later than
such time as may be required in order to preserve the tax-free
nature of a distribution to the holders of shares of Common
Stock. Notwithstanding any other provisions of this Section
7, the Corporation shall not be required to make any
adjustment of the Conversion Price for the issuance of any
shares of Common Stock pursuant to any plan providing for the
reinvestment of dividends or interest payable on securities of
the Corporation and the investment of additional optional
amounts in shares of Common Stock under such plan. All
calculations under this Section 7 shall be made to the nearest
cent (with
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<PAGE> 17
$.005 being rounded upward) or to the nearest one-tenth of a
share (with .05 of a share being rounded upward), as the case
may be. Anything in this paragraph (d) of this Section 7 to
the contrary notwithstanding, the Corporation shall be
entitled, to the extent permitted by law, to make such
reductions in the Conversion Price, in addition to those
required by this paragraph (d), as it in its discretion shall
determine to be advisable in order that any stock dividends,
subdivision of shares, reclassification or combination of
shares, distribution of rights or warrants to purchase stock
or securities, or a distribution of other assets (other than
cash dividends) hereafter made by the Corporation to its
stockholders shall not be taxable, or if that is not possible,
to diminish any income taxes that are otherwise payable
because of such event.
(e) If the Corporation shall be a party to any
transaction (including without limitation a merger, consolidation, statutory
share exchange, issuer or self tender offer for all or a substantial portion of
the shares of Common Stock outstanding, sale of all or substantially all of the
Corporation's assets or recapitalization of the Common Stock, but excluding any
transaction as to which paragraph (d)(i) of this Section 7 applies) (each of
the foregoing being referred to herein as a "Transaction"), in each case as a
result of which shares of Common Stock shall be converted into the right to
receive stock, securities or other property (including, cash or any combination
thereof), each share of Series A Preferred Stock which is not converted into
the right to receive stock, securities or other property in connection with
such Transaction shall thereupon be convertible into the kind and amount of
shares of stock, securities and other property (including cash or any
combination thereof) receivable upon such consummation, by a holder of that
number of shares of Common Stock into which one share of Series A Preferred
Stock was convertible immediately prior to such Transaction, assuming such
holder of Common Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise such holder's rights of election, if any, as to the kind or amount
of stock, securities and other property (including cash) receivable upon such
Transaction (provided that if the kind or amount of stock, securities and other
property (including cash) receivable upon such Transaction is not the same for
each share of Common Stock of the Corporation held immediately prior to such
Transaction by other than a Constituent Person or an affiliate thereof and in
respect of which such rights of election shall not have been exercised
("Non-Electing Share"), then for the purpose of this paragraph (e) the kind and
amount of stock, securities and other property (including cash) receivable upon
such Transaction by each Non-Electing Share shall be deemed to be the kind and
amount so receivable per share by a plurality of the Non-Electing Shares). The
Corporation shall not be a party to any Transaction unless the terms of such
Transaction are consistent
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with the provisions of this paragraph (e), and it shall not consent or agree to
the occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Series A Preferred Stock that will contain
provisions enabling the holders of the Series A Preferred Stock that remain
outstanding after such Transaction to convert into the consideration received
by holders of Common Stock at the Conversion Price in effect immediately prior
to such Transaction. The provisions of this paragraph (e) shall similarly
apply to successive Transactions.
(f) If:
(i) the Corporation shall declare a
dividend (or any other distribution) on the Common Stock
(other than cash dividends and cash distributions to the
extent the same constitute Permitted Common Stock Cash
Distributions); or
(ii) the Corporation shall authorize
the granting to the holders of the Common Stock of rights or
warrants to subscribe for or purchase any shares of any class
or series of capital stock or any other rights or warrants; or
(iii) there shall be any
reclassification of the Common Stock or any consolidation or
merger to which the Corporation is a party and for which
approval of any stockholders of the Corporation is required,
or a statutory share exchange, or an issuer or self tender
offer by the Corporation for all or a substantial portion of
its outstanding shares of Common Stock (or an amendment
thereto changing the maximum number of shares sought or the
amount or type of consideration being offered therefor) or the
sale or transfer of all or substantially all of the assets of
the Corporation as an entirety; or
(iv) there shall occur the voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to each holder of shares of Series A Preferred Stock at such
holder's address as shown on the stock records of the Corporation, as promptly
as possible, but at least 15 days prior to the applicable date hereinafter
specified, a notice stating (A) the record date for the payment of such
dividend, distribution or rights or warrants, or, if a record date is not
established, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights or warrants are to be
determined or (B) the date on which
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<PAGE> 19
such reclassification, consolidation, merger, statutory share exchange, sale,
transfer, liquidation, dissolution or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property, if any, deliverable upon such reclassification,
consolidation, merger, statutory share exchange, sale, transfer, liquidation,
dissolution or winding up or (C) the date on which such tender offer commenced,
the date on which such tender offer is scheduled to expire unless extended, the
consideration offered and the other material terms thereof (or the material
terms of any amendment thereto). Failure to give or receive such notice or any
defect therein shall not affect the legality or validity of the proceedings
described in this Section 7.
(g) Whenever the Conversion Price is adjusted as
herein provided, the Corporation shall promptly file with the Transfer Agent an
officer's certificate setting forth the Conversion Price after such adjustment
and setting forth a brief statement of the facts requiring such adjustment
which certificate shall be conclusive evidence of the correctness of such
adjustment absent manifest error. Promptly after delivery of such certificate,
the Corporation shall prepare a notice of such adjustment of the Conversion
Price setting forth the adjusted Conversion Price and the effective date such
adjustment becomes effective and shall mail such notice of such adjustment of
the Conversion Price to each holder of shares of Series A Preferred Stock at
such holder's last address as shown on the stock records of the Corporation.
(h) In any case in which paragraph (d) of this
Section 7 provides that an adjustment shall become effective on the day next
following the record date for an event, the Corporation may defer until the
occurrence of such event (A) issuing to the holder of any share of Series A
Preferred Stock converted after such record date and before the occurrence of
such event the additional Common Stock issuable upon such conversion by reason
of the adjustment required by such event over and above the Common Stock
issuable upon such conversion before giving effect to such adjustment and (B)
paying to such holder any amount of cash in lieu of any fraction pursuant to
paragraph (c) of this Section 7.
(i) There shall be no adjustment of the
Conversion Price in case of the issuance of any capital stock of the
Corporation in a reorganization, acquisition or other similar transaction
except as specifically set forth in this Section 7. If any action or
transaction would require adjustment of the Conversion Price pursuant to more
than one paragraph of this Section 7, only one adjustment shall be made and
such adjustment shall be the amount of adjustment that has the highest absolute
value.
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<PAGE> 20
(j) If the Corporation shall take any action
affecting the Common Stock, other than action described in this Section 7, that
in the opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of Series A Preferred Stock, the Conversion
Price for the Series A Preferred Stock may be adjusted, to the extent permitted
by law, in such manner, if any, and at such time as the Board of Directors, in
its sole discretion, may determine to be equitable under the circumstances.
(k) The Corporation shall at all times reserve
and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued Common Stock solely for the purpose of effecting
conversion of the Series A Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of Series A
Preferred Stock not theretofore converted into Common Stock. For purposes of
this paragraph (k), the number of shares of Common Stock that shall be
deliverable upon the conversion of all outstanding shares of Series A Preferred
Stock shall be computed as if at the time of computation all such outstanding
shares were held by a single holder.
The Corporation covenants that any shares of Common
Stock issued upon conversion of the shares of Series A Preferred Stock shall be
validly issued, fully paid and non-assessable.
The Corporation shall use all reasonable efforts to
list the shares of Common Stock required to be delivered upon conversion of the
shares of Series A Preferred Stock, prior to such delivery, upon each national
securities exchange, if any, upon which the outstanding shares of Common Stock
are listed at the time of such delivery.
The Corporation shall take any action reasonably
necessary to ensure that any shares of Common Stock issued upon conversion of
shares of Series A Preferred Stock are freely transferable and not subject to
any resale restrictions under the Act, or any applicable state securities or
blue sky laws (other than any shares of Common Stock which are held by an
"affiliate" (as defined in Rule 144 under the Act)).
(l) The Corporation will pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock or other securities or property on
conversion or redemption of shares of Series A Preferred Stock pursuant hereto;
provided, however, that the Corporation shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issue or
delivery of shares of Common Stock or other securities or property in a name
other than that of the holder of the shares of Series A Preferred Stock to be
converted or redeemed, and no such issue or delivery shall be made unless and
until the person requesting such issue or delivery has paid to the Corporation
the amount of any
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<PAGE> 21
such tax or established, to the reasonable satisfaction of the Corporation,
that such tax has been paid.
Section 8. Ranking. Any class or series of capital
stock of the Corporation shall be deemed to rank:
(a) prior or senior to the Series A Preferred
Stock, as to the payment of dividends and as to distribution of assets upon
liquidation, dissolution or winding up, if the holders of such class or series
shall be entitled to the receipt of dividends or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Series A Preferred Stock;
(b) on a parity with the Series A Preferred
Stock, as to the payment of dividends and as to distribution of assets upon
liquidation, dissolution or winding up, whether or not the dividend rates,
dividend payment dates or redemption or liquidation prices per share thereof be
different from those of the Series A Preferred Stock, if the holders of such
class of stock or series and the Series A Preferred Stock shall be entitled to
the receipt of dividends and of amounts distributable upon liquidation,
dissolution or winding up in proportion to their respective amounts of accrued
and unpaid dividends per share or liquidation preferences, without preference
or priority one over the other ("Parity Stock"); and
(c) junior to the Series A Preferred Stock, as to
the payment of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, if such stock or series shall be Common Stock or if
the holders of Series A Preferred Stock shall be entitled to receipt of
dividends or of amounts distributable upon liquidation, dissolution or winding
up, as the case may be, in preference or priority to the holders of shares of
such class or series ("Junior Stock").
Section 9. Voting.
(a) If and whenever six quarterly dividends
(whether or not consecutive) payable on the Series A Preferred Stock or any
series or class of Parity Stock shall be in arrears (which shall, with respect
to any such quarterly dividend, mean that any such dividend has not been paid
in full), whether or not earned or declared, the number of directors then
constituting the Board of Directors shall be increased by two (if not already
increased by reason of a similar arrearage with respect to any Parity Stock)
and the holders of shares of Series A Preferred Stock, together with the
holders of shares of every other series of Parity Stock (any other such series,
the "Voting Preferred Stock") entitled to vote on the matter, voting as a
single class regardless of series, shall be entitled, in order to fill the
vacancies thereby created, to elect two additional directors at the next annual
meeting of stockholders or special meeting held in place thereof, or at a
special meeting of the holders of the Series A Preferred Stock and the Voting
Preferred Stock entitled to vote
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<PAGE> 22
thereon, called as hereinafter provided, and at each succeeding annual meeting
at which their respective successors are to be elected. Each such vacancy
shall be apportioned among the classes of directors to prevent stacking in any
one class and to ensure that all directors in each of the classes of directors
are as equal in number as possible. Each such director, as a qualification for
election as such (and regardless of how elected) shall submit to the Board a
duly-executed, valid, binding and enforceable letter of resignation from the
Board, to be effective immediately upon the date on which all arrears in
dividends on the Series A Preferred Stock and the Voting Preferred Stock then
outstanding and holding similar rights in respect of the election of additional
directors shall have been paid and dividends thereon for the current quarterly
dividend period shall have been paid or declared and set apart for payment,
whereupon the right of the holders of the Series A Preferred Stock and the
Voting Preferred Stock to elect such additional two directors shall cease (but
subject always to the same provision for the vesting, of such voting rights in
the case of any similar future arrearages in six quarterly dividends), and the
terms of office of all persons elected as directors by the holders of the
Series A Preferred Stock and the Voting Preferred Stock shall, upon the
effectiveness of their respective letters of resignation, forthwith terminate,
and the number of the Board of directors shall be reduced accordingly. At any
time after such voting power shall have been so vested in the holders of Series
A Preferred Stock and the Voting Preferred Stock, the Secretary of the
Corporation may, and upon the written request of any holder of Series A
Preferred Stock (addressed to the Secretary at the principal office of the
Corporation) shall, call a special meeting of the holders of the Series A
Preferred Stock and of the Voting Preferred Stock for the election of the two
directors to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation for a special
meeting of the stockholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the Secretary
within 20 days after receipt of any such request, then any holder of Series A
Preferred Stock may call such meeting, upon the notice above provided, and for
that purpose shall have access to the stock books of the Corporation. The
directors elected at any such special meeting shall hold office until the next
annual meeting of the stockholders at which their respective successors are to
be elected. If any vacancy shall occur among the directors elected by the
holders of the Series A Preferred Stock and the Voting Preferred Stock entitled
to vote thereon, a successor shall be elected by the Board of Directors, upon
the nomination of the then remaining Director elected by the holders of the
Series A Preferred Stock and such Voting Preferred Stock or the successor of
such remaining Director, to serve for the remainder of the term of the director
creating the vacancy, subject however to earlier resignation as herein
provided.
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<PAGE> 23
(b) So long as any shares of Series A Preferred
Stock are outstanding, in addition to any other vote or consent of stockholders
required by law or by the Charter of the Corporation, the affirmative vote of
at least 66 2/3% of the votes entitled to be cast by the holders of the Series
A Preferred Stock and the Voting Preferred Stock, at the time outstanding,
acting as a single class regardless of series, given in person or by proxy, at
any meeting, called for the purpose, or the affirmative vote of all such
holders delivered by unanimous written consent, shall be necessary for
effecting or validating:
(i) Any amendment, alteration or
repeal of any of the provisions of these Articles
Supplementary or the Charter of the Corporation that
materially adversely affects the voting powers, rights or
preferences of the holders of the Series A Preferred Stock or
the Voting Preferred Stock; provided, however, that the
amendment of the provisions of the Charter so as to authorize
or create, or to increase the authorized amount of, any Junior
Stock or any shares of any class ranking on a parity with the
Series A Preferred Stock or the Voting Preferred Stock shall
not be deemed to materially adversely affect the voting
powers, rights or preferences of the holders of Series A
Preferred Stock, and provided further, that if any such
amendment, alteration or repeal would materially adversely
affect any voting powers, rights or preferences of the Series
A Preferred Stock or another series of Voting Preferred Stock
that are not enjoyed by some or all of the Series A Preferred
Stock or other series which otherwise would be entitled to
vote in accordance herewith, the affirmative vote of at least
66 2/3% of the votes entitled to be cast by the holders of all
series similarly affected given in person or by proxy at a
meeting duly called for the purpose, or the affirmative vote
of all such holders delivered by unanimous written consent,
shall be required in lieu of the affirmative vote of at least
66 2/3% of the votes entitled to be cast by the holders of the
shares of Series A Preferred Stock and the Voting Preferred
Stock, or the affirmative vote of all such holders by
unanimous written consent, which otherwise would be entitled
to vote in accordance herewith; or
(ii) The authorization or creation of,
or the increase in the authorized amount of, any shares of any
class or any security convertible into shares of any class
ranking, prior or senior to the Series A Preferred Stock in
the distribution of assets on any liquidation, dissolution or
winding up of the Corporation or in the payment of dividends;
provided, however, that no such vote of the holders of Series
A Preferred Stock shall be required if, at or prior to the
time when such amendment, alteration or repeal is to take
effect, or when the
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<PAGE> 24
issuance of any such prior shares or convertible security is
to be made, as the case may be, provision is made for the
redemption of all shares of Series A Preferred Stock at the
time outstanding.
For purposes of the foregoing provisions of this Section 9,
each share of Series A Preferred Stock shall have one (1) vote per share,
except that when any other series of preferred stock shall have the right to
vote with the Series A Preferred Stock as a single class on any matter, then
the Series A Preferred Stock and such other series shall have with respect to
such matters one (1) vote per $25.00 of stated liquidation preference, and
fractional votes shall be ignored. Except as expressly stated in these
Articles Supplementary, the Series A Preferred Stock shall not have any
relative, participating, optional or other special voting rights and powers,
and the consent of the holders thereof shall not be required for the taking of
any corporate action, including but not limited to any merger or consolidation
involving the Corporation or a sale of all or substantially all of the assets
of the Corporation, irrespective of the effect that such merger, consolidation
or sale may have upon the rights, preferences or voting power of the holders of
the Series A Preferred Stock.
Section 10. Restrictions on Transfer, Acquisition and
Redemption of Shares.
(a) The Series A Preferred Stock constitutes
Preferred Stock of the Corporation, and Preferred Stock constitutes Equity
Stock of the Corporation. Therefore, the Series A Preferred Stock, being Equity
Stock, is governed by and issued subject to all of the limitations, terms and
conditions of the Charter of the Corporation applicable to the Equity Stock
generally, including but not limited to the terms and conditions (including
exceptions and exemptions) of Article VII of the Charter applicable to Equity
Stock. The foregoing sentence shall not be construed to limit the
applicability to the Series A Preferred Stock of any other term or provision of
the Charter.
(b) In addition to the legend contemplated by
Article VII, Section 11 of the Charter, each certificate for Class A Preferred
Stock shall bear substantially the following legend:
"The Corporation will furnish to any stockholder, on
request and without charge, a full statement of the information required by
Section 2-211(b) of the Corporations and Associations Article of the Annotated
Code of Maryland with respect to the designations and any preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications, and terms and conditions of
redemptions of the stock of each class which the Corporation has authority to
issue and, if the Corporation is authorized to issue any preferred or special
class in series, (i) the differences in the relative rights and preferences
between the shares of each series to the extent set, and (ii) the authority of
the Board of directors to set such rights and preferences of subsequent series.
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<PAGE> 25
The foregoing summary does not purport to be complete and is subject to and
qualified in its entirety by reference to the charter of the Corporation, a
copy of which will be sent without charge to each stockholder who so requests.
Such request must be made to the Secretary of the Corporation at its principal
office."
Section 11. Severability of Provisions.
If any preference, conversion or other right, voting power,
restriction, limitation as to dividends or other distributions, qualification
or term or condition of redemption of the Series A Preferred Stock set forth
herein is invalid, unlawful or incapable of being enforced by reason of any
rule of law or public policy, all other preferences, conversion or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption of Series A
Preferred Stock set forth herein which can be given effect without the invalid,
unlawful or unenforceable provision thereof shall, nevertheless, remain in full
force and effect, and no preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions,
qualifications or terms or conditions of redemption of Series A Preferred Stock
herein set forth shall be deemed dependent upon any other provision thereof
unless so expressed therein.
SECOND: The shares of Series A Preferred Stock have been
classified and designated by the Board of Directors under the authority
contained in the Charter.
THIRD: These Articles Supplementary have been approved by
the Board of Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation
acknowledges these Articles Supplementary to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under oath,
the undersigned President acknowledges that to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties for perjury.
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IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this 4th day of February, 1997.
ATTEST: EXCEL REALTY TRUST, INC.
/s/ Graham Bullick By: /s/ Gary B. Sabin (SEAL)
- --------------------------- ---------------------------------
Graham Bullick Name: Gary B. Sabin
Assistant Secretary Title: President
