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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) May 18, 1995
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SECURITY CAPITAL PACIFIC TRUST
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(Exact Name of Registrant as Specified in its Charter)
Maryland
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(State or Other Jurisdiction of Incorporation)
0-4254 74-6056896
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(Commission File Number) (I.R.S. Employer Identification No.)
7777 Market Center Avenue, El Paso, Texas 79912
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(Address of Principal Executive Offices) (Zip Code)
(915) 877-3900
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On May 18, 1995, Security Capital Pacific Trust, a Maryland real estate
investment trust ("PTR"), announced the pricing of an offering of its Series B
Cumulative Redeemable Preferred Shares of Beneficial Interest, $1.00 par value
per share (the "Preferred Shares"). Copies of the announcement, the
underwriting agreement relating to the Preferred Shares and the Articles
Supplementary governing the Preferred Shares are included as exhibits hereto and
are incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
SEQUENTIAL
EXHIBIT NO. DOCUMENT DESCRIPTION PAGE NO.
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99.1 Press Release dated May 18, 1995.
99.2 Underwriting Agreement dated May 17, 1995 among
Goldman, Sachs & Co., Dean Witter Reynolds Inc., A.G.
Edwards & Sons, Inc., PaineWebber Incorporated and
Prudential Securities Incorporated and Security Capital
Pacific Trust.
99.3 Articles Supplementary dated as of May 17, 1995 with
respect to the Series B Cumulative Redeemable Preferred
Shares of Beneficial Interest, $1.00 par value per share,
of Security Capital Pacific Trust.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SECURITY CAPITAL PACIFIC TRUST
Dated: May 22, 1995 By: /s/ C. RONALD BLANKENSHIP
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C. Ronald Blankenship
Chairman
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SECURITY CAPITAL PACIFIC TRUST
Prices $100 Million Preferred Offering
Thursday, May 18, 1995--Security Capital Pacific Trust (New York Stock
Exchange Symbol: PTR) announced today that its offering of 4,000,000 Series B
Cumulative Redeemable Preferred Shares of Beneficial Interest, liquidation
preference $25.00 per share, was priced to yield 9%.
The proceeds of the offering will be used to repay borrowings under PTR's $350
million unsecured revolving line of bank credit and to invest in additional
multifamily properties in PTR's Western target market.
The Preferred Shares are redeemable, solely at the option of PTR, any time
after five years. The annual dividend on the Preferred Shares was fixed at $2.25
per share. The Preferred Shares are not convertible into Common Shares.
The Preferred Shares are rated investment grade (BBB+ by Standard & Poor's
Corporation and Baa3 by Moody's Investors Service Inc.). The Preferred Shares
are expected to be listed on the New York Stock Exchange under the symbol
"PTR-PRB." The offering was underwritten by a group led by Goldman, Sachs & Co.,
Dean Witter Reynolds, Inc., A.G. Edwards & Sons, Inc., PaineWebber Incorporated
and Prudential Securities Incorporated.
PTR's objective is to be the preeminent real estate operating company focusing
on the development, acquisition, operation and long-term ownership of
multifamily properties in its Western target market. PTR's primary objective is
generating long-term, sustainable growth in per share cash flow. PTR will
achieve this objective by executing an internal growth strategy that focuses on
(1) maximizing operating performance through value-added asset management, (2)
concentrating its fully integrated development capability and experienced team
of professionals on development of industry-leading product in targeted
submarkets that exhibit strong job growth and demographic trends and (3)
implementing an asset optimization strategy of redeploying capital into targeted
moderate income developments with significant long-term cash flow growth
prospects.
FOR MORE INFORMATION CONTACT: Douglas K. Ball
(800) 982-9293
or
Gerard de Gunzburg
(212) 838-9292
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SECURITY CAPITAL PACIFIC TRUST
SERIES B CUMULATIVE REDEEMABLE PREFERRED SHARES
OF BENEFICIAL INTEREST
(PAR VALUE $1.00 PER SHARE)
(LIQUIDATION PREFERENCE $25.00 PER SHARE)
Underwriting Agreement
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May 17, 1995
Goldman, Sachs & Co.,
Dean Witter Reynolds Inc.
A. G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Security Capital Pacific Trust (formerly known as Property Trust of America),
a real estate investment trust organized under the laws of the State of Maryland
(the "Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") an aggregate of 4,000,000 Series B Cumulative Redeemable
Preferred Shares of Beneficial Interest, par value $1.00 per share, Liquidation
Preference $25.00 Per Share (the "Firm Shares"), of the Company (the "Preferred
Shares"), and, at the election of the Underwriters, up to 600,000 additional
Preferred Shares (the "Optional Shares") (the Firm Shares and the Optional
Shares which the Underwriters elect to purchase pursuant to Section 2 hereof
being collectively called the "Shares").
1. The Company represents and warrants to, and agrees with, each of the
Underwriters that:
(a) Two registration statements on Form S-3 (Files No. 33-78402 and 33-
86444) in respect of the Shares have been filed with the Securities and
Exchange Commission (the "Commission"); such registration statements and
any post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits thereto,
but including all documents incorporated by reference in the prospectuses
contained therein, to the Representatives for each of the other
Underwriters, have been declared effective by the Commission in such form;
no other document with respect to such registration statements or document
incorporated by reference therein has heretofore been filed, or transmitted
for filing, with the Commission (other than prospectuses filed pursuant to
Rule 424(b) of the rules and regulations of the Commission under the
Securities Act of 1933, as amended (the "Act") each in the form heretofore
delivered to the Representatives); and no stop orders suspending the
effectiveness of such
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registration statements have been issued and no proceedings for that
purpose have been initiated or threatened by the Commission (any
preliminary prospectus included in such registration statements or filed
with the Commission pursuant to Rule 424(a) under the Act, is hereinafter
called a "Preliminary Prospectus"; the various parts of such registration
statements, including all exhibits thereto and the documents incorporated
by reference in the prospectuses contained in the registration statements
at the time such part of the registration statements became effective, each
as amended at the time such part of the registration statements became
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Shares, in the form in which it
has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter called
the "Prospectus"; any reference herein to any Preliminary Prospectus or the
Prospectus shall be deemed to refer to and include the documents
incorporated by reference pursuant to Item 12 of Form S-3 under the Act, as
of the date of such Preliminary Prospectus or Prospectus, as the case may
be; any reference to any amendment or supplement to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after the date of such Preliminary Prospectus or
Prospectus, as the case may be, under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may be; any reference to
any amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration
Statement that is incorporated by reference in the Registration Statement;
and any reference to the Prospectus as amended or supplemented shall be
deemed to refer to the Prospectus as amended or supplemented in the form in
which it is filed with the Commission pursuant to Rule 424(b) under the Act
in accordance with Section 5(a) hereof, including any documents
incorporated by reference therein as of the date of such filing);
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act and the rules and regulations of
the Commission thereunder, and did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
Goldman, Sachs & Co. expressly for use therein;
(c) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by
reference in the Prospectus or any further amendment or supplement thereto,
when such documents become effective or are filed with the Commission, as
the case may be, will conform in all material respects to the requirements
of the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided, however, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company through the
Representatives expressly for use in the Prospectus as amended or
supplemented;
(d) The Registration Statement and the Prospectus conform, and any
amendments or supplements to the Registration Statement or the Prospectus
conform or will conform, in all material respects to the requirements of
the Act and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Prospectus and any amendment or supplement thereto,
contain an untrue statement of a material fact or omit to state
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a material fact required to be stated therein or necessary to make the
statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Company by an Underwriter through the Representatives
expressly for use in the Prospectus as amended or supplemented relating to
such Shares;
(e) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been any change in the capital stock or long-term
debt of the Company or any of its subsidiaries, or any material adverse
change, or any development involving a prospective material adverse change,
in or affecting the general affairs, management, financial position,
shareholders' equity, or results of operations of the Company and its
subsidiaries, otherwise than as set forth or contemplated in the Prospectus
as amended or supplemented;
(f) The Company and its subsidiaries have good and marketable title in
fee simple to all real property described in the Prospectus as amended or
supplemented as owned by them, and good and marketable title to all
personal property owned by them, in each case free and clear of all liens,
encumbrances and defects except such as are described in the Prospectus as
amended or supplemented or such as do not materially affect the value of
such property and do not interfere with the use made or proposed to be made
of such property by the Company and its subsidiaries; and any real property
and buildings held under lease by the Company and its subsidiaries and
described in the Prospectus are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not
interfere with the use made or proposed to be made of such property and
buildings by the Company and its subsidiaries;
(g) The Company has been duly incorporated and is validly existing as a
real estate investment trust of unlimited duration with transferable shares
of beneficial interest in good standing under the laws of the State of
Maryland, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus as
amended or supplemented, and has been duly qualified for the transaction of
business and is in good standing under the laws of each other jurisdiction
in which it owns or leases properties or conducts any business so as to
require such qualification, or is subject to no material liability or
disability by reason of the failure to be so qualified in any such
jurisdiction; and each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation;
(h) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented, and all of the issued shares of
capital stock of the Company have been duly and validly authorized and
issued, are fully paid and, except as described in the Prospectus as
amended or supplemented, non-assessable and conform to the description
thereof contained in the Prospectus; and all of the issued shares of
capital stock of each subsidiary of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and (except for
directors' qualifying shares and except as set forth in the Prospectus) are
owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims;
(i) The Shares have been duly and validly authorized, and, when issued
and delivered against payment therefor as provided herein, will be duly and
validly issued and fully paid and, except as described in the Prospectus as
amended or supplemented, non-assessable and will conform to the description
of the Shares contained in the Prospectus as amended or supplemented;
(j) The issue and sale of the Shares by the Company and the compliance by
the Company with all of the provisions of this Agreement and the
consummation of the transactions contemplated herein will not conflict with
or result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its
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subsidiaries is a party or by which the Company or any of its subsidiaries
is 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 provisions of the Restated Declaration of Trust or By-laws of the
Company or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties; and no consent, approval,
authorization, order, registration or qualification of or with any such
court or governmental agency or body is required for the issue and sale of
the Shares or the consummation by the Company of the transactions
contemplated by this Agreement, except (A) the registration under the Act
of the Shares and (B) such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Shares by the Underwriters;
(k) Other than as set forth in the Prospectus as amended or supplemented,
there are no legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or of which any property of the
Company or any of its subsidiaries is the subject, which, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of the
Company and its subsidiaries; and, to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(l) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its subsidiaries are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder;
(m) Neither the Company nor any of its affiliates does business with the
government of Cuba or with any person or affiliate located in Cuba within
the meaning of Section 517.075, Florida Statutes; and
(n) With respect to all tax periods regarding which the Internal Revenue
Service is or will be entitled to assert any claim, the Company has met the
requirements for qualification as a real estate investment trust under
Sections 856 through 860 of the Internal Revenue Code, as amended, and the
Company's present and contemplated operations, assets and income continue
to meet such requirements; and the Company is not an open-end investment
company that is or is required to be registered under Section 8 of the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(o) 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 it, or of (b) any unlawful spills, releases, discharges or
disposal of Hazardous Materials that have occurred or are presently
occurring off such properties as a result of any construction on or
operation and use of such properties, which presence or occurrence would
materially adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company. In
connection with the construction on or operation and use of the properties
owned by the Company, the Company represents that, as of the date of this
Agreement, it 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; and
(p) The REIT Management Agreement ("REIT Management Agreement") described
in the Prospectus as amended or supplemented has been duly authorized,
executed and delivered by the Company and Security Capital Pacific
Incorporated (formerly Security Capital (Southwest) Incorporated) (the
"REIT Manager") and constitutes a legal, valid and binding agreement
enforceable in accordance with its terms, subject as to enforcement to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors
rights and 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 and delivery of such agreement and the performance thereof by the
Company and the REIT Manager are within the power and
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authority of the Company and the REIT Manager, do not violate any provision
of or constitute a default under any agreement or instrument to which the
Company or the REIT Manager is bound, and do not require the consent,
approval, authorization or order of any court or governmental agency or
body.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $24.2125, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Shares as provided below, the Company agrees to issue and sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Company, at the purchase price per share set forth
in clause (a) of this Section 2, that portion of the number of Optional Shares
as to which such election shall have been exercised (to be adjusted by you so as
to eliminate fractional shares) determined by multiplying such number of
Optional Shares by a fraction, the numerator of which is the maximum number of
Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to 600,000 Optional Shares, at the purchase price per share
set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus as amended or supplemented.
4. Certificates for the Firm Shares and the Optional Shares to be purchased by
each Underwriter hereunder, and in such authorized denominations and registered
in such names as the Representatives may request upon at least forty-eight
hours' prior notice to the Company, shall be delivered by or on behalf of the
Company to Goldman, Sachs & Co. for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor by
certified or official bank check or checks, payable to the order of the Company
in New York Clearing House funds, all at the offices of Sullivan & Cromwell, 125
Broad Street, New York, New York 10004. The time and date of such delivery and
payment shall be, with respect to the Firm Shares, 9:30 a.m., New York time, on
May 24, 1995, or at such other time and date as you and the Company may agree
upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York
time, on the date specified by you in the written notice given by you of the
Underwriters' election to purchase such Optional Shares, or at such other time
and date as you and the Company may agree upon in writing. Such time and date
for delivery of the Firm Shares is herein called the "First Time of Delivery,"
such time and date for delivery of the Optional Shares, if not the First Time of
Delivery, is herein called the "Second Time of Delivery," and each such time and
date for delivery is herein called a "Time of Delivery". Such certificates will
be made available for checking and packaging at least twenty-four hours prior to
each Time of Delivery at the office of Goldman, Sachs & Co., 85 Broad Street,
New York, New York 10004.
5. The Company agrees with each of the Underwriters:
(a) To prepare the Prospectus as amended or supplemented in a form
approved by you and to file such Prospectus pursuant to Rule 424(b) under
the Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement, or, if
applicable, such earlier time as may be required by Rule 424(b); to make no
further amendment or any supplement to the Registration Statement or
Prospectus as amended or supplemented prior to the last Time of Delivery
which shall be reasonably disapproved by you promptly after reasonable
notice thereof; to advise you, promptly after it receives notice thereof,
of the time when the Registration
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Statement, or any amendment thereto, has been filed or becomes effective or
any supplement to the Prospectus or any amended Prospectus has been filed
and to furnish you with copies thereof; to file promptly all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act for so long as the delivery of a prospectus is required
in connection with the offering or sale of the Shares; to advise you,
promptly after it receives notice thereof, of the issuance by the
Commission of any stop order or of any order preventing or suspending the
use of any Preliminary Prospectus or prospectus, of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, of
the initiation or threatening of any proceeding for any such purpose, or of
any request by the Commission for the amending or supplementing of the
Registration Statement or Prospectus or for additional information; and, in
the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Shares
or suspending any such qualification, promptly to use its best efforts to
obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities
laws of such jurisdictions as you may request and to comply with such laws
so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution
of the Shares, provided that in connection therewith the Company shall not
be required to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction;
(c) To furnish the Underwriters with copies of the Prospectus as amended
or supplemented in such quantities as you may from time to time reasonably
request, and, if the delivery of a prospectus is required at any time prior
to the expiration of nine months after the time of issue of the Prospectus
as amended or supplemented in connection with the offering or sale of the
Shares and if at such time any event shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during
such same period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus in
order to comply with the Act or the Exchange Act, to notify the
Representatives and upon their request to file such document and to prepare
and furnish without charge to each Underwriter and to any dealer in
securities as many copies as the Representatives may from time to time
reasonably request of an amended Prospectus or a supplement to the
Prospectus which will correct such statement or omission or effect such
compliance;
(d) To make generally available to its security holders as soon as
practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c)
under the Act), an earning statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to
and including the later of the last Time of Delivery and such earlier time
as you may notify the Company, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Shares (except for debt
securities subsequent to the First Time of Delivery);
(f) To furnish to its shareholders as soon as practicable after the end
of each fiscal year an annual report (including a balance sheet and
statements of income, shareholders' equity and cash flows of the Company
and its consolidated subsidiaries, certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement),
consolidated summary financial information of the Company and its
subsidiaries for such quarter in reasonable detail;
(g) During a period of three years from the date of this Agreement, to
furnish to the Underwriters copies of all reports or other communications
(financial or other) furnished to shareholders, and to deliver to the
Underwriters (i)
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as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national
securities exchange on which any class of securities of the Company is
listed; and (ii) such additional information concerning the business and
financial condition of the Company as the Underwriters may from time to
time reasonably request (such financial statements to be on a consolidated
basis to the extent the accounts of the Company and its subsidiaries are
consolidated in reports furnished to its shareholders generally or to the
Commission);
(h) To use its best efforts to list, subject to notice of issuance, the
Preferred Shares on the New York Stock Exchange, within the time period
described in the Prospectus as amended or supplemented;
(i) To continue to elect to qualify as a "real estate investment trust"
under the Internal Revenue Code of 1986, as amended, and to use its best
efforts to continue to meet the requirements to qualify as a "real estate
investment trust"; and
(j) Not to be or become, at any time prior to the expiration of three
years after the last Time of Delivery, an open-end investment trust, unit
investment trust, closed-end investment company or face-amount certificate
company that is or is required to be registered under Section 8 of the
Investment Company Act.
6. The Company covenants and agrees with the several Underwriters that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
registration of the Shares under the Act and all other expenses in connection
with the preparation, printing and filing of the Registration Statement, any
Preliminary Prospectus and the Prospectus and amendments and supplements thereto
and the mailing and delivering of copies thereof to the Underwriters and
dealers; (ii) the cost of printing or producing any Agreement among
Underwriters, this Agreement, any Blue Sky Memorandum and any other documents in
connection with the offering, purchase, sale and delivery of the Shares; (iii)
all expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 5(b) hereof, including
the fees and disbursements of counsel for the Underwriters in connection with
such qualification and in connection with the Blue Sky survey(s); (iv) the cost
of preparing certificates for the Shares; (v) the cost and charges of any
transfer agent or registrar or dividend disbursing agent; and (vi) all other
costs and expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this Section. It is
understood, however, that, except as provided in this Section, and Sections 8
and 11 hereof, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on resale of any of the
Shares by them, and any advertising expenses connected with any offers they may
make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in the discretion of the
Representatives, to the condition that all representations and warranties and
other statements of the Company herein are, at and as of such Time of Delivery,
true and correct, the condition that the Company shall have performed all of its
obligations hereunder theretofore to be performed, and the following additional
conditions:
(a) The Prospectus as amended or supplemented shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and regulations under the Act and
in accordance with Section 5(a) hereof; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information
on the part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) Sullivan & Cromwell, counsel to the Underwriters, shall have
furnished to you such opinion or opinions, dated such Time of Delivery,
with respect to the organization of the Company, the validity of the Shares
being delivered at such Time of Delivery, the Registration Statement, the
Prospectus as well as such other related matters as you may reasonably
request, and such counsel shall have received such papers and information
as they may reasonably request to enable them to pass upon such matters;
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(c) Mayer, Brown & Platt shall have furnished to you their written
opinion, dated such Time of Delivery, respectively, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a real estate investment trust in good standing under the laws of the
State of Maryland, with power and authority to own its properties and
conduct its business as described in the Prospectus as amended or
supplemented;
(ii) The Company has an authorized capitalization as set forth in the
Prospectus as amended or supplemented; and all of the issued shares of
capital stock of the Company (including the Shares being delivered at
such Time of Delivery) have been duly and validly authorized and issued
and are fully paid and, except as described in the Prospectus as
amended or supplemented, non-assessable; and the Preferred Shares
conform, in all material respects, to the description thereof in the
Prospectus as amended or supplemented; and the holders of outstanding
capital stock of the Company are not entitled to preemptive or other
rights afforded by the Company to subscribe for the Shares;
(iii) The Company has been duly qualified for the transaction of
business and is in good standing under the laws of each other
jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, or is subject to no
material liability or disability by reason of failure to be so
qualified in any such jurisdiction (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of public officials
or officers of the Company, provided that such counsel shall state that
they believe that both you and they are justified in relying upon such
opinions and certificates);
(iv) Each subsidiary of the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation; and all of the issued shares of
capital stock of each such subsidiary have been duly and validly
authorized and issued, are fully paid and non-assessable, and are owned
directly or indirectly by the Company, free and clear of all perfected
liens, encumbrances, equities or claims (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of local
counsel and in respect to matters of fact upon certificates of public
officials or officers of the Company or its subsidiaries, provided that
such counsel shall state that they believe that both you and they are
justified in relying upon such opinions and certificates);
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus as amended or supplemented, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject which, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, shareholders' equity, or results of operations of the Company
and its subsidiaries; and, to the best of such counsel's knowledge, no
such proceedings are threatened or contemplated by governmental
authorities or threatened by others;
(vi) The REIT Manager has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation and has corporate power to conduct
its business as described in the Prospectus;
(vii) The REIT Management Agreement has been duly authorized,
executed and delivered by the parties thereto and constitutes a valid
and legally binding agreement, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and 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 therefrom may be brought;
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(viii) This Agreement has been duly authorized, executed and
delivered by the Company;
(ix) The issue and sale of the Shares being delivered at such Time of
Delivery by the Company and the compliance by the Company with all of
the provisions of this Agreement and the consummation of the
transactions herein contemplated will not result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company or
any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is 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 provisions of the Restated Declaration
of Trust or By-laws of the Company or any statute or any order, rule or
regulation known to such counsel of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or
any of their properties, the breach or violation of which is of
material significance in respect of the business or financial condition
of the Company;
(x) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue and sale of the Shares or the consummation by
the Company of the transactions contemplated by this Agreement or the
terms of the Shares, except such as have been obtained under the Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Shares by
the Underwriters;
(xi) The statements set forth (i) in the Prospectus under the caption
"Description of Preferred Shares" and "Federal Income Tax
Considerations" and (ii) in the Prospectus as amended or supplemented
under the captions "Description of the Series B Preferred Shares" and
"Certain Federal Income Tax Considerations", to the extent such
statements relate to matters of law or regulation or constitute
summaries of documents described therein, are true and accurate in all
material respects;
(xii) The Company has qualified to be taxed as a real estate
investment trust pursuant to Sections 856 through 860 of the Internal
Revenue Code, as amended, for the fiscal years ended December 31, 1989
through December 31, 1993, and the Company's present method of
operation and its assets and contemplated income are such that the
Company is in a position under present law to so qualify for the fiscal
year ending December 31, 1994 and in the future; and the Company is not
an open-end investment company, unit investment trust, closed-end
investment company or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company
Act;
(xiii) The investments of the Company described in the Prospectus
are permitted investments under the Restated Declaration of Trust of
the Company;
(xiv) The documents incorporated by reference in the Prospectus or
any further amendment or supplement thereto made by the Company prior
to such Time of Delivery (other than the financial statements and
related schedules therein and other financial information included or
incorporated by reference therein, as to which such counsel need
express no opinion), when they became effective or were filed with the
Commission, as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder;
and they have no reason to believe that any of such documents, when
such documents became effective or were so filed, as the case may be,
contained, in the case of a registration statement which became
effective under the Act, 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, in the
case of other documents which were filed under the Exchange Act with
the Commission, an untrue statement of a material fact or omitted to
state a material fact necessary in order to make the
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statements therein, in the light of the circumstances under which they
were made when such documents were so filed, not misleading; and
(xv) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such
Time of Delivery (other than the financial statements and related
schedules therein and other financial information included or
incorporated by reference therein, as to which such counsel need
express no opinion) comply as to form in all material respects with the
requirements of the Act and the rules and regulations thereunder; they
have no reason to believe that, as of its effective date, the
Registration Statement or any further amendment thereto made by the
Company prior to such Time of Delivery (other than the financial
statements and related schedules therein, as to which such counsel need
express no opinion) contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that, as of
its date, the Prospectus or any further amendment or supplement thereto
made by the Company prior to such Time of Delivery (other than the
financial statements and related schedules therein and other financial
information included or incorporated by reference therein, as to which
such counsel need express no opinion) contained an untrue statement of
a material fact or omitted to state a material fact necessary to make
the statements therein, in light of the circumstances in which they
were made, not misleading or that, as of such Time of Delivery, either
the Registration Statement or the Prospectus or any further amendment
or supplement thereto made by the Company prior to such Time of
Delivery (other than the financial statements and related schedules
therein and other financial information included or incorporated by
reference therein, as to which such counsel need express no opinion)
contains an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading; and they do not
know of any amendment to the Registration Statement required to be
filed or of any contracts or other documents of a character required to
be filed as an exhibit to the Registration Statement or required to be
incorporated by reference into the Prospectus or required to be
described in the Registration Statement or the Prospectus which are not
filed or incorporated by reference or described as required.
In rendering such opinion, Mayer, Brown & Platt may rely as to matters
governed by the laws of states other than Illinois or Federal laws on local
counsel in such jurisdictions, provided that in each case, Mayer, Brown &
Platt shall state that they believe that they and the Underwriters are
reasonably justified in relying on such other counsel. In rendering the
opinions contained in paragraphs (xi) (insofar as said opinion refers to
information in the Prospectus under the caption "Federal Income Tax
Considerations" or in the Prospectus as amended or supplemented under the
caption "Certain Federal Income Tax Considerations" ) and (xii), such
opinions may be based upon (a) the Internal Revenue Code, as amended, and
the rules and regulations promulgated thereunder, (b) Maryland law existing
and applicable to the Company, (c) fact and other matters set forth in the
Prospectus, (d) the provisions of the Restated Declaration of Trust of the
Company and the REIT Management Agreement, and (e) certain statements and
representations made by the Company to Mayer, Brown & Platt.
(d) On the date hereof and also at each Time of Delivery, KPMG Peat
Marwick LLP shall have furnished to you a letter or letters, dated the
respective date of delivery thereof, in form and substance satisfactory to
you, to the effect set forth in Annex I hereto;
(e) (i) Neither the Company, nor any of its subsidiaries, shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus, and (ii) since the respective dates as
of which information is given in the Prospectus, there shall not have been
any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, shareholders' equity,
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or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of which,
in any such case described in Clause (i) or (ii), is in your judgment so
material and adverse as to make it impracticable or inadvisable to proceed
with the public offering or the delivery of the Shares on the terms and in
the manner contemplated in the Prospectus as amended or supplemented;
(f) On or after the date hereof, there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York State authorities; or (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the
effect of any such event specified in this Clause (iv) in your judgment
makes it impracticable or inadvisable to proceed with the public offering
or the delivery of the Firm Shares or Optional Shares or both on the terms
and in the manner contemplated in the Prospectus;
(g) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities or preferred stock
(including the Preferred Shares) by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's
debt securities or preferred stock (including the Preferred Shares);
(h) The Company shall have furnished or caused to be furnished to you at
each Time of Delivery Shares certificates of officers of the Company
satisfactory to you as to the accuracy of the representations and
warranties of the Company herein at and as of such Time of Delivery, as to
the performance by the Company of all of its obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth
in subsections (a) and (e) of this Section and as to such other matters as
the Representatives may reasonably request.
8. (a) The Company will indemnify and hold harmless each Underwriter
against any losses, claims, damages or liabilities, joint or several, to which
such Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Shares, or any amendment
or supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such action or
claim as such expenses are incurred; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability (or actions in respect thereof) arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through you expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Shares, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was
made in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any other
prospectus relating to the Shares, or any
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such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through you expressly
for use therein; and will reimburse the Company for any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or (b)
above of notice of the commencement of any action, such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying party under
such subsection, notify the indemnifying party in writing of the commencement
thereof; but the omission so to notify the indemnifying party shall not relieve
it from any liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the commencement
thereof, the indemnifying party shall be entitled to participate therein and, to
the extent that it shall wish, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, with counsel satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party), and, after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation.
(d) If the indemnification provided for in this Section 8 is unavailable to or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above in respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the immediately
preceding sentence is not permitted by applicable law or if the indemnified
party failed to give the notice required under subsection (c) above, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other shall be deemed to be in the same proportion as the total net
proceeds from such offering (before deducting expenses) received by the Company
bear to the total underwriting discounts and commissions received by the
Underwriters. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the applicable Shares underwritten by it 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 by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters in this
subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in addition
to any liability which the Company may otherwise have and shall extend, upon the
same terms and conditions, to each person, if any, who controls any Underwriter
within
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the meaning of the Act; and the obligations of the Underwriters under this
Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and trustee of the Company and to each person, if
any, who controls the Company within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to purchase the
Firm Shares or Optional Shares which it has agreed to purchase hereunder at a
Time of Delivery, you may in your discretion arrange for you or another party or
other parties to purchase such Shares on the terms contained herein. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Firm Shares or Optional Shares, as the case may be, then
the Company shall be entitled to a further period of thirty-six hours within
which to procure another party or other parties reasonably satisfactory to you
to purchase such Shares on such terms. In the event that, within the respective
prescribed period, you notify the Company that you have so arranged for the
purchase of such Shares, or the Company notifies you that it has so arranged for
the purchase of such Shares, you or the Company shall have the right to postpone
a Time of Delivery for such Shares for a period of not more than seven days, in
order to effect whatever changes may thereby be made reasonably necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Company agrees to file promptly any
amendments or supplements to the Registration Statement or the Prospectus which
in your opinion may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section with
like effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the Firm
Shares or Optional Shares, as the case may be, of a defaulting Underwriter or
Underwriters by you and the Company as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed one-
eleventh of the aggregate number of the Firm Shares or Optional Shares, as the
case may be, to be purchased at the respective Time of Delivery, then the
Company shall have the right to require each non-defaulting Underwriter to
purchase the number of Firm Shares or Optional Shares, as the case may be, which
such Underwriter agreed to purchase hereunder at such Time of Delivery, and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Firm Shares or Optional Shares, as the case may
be, which such Underwriter agreed to purchase hereunder) of the Firm Shares or
Optional Shares, as the case may be, of such defaulting Underwriter or
Underwriters for which such arrangements have not been made; but nothing herein
shall relieve a defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the Firm
Shares or Optional Shares, as the case may be, of a defaulting Underwriter or
Underwriters by you and the Company as provided in subsection (a) above, the
aggregate number of Firm Shares or Optional Shares, as the case may be, which
remains unpurchased exceeds one-eleventh of the aggregate number of the Firm
Shares or Optional Shares, as the case may be, to be purchased at the respective
Time of Delivery, as referred to in subsection (b) above, or if the Company
shall not exercise the right described in subsection (b) above to require non-
defaulting Underwriters to purchase Firm Shares or Optional Shares, as the case
may be, of a defaulting Underwriter or Underwriters, then this Agreement (or,
with respect to the Second Time of Delivery, the obligations of the Underwriters
to purchase and of the Company to sell the Optional Shares) shall thereupon
terminate, without liability on the part of any non-defaulting Underwriter or
the Company, except for the expenses to be borne by the Company and the
Underwriters as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties and
other statements of the Company and the several Underwriters, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person of any Underwriter, or the Company
or any officer or trustee or controlling person of the Company, and shall
survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, the
Company shall not then be under any liability to any Underwriter except as
provided in Sections 6 and 8 hereof; but, if for any other reason, any Shares
are not delivered by or on behalf of the Company as provided herein, the Company
will reimburse the Underwriters through you for all out-of-pocket
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expenses approved in writing by the Representatives, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Shares not so delivered,
but the Company shall then be under no further liability to any Underwriter
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman, Sachs &
Co., at 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit of,
the Underwriters, the Company and, to the extent provided in Sections 8 and 10
hereof, the officers and trustees of the Company and each person who controls
the Company or any Underwriter, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Shares from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the term
"business day" shall mean any day when the Commission's office in Washington,
D.C. is open for business.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties hereto
in any number of counterparts, each of which shall be deemed to be an original,
but all such respective counterparts shall together constitute one and the same
instrument.
17. Under the terms of the Company's Restated Declaration of Trust, all
persons dealing with the Company shall look solely to the Company property for
satisfaction of claims of any nature, and no trustee, officer, agent or
shareholder of the Company shall be held to any person liable in tort, contract
or otherwise as the result of the execution and delivery of this Agreement by
the Company.
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If the foregoing is in accordance with your understanding, please sign and
return to us nine counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwiters and the Company.
It is understood that your acceptance of this letter on behalf of each of the
Underwriters is pursuant to the authority set forth in a form of Agreement of
Underwriters, the form of which shall be submitted to the Company for
examination upon request, but without warranty on your part as to the authority
of the signers thereof.
Very truly yours,
Security Capital Pacific Trust
By: /s/ Paul E. Szurek
------------------------
Name: Paul E. Szurek
Title: Secretary
Accepted as of the date hereof:
Goldman, Sachs & Co.
Dean Witter Reynolds Inc.
A. G. Edwards & Sons, Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
By: /s/ Goldman, Sachs & Co.
------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Underwriters
-15-
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
MAXIMUM NUMBER
OF OPTIONAL
NUMBER OF SHARES WHICH
FIRM SHARES MAY BE
UNDERWRITER TO BE PURCHASED PURCHASED
----------- --------------- --------------
<S> <C> <C>
Goldman, Sachs & Co. ................. 555,000 83,250
Dean Witter Reynolds Inc. ............ 555,000 83,250
A. G. Edwards & Sons, Inc. ........... 555,000 83,250
PaineWebber Incorporated.............. 555,000 83,250
Prudential Securities Incorporated.... 555,000 83,250
Advest, Inc. ......................... 25,000 3,750
J.C. Bradford & Co. .................. 25,000 3,750
Alex. Brown & Sons Incorporated....... 75,000 11,250
Cowen & Company....................... 25,000 3,750
Crowell, Weedon & Co. ................ 25,000 3,750
Dain Bosworth Incorporated............ 25,000 3,750
Fahnestock & Co. Inc. ................ 25,000 3,750
Interstate/Johnson Lane Corporation... 25,000 3,750
Janney Montgomery Scott Inc. ......... 25,000 3,750
Edward D. Jones & Co. ................ 75,000 11,250
Kemper Securities, Inc. .............. 75,000 11,250
Kennedy, Cabot & Co. ................. 25,000 3,750
Legg Mason Wood Walker, Incorporated.. 75,000 11,250
McDonald & Company Securities, Inc. .. 25,000 3,750
McGinn, Smith & Co., Inc. ............ 25,000 3,750
Morgan Keegan & Company, Inc. ........ 25,000 3,750
Oppenheimer & Co., Inc. .............. 75,000 11,250
Piper Jaffray Inc. ................... 75,000 11,250
Principal Financial Securities, Inc. . 75,000 11,250
Rauscher Pierce Refsnes, Inc. ........ 25,000 3,750
Raymond James & Associates, Inc. ..... 25,000 3,750
Robertson, Stephens & Company, L.P. .. 75,000 11,250
The Robinson-Humphrey Company, Inc. .. 75,000 11,250
Scott & Stringfellow, Inc. ........... 25,000 3,750
Sutro & Co. Incorporated.............. 25,000 3,750
Trilon International Inc. ............ 25,000 3,750
Tucker Anthony Incorporated........... 25,000 3,750
U.S. Clearing Corp. .................. 25,000 3,750
Wheat, First Securities, Inc. ........ 75,000 11,250
--------- ---------
Total................................. 4,000,000 600,000
========= =========
</TABLE>
<PAGE>
ANNEX I
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to the
Company and its subsidiaries within the meaning of the Act and the applicable
published rules and regulations thereunder;
(ii) In their opinion, the financial statements audited by them and
included or incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the applicable
accounting requirements of the Act or the Exchange Act, as applicable, and
the related published rules and regulations thereunder;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Prospectus and included or
incorporated by reference in Item 6 of the Company's Annual Report on Form
10-K for the most recent fiscal year agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated financial
statements for such five fiscal years which were included or incorporated by
reference in the Company's Annual Reports on Form 10-K for such fiscal years;
(iv) On the basis of limited procedures, not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred
to below, a reading of the latest available interim financial statements of
the Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited financial
statements included or incorporated by reference in the Prospectus, inquiries
of officials of the Company and its subsidiaries responsible for financial
and accounting matters and such other inquiries and procedures as may be
specified in such letter, nothing came to their attention that caused them to
believe that:
(A) the unaudited condensed consolidated statements of earnings,
consolidated balance sheets and consolidated statements of cash flows
included or incorporated by reference in the Company's Quarterly Reports
on Form 10-Q incorporated by reference in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations thereunder or are not in
conformity with generally accepted accounting principles applied on a
basis substantially consistent with the basis for the audited consolidated
statements of earnings, consolidated balance sheets and consolidated
statements of cash flows included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in
the unaudited consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis for the
corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Company's Annual Report on
Form 10-K for the most recent fiscal year;
1
<PAGE>
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement
data and balance sheet items included in the Prospectus and referred to in
Clause (B) were not determined on a basis substantially consistent with
the basis for the audited financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most recent
fiscal year;
(D) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as
to form in all material respects with the applicable accounting
requirements of the Act and the published rules and regulations thereunder
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the shareholders' equity
(other than issuances of capital stock upon exercise of options which were
outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Company and its subsidiaries, or any
decreases in consolidated net current assets or net assets or other items
specified by the Representatives, or any increases in any items specified
by the Representatives, in each case as compared with amounts shown in the
latest balance sheet included or incorporated by reference in the
Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described
in such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified
date referred to in Clause (E) there were any decreases in consolidated
net income or net earnings from operations or the total or per share
amounts of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period of
the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may occur or
which are described in such letter; and
(v) In addition to the audit referred to in their report(s) included or
incorporated by reference in the Prospectus and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives which are derived from
the general accounting records of the Company and its subsidiaries, which
appear in the Prospectus (excluding documents incorporated by reference) or
in Part II of, or in exhibits and schedules to, the Registration Statement
specified by the Representatives or in documents incorporated by reference in
the Prospectus specified by the Representatives, and have compared certain of
such amounts, percentages and financial information with the accounting
records of the Company and its subsidiaries and have found them to be in
agreement.
2
<PAGE>
Series B Cumulative Redeemable
Preferred Shares of Beneficial Interest
ARTICLES SUPPLEMENTARY
SECURITY CAPITAL PACIFIC TRUST
==============================
Articles Supplementary of Board of Trustees Classifying
and Designating a Series of Preferred Shares as
Series B Cumulative Redeemable Preferred
Shares of Beneficial Interest and Fixing Distribution and
Other Preferences and Rights of Such Series
==============================
Dated as of May 17, 1995
<PAGE>
SECURITY CAPITAL PACIFIC TRUST
==============================
Articles Supplementary of Board of Trustees Classifying
and Designating a Series of Preferred Shares as
Series B Cumulative Redeemable Preferred
Shares of Beneficial Interest and Fixing Distribution and
Other Preferences and Rights of Such Series
==============================
The undersigned, being all of the Trustees of Security Capital Pacific
Trust, a Maryland real estate investment trust (the "Trust"), hereby certify to
the State Department of Assessments and Taxation of Maryland pursuant to section
8-203(b) of the Annotated Code of Maryland that:
FIRST: The Board of Trustees has classified 4,600,000 unissued shares of
the Trust as Series B Cumulative Redeemable Preferred Shares of Beneficial
Interest (the "Series B Preferred Shares").
SECOND: The following is a description of the Series B Preferred Shares,
including the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and terms and
conditions of redemption thereof:
Section 1. Number of Shares and Designation. This class of Preferred
Shares shall be designated as Series B Cumulative Redeemable Preferred Shares of
Beneficial Interest (the "Series B Preferred Shares") and the number of shares
which shall constitute such series shall not be more than 4,600,000 shares, par
value $1.00 per share, which number may be decreased (but not below the number
thereof then outstanding plus the number required to fulfill the Trust's
obligations under options, warrants or similar rights issued by the Trust) from
time to time by the Board of Trustees.
Section 2. Definitions. For purposes of the Series B Preferred Shares,
the following terms shall have the meanings indicated:
"Board of Trustees" shall mean the Board of Trustees of the Trust or
any committee authorized by such Board of Trustees to perform any of its
responsibilities with respect to the Series B Preferred Shares.
<PAGE>
"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
City, New York are not required to be open.
"Call Date" shall mean the date specified in the notice to holders
required under subparagraph (e) of Section 5 as the Call Date.
"Common Shares" shall mean the common Shares of Beneficial Interest of
the Trust, par value $1.00 per share.
"Dividend Payment Date" shall mean the last calendar day of March,
June, September and December in each year, commencing on June 30, 1995;
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
April 1, July 1, October 1, and January 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 June 30, 1995).
"Fully Junior Shares" shall mean the Common Shares and any other class
or series of shares of the Trust now or hereafter issued and outstanding
over which the Series B Preferred Shares have preference or priority in
both (i) the payment of dividends and (ii) the distribution of assets on
any liquidation, dissolution or winding up of the Trust.
"Issue Date" shall mean the first date on which the Series B Preferred
Shares are issued and sold.
"Junior Shares" shall mean the Common Shares and any other class or
series of shares of the Trust now or hereafter issued and outstanding over
which the Series B Preferred Shares have preference or priority in the
payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Trust.
"Parity Shares" shall have the meaning set forth in paragraph (b) of
Section 7.
"Person" shall mean any individual, firm, partnership, corporation or
other entity, and shall include any successor (by merger or otherwise) of
such entity.
"Series B Preferred Shares" shall have the meaning set forth in
Section 1 hereof.
-2-
<PAGE>
"set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Trust 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 Trustees,
the allocation of funds to be so paid on any series or class of capital
stock of the Trust; provided, however, that if any funds for any class or
series of Junior Shares or any class or series of stock ranking on a parity
with the Series B Preferred Shares as to the payment of dividends are
placed in a separate account of the Trust or delivered to a disbursing,
paying or other similar agent, then "set apart for payment" with respect to
the Series B Preferred Shares shall mean placing such funds in a separate
account or delivering such funds to a disbursing, paying or other similar
agent.
"Transfer Agent" means Chemical Bank, New York City, New York, or such
other agent or agents of the Trust as may be designated by the Board of
Trustees or their designee as the transfer agent for the Series B Preferred
Shares.
"Voting Preferred Shares" shall have the meaning set forth in Section
8 hereof.
Section 3. Dividends.
(a) The holders of Series B Preferred Shares shall be entitled to
receive, when, as and if declared by the Board of Trustees out of funds
legally available for that purpose, dividends payable in cash in an amount
per share equal to $2.25. Such dividends shall begin to accrue and shall
be fully cumulative from the Issue Date, whether or not in any Dividend
Period or Periods there shall be funds of the Trust legally available for
the payment of such dividends, and shall be payable quarterly, when, as and
if declared by the Board of Trustees, in arrears on 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
Series B Preferred Shares, as they appear on the stock records of the Trust
at the close of business on such record dates, not less than 10 nor more
than 50 days preceding such Dividend Payment Dates thereof, as shall be
fixed by the Board of Trustees. Accrued and unpaid dividends for any past
Dividend Periods may be declared and paid at any time and for such interim
periods, without reference to any regular Dividend Payment Date, to holders
of record on such date, not less than 10 nor more than 50 days preceding
the payment date thereof, as may be fixed by the Board of Trustees.
(b) The amount of dividends payable for each full Dividend Period for
the Series B Preferred Shares shall be computed by dividing the annual
dividend rate by four. The amount of dividends payable for the initial
Dividend Period, or any other period shorter or longer than a full Dividend
Period, on the Series B Preferred Shares shall be computed on the basis of
twelve 30-day months and a 360-day year. Holders of Series B Preferred
Shares shall not be entitled to any dividends, whether payable in
-3-
<PAGE>
cash, property or stock, in excess of cumulative dividends, as herein
provided, on the Series B Preferred Shares. No interest, or sum of money in
lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series B Preferred Shares that may be in arrears.
(c) So long as any Series B Preferred Shares are outstanding, no
dividends, except as described in the immediately following sentence, shall
be declared or paid or set apart for payment on any class or series of
Parity Shares for any period unless full cumulative dividends have been or
contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Series B
Preferred Shares for all Dividend Periods terminating on or prior to the
Dividend Payment Date on such class or series of Parity Shares. When
dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared upon Series B Preferred
Shares and all dividends declared upon any other class or series of Parity
Shares shall be declared ratably in proportion to the respective amounts of
dividends accumulated and unpaid on the Series B Preferred Shares and
accumulated and unpaid on such Parity Shares.
(d) So long as any Series B Preferred Shares are outstanding, no
dividends (other than dividends or distributions paid solely in shares of,
or options, warrants or rights to subscribe for or purchase shares of,
Fully Junior Shares) shall be declared or paid or set apart for payment or
other distribution declared or made upon Junior Shares, nor shall any
Junior Shares be redeemed, purchased or otherwise acquired (other than a
redemption, purchase or other acquisition of Common Shares made for
purposes of an employee incentive or benefit plan of the Trust or any
subsidiary) 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) by the Trust, directly or indirectly (except by conversion into or
exchange for Fully Junior Shares), unless in each case (i) the full
cumulative dividends on all outstanding Series B Preferred Shares and any
other Parity Shares of the Trust shall have been paid or declared and set
apart for payment for all past Dividend Periods with respect to the Series
B Preferred Shares and all past dividend periods with respect to such
Parity Shares and (ii) sufficient funds shall have been paid or declared
and set apart for the payment of the dividend for the current Dividend
Period with respect to the Series B Preferred Shares and the current
dividend period with respect to such Parity Shares.
(e) No distributions on Series B Preferred Shares shall be declared by
the Board of Trustees of the Trust or paid or set apart for payment by the
Trust at such time as the terms and provisions of any agreement of the
Trust, including any agreement relating to its indebtedness, prohibits such
declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law.
-4-
<PAGE>
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of the
Trust, whether voluntary or involuntary, before any payment or distribution
of the assets of the Trust (whether capital or surplus) shall be made to or
set apart for the holders of Junior Shares, the holders of the Series B
Preferred Shares shall be entitled to receive Twenty-Five Dollars ($25.00)
per Series B Preferred Share plus an amount equal to all dividends (whether
or not earned or declared) accrued and unpaid thereon to the date of final
distribution to such holders; but such holders shall not be entitled to any
further payment. If, upon any liquidation, dissolution or winding up of
the Trust, the assets of the Trust, or proceeds thereof, distributable
among the holders of the Series B Preferred Shares 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 Shares, then such assets,
or the proceeds thereof, shall be distributed among the holders of Series B
Preferred Shares and any such other Parity Shares ratably in accordance
with the respective amounts that would be payable on such Series B
Preferred Shares and any such other Parity Shares if all amounts payable
thereon were paid in full. For the purposes of this Section 4, (i) a
consolidation or merger of the Trust with one or more corporations, (ii) a
sale or transfer of all or substantially all of the Trust'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 Trust.
(b) Subject to the rights of the holders of shares of any series or
class or classes of stock ranking on a parity with or prior to the Series B
Preferred Shares upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Trust, after payment shall
have been made in full to the holders of the Series B Preferred Shares, as
provided in this Section 4, any other series or class or classes of Junior
Shares shall, subject to the respective terms and provisions (if any)
applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the Series B Preferred Shares shall
not be entitled to share therein.
Section 5. Redemption at the Option of the Trust.
(a) Subject to Section 9 hereof, the Series B Preferred Shares shall
not be redeemable by the Trust prior to the fifth anniversary of the Issue
Date. On and after the fifth anniversary of the Issue Date, the Trust, at
its option, may redeem the Series B Preferred Shares, in whole at any time
or from time to time in part at the option of the Trust at a redemption
price of Twenty-Five Dollars ($25.00) per Series B Preferred Share, plus
the amounts indicated in Section 5(b).
(b) Upon any redemption of Series B Preferred Shares pursuant to this
Section 5, the Trust shall pay any accrued and unpaid dividends in arrears
for any Dividend Period ending on or prior to the Call Date. If the Call
Date falls after a
-5-
<PAGE>
dividend payment record date and prior to the corresponding Dividend
Payment Date, then each holder of Series B Preferred Shares 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 before such Dividend Payment
Date. Except as provided above, the Trust shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on Series B
Preferred Shares called for redemption.
(c) If full cumulative dividends on the Series B Preferred Shares and
any other class or series of Parity Shares of the Trust have not been paid
or declared and set apart for payment, the Series B Preferred Shares may
not be redeemed under this Section 5 in part and the Trust may not purchase
or acquire Series B Preferred Shares, otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of Series B
Preferred Shares or pursuant to Section 9 hereof.
(d) The redemption price to be paid upon any redemption of the Series
B Preferred Shares (other than any amounts indicated in Section 5(b) and
other than a redemption pursuant to Section 9) shall be payable solely out
of the sale proceeds of other capital shares of the Trust and from no other
source.
(e) Notice of the redemption of any Series B Preferred Shares under
this Section 5 shall be mailed by first-class mail to each holder of record
of Series B Preferred Shares to be redeemed at the address of each such
holder as shown on the Trust's record, not less than 30 nor more than 90
days prior to the Call Date. Neither the failure to mail any notice
required by this paragraph (e), 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
notice shall state, as appropriate: (1) the Call Date; (2) the number of
Series B Preferred Shares to be redeemed and, if fewer than all the shares
held by such holder are to be redeemed, the number of such shares to be
redeemed from such holder; (3) the place or places at which certificates
for such shares are to be surrendered; and (4) that dividends on the shares
to be redeemed shall cease to accrue on such Call Date except as otherwise
provided herein. Notice having been mailed as aforesaid, from and after
the Call Date (unless the Trust shall fail to make available an amount of
cash necessary to effect such redemption), (i) except as otherwise provided
herein, dividends on the Series B Preferred Shares so called for redemption
shall cease to accrue, (ii) said shares shall no longer be deemed to be
outstanding, and (iii) all rights of the holders thereof as holders of
Series B Preferred Shares of the Trust shall cease (except the right to
receive 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 Trust's obligation to provide
cash in accordance with the preceding
-6-
<PAGE>
sentence shall be deemed fulfilled if, on or before the Call Date, the
Trust shall deposit with a bank or trust company (which may be an affiliate
of the Trust) that has an office in the Borough of Manhattan, City of New
York, and that has, or is an affiliate of a bank or trust company that has,
capital and surplus of at least $50,000,000, necessary for such redemption,
in trust, with irrevocable instructions that such cash be applied to the
redemption of the Series B Preferred Shares so called for redemption. No
interest shall accrue for the benefit of the holders of Series B Preferred
Shares to be redeemed on any cash so set aside by the Trust. 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 Trust, after
which reversion the holders of such shares so called for redemption shall
look only to the general funds of the Trust 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 Trust shall so require and if the
notice shall so state), such shares shall be exchanged for any cash
(without interest thereon) for which such shares have been redeemed. If
fewer than all the outstanding Series B Preferred Shares are to redeemed,
shares to be redeemed shall be selected by the Trust from outstanding
Series B Preferred Shares not previously called for redemption by lot or
pro rata (as nearly as may be) or by any other method determined by the
Trust in its sole discretion to be equitable. If fewer than all the Series
B Preferred Shares represented by any certificate are redeemed, then new
certificates representing the unredeemed shares shall be issued without
cost to the holder thereof.
Section 6. Shares To Be Retired. All Series B Preferred Shares which
shall have been issued and reacquired in any manner by the Trust shall be
restored to the status of authorized but unissued Shares of Beneficial Interest
of the Trust, without designation as to class or series.
Section 7. Ranking. Any class or series of stock of the Trust shall be
deemed to rank:
(a) prior to the Series B Preferred Shares, 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 B Preferred Shares;
(b) on a parity with the Series B Preferred Shares, 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 B Preferred Shares, if the holders of such class of stock or
series and the Series B Preferred Shares shall be entitled
-7-
<PAGE>
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 Shares");
(c) junior to the Series B Preferred Shares, 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 Junior Shares; and
(d) junior to the Series B Preferred Shares, as to the payment of
dividends and as to the distribution of assets upon liquidation,
dissolution or winding up, if such stock or series shall be Fully Junior
Shares.
Section 8. Voting. If and whenever six quarterly dividends (whether or not
consecutive) payable on the Series B Preferred Shares or any series or class of
Parity Shares 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 trustees then constituting the
Board of Trustees shall be increased by two and the holders of Series B
Preferred Shares, together with the holders of shares of every other series of
Parity Shares (any such other series, the "Voting Preferred Shares"), voting as
a single class regardless of series, shall be entitled to elect two additional
trustees to serve on the Board of Trustees at any annual meeting of shareholders
or special meeting held in place thereof, or at a special meeting of the holders
of the Series B Preferred Shares and the Voting Preferred Shares called as
hereinafter provided. Whenever all arrears in dividends on the Series B
Preferred Shares and the Voting Preferred Shares then outstanding shall have
been paid and dividends thereon for the current quarterly dividend period shall
have been paid or declared and set apart for payment, then the right of the
holders of the Series B Preferred Shares and the Voting Preferred Shares to
elect such additional two trustees 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 trustees by the holders of the Series B Preferred Shares and
the Voting Preferred Shares shall forthwith terminate and the number of the
Board of Trustees shall be reduced accordingly. At any time after such voting
power shall have been so vested in the holders of Series B Preferred Shares and
the Voting Preferred Shares, the secretary of the Trust may, and upon the
written request of any holder of Series B Preferred Shares (addressed to the
secretary at the principal office of the Trust) shall, call a special meeting of
the holders of the Series B Preferred Shares and of the Voting Preferred Shares
for the election of the two trustees to be elected by them as herein provided,
such call to be made by notice similar to that provided in the Bylaws of the
Trust for a special meeting of the shareholders 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 B Preferred Shares may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock records of the
Trust. The trustees elected at any such special meeting shall hold office until
the next annual meeting of the
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shareholders or special meeting held in lieu thereof if such office shall not
have previously terminated as above provided. If any vacancy shall occur among
the trustees elected by the holders of the Series B Preferred Shares and the
Voting Preferred Shares, a successor shall be elected by the Board of Trustees,
upon the nomination of the then-remaining trustee elected by the holders of the
Series B Preferred Shares and the Voting Preferred Shares or the successor of
such remaining trustee, to serve until the next annual meeting of the
shareholders or special meeting held in place thereof if such office shall not
have previously terminated as provided above. Notwithstanding any other
provisions of this paragraph, in any vote for the election of additional
trustees hereunder, the Series B Preferred Shares and Voting Preferred Shares
beneficially owned by Security Capital Group Incorporated, a Maryland
corporation, any of its direct or indirect subsidiaries and any of their
respective directors, officers or controlling stockholders (together, the
"Restricted Parties"), shall be voted in the same respective percentages as the
Series B Preferred Shares and Voting Preferred Shares that are not beneficially
owned by the Restricted Parties. The provisions in the preceding sentence shall
cease and be of no further force and effect from and after such time, but only
as long as, the Restricted Parties together no longer beneficially own in excess
of 10% of the Trust's outstanding Common Shares.
So long as any Series B Preferred Shares are outstanding, in addition to
any other vote or consent of shareholders required by law or by the Restated
Declaration of Trust, as amended, the affirmative vote of at least 66-2/3% of
the votes entitled to be cast by the holders of the Series B Preferred Shares
and the Voting Preferred Shares, at the time outstanding, acting as a single
class regardless of series, given in person or by proxy, either in writing
without a meeting or by vote at any meeting called for the purpose, shall be
necessary for effecting or validating:
(a) Any amendment, alteration or repeal of any of the provisions of
the Restated Declaration of Trust or these Articles Supplementary that
materially and adversely affects the voting powers, rights or preferences
of the holders of the Series B Preferred Shares or the Voting Preferred
Shares; provided, however, that the amendment of the provisions of the
Restated Declaration of Trust so as to authorize or create or to increase
the authorized amount of, any Fully Junior Shares, Junior Shares that are
not senior in any respect to the Series B Preferred Shares, or any shares
of any class ranking on a parity with the Series B Preferred Shares or the
Voting Preferred Shares shall not be deemed to materially adversely affect
the voting powers, rights or preferences of the holders of Series B
Preferred Shares, and provided, further, that if any such amendment,
alteration or repeal would materially and adversely affect any voting
powers, rights or preferences of the Series B Preferred Shares or another
series of Voting Preferred Shares that are not enjoyed by some or all of
the other series otherwise 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, similarly given, 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 Series B Preferred Shares and the
Voting Preferred Shares otherwise entitled to vote in accordance herewith;
or
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(b) A share exchange that affects the Series B Preferred Shares, a
consolidation with or merger of the Trust into another entity, or a
consolidation with or merger of another entity into the Trust, unless in
each such case each Series B Preferred Share (i) shall remain outstanding
without a material and adverse change to its terms and rights or (ii) shall
be converted into or exchanged for convertible preferred stock of the
surviving entity having preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications and terms
or conditions of redemption thereof identical to that of a Series B
Preferred Share (except for changes that do not materially and adversely
affect the holders of the Series B Preferred Shares); or
(c) 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 to the Series B Preferred Shares in
the distribution of assets on any liquidation, dissolution or winding up of
the Trust or in the payment of dividends;
provided, however, that no such vote of the holders of Series B Preferred Shares
shall be required if, at or prior to the time when such amendment, alteration or
repeal is to take effect, or when the 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 Series B Preferred Shares at the time outstanding.
For purposes of the foregoing provisions of this Section 8, each Series B
Preferred Share shall have one (1) vote per share, except that when any other
series of Preferred Shares shall have the right to vote with the Series B
Preferred Shares as a single class on any matter, then the Series B Preferred
Shares and such other series shall have with respect to such matters one (1)
vote per $25.00 of stated liquidation preference. Except as otherwise required
by applicable law or as set forth herein, the Series B Preferred Shares shall
not have any relative, participating, optional or other special voting rights
and powers other than as set forth herein, and the consent of the holders
thereof shall not be required for the taking of any trust action.
Section 9. Limitation on Ownership.
(a) Limitation. Notwithstanding any other provision of the terms of
the Series B Preferred Shares, except as provided in the next sentence and
in Section 9(b), no Person, or Persons acting as a group, shall at any time
directly or indirectly acquire ownership of more than 25% of the
outstanding Series B Preferred Shares. Any Series B Preferred Shares owned
by a Person or Persons acting as a group in excess of such 25% shall be
deemed "Excess Preferred Shares," except that any such shares in excess of
25% will not be considered Excess Preferred Shares if the 25% limitation is
exceeded solely as a result of the Trust's redemption of Series B Preferred
Shares, provided that thereafter any additional Series B Preferred Shares
acquired by such Person or Persons acting as a group shall be considered
Excess Preferred Shares. Within 10 days of becoming aware of the existence
of Excess Preferred Shares (whether by notice on
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Schedule 13D or otherwise), the Trust shall redeem any and all Excess
Preferred Shares by giving notice of redemption to the holder or holders
thereof, unless, prior to the giving of such notice the holder shall have
disposed of its ownership in the Excess Preferred Shares. Such notice
shall set forth the number of Series B Preferred Shares constituting Excess
Preferred shares, the redemption price and the place or places at which the
certificates representing such Excess Preferred Shares are to be
surrendered and such notice shall set forth the matters described in the
following sentence. From and after the date of giving such notice of
redemption, the Series B Preferred Shares called for redemption shall cease
to be outstanding and the holder thereof shall cease to be entitled to
dividends (other than dividends declared but unpaid prior to the notice of
redemption), voting rights and other benefits with respect to such shares
excepting the rights to payment of the redemption price determined and
payable as set forth in the next two sentences. Subject to the limitation
on payment set forth in the following sentence, the redemption price of
each Excess Preferred Share called for redemption shall be the average
daily per Series B Preferred Share closing sales price, if the Series B
Preferred Shares are listed on a national securities exchange or, if not,
are reported on the NASDAQ National Market System, and if the Series B
Preferred Shares are not so listed or reported, shall be the mean between
the average per Series B Preferred Share closing bid prices and the average
per Series B Preferred Share closing asked prices, in each case during the
30 day period ending on the business day prior to the redemption date, or
if there have been no sales on a national securities exchange or the NASDAQ
National Market System and no published bid quotations and no published
asked quotations with respect to Series B Preferred Shares during such 30
day period, the redemption price shall be the price determined by the
Trustees in good faith. Unless the Trustees determine that it is in the
interest of the Trust to make earlier payment of all of the amount
determined as the redemption price per Series B Preferred Share in
accordance with the preceding sentence, the redemption price may be
payable, at the option of the Trustees, at any time or times up to, but not
later than the earlier of (i) five years after the redemption date, or (ii)
the liquidation of the Trust, in which latter event the redemption price
shall not exceed an amount which is the sum of the per Series B Preferred
Share distributions designated as liquidating distributions and return of
capital distributions declared with respect to unredeemed Series B
Preferred Shares of the Trust of record subsequent to the redemption date;
and in any event, no interest shall accrue with respect to the period
subsequent to the redemption date to the date of such payment. Nothing in
this Section 9(a) shall preclude the settlement of any transaction entered
into through the facilities of the New York Stock Exchange.
(b) Exemptions. The limitation on ownership set forth in Section 9(a)
shall not apply to the acquisition of Series B Preferred Shares by an
underwriter in a public offering of Series B Preferred Shares and shall not
apply to the ownership of Series B Preferred Shares by a managing
underwriter in the initial public offering of Series B Preferred Shares.
The Trustees, in their sole and absolute discretion, may exempt from the
ownership limitation set forth in Section 9(a) certain designated Series B
Preferred
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Shares owned by a person (other than any of the Restricted Parties) who has
provided the Trustees with evidence and assurances acceptable to the
Trustees that the qualification of the Trust as a real estate investment
trust would not be jeopardized thereby.
Section 10. Record Holders. The Trust and the Transfer Agent may deem and
treat the record holder of any Series B Preferred Shares as the true and lawful
owner thereof for all purposes, and neither the Trust nor the Transfer Agent
shall be affected by any notice to the contrary.
Section 11. Sinking Fund. The Series B Preferred Shares shall not be
entitled to the benefits of any retirement or sinking fund.
THIRD: The Series B Preferred Shares have been classified by the Board of
Trustees under the authority contained in Article 2, Section 1, of the Restated
Declaration of Trust dated June 18, 1991, as amended.
FOURTH: Each undersigned Trustee acknowledges these Articles Supplementary
to be the act of the Trust and further, as to all matters or facts required to
be verified under oath, each such Trustee 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 of
perjury.
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IN WITNESS WHEREOF, these Articles Supplementary have been duly executed by
the undersigned Trustees this 17th day of May, 1995.
SECURITY CAPITAL PACIFIC TRUST
By: /s/ C. Ronald Blankenship
------------------------------
C. Ronald Blankenship, Trustee
By: /s/ Calvin K. Kessler
-------------------------------
Calvin K. Kessler, Trustee
By: /s/ James H. Polk III
-------------------------------
James H. Polk III, Trustee
By: /s/ John C. Schweitzer
-------------------------------
John C. Schweitzer, Trustee
By: /s/ William G. Myers
-------------------------------
William G. Myers, Trustee
By: /s/ John T. Kelley, III
-------------------------------
John T. Kelley, III, Trustee
By: /s/ James A. Cardwell
-------------------------------
James A. Cardwell, Trustee
