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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) August 3, 1999
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ARCHSTONE COMMUNITIES 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)
1-10272 74-6056896
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(Commission File Number) (I.R.S. Employer Identification No.)
7670 South Chester Street, Englewood, CO 80112
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(Address of Principal Executive Offices) (Zip Code)
(303) 708-5959
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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 August 3, 1999, Archstone Communities Trust, a Maryland real estate
investment trust ("Archstone"), priced of an offering of its Series D Cumulative
Redeemable Preferred Shares of Beneficial Interest, $1.00 par value per share
(the "Preferred Shares"). Copies of 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.
<TABLE>
<CAPTION>
Sequential
Exhibit No. Document Description Page No.
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<S> <C> <C>
99.1 Purchase Agreement dated August 3, 1999 among Merrill Lynch
& Co., Merrill, Lynch, Pierce, Fenner & Smith Incorporated,
A.G. Edwards & Sons, Inc., PaineWebber Incorporated and
Prudential Securities Incorporated and Archstone Communities
Trust.
99.2 Articles Supplementary dated as of August 3, 1999 with
respect to the Series D Cumulative Redeemable Preferred
Shares of Beneficial Interest, $1.00 par value per share, of
Archstone Communities 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.
ARCHSTONE COMMUNITIES TRUST
Dated: August 3, 1999 By: /s/ Charles E. Mueller, Jr.
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Charles E. Mueller, Jr.
Chief Financial Officer
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ARCHSTONE COMMUNITIES TRUST
(a Maryland real estate investment trust)
2,000,000 Shares
8 3/4% Series D Cumulative Redeemable Preferred Shares
of Beneficial Interest
(Par Value $1.00 Per Share)
(Liquidation Preference $25.00 Per Share)
PURCHASE AGREEMENT
August 3, 1999
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
As Representatives of the Several Underwriters named in Schedule I hereto
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Archstone Communities Trust, a Maryland real estate investment trust (the
"Company"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and each of the other
Underwriters named in Schedule I hereto (the "Underwriters", which term shall
also include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch, A.G. Edwards & Sons, Inc., PaineWebber
Incorporated and Prudential Securities Incorporated are acting as
representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of 8 3/4% Series D
Cumulative Redeemable Preferred Shares of Beneficial Interest, par value $1.00
per share, liquidation preference $25.00 per share, of the Company (the
"Preferred Shares") set forth in said Schedule I, and with respect to the grant
by the Company to the Underwriters, acting
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severally and not jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 300,000 additional Preferred Shares to cover over-
allotments, if any. The aforesaid 2,000,000 Preferred Shares (the "Initial
Securities") to be purchased by the Underwriters and all or any part of the
300,000 Preferred Shares subject to the option described in Section 2(b) hereof
(the "Option Securities") are hereinafter called, collectively, the
"Securities."
The Company has filed with the Securities and Exchange Commission (the
"Commission") two registration statements on Form S-3 (Nos. 333-12885 and
333-68591) with respect to the Securities under the Securities Act of 1933, as
amended (the "1933 Act"). 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 to such registration statements, but
including all documents incorporated by reference in the prospectus contained in
the latest registration statement, 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 documents
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 "1933 Act Regulations"), each in the form heretofore
delivered to the Representatives). Such registration statements (as so amended,
if applicable), including the information, if any, deemed to be a part thereof
pursuant to Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), are collectively referred to herein as the "Registration
Statement"; and the final prospectus and the final prospectus supplement
relating to the offering of the Securities, in the forms furnished to the
Underwriters by the Company for use in connection with the offering of the
Securities, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statement" and the
"Prospectus" shall also be deemed to include all documents incorporated therein
by reference pursuant to the Securities Exchange Act of 1934, as amended (the
"1934 Act"), prior to the date of this Purchase Agreement; provided, further,
that if the Company files a registration statement with the Commission pursuant
to Rule 462(b) of the 1933 Act Regulations (the "Rule 462(b) Registration
Statement"), then all references to "Registration Statement" shall also be
deemed to include the Rule 462(b) Registration Statement; and provided, further,
that if the Company elects to rely upon Rule 434 of the 1933 Act Regulations,
then all references to "Prospectus" shall also be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated term sheet
(the "Term Sheet"), as the case may be, in the forms first furnished to the
Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references to the date of the Prospectus shall mean the
date of this Purchase Agreement. A "preliminary prospectus" shall be deemed to
refer to any prospectus that omitted, as applicable, the Rule 434 Information or
other information to be included upon pricing in a form of prospectus filed with
the Commission pursuant to Rule 424(b) of the 1933 Act Regulations and was used
after the Registration Statement became effective and prior to the initial
delivery of the Prospectus to the Underwriters by the Company. For purposes of
this Purchase Agreement, all references to the Registration Statement,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any copy filed
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with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Purchase Agreement to financial statements and
schedules and other information which is "contained," "included" or "stated" (or
other references of like import) in the Registration Statement, Prospectus or
preliminary prospectus shall be deemed to mean and include all such financial
statements and schedules and other information that is incorporated by reference
in the Registration Statement, Prospectus or preliminary prospectus, as the case
may be, prior to the date of this Purchase Agreement; and all references in this
Purchase Agreement to amendments or supplements to the Registration Statement or
Prospectus shall be deemed to include the filing of any document under the 1934
Act that is incorporated by reference in the Registration Statement or
Prospectus as the case may be, after the date of this Purchase Agreement.
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to each Underwriter, as of the
date hereof, and as of the Closing Time (as defined below) and, if applicable,
as of each Date of Delivery (as defined below) (in each case, a "Representation
Date"), as follows:
(1) The Company meets the requirements for use of Form S-3 under the 1933
Act. The Registration Statement (including any Rule 462(b) Registration
Statement) has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement (or such Rule 462(b)
Registration Statement) has been issued under the 1933 Act and no proceedings
for that purpose have been instituted or are pending or, to the knowledge of the
Company, are threatened by the Commission, and any request on the part of the
Commission for additional information has been complied with.
At the respective times the Registration Statement (including any Rule
462(b) Registration Statement) and any post-effective amendments thereto
(including the filing of the Company's most recent Annual Report on Form 10-K
with the Commission (the "Annual Report on Form 10-K")) became effective and at
each Representation Date, the Registration Statement (including any Rule 462(b)
Registration Statement) and any amendments thereto complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not 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. At the date of the Prospectus,
at the Closing Time and at each Date of Delivery, if any, neither the Prospectus
nor any amendments or supplements thereto included or will include an untrue
statement of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If the Company elects
to rely upon Rule 434 of the 1933 Act Regulations, the Company will comply with
the requirements of Rule 434. Notwithstanding the foregoing, the representations
and warranties in this subsection shall not apply to (i) that part of the
Registration
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Statement which constitutes the Statement of Eligibility and Qualification of
the trustee on Form T-1 and (ii) statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in conformity
with information furnished to the Company in writing by any Underwriter through
the Representatives expressly for use in the Registration Statement or the
Prospectus.
The preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with the offering of the Securities and filed pursuant to
Rule 424 under the 1933 Act, complied when so filed in all material respects
with the 1933 Act Regulations and are identical to any electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(2) The documents incorporated or deemed to be incorporated by reference
in the Registration Statement and the Prospectus, when they became effective or
at the time they were or hereafter are filed with the Commission, complied and
will comply in all material respects with the requirements of the 1934 Act and
the rules and regulations of the Commission thereunder (the "1934 Act
Regulations") and, when read together with the other information in the
Prospectus, at the date of the Prospectus, at the Closing Time and at each Date
of Delivery, if any, did not and will not include an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(3) The accountants who certified the financial statements and any
supporting schedules thereto included in the Registration Statement and the
Prospectus are independent public accountants as required by the 1933 Act and
the 1933 Act Regulations.
(4) The historical financial statements of the Company included in the
Registration Statement and the Prospectus, together with the related schedules
and notes, as well as those historical financial statements, schedules and notes
of any other entity included therein, present fairly the financial position of
the Company and its consolidated subsidiaries, or such other entity, as the case
may be, at the dates indicated and the statement of operations, shareholders'
equity and cash flows of the Company and its consolidated subsidiaries, or such
other entity, as the case may be, for the periods specified. Such historical
financial statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the Registration
Statement and the Prospectus present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data included
in the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement and the Prospectus. In addition, the pro
forma financial statements and the related notes thereto incorporated by
reference in the Registration Statement and the Prospectus present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the
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bases described therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give effect to
the transactions and circumstances referred to therein.
(5) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
(A) there has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse Effect"), (B)
there have been no transactions entered into by the Company or any of its
subsidiaries, other than those arising in the ordinary course of business, that
are material with respect to the Company and its subsidiaries considered as one
enterprise and (C) except for regular dividends on the Company's common shares
of beneficial interest or preferred shares of beneficial interest, in amounts
per share that are consistent with past practice or the Company's Amended and
Restated Declaration of Trust or articles supplementary thereto, respectively,
there has been no dividend or distribution of any kind declared, paid or made by
the Company on any of its shares of beneficial interest.
(6) The Company has been duly organized 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 to own, lease and operate its properties and conduct
its business as described in the Prospectus and to enter into and perform its
obligations under this Purchase Agreement; and 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, leases or operates properties, or
conducts any business, so as to require such qualification, other than where the
failure to be so qualified or in good standing would not result in a Material
Adverse Effect.
(7) Each of the Company's subsidiaries (within the meaning of Regulation
S-X promulgated by the Commission) is listed in Schedule I hereto (each, a
"Subsidiary" and, collectively, the "Subsidiaries") and has been duly
incorporated or organized and is validly existing in good standing as a
corporation or limited partnership, as the case may be, under the laws of its
jurisdiction of incorporation or organization, with power and authority
(corporate or other) to own, lease and operate its properties and conduct its
business as described in the Prospectus, and has been duly qualified as a
foreign corporation or limited partnership, as the case may be, for the
transaction of business and is in good standing under the laws of each other
jurisdiction in which it owns, leases or operates properties or conducts any
business so as to require such qualification, other than where the failure to be
so qualified or in good standing would not result in a Material Adverse Effect;
and all of the issued and outstanding shares of capital stock or partnership
interests of each Subsidiary of the Company have been duly authorized and
validly issued, are fully paid and (except for general partnership interests)
non-assessable, and (except as disclosed in Exhibit A hereto or in the case of
foreign Subsidiaries, for directors' qualifying shares) are owned by the
Company, directly or indirectly, free and clear of all liens, encumbrances,
security interests and claims.
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(8) Neither the Company nor any of the Subsidiaries is party to any joint
venture with any other entity, except as described in the Prospectus.
(9) The Company's authorized, issued and outstanding shares of beneficial
interest are as set forth in the Prospectus. The issued and outstanding shares
of beneficial interest of the Company have been duly authorized and validly
issued by the Company and are fully paid and, except as described in Exhibit B
hereto, non-assessable.
(10) This Purchase Agreement has been duly authorized, executed and
delivered by the Company.
(11) The Securities have been duly authorized by the Company for issuance
and sale pursuant to this Purchase Agreement and when issued and delivered by
the Company pursuant hereto against payment of the consideration therefor
specified herein, will be validly issued, fully paid and, except as described in
Exhibit B hereto, non-assessable and will not be subject to preemptive or other
similar rights of any securityholder of the Company. The articles supplementary
to the Company's Amended and Restated Declaration of Trust relating to the
Securities will be in full force and effect prior to the Closing
Time.
(12) The Securities conform in all material respects to the statements
relating thereto contained in the Prospectus and the certificates evidencing the
Securities will be in substantially the form filed or incorporated by reference,
as the case may be, as an exhibit to the Registration Statement.
(13) Neither the Company nor any of the Subsidiaries is in violation of its
declaration of trust, charter, bylaws, partnership agreement or other governing
instrument or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
deed of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of the Subsidiaries is a party or by
which it or any of them may be bound, or to which any of the assets, properties
or operations of the Company or any of the Subsidiaries is subject
(collectively, "Agreements and Instruments"), except for such defaults that
would not result in a Material Adverse Effect. The execution, delivery and
performance of this Purchase Agreement and the consummation of the transactions
contemplated herein (including the issuance and sale of the Securities and the
use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the Company
with its obligations hereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under, or result in
the creation or imposition of any lien, charge or encumbrance upon any assets,
properties or operations of the Company or any of the Subsidiaries pursuant to,
any Agreements and Instruments (except such conflicts, breaches or defaults that
would not reasonably be expected to result in a Material Adverse Effect), nor
will such action result in any violation of the provisions of the declaration of
trust, charter, bylaws, partnership agreement or other governing instrument
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of the Company or any of the Subsidiaries or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of the Subsidiaries or any of their assets, properties or
operations. As used herein, a "Repayment Event" means any event or condition
which gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by
the Company or any of the Subsidiaries.
(14) No labor dispute with the employees of the Company or any of the
Subsidiaries exists or, to the knowledge of the Company, is threatened, and the
Company is not aware of any existing or threatened labor disturbance by the
employees of any of its or any Subsidiary's principal suppliers, manufacturers,
customers or contractors that, in either case, may reasonably be expected to
result in a Material Adverse Effect.
(15) There is no action, suit, proceeding, inquiry or investigation before
or brought by any court or governmental agency or body, domestic or foreign, now
pending, or to the knowledge of the Company threatened, against or affecting the
Company or any of the Subsidiaries that is required to be disclosed in the
Registration Statement and the Prospectus (other than as stated therein), or
that might reasonably be expected to result in a Material Adverse Effect or that
might reasonably be expected to materially and adversely affect the consummation
of the transactions contemplated under this Purchase Agreement or the
performance by the Company of its obligations hereunder. The aggregate of all
pending legal or governmental proceedings to which the Company or any of the
Subsidiaries is a party or of which any of their respective assets, properties
or operations is the subject that are not described in the Registration
Statement and the Prospectus, including ordinary routine litigation incidental
to the business, could not reasonably be expected to result in a Material
Adverse Effect.
(16) There are no contracts or other documents that are required to be
described in the Registration Statement, the Prospectus or the documents
incorporated by reference therein or to be filed as exhibits thereto that have
not been so described and filed as required.
(17) No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any court or governmental authority or
agency, domestic or foreign, is necessary or required for the due authorization,
execution and delivery by the Company of this Purchase Agreement or for the
offer, issue and sale of the Securities except such as have been obtained under
the 1933 Act and the 1933 Act Regulations, and except as may be required under
state securities or blue sky laws in connection with the purchase and
distribution of the Securities by the Underwriters.
(18) The Company and each of its Subsidiaries have good and marketable
title in fee simple to all real property described in the Prospectus 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 or such as do not
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materially affect the value of such property and do not interfere with the use
made and proposed to be made of such property by the Company and the
Subsidiaries; and any real property and buildings held under lease by the
Company and the Subsidiaries and described in the Prospectus are held by them
under valid and subsisting leases with such exceptions as are not material and
do not interfere with the use made and proposed to be made of such property and
buildings by the Company and the Subsidiaries.
(19) The Company and the Subsidiaries taken as a whole carry, or are
covered by, insurance in such amounts and covering such risks as is adequate for
the conduct of their business and the value of their properties.
(20) 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 organization, ownership, method of operation, assets
and income continue to meet such requirements.
(21) Each of the Company and the Subsidiaries owns, possesses or has
obtained all material licenses, permits, certificates, consents, orders,
approvals and other authorizations from, and has made all material declarations
and filings with, all federal, state, local and other governmental authorities
(including foreign regulatory agencies), all self-regulatory organizations and
all courts and other tribunals, domestic or foreign, necessary to own, lease and
operate its properties and to carry on its business as conducted as of the date
hereof, except in each case where the failure to obtain licenses, permits,
certificates, consents, orders, approvals and other authorizations, or to make
all declarations and filings, would not reasonably be expected to result in a
Material Adverse Effect, and none of the Company or any of the Subsidiaries has
received any notice of any proceeding relating to revocation or modification of
any such license, permit, certificate, consent, order, approval or other
authorization, except as described in the Registration Statement and the
Prospectus and except, in each case, where such revocation or modification would
not reasonably be expected to result in a Material Adverse Effect; and the
Company and each of the Subsidiaries are in material compliance with all laws,
rules and regulations relating to the conduct of their respective businesses as
conducted as of the date hereof, except where noncompliance and such laws or
regulations would not reasonably be expected to result in a Material Adverse
Effect.
(22) Except as disclosed in the Prospectus, the Company and its
Subsidiaries (i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their business, (iii) are in compliance with all
terms and conditions of any such permit, license or approval and (iv) have no
knowledge of the unlawful presence of any hazardous substances, hazardous
materials, toxic substances or waste materials on any of the properties
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owned by them, or of any unlawful spills, releases, discharges or disposal of
such hazardous materials that have occurred or are presently occurring off such
properties as a result of any construction on operation and use of such
properties, except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or unlawful presence of
hazardous materials or occurrence would not, singly or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
(23) Other than as set forth in the Prospectus, the mortgages and deeds of
trust encumbering the properties and assets described in the Prospectus (i) are
not convertible and neither the Company nor any of the Subsidiaries holds a
participating interest therein, and (ii) are not cross-defaulted or cross-
collateralized to any property not owned by the Company or any of the
Subsidiaries.
(24) The Company is not an "investment company" or an entity "controlled"
by an "investment company", as such terms are defined in the Investment Company
Act of 1940, as amended.
(b) Any certificate signed by any officer of the Company or any of the
Subsidiaries and delivered to any Underwriter or to counsel for the Underwriters
in connection with the offering of the Securities shall be deemed a
representation and warranty by the Company to each Underwriter as to the matters
covered thereby on the date of such certificate and, unless subsequently amended
or supplemented, at each Representation Date subsequent thereto.
SECTION 2. Sale and Delivery to Underwriters; Closing
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to
sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Company, at the price per
share set forth in Schedule II, the number of Initial Securities set forth in
Schedule I opposite the name of such Underwriter, plus any additional number of
Initial Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 300,000 Preferred Shares at the price per share set
forth in Schedule II. The option hereby granted will expire 30 days after the
date hereof, and may be exercised in whole or in part from time to time only for
the purpose of covering over-allotments that may be made in connection with the
offering and distribution of the Initial Securities upon notice by the
Representatives to the Company setting forth the number of Option Securities as
to which the several Underwriters are then exercising the option and the time,
date and place of payment and delivery for such Option Securities. Any such time
and date of payment and delivery (each, a "Date of Delivery") shall be
determined by
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the Representatives, but shall not be later than seven full business days nor
earlier than two full business days after the exercise of said option, nor in
any event prior to the Closing Time, unless otherwise agreed upon by the
Representatives and the Company. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, severally and not
jointly, will purchase that proportion of the total number of Option Securities
then being purchased that the number of Initial Securities each such Underwriter
has severally agreed to purchase as set forth in Schedule I opposite the name of
such Underwriter bears to the total number of Initial Securities, subject to
such adjustments as the Representatives in their discretion shall make to
eliminate any sales or purchases of a fractional number of Option Securities.
(c) Payment of the purchase price for, and delivery of, the Initial
Securities shall be made at the offices of Mayer, Brown & Platt, 190 South
LaSalle Street, Suite 3900, Chicago, Illinois 60603-3441, or at such other place
as shall be agreed upon by the Representatives and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10 hereof), or such other
time not later than ten business days after such date as shall be agreed upon by
the Representatives and the Company (such time and date of payment and delivery
being herein called "Closing Time"). In addition, in the event that the
Underwriters have exercised their option, if any, to purchase any or all of the
Option Securities, payment of the purchase price for, and delivery of such
Option Securities shall be made at the above-mentioned offices of Mayer, Brown &
Platt, or at such other place as shall be agreed upon by the Representatives and
the Company, on the relevant Date of Delivery as specified in the notice from
the Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of the
Securities to be purchased by them. It is understood that each Underwriter has
authorized Merrill Lynch, for its account, to accept delivery of, receipt for,
and make payment of the purchase price for, the Securities that it has severally
agreed to purchase. Merrill Lynch, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Securities to be purchased by any Underwriter whose funds have not
been received by the Closing Time or the relevant Date of Delivery, as the case
may be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) The Securities or certificates for the Securities, as applicable,
shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day prior to
the Closing Time or the relevant Date of Delivery, as the case may be. The
Securities or certificates for the Securities, as applicable, will be made
available for examination and packaging by the Representatives in The City of
New York not later than 10:00 A.M. (Eastern time) on the business day prior to
the Closing Time or the relevant Date of Delivery, as the case may be.
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SECTION 3. Covenants of the Company. The Company covenants with each
Underwriter as follows:
(a) The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A of the 1933 Act Regulations and/or Rule 434 of the
1933 Act Regulations, if and as applicable, and will notify the Representatives
promptly of (i) the effectiveness of any post-effective amendment to the
Registration Statement or the filing of any supplement or amendment to the
Prospectus, (ii) the receipt of any comments from the Commission, (iii) any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation of any proceedings for any of such purposes. The Company will
promptly effect the filings necessary pursuant to Rule 424 and will take such
steps as it deems necessary to ascertain promptly whether the Prospectus
transmitted for filing under Rule 424 was received for filing by the Commission.
The Company will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Company will give the Representatives notice of its intention to
file or prepare any amendment to the Registration Statement (including any
filing under Rule 462(b) of the 1933 Act Regulations), any term sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
whether pursuant to the 1933 Act, the 1934 Act or otherwise, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.
(c) The Company has furnished or will deliver to each Underwriter and
counsel for the Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits
filed therewith or incorporated by reference therein and documents incorporated
or deemed to be incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to each Underwriter,
without charge, a conformed copy of the Registration Statement as originally
filed and of each amendment thereto (without exhibits) for each of the
Underwriters. The Registration Statement and each amendment thereto furnished to
the Underwriters will be identical to any electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(d) The Company will furnish to each Underwriter, without charge, during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act, such number of copies of the Prospectus as such Underwriter may
reasonably request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to any
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electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(e) The Company will comply with the 1933 Act and the 1933 Act Regulations
and the 1934 Act and the 1934 Act Regulations so as to permit the completion of
the distribution of the Securities as contemplated in this Purchase Agreement
and in the Registration Statement and the Prospectus. If at any time when the
Prospectus is required by the 1933 Act or the 1934 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the reasonable opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement in order that the Registration Statement 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 or to
amend or supplement the Prospectus in order that the Prospectus will not include
an untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the reasonable opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the Prospectus in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters, without charge, such number of copies of such amendment or
supplement as the Underwriters may reasonably request.
(f) The Company will use its reasonable best efforts, in cooperation with
the Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions (domestic or
foreign) as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the date
hereof; provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign entity or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company will file such statements and
reports as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the date
hereof.
(g) The Company will timely file such reports pursuant to the 1934 Act as
are necessary in order to make generally available to its securityholders as
soon as practicable an earning statement for the purposes of, and to provide the
benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under "Use of
Proceeds".
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(i) The Company will use its best efforts to effect the listing of the
Securities on the New York Stock Exchange.
(j) Between the date hereof and the Closing Time, the Company will not,
without the prior written consent of Merrill Lynch, directly or indirectly,
issue, sell, offer or contract to sell, grant any option for the sale of, or
otherwise dispose of its preferred shares of beneficial interest.
(k) The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, will file all documents required
to be filed with the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses.
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(a) The Company will pay all expenses incident to the performance of its
obligations under this Purchase Agreement, including (i) the preparation,
printing and filing of the Registration Statement (including financial
statements and exhibits) as originally filed and of each amendment thereto, (ii)
the preparation and delivery to the Underwriters of this Purchase Agreement, any
Agreement among Underwriters, and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the Securities, and
any certificates for the Securities to the Underwriters, including any transfer
taxes and any stamp or other duties payable upon the sale, issuance or delivery
of the Securities to the Underwriters, (iv) the fees and disbursements of the
Company's counsel, accountants and other advisors or agents (including transfer
agent and registrar), (v) the qualification of the Securities under state
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
and delivery of the Blue Sky Survey, and any amendment thereto, (vi) the
printing and delivery to the Underwriters of copies of each preliminary
prospectus, any Term Sheet, and the Prospectus and any amendments or supplements
thereto, (vii) the fees charged by nationally recognized statistical rating
organizations for the rating of the Securities, and (viii) the fees and expenses
incurred with respect to the listing of the Securities.
(b) If the Purchase Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the
Company shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for the Securities are subject to the accuracy
of the representations and warranties of the Company contained in Section 1
hereof or in certificates of any officer of the Company or any of the
Subsidiaries delivered pursuant to the provisions
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hereof, to the performance by the Company of its covenants and other obligations
hereunder, and to the following further conditions:
(a) The Registration Statement, including any Rule 462(b) Registration
Statement, has become effective under the 1933 Act and no stop order suspending
the effectiveness of the Registration Statement shall have been issued under the
1933 Act and no proceedings for that purpose shall have been instituted or be
pending or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Underwriters. A prospectus containing
information relating to the description of the Securities the specific method of
distribution and similar matters shall have been filed with the Commission in
accordance with Rule 424(b)(1), (2), (3), (4) or (5), as applicable (or any
required post-effective amendment providing such information shall have been
filed and declared effective in accordance with the requirements of Rule 430A),
or, if the Company has elected to rely upon Rule 434 of the 1933 Act
Regulations, a Term Sheet including the Rule 434 Information shall have been
filed with the Commission in accordance with Rule 424(b)(7).
(b) At Closing Time, the Representatives shall have received the favorable
opinion, dated as of Closing Time, of Mayer, Brown & Platt, counsel for the
Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other
Underwriters, to the effect set forth in Exhibit C hereto and to such further
effect as counsel to the Underwriters may reasonably request. In giving such
opinion, such counsel may rely, as to certain matters of Maryland law, upon the
opinion of Ballard Spahr Andrews & Ingersoll, LLP, Baltimore, Maryland.
(c) At Closing Time, the Representatives shall have received the favorable
opinion, dated as of Closing Time, of Andrews & Kurth L.L.P., counsel for the
Underwriters, together with signed or reproduced copies of such letter for each
of the other Underwriters, with respect to the matters set forth in (1), (6),
(8), (9), (10) (solely as to the information in the Prospectus under
"Description of the Series D Preferred Shares"), (15), (16) and the final
paragraph of Exhibit C hereto. In giving such opinion, such counsel may rely, as
to all matters governed by the laws of jurisdictions other than the law of the
State of New York, the federal law of the United States and the General
Corporation Law of the State of Delaware, upon the opinions of counsel
satisfactory to the Representatives. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and the Subsidiaries
and certificates of public officials.
(d) At Closing Time, there shall not have been, since the date hereof or
since the respective dates as of which information is given in the Prospectus,
any material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and the
Subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, and the Representatives shall have received a
certificate of the Chief Executive Officer or a Vice President of the Company
and of the Chief Financial Officer or chief
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accounting officer of the Company, dated as of Closing Time, to the effect that
(i) there has been no such material adverse change, (ii) the representations and
warranties in Section 1(a) are true and correct with the same force and effect
as though expressly made at and as of the Closing Time, (iii) the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted, are pending or, to the
best of such officer's knowledge, are threatened by the Commission.
(e) At the date hereof, the Representatives shall have received from KPMG
LLP a letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) At Closing Time, the Representatives shall have received from KPMG LLP
a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this
Section 5, except that the specified date referred to shall be a date not more
than three business days prior to the Closing Time.
(g) At Closing Time and at any relevant Date of Delivery, the Securities
shall have the ratings accorded by any "nationally recognized statistical rating
organization", as defined by the Commission for purposes of Rule 436(g)(2) of
the 1933 Act Regulations, as specified in Schedule II, and the Company shall
have delivered to the Representatives a letter, dated as of such date, from each
such rating organization, or other evidence satisfactory to the Representatives,
confirming that the Securities have such ratings. Since the date hereof, there
shall not have occurred a downgrading in, or withdrawal of, the rating assigned
to the Securities or any of the Company's other securities by any such rating
organization, and no such rating organization shall have publicly announced that
it has under surveillance or review its rating of the Securities or any of the
Company's other securities.
(h) At Closing Time, the Securities shall have been approved for listing,
subject only to official notice of issuance, on the New York Stock Exchange.
(i) In the event that the Underwriters exercise their option to purchase
all or any portion of the Option Securities, the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any of the Subsidiaries hereunder shall be true and correct as
of each Date of Delivery, and, at the relevant Date of Delivery, the
Representatives shall have received:
(1) A certificate, dated such Date of Delivery, of the Chief
Executive Officer or a Vice President of the Company and the Chief
Financial Officer or chief accounting
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officer of the Company, confirming that the certificate delivered at the
Closing Time pursuant to Section 5(d) hereof remains true and correct as of
such Date of Delivery.
(2) The favorable opinion of Mayer, Brown & Platt, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(b) hereof.
(3) The favorable opinion of Andrews & Kurth L.L.P., counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Securities and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(4) A letter from KPMG LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially in the same
form and substance as the letter furnished to the Representatives pursuant
to Section 5(f) hereof, except that the "specified date" on the letter
furnished pursuant to this paragraph shall be a date not more than three
business days prior to such Date of Delivery.
(6) Since the date hereof, there shall not have occurred a
downgrading in, or withdrawal of, the rating assigned to the Securities or
any of the Company's other securities by any such rating organization, and
no such rating organization shall have publicly announced that it has under
surveillance or review its rating of the Securities or any of the Company's
other securities.
(j) At Closing Time and at each Date of Delivery, counsel for the
Underwriters shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Securities as herein contemplated, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the Securities
as herein contemplated shall be satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
(k) If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Purchase Agreement (or,
with respect to the Underwriters' purchase of Option Securities on a Date of
Delivery after the Closing Time, the obligations of the Underwriters to purchase
the Option Securities on such Date of Delivery) may be terminated by the
Representatives by notice to the Company at any time at or prior to the Closing
Time (or such Date of Delivery, as applicable), and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 6 and 7 (and in the case of a termination by the
Representatives to purchase Option Securities, Sections 1 and 8) shall survive
any such termination and remain in full force and effect.
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SECTION 6. Indemnification.
(a) The Company agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(1) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information deemed to be a part thereof, if applicable, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading
or arising out of any untrue statement or alleged untrue statement of a
material fact included in any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(2) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(3) against any and all expense whatsoever, as incurred (including
the reasonable fees and disbursements of counsel chosen by Merrill Lynch),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information deemed to be a part thereof, if applicable, or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto).
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its trustees, each of its officers who signed the Registration
Statement, and each person, if any,
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who controls the Company within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a) of this
Section, as incurred, but only with respect to untrue statements or omissions,
or alleged untrue statements or omissions, made in the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the Rule 434
Information deemed to be a part thereof, if applicable, or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability that it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by Merrill Lynch, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(2) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified
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party in accordance with such request prior to the date of such settlement.
Notwithstanding the immediately preceding sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, an indemnifying party shall
not be liable for any settlement of the nature contemplated by Section 6(a)(2)
effected without its consent if such indemnifying party (i) reimburses such
indemnified party in accordance with such request to the extent it considers
such request to be reasonable and (ii) provides written notice to the
indemnified party indicating that the Company believes the unpaid balance to be
unreasonable, in each case prior to the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) 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 hand, from the offering of the
Securities or (ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, 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 hand, in connection with the offering of the
Securities shall be deemed to be in the same respective proportions as the total
net proceeds from the offering of the Securities (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet bear to the
aggregate initial public offering price of the Securities as set forth on such
cover.
The relative fault of the Company, on the one hand, and the Underwriters,
on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters 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 contribution pursuant to this Section 7 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 Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or
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other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages that such
Underwriter has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each trustee of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the number of Initial Securities set forth opposite their
respective names in Schedule I hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Purchase Agreement or in certificates of officers of the Company or any of the
Subsidiaries submitted pursuant hereto or thereto shall remain operative and in
full force and effect, regardless of any investigation made by or on behalf of
any Underwriter or controlling person, or by or on behalf of the Company, and
shall survive delivery of and payment for the Securities.
SECTION 9. Termination.
(a) The Representatives may terminate this Purchase Agreement, by notice
to the Company, at any time at or prior to the Closing Time or any relevant Date
of Delivery, if (i) there has been, since the time of execution of this Purchase
Agreement or since the respective dates as of which information is given in the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) there has occurred any
material adverse change in the financial markets in the United States or any
outbreak of hostilities involving the United States or escalation thereof or
other calamity or crisis involving the United States or any change or
development involving a prospective change in national or international
political, financial or economic
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conditions, in each case the effect of which is such as to make it, in the
judgment of the Representatives, impracticable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) trading in any
securities of the Company has been suspended or materially limited by the
Commission or the New York Stock Exchange, or if trading generally on the New
York Stock Exchange or the American Stock Exchange or in the Nasdaq National
Market has been suspended or materially limited, or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices have been required, by
either of said exchanges or by such system or by order of the Commission, the
NASD or any other governmental authority, or (iv) a banking moratorium has been
declared by either Federal or New York authorities.
(b) If this Purchase Agreement is terminated pursuant to this Section 9,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 6 and
7 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time or the relevant Date of
Delivery, as the case may be, to purchase the Securities that it or they are
obligated to purchase under this Purchase Agreement (the "Defaulted
Securities"), then the Representatives shall have the right, within 36 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all or any portion of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representatives shall not have completed such
arrangements within such 36-hour period, then:
(a) if the number of Defaulted Securities after adjusting for any
arrangement as set forth above does not exceed 10% of the number of
Securities to be purchased on such date, the non-defaulting Underwriters
shall be obligated, severally and not jointly, to purchase the full amount
thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities after adjusting for any
arrangement as set forth above exceeds 10% of the number of Securities to
be purchased on such date, this Purchase Agreement (or, with respect to the
Underwriters' exercise of any applicable over-allotment option for the
purchase of Option Securities on a Date of Delivery after the Closing Time,
the obligations of the Underwriters to purchase, and the Company to sell,
such Option Securities on such Date of Delivery) shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.
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<PAGE>
In the event of any such default which does not result in a termination of
this Purchase Agreement or, in the case of a Date of Delivery after the Closing
Time, a termination of the obligations of the Underwriters and the Company with
respect to the Option Securities, as the case may be, either the Representatives
or the Company shall have the right to postpone the Closing Time or the relevant
Date of Delivery, as the case may be, for a period not exceeding seven days in
order to effect any required changes in the Registration Statement or the
Prospectus or in any other documents or arrangements.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Merrill Lynch at World Financial Center, North
Tower, New York, New York 10281-1201, attention of Tjarda Clagett; and notices
to the Company shall be directed to it at 7670 South Chester Street, Englewood,
Colorado 80112, attention of Charles E. Mueller, Jr.
SECTION 12. Parties. This Purchase Agreement shall each inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Purchase Agreement
is intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the
controlling persons and officers and trustees referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Purchase Agreement or any provision herein
or therein contained. This Purchase Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and thereto and their respective successors, and said controlling persons
and officers and trustees and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS PURCHASE AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
SECTION 15. Any obligation or liability whatsoever of Company which may
arise at any time under this Purchase Agreement or any obligation or liability
which may be incurred by it pursuant to any other instrument, transaction or
undertaking contemplated hereby shall be satisfied, if at all, out of Company's
assets only. No such obligation or liability shall be personally binding upon,
nor shall resort for the enforcement thereof be had to, the property of any of
its shareholders, trustees, officers, employees or agents, regardless of whether
such obligation or liability is in the nature of contract, tort or otherwise.
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<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
Purchase Agreement, along with all counterparts, will become a binding agreement
between each of the Underwriters and the Company in accordance with its terms.
Very truly yours,
ARCHSTONE COMMUNITIES TRUST
By: /s/ Charles E. Mueller, Jr.
---------------------------------------
Name: Charles E. Mueller, Jr.
Title: Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
A.G. EDWARDS & SONS, INC.
PAINEWEBBER INCORPORATED
PRUDENTIAL SECURITIES INCORPORATED
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Elizabeth Anne Casey
----------------------------
Authorized Signatory
On behalf of each of the Underwriters
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<PAGE>
Series D Cumulative Redeemable Preferred Shares of Beneficial Interest
ARTICLES SUPPLEMENTARY
ARCHSTONE COMMUNITIES TRUST
==============================
Articles Supplementary of Board of Trustees Classifying
and Designating a Series of Preferred Shares of Beneficial Interest as
Series D Cumulative Redeemable Preferred Shares of Beneficial Interest
and Fixing Distribution and Other Preferences and Rights of Such Series
==============================
Dated as of August 3, 1999
<PAGE>
ARCHSTONE COMMUNITIES TRUST
==============================
Articles Supplementary of Board of Trustees Classifying
and Designating a Series of Preferred Shares of Beneficial Interest as
Series D Cumulative Redeemable Preferred Shares of Beneficial Interest
and Fixing Distribution and Other Preferences and Rights of Such Series
==============================
Archstone Communities Trust, a Maryland real estate investment trust (the
"Trust"), hereby certifies to the State Department of Assessments and Taxation
of Maryland pursuant to section 8-203(b) of the Annotated Code of Maryland that:
FIRST: Pursuant to the authority granted and vested in the Board of
Trustees of the Trust (the "Board of Trustees") by Article II, Section 1 of the
Amended and Restated Declaration of Trust dated June 30, 1998, as amended (the
"Declaration of Trust"), the Board of Trustees has reclassified 2,300,000
unissued Common Shares of Beneficial Interest of the Trust as Series D
Cumulative Redeemable Preferred Shares of Beneficial Interest, $1.00 par value
per share (the "Series D Preferred Shares").
SECOND: The following is a description of the Series D Preferred Shares,
including the preferences, 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 of Beneficial Interest shall be designated as Series D Cumulative
Redeemable Preferred Shares of Beneficial Interest (the "Series D Preferred
Shares") and the number of shares which shall constitute such series shall be
2,300,000, $1.00 par value 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 D 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 D 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 fixed for redemption of the Series D
Preferred Shares and 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 September 30,
1999; provided, however, that if any Dividend Payment Date falls on any day
other than a Business Day, the dividend payment due on such Dividend
Payment Date shall be paid on the Business Day immediately following such
Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods commencing on
January 1, April 1, July 1 and October 1 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend
Period (other than the initial Dividend Period, which shall commence on the
Issue Date and end on and include September 30, 1999).
"Fully Junior Shares" shall mean the Common Shares and any other class
or series of shares of beneficial interest of the Trust now or hereafter
issued and outstanding over which the Series D 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 D Preferred
Shares are issued and sold.
"Junior Shares" shall mean the Common Shares and any other class or
series of shares of beneficial interest of the Trust now or hereafter
issued and outstanding over which the Series D 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 and,
unless the context clearly indicates otherwise, shall include Fully Junior
Shares.
"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.
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<PAGE>
"Series D Preferred Shares" shall have the meaning set forth in
Section 1 hereof.
"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 shares of
beneficial interest of the Trust; provided, however, that if any funds for
any class or series of Junior Shares or any class or series of shares of
beneficial interest ranking on a parity with the Series D 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 D 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 ChaseMellon Shareholder Services, LLC, 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 D Preferred Shares.
"Voting Preferred Shares" shall have the meaning set forth in Section
8 hereof.
Section 3. Dividends.
(a) The holders of Series D 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 $2.1875 per annum. 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 D 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 on the Series D Preferred Shares 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 D 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 D Preferred Shares
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<PAGE>
shall be computed on the basis of twelve 30-day months and a 360-day year.
Holders of Series D Preferred Shares shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of
cumulative dividends, as herein provided, on the Series D 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 D Preferred
Shares that may be in arrears.
(c) So long as any Series D Preferred Shares are outstanding, no full
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 D
Preferred Shares for all past 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 full payment
is not so set apart), as aforesaid, all dividends declared upon Series D
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 D Preferred
Shares and accumulated and unpaid on such Parity Shares.
(d) So long as any Series D 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 Junior Shares) 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 D 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 D
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 D Preferred Shares and the current dividend period
with respect to such Parity Shares. Any dividend payment on the Series D
Preferred Shares shall first be credited against the earliest accrued but
unpaid dividend due which remains payable.
(e) No distributions on Series D 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.
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<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 D
Preferred Shares shall be entitled to receive Twenty-Five Dollars ($25.00)
per Series D 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 D 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 D
Preferred Shares and any such other Parity Shares ratably in accordance
with the respective amounts that would be payable on such Series D
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, real
estate investment trusts or other entities, (ii) a sale, lease 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 shares of beneficial interest ranking on a parity with
or prior to the Series D 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 D
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 D
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 D Preferred Shares shall
not be redeemable by the Trust prior to August 6, 2004. On and after August
6, 2004, the Trust, at its option, may redeem the Series D 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
D Preferred Share, plus the amounts indicated in Section 5(b).
(b) Upon any redemption of Series D Preferred Shares pursuant to this
Section 5, the Trust shall pay any accrued and unpaid dividends in arrears
for any
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<PAGE>
Dividend Period ending on or prior to the Call Date. If the Call Date falls
after a dividend payment record date and prior to the corresponding
Dividend Payment Date, then each holder of Series D 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 D
Preferred Shares called for redemption.
(c) If full cumulative dividends on the Series D 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 D Preferred Shares may
not be redeemed under this Section 5 in part and the Trust may not purchase
or acquire Series D Preferred Shares, otherwise than pursuant to a purchase
or exchange offer made on the same terms to all holders of Series D
Preferred Shares or pursuant to Section 9 hereof.
(d) The redemption price to be paid upon any redemption of the Series
D 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 shares of beneficial interest of the Trust
and from no other source.
(e) Notice of the redemption of any Series D Preferred Shares under
this Section 5 shall be mailed by first-class mail to each holder of record
of Series D Preferred Shares to be redeemed at the address of each such
holder as shown on the Trust's records, 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 D 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 redemption price of $25.00 plus accrued
and unpaid dividends through the Call Date; (4) the place or places at
which certificates for such shares are to be surrendered; and (5) 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 D 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 D 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
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<PAGE>
dividends payable thereon). The Trust's obligation to provide cash in
accordance with the preceding 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,
funds necessary for such redemption, in trust, with irrevocable
instructions that such cash be applied to the redemption of the Series D
Preferred Shares so called for redemption. No interest shall accrue for the
benefit of the holders of Series D 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 D Preferred Shares are to redeemed,
shares to be redeemed shall be selected by the Trust from outstanding
Series D 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
D 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 D 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 Common Shares of Beneficial
Interest of the Trust.
Section 7. Ranking. Any class or series of shares of beneficial
interest of the Trust shall be deemed to rank:
(a) prior to the Series D 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 D Preferred Shares;
(b) on a parity with the Series D 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 D Preferred Shares, if the holders of such class of stock or
series and the Series D Preferred Shares shall be entitled
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<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 D 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 D 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 D 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 D
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 D Preferred Shares and the Voting Preferred Shares called as
hereinafter provided. Whenever all arrears in dividends on the Series D
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 D 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 D 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 D Preferred Shares and
the Voting Preferred Shares, the secretary of the Trust may, and upon the
written request of any holder of Series D Preferred Shares (addressed to the
secretary at the principal office of the Trust) shall, call a special meeting of
the holders of the Series D 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 D 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 shareholders or special meeting held in lieu
thereof if such office shall not have previously
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<PAGE>
terminated as above provided. If any vacancy shall occur among the trustees
elected by the holders of the Series D 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 D
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 D 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 D 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 D Preferred Shares are outstanding, in addition to
any other vote or consent of shareholders required by law or by the Declaration
of Trust, the affirmative vote of at least 66 2/3% of the votes entitled to be
cast by the holders of the Series D 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 Declaration of Trust or these Articles Supplementary that materially
and adversely affects the voting powers, rights or preferences of the
holders of the Series D Preferred Shares or the Voting Preferred Shares;
provided, however, that the amendment of the provisions of the 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 D Preferred Shares, or any shares of any class
ranking on a parity with the Series D 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 D 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 D 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 D 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 D 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 D 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 preferred shares of the surviving entity
having preferences, rights, voting powers, restrictions, limitations as to
dividends, qualifications and terms or conditions of redemption thereof
identical to that of a Series D Preferred Share (except for changes that do
not materially and adversely affect the holders of the Series D 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 D 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 D 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 D Preferred Shares at the time outstanding.
For purposes of the foregoing provisions of this Section 8, each Series D
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 D
Preferred Shares as a single class on any matter, then the Series D Preferred
Shares and such other series shall have with respect to such matters one (1)
vote per Twenty-Five Dollars ($25.00) of stated liquidation preference. Except
as otherwise required by applicable law or as set forth herein, the Series D
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 D 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 D Preferred Shares. Any Series D 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 D Preferred
Shares, provided that thereafter any additional Series D 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 D 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 D 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 D Preferred Share closing sales price, if the Series D
Preferred Shares are listed on a national securities exchange or, if not,
are reported on the NASDAQ National Market System, and if the Series D
Preferred Shares are not so listed or reported, shall be the mean between
the average per Series D Preferred Share closing bid prices and the average
per Series D 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 D 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 D 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 D Preferred
Share distributions designated as liquidating distributions and return of
capital distributions declared with respect to unredeemed Series D
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 D Preferred Shares by an
underwriter in a public offering of Series D Preferred Shares and shall not
apply to the ownership of Series D Preferred Shares by a managing
underwriter in the initial public offering of Series D 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 D
Preferred Shares owned by a person (other than any of the Restricted
Parties) who has provided
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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 D 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 D Preferred Shares shall not be
entitled to the benefits of any retirement or sinking fund.
THIRD: The Series D Preferred Shares have been classified by the Board of
Trustees under the authority contained in Article II, Section 1, of the
Declaration of Trust.
FOURTH: These Articles Supplementary have been approved by the Board of
Trustees in the manner and by the votes required by law.
FIFTH: The undersigned each 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 of the undersigned 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, the Trust has caused these Articles Supplementary to be
signed in its name and on its behalf by its Senior Vice President and Chief
Financial Officer and attested to by its Assistant Secretary on this 3rd day of
August, 1999.
ARCHSTONE COMMUNITIES TRUST
By: /s/ Charles E. Mueller, Jr.
---------------------------
Charles E. Mueller, Jr.
Senior Vice President and
Chief Financial Officer
ATTEST:
/s/ Mark W. Pearson
-------------------
Name: Mark W. Pearson
Assistant Secretary
