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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 30, 1999
REGISTRATION STATEMENT NO. 333-
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE TOWN AND COUNTRY TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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MARYLAND 52-6613091
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
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100 SOUTH CHARLES STREET, SUITE 1700
BALTIMORE, MARYLAND 21201
(410) 539-7600
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
MR. HARVEY SCHULWEIS
PRESIDENT AND CHIEF EXECUTIVE OFFICER
THE TOWN AND COUNTRY TRUST
100 SOUTH CHARLES STREET, SUITE 1700
BALTIMORE, MARYLAND 21201
(410) 539-7600
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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COPIES TO:
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JAMES H. BERICK, ESQ. ROBERT W. REEDER, ESQ.
BERICK, PEARLMAN & MILLS CO., L.P.A. SULLIVAN & CROMWELL
1350 EATON CENTER 125 BROAD STREET
1111 SUPERIOR AVENUE NEW YORK, NY 10004
CLEVELAND, OHIO 44114 (212) 558-4000
(216) 861-4900
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement as the
Registrant shall determine.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE OFFERING
SECURITIES TO BE REGISTERED REGISTERED(1)(2) PRICE(1)(3) REGISTRATION FEE(3)
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Common Shares of Beneficial Interest......... (4)
Preferred Shares of Beneficial Interest...... (4)(5)
Depositary Shares Representing...............
Preferred Shares of Beneficial Interest...... (6)
Common Share Warrants........................
Preferred Share Warrants.....................
Depositary Share Warrants....................
Total........................................ $75,000,000 $75,000,000 $19,800
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(CONTINUED OVER)
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(CONTINUED FROM COVER)
(1) In U.S. dollars or the equivalent thereof in one or more foreign currencies,
currency units or composite currencies. Each registered security may be
offered as part of a unit.
(2) Includes Additional Common Shares and Additional Preferred Shares (each as
defined below).
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) of the Securities Act of 1933, as amended (the
"Securities Act"). Exclusive of accrued interest, distributions and
dividends, if any.
(4) Includes an indeterminate number of additional Common Shares of Beneficial
Interest ("Additional Common Shares") as may be issued on (i) conversion of
any Preferred Shares of Beneficial Interest ("Preferred Shares") into Common
Shares, (ii) exercise of Preferred Share Warrants, if and to the extent the
underlying Preferred Shares are convertible into Common Shares or
(iii) exercise of any Common Share Warrants as may be issued.
(5) Includes an indeterminate number of additional Preferred Shares ("Additional
Preferred Shares") as may be issued on (i) exercise of any Preferred Share
Warrants as may be issued, (ii) conversion of any Depositary Shares or
(iii) exercise of any Depositary Share Warrants and subsequent conversion of
Depositary Shares received thereby.
(6) This Registration Statement covers an indeterminate number of Depositary
Shares as may be issued on exercise of any Depositary Share Warrants.
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SUBJECT TO COMPLETION. DATED DECEMBER 30, 1999.
THE INFORMATION IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY BE
CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED.
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PROSPECTUS
THE TOWN AND COUNTRY TRUST
COMMON SHARES OF BENEFICIAL INTEREST
PREFERRED SHARES OF BENEFICIAL INTEREST
DEPOSITARY SHARES
WARRANTS
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We may offer at various times up to $75,000,000 of the types of securities
listed above in one or more offerings.
We will provide specific terms of these securities in supplements to this
prospectus. We urge you to read this prospectus and any prospectus supplement
carefully before you make your investment decision.
This prospectus may not be used to offer and sell these securities unless
accompanied by a prospectus supplement.
The common shares offered hereby are listed on the New York Stock Exchange under
the symbol "TCT". If we decide to list any other securities offered hereby on a
national securities exchange upon issuance, the supplements to this prospectus
will identify the exchange and state when we expect trading to begin.
INVESTING IN OUR SECURITIES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS" ON PAGES
2 TO 8.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus or any accompanying prospectus supplement is truthful or complete.
Any representation to the contrary is a criminal offense.
We may offer the securities through underwriters or agents or directly to
investors. The supplements to this prospectus will provide the specific terms of
the plan of distribution.
The date of this prospectus is , 1999.
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TABLE OF CONTENTS
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PAGE
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About this Prospectus..................................................................................... 1
Cautionary Statement Regarding Forward-Looking Statements................................................. 1
About The Town and Country Trust.......................................................................... 2
Risk Factors.............................................................................................. 2
Use of Proceeds........................................................................................... 8
General Description of the Offered Securities............................................................. 8
Description of Our Shares of Beneficial Interest.......................................................... 8
Description of Depositary Shares.......................................................................... 12
Description of Warrants................................................................................... 15
Material Federal Income Tax Considerations................................................................ 16
Plan of Distribution...................................................................................... 23
Validity of the Securities................................................................................ 24
Experts................................................................................................... 24
Where You Can Find More Information....................................................................... 24
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission, which is commonly referred to as the "SEC",
utilizing a "shelf" registration process. Under this shelf process, we may offer
and sell any combination of the securities described in this prospectus in one
or more offerings up to a total dollar amount of $75,000,000. This prospectus
provides you with a general description of the securities we may offer. Each
time we offer securities, we will provide a prospectus supplement and attach it
to this prospectus. The prospectus supplement will contain specific information
about the terms of the securities being offered at that time. The prospectus
supplement also may add, update or change information contained in this
prospectus. To the extent information in this prospectus is inconsistent with
information contained in a prospectus supplement, you should rely on the
information in the prospectus supplement. You should read both this prospectus
and any prospectus supplement, together with additional information described
under the heading "Where You Can Find More Information", and any additional
information you may need to make your investment decision.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
We have made certain statements in this prospectus and our other filings
with the SEC which may constitute "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995. The words and
phrases "looking ahead", "we are confident", "should be", "will be",
"predicted", "believe", "expect", "anticipate", and similar expressions identify
forward-looking statements. These forward-looking statements reflect our current
views in respect of future events and financial performance, but are subject to
many uncertainties and factors relating to our operations and business
environment which may cause our actual results to differ materially from any
future results expressed or implied by such forward-looking statements. We
undertake no obligation to update publicly or revise any forward-looking
statements whether as a result of new information, future events or otherwise.
Accordingly, you should not place undue reliance on such statements.
IMPORTANT FACTS THAT MAY AFFECT OUR EXPECTATIONS, ESTIMATES OR PROJECTIONS
INCLUDE, BUT ARE NOT LIMITED TO:
- Our Funds Available for Distribution to Shareholders may be reduced by:
-- A reduction in rental rates due to competition or market conditions;
-- An increase in our vacancy rates due to competition or market
conditions; or
-- Increased or unanticipated expenses which can not be offset by an
increase in rental or occupancy rates.
- The value of our properties may decline as a result of:
-- A general decline in the market value of multi-family apartments or a
decline in the value of multi-family apartments in the mid-Atlantic
states;
-- An unexpected increase in maintenance expenses;
-- An unexpected casualty; or
-- The occurrence or the discovery of an environmental problem.
- We may lose our status as a real estate investment trust as a result of:
-- Changes in the Federal income tax laws; or
-- Our failure to comply with Federal income tax requirements.
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ABOUT THE TOWN AND COUNTRY TRUST
We own and operate multi-family apartment buildings in the mid-Atlantic and
Southeastern regions of the United States. Our properties primarily contain one-
and two-bedroom apartments. We typically rent our apartments to families and
individuals on a year-to-year basis.
For Federal income tax purposes, we are structured as a real estate
investment trust, or "REIT", which means that, so long as we comply with the
relevant requirements, we are not subject to Federal income tax on our profits.
The Town and Country Trust is a holding company. The primary business of The
Town and Country Trust is to act as a general partner of The TC Operating
Limited Partnership. We own all of our properties through partnerships of which
The TC Operating Limited Partnership and we are, indirectly, the sole partners.
The TC Operating Limited Partnership manages all of our properties. This
structure of operation is commonly referred to as an "umbrella partnership", or
"Up-REIT", structure.
Our principal executive offices are located at 100 South Charles Street,
Suite 1700, Baltimore, Maryland 21201 and our telephone number is
(410) 539-7600.
RISK FACTORS
INVESTING IN OUR EQUITY SECURITIES INVOLVES SIGNIFICANT RISKS. YOU SHOULD
CAREFULLY CONSIDER, AMONG OTHER FACTORS, THE MATTERS DESCRIBED BELOW.
REVENUES AVAILABLE FOR DISTRIBUTION TO OUR SHAREHOLDERS ARE AFFECTED BY MANY
FACTORS INCLUDING THOSE DESCRIBED BELOW.
OUR FUNDS AVAILABLE FOR DISTRIBUTION TO OUR SHAREHOLDERS MAY BE REDUCED BY A
DECREASE IN THE RENTAL RATES THAT WE ARE ABLE TO CHARGE.
Our principal source of revenues is the rents that we charge. We may need to
reduce our rental rates from time to time in order to respond to competition
from other multifamily apartments or due to a general economic decline in the
markets where we operate. A number of our competitors have greater resources
than us and may be able to reduce rates in order to increase occupancy. Also, a
general economic decline in areas where we operate may require us to reduce our
rental rates. For a further discussion of the competitive environment in which
we operate, see "Real Estate Investments' Value and Income Fluctuate Due to
Various Factors Including Those Described Below--We Are in a Competitive
Business" below, and for a discussion of the markets in which we operate, see
"--a Downturn in the Mid-Atlantic Region of the United States May Reduce Our
Funds Available for Distribution to Our Shareholders and May Reduce the Value of
Our Properties" below.
OUR FUNDS AVAILABLE FOR DISTRIBUTION TO OUR SHAREHOLDERS MAY BE REDUCED BY AN
INCREASE IN OUR VACANCY RATES.
Many of our buildings are almost fully occupied. Our average occupancy rate
for the nine months ended September 30, 1999 was approximately 94.7%. This level
of occupancy may not continue indefinitely. Our vacancy rates may increase due
to competition or a general market downturn in the areas where we operate. For a
further discussion of the competitive environment in which we operate, see "Real
Estate Investments' Value and Income Fluctuate Due to Various Factors Including
Those Described Below--We Are in a Competitive Business" below and for a
discussion of the markets in which we operate, see "--A Downturn in the
Mid-Atlantic Region Of the United States May Reduce Our Funds Available for
Distribution to Our Shareholders and May Reduce the Value of Our Properties"
below.
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OUR FUNDS AVAILABLE FOR DISTRIBUTION TO OUR SHAREHOLDERS MAY BE REDUCED BY AN
INCREASE IN OUR EXPENSES THAT CAN NOT BE OFFSET THROUGH AN INCREASE IN RENTAL
RATES OR OCCUPANCY.
Our expenses over the last five years have increased at approximately 2.2%
per annum. We may not be able to limit our expense increases to this level in
the future. Our expenses may increase due to a higher level of inflation, an
increase in the cost of maintaining our buildings or an increase in the cost of
living in the areas in which we operate. See "--The Age of Our Apartment
Communities May Make Us Less Competitive and Require Us to Make Significant
Capital Expenditures" for a discussion of our possible need to make capital
expenditures on our buildings. If our expenses increase we may be unable to
increase our rental rates or occupancy levels to offset the increased expenses.
OUR FUNDS AVAILABLE FOR DISTRIBUTION TO OUR SHAREHOLDERS MAY BE REDUCED BY AN
UNANTICIPATED CASUALTY.
We may sustain a loss as a result of a natural disaster, like a flood or
hurricane. While we maintain insurance on our properties, depending upon the
casualty, the insurance may be insufficient to cover our losses. For a
discussion of the adequacy of our insurance coverage, see "Real Estate
Investments' Value and Income Fluctuate Due To Various Factors Including Those
Described Below--Some Of Our Potential Losses May Not Be Covered By Insurance"
below.
WE MAY INCUR ANTICIPATED COSTS AND LIABILITIES DUE TO ENVIRONMENTAL PROBLEMS.
As an operator of apartment buildings, we face the risk that an
environmental problem may arise. To the extent that we have an environmental
problem, we are subject to potential liability to the tenants of the building
and for the costs of the cleaning up the problem. We may have liability for the
environmental problem even if we did not cause or know of it. While we have not
to date suffered a material loss as a result of an environmental problem, it is
possible that an environmental problem may develop of which we were previously
unaware. For a discussion of our exposure to environmental liability, see "Real
Estate Investments' Value and Income Fluctuate Due To Various Factors Including
Those Described Below--We May Incur Costs To Comply With Environmental Laws"
below.
THE AGE OF OUR APARTMENT COMMUNITIES MAY MAKE US LESS COMPETITIVE AND REQUIRE US
TO MAKE SIGNIFICANT CAPITAL EXPENDITURES.
The average age of our apartment communities is 22 years. The age of our
communities may place us at a disadvantage in competing with newer apartment
communities. As our communities age, the costs of maintaining our communities
may increase.
A DOWNTURN IN THE MID-ATLANTIC REGION OF THE UNITED STATES MAY REDUCE OUR FUNDS
AVAILABLE FOR DISTRIBUTION TO OUR SHAREHOLDERS AND MAY REDUCE THE VALUE OF OUR
PROPERTIES.
Thirty-six of our 42 properties are located in five states in the
mid-Atlantic region of the United States. As a result, our performance is linked
to the economic conditions and the market for apartments in the mid-Atlantic
states. A downturn in the economy in this region may reduce our rental rates,
increase our vacancies and reduce the value of our properties.
REAL ESTATE INVESTMENTS' VALUE AND INCOME FLUCTUATE DUE TO VARIOUS FACTORS
INCLUDING THOSE DESCRIBED BELOW.
THE VALUE OF REAL ESTATE FLUCTUATES DEPENDING ON CONDITIONS IN THE GENERAL
ECONOMY AND THE REAL ESTATE BUSINESS. THESE CONDITIONS MAY ALSO LIMIT OUR
REVENUES AND AVAILABLE CASH.
The factors that affect the value of our real estate include, among other
things:
- national, regional and local economic conditions;
- reduced demand for rentals in a property's area;
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- whether tenants consider a property attractive;
- how well we manage our properties;
- competition from comparable properties;
- tenants' ability to pay rents;
- increases or decreases in market rental rates;
- increases in operating costs due to inflation, increased real estate taxes
and other factors;
- government regulations and changes in zoning or tax laws;
- market interest rates;
- our ability to pay for adequate maintenance and insurance, including
insurance premiums, utilities and real estate taxes; and
- our potential liability for environmental or other legal claims.
WE MAY BE UNABLE TO REFINANCE OUR INDEBTEDNESS IF THE VALUE OF OUR PROPERTIES
DECLINE.
We have $367 million of indebtedness that comes due in 2008. This debt is
secured by mortgages on substantially all of our properties and these mortgages
are cross-collateralized. See "Cross-Collateralization May Permit a Lender to
Foreclose on Substantially All of Our Properties In the Event We Are Unable to
Service Our Indebtedness" for a further discussion of cross-collateralization.
We may be unable to refinance our debt due to a number of factors, including a
reduction in the value of our properties. See "Real Estate Investments' Value
and Income Fluctuate Due to Various Factors Including Those Described Below"
below for a discussion of factors that may adversely affect the value of our
properties.
CROSS-COLLATERALIZATION MAY PERMIT A LENDER TO FORECLOSE ON SUBSTANTIALLY ALL OF
OUR PROPERTIES IN THE EVENT WE ARE UNABLE TO SERVICE OUR INDEBTEDNESS.
Approximately $367 million of our existing of debt is cross-collateralized
by 35 of our properties. Cross-collateralization makes all of the subject
properties available to the lender in order to satisfy our debt. In the event
that we are unable to service this debt or otherwise default on this loan, our
lenders would have the ability to foreclose on the mortgages on all of the
subject properties.
WE ARE IN A COMPETITIVE BUSINESS.
The real estate industry is highly competitive. In each region in which we
operate, we compete for tenants with a large number of real estate property
owners. Since all of our properties are in areas where there are properties of
the same type and quality, the competition we face could affect our ability to
attract and retain tenants. In addition, we compete with other major real estate
investors with significant capital for attractive investment properties.
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WE MAY INCUR COSTS TO COMPLY WITH ENVIRONMENTAL LAWS.
Under various federal, state or local laws, ordinances and regulations, a
current or previous owner or operator of real estate may be required to
investigate and clean up hazardous or toxic substances released at a property,
and may be held liable to a governmental entity or to third parties for property
damage or personal injuries and for investigation and clean-up costs incurred by
the parties in connection with the contamination. These laws often impose
liability without regard to whether the owner or operator knew of, or was
responsible for, the release of the hazardous or toxic substances. The presence
of contamination or the failure to remediate contamination may adversely affect
the owner's ability to sell or lease real estate or to borrow using the real
estate as collateral. Other federal, state and local laws, ordinances and
regulations require abatement or removal of asbestos-containing materials in the
event of demolition or some renovations or remodeling and also govern emissions
of and exposure to asbestos fibers in the air. Federal and state laws also
regulate the operation and subsequent removal of underground storage tanks. In
connection with the ownership, operation and management of our properties, we
could be held liable for the costs of remedial action with respect to these
regulated substances or tanks or related claims arising out of environmental
contamination at our properties.
SOME OF OUR POTENTIAL LOSSES MAY NOT BE COVERED BY INSURANCE.
We carry comprehensive liability, fire, extended coverage and rental loss
insurance on all of our properties. We believe the policy specifications and
insured limits of these policies are adequate and appropriate. There are,
however, some types of losses, including lease and other contract claims, that
generally are not insured. If an uninsured loss or a loss in excess of insured
limits occurs, we could lose all or a portion of the capital we have invested in
a property, as well as the anticipated future revenue from the property. If this
happens, we might nevertheless remain obligated for any mortgage debt or other
financial obligations related to the property.
YEAR 2000 ISSUES COULD SERIOUSLY HARM OUR BUSINESS BY CREATING INTERNAL AND
EXTERNAL OPERATIONAL DIFFICULTIES.
The Year 2000 problem is the potential for system and processing failures of
date-related data arising from the use of two digits by computer-controlled
systems, rather than four digits, to define the applicable year. We may
experience operations difficulties because of undetected errors or defects in
the technology that we use in our internal systems. We rely, directly and
indirectly, on the systems of business enterprises such as suppliers, utilities,
creditors and financial institutions, which could be subject to operational
difficulties arising out of Year 2000 issues. Any failure on our part of our
principal internal systems or other business' systems as a result of the Year
2000 problem could seriously harm our business, reputation, financial condition
or results of operations.
We have completed our assessment of the Year 2000 readiness of our
information technology and other systems. We believe our most critical systems
are our accounts receivable and rent collection, fixed asset, financial
reporting and security systems. In order for these systems to function properly
in the year 2000 and afterwards, we have tested our software and modified and
replaced portions of our software. We used our own resources, as well as
resources purchased from others, to do so. The total cost of our Year 2000
project was approximately $50,000. We anticipate that these software
modifications, which are substantially complete, will address any Year 2000
problems in our critical systems.
We have asked our significant third-party suppliers and vendors to assess
their Year 2000 readiness. Our most important vendors include public utilities,
water and gas companies. While we are unaware that any of these vendors will
have a Year 2000 problem, we can not verify this. Most of our vendors are not
engaging in Year 2000 testing with individual customers. A lack of readiness by
utilities
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and water and gas companies could pose significant impediments to our ability to
carry on normal operations. A failure of our tenants to receive light, heat and
water could potentially jeopardize their safety and could result in claims
against us. We may face significant liability if our tenants are deprived of
basic services as a result of a Year 2000 problem. We can give no assurance that
the systems of other companies, on which our systems rely, will be modified to
address the Year 2000 issue on a timely basis and will not have an adverse
effect on us.
OUR ORGANIZATIONAL AND FINANCIAL STRUCTURE GIVES RISE TO OPERATIONAL AND
FINANCIAL RISKS INCLUDING THOSE DESCRIBED BELOW.
IN THE CASE OF A SALE OR REFINANCING OF OUR ORIGINAL 26 PROPERTIES, OUR CHAIRMAN
AND PRESIDENT MAY HAVE A CONFLICT OF INTEREST.
A sale, or refinancing for less than $232 million, of our original 26
properties may cause a significant tax liability to accrue to the limited
partners of The TC Operating Limited Partnership. These limited partners include
Mr. Schulweis, who is our President and Chief Executive Officer and a member of
our Board of Trustees, and an entity owned by Mr. Lerner, the Chairman of our
Board of Trustees. As a result, if our Board of Trustees were presented with the
question of whether to sell our original 26 properties or refinance these
properties for less than $232 million, Mr. Lerner and Mr. Schulweis would have a
conflict between their interests as limited partners in The TC Operating Limited
Partnership and as shareholders and trustees of The Town and Country Trust.
OUR CHARTER DOCUMENTS AND APPLICABLE LAW MAY HINDER ANY ATTEMPT TO ACQUIRE US.
Generally, for us to maintain our qualification as a REIT under the Internal
Revenue Code, not more than 50% in value of our outstanding shares of beneficial
interest may be owned, directly or indirectly, by five or fewer individuals at
any time during the last half of our taxable year. The Internal Revenue Code
defines "individuals" for this purpose to include some types of entities. Under
our declaration of trust, no person may own more than 5.0% of the lesser of the
number or value of our outstanding common shares, except for Mr. Lerner, for
whom the ownership limit is 29%. These restrictions on transferability and
ownership may delay, deter or prevent a change in control or other transaction
that might involve a premium price or otherwise be in the best interest of the
shareholders.
Our declaration of trust authorizes the Board of Trustees:
- to cause us to issue additional authorized but unissued common shares or
preferred shares;
- to classify or reclassify any unissued shares; and
- to set the preferences, rights and other terms of any classified or
reclassified shares that we issue.
The Board of Trustees could establish a series of preferred shares whose
terms could delay, deter or prevent a change in control or other transaction
that might involve a premium price or otherwise be in the best interest of our
shareholders. Our declaration of trust and bylaws contain other provisions that
may delay, deter or prevent a change in control or other transaction that might
involve a premium price or otherwise be in the best interest of the
shareholders.
Under Maryland law, as applicable to real estate investment trusts,
specified "business combinations" between a Maryland real estate investment
trust and an "interested shareholder" (as defined below) or an affiliate of an
interested shareholder are prohibited for five years after the most recent date
on which the interested shareholder becomes an interested shareholder. Business
combinations, for purposes of the preceding sentence, include specified mergers,
consolidations, share exchanges and asset transfers and some issuances and
reclassifications of equity securities. After the end of the five-year period,
any business combination with an interested shareholder or an affiliate of
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the interested shareholder must be recommended by the board of trustees of the
trust and approved by the affirmative vote of at least:
- 80% of the votes entitled to be cast by holders of outstanding voting
shares of beneficial interest of the trust, voting together as a single
voting group; and
- two-thirds of the votes entitled to be cast by holders of voting shares of
the trust other than voting shares held by the interested shareholder with
whom, or with whose affiliate, the business combination is to be effected
or held by an affiliate or associate of the interested shareholder, voting
together as a single voting group.
These percentage approval requirements do not apply if, among other
conditions, the trust's common shareholders receive a statutorily defined
minimum price for their shares and the consideration is received in cash or in
the same form as previously paid by the interested shareholder for its common
shares. The provisions of the Maryland law also do not apply to business
combinations that are approved or exempted by the board of trustees of the trust
before the interested shareholder becomes an interested shareholder. The
Maryland law defines "interested shareholder" as any person who beneficially
owns 10% or more of the voting power of the trust's shares or an affiliate or an
associate (as defined in the Maryland law) of the trust who, at any time within
the two-year period before the date in question, was the beneficial owner of 10%
or more of the voting power of the then outstanding voting shares of beneficial
interest of the trust. A person is not an interested shareholder if, prior to
the time the person would have become an interested shareholder, the board
approved the transaction which would have resulted in the person becoming an
interested shareholder.
Our Board of Trustees has adopted an irrevocable resolution which exempts
from this statute any business combination with Mr. Lerner or any of his present
or future affiliates or associates or any person acting in concert with any of
them. As a result, Mr. Lerner or any of the other specified persons may be able
to enter into business combinations with us which may not be in the best
interest of shareholders. With respect to business combinations with other
persons, the business combination provisions of Maryland law may delay, deter or
prevent a change in control or other transaction that might involve a premium
price or otherwise be in the best interest of the shareholders.
Additionally, under Maryland law, as amended, "control shares" (as defined
below) of a Maryland REIT acquired in a control share acquisition generally have
no voting rights except those voting rights that have been approved by a vote of
two-thirds of the votes eligible to vote under the statute. Maryland law defines
"control shares" as voting shares of stock or beneficial interest which entitle
their holder to several specified ranges of voting power in elections of
directors. If voting rights are not approved at a meeting of shareholders, a
Maryland company generally may redeem any or all of the control shares for fair
value. If voting rights for control shares are approved at a shareholders'
meeting and the acquiror becomes entitled to vote a majority of the shares of
beneficial interest entitled to vote, all other shareholders may exercise
appraisal rights. Our bylaws contain a provision exempting from the control
share acquisition statute any future transaction which otherwise would be
subject to the statute by Mr. Lerner or any of his present or future affiliates
or associates or any person acting in concert with any of them.
WE MIGHT FAIL TO QUALIFY OR REMAIN QUALIFIED AS A REIT.
It is possible that we may lose our status as a REIT for Federal income tax
purposes. Qualification as a REIT for Federal income tax purposes is governed by
highly technical and complex provisions of the Internal Revenue Code for which
there are only limited judicial or administrative interpretations. Our
qualification as a REIT also depends on various facts and circumstances that are
not entirely within our control. In addition, legislation, new regulations,
administrative interpretations or court decisions might significantly change the
tax laws with respect to the requirements for qualification as a REIT or the
Federal income tax consequences of qualification as a REIT.
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If, for any taxable year, we fail to maintain our qualification as a REIT,
we could not deduct distributions to shareholders in computing our taxable
income and would have to pay Federal income tax on our taxable income at regular
corporate rates. The Federal income tax payable would include any applicable
alternative minimum tax. As a result, the amount of money available to
distribute to shareholders would be reduced for the year or years involved, and
we would no longer be required to distribute money to shareholders. In addition,
we would also be disqualified from treatment as a REIT for the four taxable
years following the year during which qualification was lost, unless we were
entitled to relief under the relevant statutory provisions. Although we
currently intend to operate in a manner designed to allow us to qualify as a
REIT, future economic, market, legal, tax or other considerations may cause us
to revoke the REIT election.
USE OF PROCEEDS
Unless otherwise indicated in an accompanying prospectus supplement, we
intend to use the proceeds from the sale of the securities for general purposes,
including capital expenditures, acquisition or development of additional
properties, repayment of indebtedness, repurchases of our common shares and
meeting our working capital needs.
GENERAL DESCRIPTION OF THE OFFERED SECURITIES
We may use this prospectus to offer common shares of beneficial interest,
preferred shares of beneficial interest, depositary shares, warrants to purchase
common shares, warrants to purchase preferred shares, warrants to purchase
depositary shares or any combination of the foregoing, either individually or as
units consisting of two or more of such securities. We will set forth the
specific terms of any securities offered in an accompanying prospectus
supplement.
DESCRIPTION OF OUR SHARES OF BENEFICIAL INTEREST
We were formed as a real estate investment trust under the laws of the State
of Maryland. The rights of our shareholders are governed by Title 8 of the
Corporations and Associations Article, Annotated Code of Maryland, to which we
refer in this prospectus as the "Maryland REIT Law", and certain provisions of
the Maryland General Corporation Law, to which we refer in this prospectus as
the "MGCL", and by our declaration of trust and bylaws. The following summary of
the terms of our shares of beneficial interest is not complete and is subject
to, and qualified in its entirety by reference to, our declaration of trust and
bylaws and any applicable articles supplementary to the declaration of trust
designating the terms of a series of preferred shares. We refer in this
prospectus to any such articles supplementary as "designating articles". You
should refer to the exhibits to the registration statement for copies of our
declaration of trust and bylaws, which are incorporated by reference as exhibits
to the registration statement of which this prospectus is a part. See "Where You
Can Find More Information".
AUTHORIZED SHARES
Our declaration of trust provides that we may issue up to 500.0 million
shares of beneficial interest, par value $0.01 per share. Our Board of Trustees
is authorized, under our declaration of trust, to classify such shares as common
shares or preferred shares, and to set the rights, privileges and preferences of
such shares. On December 17, 1999, there were 15,789,080 common shares issued
and outstanding and no preferred shares issued and outstanding.
Under the Maryland REIT Law, a shareholder is not liable for our obligations
solely as a result of his or her status as a shareholder. Our declaration of
trust provides that no shareholder is liable for any of our debts or obligations
solely by reason of being a shareholder.
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All persons who own, directly or by virtue of the attribution provisions of
the Internal Revenue Code, more than 1.0% in number or value of our outstanding
shares of beneficial interest, whether preferred or common, must give a written
notice to us containing certain specified information by January 30 of each
year. In addition, each shareholder is required, upon demand, to disclose to us
in writing such information in respect of such shareholder's direct, indirect
and constructive ownership of beneficial interests as we deem necessary to
comply with the provisions of the Internal Revenue Code applicable to a real
estate investment trust, to comply with the requirements of any taxing authority
or governmental agency or to determine any such compliance.
ISSUANCE OF PREFERRED SHARES
Our Board of Trustees has the authority to issue preferred shares from time
to time, in one or more series, without any further action by our shareholders.
The following description of our preferred shares sets forth general terms and
provisions of the preferred shares to which any prospectus supplement may
relate. The preferred shares, when issued, will be fully paid and
non-assessable.
Because our Board of Trustees has the power to establish the preferences,
powers and rights of each series of preferred shares, it may afford the holders
of any series of preferred shares preferences, powers and rights, voting or
otherwise, senior to the rights of holders of common shares. The issuance of
preferred shares could have the effect of delaying, deferring or preventing a
change of control that might involve a premium price for common shareholders or
otherwise be in their best interest and may adversely affect the voting and
other rights of holders of the common shares. See "Risk Factors--Our
Organizational And Financial Structure Gives Rise To Operational And Financial
Risks Including Those Described Below--Our Charter Documents and Applicable Law
May Hinder Any Attempt To Acquire Us" for a discussion of the provisions of our
organizational documents that may prevent or deter an acquisition of Town and
Country.
The rights, preferences, privileges and restrictions of any series of
preferred shares will be fixed by the designating articles relating to the
series. A prospectus supplement relating to each series will specify the terms
of the preferred shares, including the following:
- the title of the preferred shares;
- the number of preferred shares in the series and the liquidation
preference per share;
- the dividend rate(s), period(s) and/or payment date(s) or method(s) of
calculation of the dividend rate;
- the date from which dividends will accumulate;
- the relative ranking and preferences as to dividend rights and rights upon
the liquidation, dissolution or winding up of our affairs;
- any voting rights, either generally or upon the issuance of another series
of preferred shares;
- any mandatory or optional redemption provisions;
- any right to convert or exchange the preferred shares for other
securities;
- any limitation on issuance of any other series of preferred shares;
- any limitations or restriction on the ownership or transfer of the
preferred shares;
- whether interests in the preferred shares will be represented by
depositary shares;
- the procedures for any auction and remarketing; and
- any additional rights, preferences, privileges, limitations and
restrictions of the preferred shares which are not inconsistent with the
declaration of trust, bylaws and any designating articles.
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COMMON SHARES
Our Board of Trustees has the authority to issue common shares from time to
time without any further action by our shareholders. The following description
of our common shares sets forth general terms and provisions of the common
shares to which any prospectus supplement may relate. All outstanding common
shares are, and any new common shares, when issued, will be, fully paid and
non-assessable.
The common shares have the dividend, liquidation, voting and general rights
set forth below unless otherwise specified in the prospectus supplement being
used to offer the common shares.
The applicable prospectus supplement will describe the terms of the common
shares including, where applicable, the following:
- the number of common shares to be offered; and
- any additional terms of the common shares which are not inconsistent with
the provisions of the declaration of trust and the bylaws.
DIVIDENDS AND LIQUIDATION RIGHTS.
Subject to the preferential rights of any class or series of preferred
shares, holders of common shares will be entitled to receive distributions on
such shares if authorized and declared by our Board of Trustees and to share
ratably in our assets legally available for distribution to the shareholders in
the event of our liquidation, dissolution or winding-up after payment of, or
adequate provision for, all of our known debts and liabilities.
All of our common shares rank equally as to their dividend, distribution,
liquidation and other rights.
VOTING RIGHTS.
Each outstanding common share entitles the holder to one vote on all matters
submitted to a vote of shareholders. These matters include the election of
trustees and, except as otherwise required by law or except as provided with
respect to any preferred shares, the holders of such shares will possess
exclusive voting power. Our declaration of trust provides that our trustees are
elected by a plurality vote. Our declaration of trust provides that there is no
cumulative voting in the election of trustees.
Our declaration of trust provides that the approval of a majority of the
votes cast shall be required to approve any other matter submitted to the
shareholders for approval, except as otherwise provided by law, the declaration
of trust, or the bylaws. A proposal to terminate the existence of the trust
requires the affirmative vote of holders of two-thirds of the shares of all
classes. A proposal to amend the declaration of trust requires the affirmative
vote of the holders of at least a majority of the shares entitled to vote on the
proposal. Our declaration of trust provides that the Board of Trustees has the
authority to amend the declaration of trust at any time to cause to us to
continue to meet the requirements applicable to a REIT and to determine, at any
time and from time to time, whether to attempt to cause us to qualify as a REIT.
GENERAL.
Except as otherwise set forth in the applicable prospectus supplement, a
holder of the common shares has no conversion, sinking fund, redemption rights,
exchange rights or preemptive rights to subscribe for any of our securities.
The transfer agent and registrar for our common shares is National City
Bank, Cleveland, Ohio.
Our common shares are listed on the New York Stock Exchange under the
trading symbol "TCT".
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RESTRICTIONS ON OWNERSHIP AND TRANSFER
Our declaration of trust contains restrictions on the number of our shares
of beneficial interest that shareholders may own. For us to qualify as a REIT
under the Internal Revenue Code no more than 50.0% in value of our outstanding
shares of beneficial interest may be owned, actually or constructively under the
applicable attribution rules of the Internal Revenue Code, by five or fewer
individuals during the last half of a taxable year. We refer to this as the
"5/50 Rule". Pension plans and mutual funds are among the entities that are not
treated as individuals for the purposes of the 5/50 Rule. Individuals that own
indirect interests in shares through entities that are not treated as
individuals for purposes of the 5/50 Rule are treated as owning their
proportionate share of such shares for the purposes of the 5/50 Rule. Our shares
of beneficial interest must also be owned by 100 or more persons during at least
335 days of a taxable year of 12 months or during a proportionate part of a
shorter taxable year.
In general, the ownership limit set forth in our declaration of trust
provides that no person or entity may own, or be deemed to own by virtue of the
applicable constructive ownership provisions of the Internal Revenue Code, more
than 5.0% of the lesser of the number or value of our outstanding shares of
beneficial interest, except for Mr. Lerner, as to whom the limit is 29.0%. The
constructive ownership rules of the Internal Revenue Code are complex, and may
cause shares owned actually or constructively by a group of related individuals
and/or entities to be deemed to be constructively owned by one individual or
entity.
Although they are not required to, our Board of Trustees may waive the
ownership limit provided in our declaration of trust with respect to a
particular shareholder if our Board of Trustees determines that the
shareholder's ownership will not jeopardize our status as a REIT and otherwise
decides such action would be in our best interest. Our Board of Trustees may
place whatever conditions they deem appropriate on such waiver.
Our declaration of trust further provides that our Board of Trustees may
refuse to permit a transfer of shares if, in the opinion of the Board of
Trustees, the proposed transfer may jeopardize our qualification as a REIT.
Any person who acquires or attempts or intends to acquire actual or
constructive ownership of our shares of beneficial interest that will or may
violate any of the restrictions on transferability of ownership discussed above
must give notice immediately to us. If any purported transfer of our shares or
any other event otherwise would result in any person violating the ownership
limit, the number of shares purported to be transferred in excess of the
ownership limit shall be converted into a separate class of "excess shares". The
excess shares shall not be entitled to receive any dividends or distributions or
to vote on any matter (other than as provided by Maryland law). Within 30 days
after the earlier of our receipt of notice from a holder of his or her
acquisition of excess shares or our independent discovery of an acquisition of
excess shares, we will call the excess shares for redemption at a price equal to
the lower of the price paid in the transaction creating the excess shares or the
market price for the shares on the redemption date. We may pay the redemption
price at any time or times up to our date of liquidation, unless our Board of
Trustees determines that it is in our best interest to pay the redemption price
on an earlier date. If the Board of Trustees determines to pay the redemption
price at the liquidation of the Trust, the redemption price shall not exceed the
sum of the per-share liquidating distributions and the return of capital
distributions declared in respect of shares of record after the redemption date.
No interest shall accrue from the redemption date to the date of payment.
We will not redeem the excess shares if the holder of the excess shares has
disposed of them prior to our giving written notice of redemption. If the excess
shares have been disposed of, the holder of the excess shares must pay to us the
amount (if any) by which the consideration he or she received in disposing of
the excess shares (or, if the transfer was without consideration, the market
value of the excess shares) exceeded the redemption price we would have paid for
the excess shares. We will rescind
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the redemption if the holder of the excess shares, within 30 days after
receiving our notice of redemption, transfers, to a person in whose hands the
shares will not violate the ownership limit, enough of his or her remaining
shares so that he or she no longer holds shares in excess of the ownership limit
and pays us the amount, if any, by which the greater of (1) the market value of
the excess shares on the date of the transfer of the remaining shares and
(2) the price received on the sale of the remaining shares exceeds the purchase
price of the excess shares (or, if the acquisition of the excess shares was
without consideration, the market value of the excess shares on the date of
acquisition).
If any attempted acquisition of shares would cause our shares of beneficial
interest to be owned beneficially fewer than 100 persons, such acquisition will
be null and void in its entirety and the intended purchaser or recipient will
acquire no rights to the shares.
Except as otherwise described above, any change in the ownership limit would
require an amendment to our declaration of trust. Generally, amendments to our
declaration of trust require the affirmative vote of holders owning at least a
majority of our shares of beneficial interest outstanding and entitled to vote
thereon. Our declaration of trust provides that the Board of Trustees has the
authority to determine, at any time and from time to time, whether to attempt to
cause us to qualify as a REIT.
All certificates representing our common shares currently bear a legend
referring to the restrictions described above.
If the redemption provisions discussed above are determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation, then the
intended transferee of any shares in violation of the ownership limit may be
deemed, at our option, to have acted as agent on our behalf in acquiring such
shares and to hold such shares on our behalf.
The ownership limitations discussed above may have the effect of precluding
acquisition of control of the Trust without the consent of our Board of Trustees
and, consequently, shareholders may be unable to realize a premium for their
shares over the then-prevailing market price which is customarily associated
with such acquisitions. See "Risk Factors--Our Organizational And Financial
Structure Gives Rise To Operational And Financial Risks Including Those
Described Below--Our Charter Documents and Applicable Law May Hinder Any Attempt
To Acquire Us" for a discussion of the provisions of our organizational
documents that may impact an acquisition of Town and Country.
These restrictions will not preclude settlement for transactions through the
New York Stock Exchange.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
The following summary of each of the deposit agreement, the depositary
shares and the depositary receipts, each as described below, is not complete,
and is qualified in its entirety by reference to the deposit agreement and
depositary receipts with respect to the depositary shares relating to any
particular series of preferred shares. You should refer to the exhibits to the
registration statement for copies of the forms of the deposit agreement and
deposit receipts. See "Where You Can Find More Information".
The following summary of the deposit agreement, the depositary shares and
the depositary receipts relates to terms and conditions applicable to the
depositary shares generally. The particular terms of any series of depositary
shares will be described in the applicable prospectus supplement. If so
indicated in the prospectus supplement, the terms of any such series may differ
from the terms set forth below.
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Each depositary share evidences a specified fraction of a preferred share.
The preferred shares underlying any depositary shares will be deposited under a
separate deposit agreement between us and a bank or trust company selected by us
as depositary. The bank or trust company acting as depositary will be specified
in the applicable prospectus supplement. Subject to the terms of the applicable
deposit agreement, each owner of a depositary share will be entitled, in
proportion to the applicable fractional interest in a preferred share underlying
such depositary share, to all the rights, preferences or privileges of such
preferred shares (including dividend, voting, redemption, conversion, exchange
and liquidation rights).
DIVIDENDS
The depositary will distribute all cash dividends or other cash
distributions received by it in respect of the preferred shares to the record
holders of depositary shares relating to such preferred shares in proportion to
the numbers of depositary shares held on the relevant record date. The amount
made available for distribution will be reduced by any amounts withheld by the
depositary or us on account of taxes.
In the event of a distribution other than in cash, the depositary will
distribute securities or property received by it to the record holders of
depositary shares in proportion to the numbers of depositary shares held on the
relevant record date, unless the depositary determines that it is not feasible
to make such distribution. In that case, the depositary may make the
distribution by such method as it deems equitable and practicable. One such
possible method is for the depositary to sell the securities or property and
then distribute the net proceeds from the sale as provided in the case of a cash
distribution.
WITHDRAWAL OF SHARES
Upon surrender of depositary receipts representing any number of whole
shares at the depositary's office, unless the related depositary shares
previously have been called for redemption, the holder of the depositary shares
evidenced by the depositary receipts will be entitled to delivery of the number
of whole shares of the related series of preferred shares and all money and
other property, if any, underlying such depositary shares. However, once such an
exchange is made, the preferred shares cannot thereafter be redeposited in
exchange for depositary shares. Holders of depositary shares will be entitled to
receive whole shares of the related series of preferred shares on the basis set
forth in the applicable prospectus supplement. If the depositary receipts
delivered by the holder evidence a number of depositary shares representing more
than the number of whole preferred shares of the related series to be withdrawn,
the depositary will deliver to the holder at the same time a new depositary
receipt evidencing the excess number of depositary shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever we redeem the preferred shares, the depositary will redeem a number
of depositary shares representing the same number of preferred shares so
redeemed. If fewer than all of the depositary shares are to be redeemed, the
depositary shares to be redeemed will be selected by lot, pro rata or by any
other equitable method as the depositary may determine.
VOTING OF UNDERLYING PREFERRED SHARES
Upon receipt of notice of any meeting at which the holders of the preferred
shares of any series are entitled to vote, the depositary will mail the
information contained in the notice of meeting to the record holders of the
depositary shares relating to that series of preferred shares. Each record
holder of the depositary shares on the record date will be entitled to instruct
the depositary as to the exercise of the voting rights represented by the number
of preferred shares underlying the holder's depositary
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shares. The depositary will endeavor, to the extent it is practical to do so, to
vote the number of whole preferred shares underlying such depositary shares in
accordance with such instructions. We will agree to take all action that the
depositary may deem reasonably necessary in order to enable the depositary to do
so. To the extent the depositary does not receive specific instructions from the
holders of depositary shares relating to such preferred shares, it will abstain
from voting such preferred shares.
AMENDMENT AND TERMINATION OF DEPOSIT AGREEMENT
The form of depositary receipt evidencing the depositary shares and any
provision of the applicable deposit agreement may at any time be amended by
agreement between us and the depositary. We may, with the consent of the
depositary, amend the deposit agreement from time to time in any manner that we
desire. However, if the amendment would materially and adversely alter the
rights of the existing holders of depositary shares, the amendment would need to
be approved by the holders of at least a majority of the depositary shares then
outstanding.
The deposit agreement may be terminated by us or the depositary if:
- all outstanding depositary shares have been redeemed; or
- there has been a final distribution in respect of the preferred shares of
the applicable series in connection with our liquidation, dissolution or
winding up and such distribution has been made to the holders of
depositary receipts.
RESIGNATION AND REMOVAL OF DEPOSITARY
The depositary may resign at any time by delivering to us notice of its
election to do so. We may remove a depositary at any time. Any resignation or
removal will take effect upon the appointment of a successor depositary and its
acceptance of appointment.
CHARGES OF DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of any depositary arrangements. We will pay all
charges of each depositary in connection with the initial deposit of the
preferred shares of any series, the initial issuance of the depositary shares,
any redemption of such preferred shares and any withdrawals of such preferred
shares by holders of depositary shares. Holders of depositary shares will be
required to pay any other transfer taxes.
NOTICES
Each depositary will forward to the holders of the applicable depositary
shares all notices, reports and communications from us which are delivered to
such depositary and which we are required to furnish the holders of the
preferred shares.
LIMITATION OF LIABILITY
The deposit agreement contains provisions that limit our liability and the
liability of the depositary to the holders of depositary shares. Under the
deposit agreement, we and the depositary have no liability to the holders of the
depositary receipts other than for our negligence, willful misconduct or bad
faith. Both the depositary and we are also entitled to an indemnity from the
holders of the depositary shares prior to bringing, or defending against, any
legal proceeding. We or any depositary may rely upon written advice of counsel
or accountants, or information provided by persons presenting preferred shares
for deposit, holders of depositary shares or other persons believed by us or it
to be competent and on documents believed by us or them to be genuine.
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DESCRIPTION OF WARRANTS
We may issue warrants to purchase common shares, preferred shares or
depositary shares. We may issue warrants independently or together with any
other securities offered by any prospectus supplement and the warrants may be
attached to or separate from those securities. Each series of warrants will be
issued under a separate warrant agreement, to be entered into between us and a
warrant agent specified in a prospectus supplement. You should refer to the
exhibits to the registration statement for copies of the forms of warrant
agreements. See "Where You Can Find More Information". The warrant agent will
act solely as our agent in connection with the warrants of such series and will
not assume any obligation or relationship of agency or trust with any of the
holders of the warrants. The warrant agent will be specified in the applicable
prospectus supplement. We will set forth further terms of the warrants and the
applicable warrant agreements in the applicable prospectus supplement relating
to the issuance of any warrants.
The applicable prospectus supplement will describe the terms of the warrants
in respect of which this prospectus is being delivered including, where
applicable, the following:
- the title of the warrants;
- the aggregate number of the warrants;
- the number of common shares, preferred shares or depositary shares
purchasable upon exercise of the warrants;
- the designation and terms of the securities, if any, with which the
warrants are issued and the number of the warrants issued with each such
offered security;
- the date, if any, on and after which the warrants and the related common
shares, preferred shares or depositary shares will be separately
transferable;
- the price at which each common share, preferred share or depositary share
purchasable upon exercise of the warrants may be purchased;
- the date on which the right to exercise the warrants shall commence and
the date on which the right shall expire;
- the minimum or maximum amount of the warrants which may be exercised at
any one time;
- any circumstances that will cause the warrants to be deemed to be
automatically exercised; and
- any other material terms of the warrants.
The exercise of any warrants will be subject to and limited by the transfer
and ownership restrictions in our declaration of trust, which we have described
under "Description of Our Shares of Beneficial Interest--Restrictions on
Ownership and Transfer".
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MATERIAL FEDERAL INCOME TAX CONSIDERATIONS
The following discussion summarizes the material federal income tax
considerations to us resulting from the treatment of us as a REIT. Berick,
Pearlman & Mills Co., L.P.A., has acted as our tax counsel in connection with
the preparation of this prospectus. This summary should not be construed as tax
advice.
The statements in this summary are based on current provisions of the
Internal Revenue Code and the related Treasury Regulations and administrative
and judicial interpretations, all as of the date hereof, and all of which are
subject to change, possibly with retroactive effect. The provisions of the
Internal Revenue Code and the related Treasury Regulations and administrative
and judicial interpretations that concern REITs are highly technical and
complex, and this summary is qualified in its entirety by those Internal Revenue
Code provisions, Treasury Regulations, and administrative and judicial
interpretations. We can give no assurance that future legislative, judicial, or
administrative actions or decisions will not affect the accuracy of any
statements in this summary. In addition, we can give no assurance that we will
seek a ruling from the Internal Revenue Service with respect to any matter
discussed herein, or that the IRS or a court will agree with the statements made
herein.
This summary of material federal income tax considerations describes our tax
treatment as a REIT. The summary describes the complex technical requirements
which we must satisfy in order to qualify as a REIT. Our failure to meet those
requirements could result in our income becoming taxable in the same manner as
any regular C corporation (i.e. any corporation subject to full corporate-level
tax). The resulting tax liability to us if we failed to meet the REIT
requirements would have a significant adverse effect on an investment in the
securities. In addition, even if we do qualify as a REIT, various federal income
taxes may still be imposed on us as are described in the summary.
TAXATION OF THE TOWN AND COUNTRY TRUST
GENERAL.
We have elected to be taxed as a REIT under Sections 856 through 860 of the
Internal Revenue Code and the applicable Treasury Regulations, which together
set forth the requirements for qualifying as a REIT (the "REIT Requirements"),
beginning with our taxable year ended December 31, 1993. We believe that we are
organized, have operated and will continue to operate in a manner to qualify for
taxation as a REIT under the Internal Revenue Code. We can provide no assurance,
however, that we will continue to operate in a manner to remain qualified as a
REIT.
Subject to the qualifications described in this summary and stated in its
opinion, in the opinion of Berick, Pearlman & Mills Co., L.P.A., we are
organized in conformity with the requirements for qualification as a REIT under
the Internal Revenue Code, our method of operation has enabled us to meet the
requirements for qualification and taxation as a REIT under the Internal Revenue
Code and our proposed method of operation will allow us to continue to meet such
requirements. An opinion of counsel is not binding on the IRS or a court and we
can give no assurance that the IRS or a court will not take a position different
from that expressed by our tax counsel. We also must emphasize that our tax
counsel's opinion is based on various assumptions and is conditioned upon
numerous representations made by us and The TC Operating Limited Partnership as
to factual matters, including those related to our and its businesses and
properties as set forth in this prospectus. Our tax counsel has not
independently verified our representations. Our qualification and taxation as a
REIT also depend upon our ability to meet on a continuing basis the actual
operating results, distribution levels, diversity of ownership and the various
other qualification tests imposed by the Internal Revenue Code as discussed
below. Our tax counsel will not review our compliance with these tests on a
continuing basis.
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Accordingly, we can provide no assurance that the actual results of our
operations for any given taxable year will satisfy the REIT Requirements. See
"--Failure to Qualify", below.
REIT TAXATION.
For any taxable year in which we qualify for taxation as a REIT, we
generally will not be subject to federal corporate income tax on that portion of
our ordinary income or capital gain that is currently distributed to our
shareholders. The REIT provisions of the Internal Revenue Code generally allow a
REIT to deduct dividends paid to its shareholders in calculating its taxable
income. This deduction for dividends paid to shareholders substantially
eliminates the federal "double taxation" on earnings (once at the corporate
level and once again at the shareholder level) that generally results from an
investment in a corporation.
Even if we continue to qualify for taxation as a REIT, we may be subject to
federal income tax in the following circumstances:
- We will be taxed at regular corporate rates on any undistributed "REIT
taxable income" and undistributed net capital gains.
- In some circumstances, we may be subject to the corporate "alternative
minimum tax" on our items of tax preference, if any.
- If we have net income from the sale or other disposition of "foreclosure
property" which is held primarily for sale to customers in the ordinary
course of business or other nonqualifying income from foreclosure
property, we will be subject to tax on such income at the highest
regular corporate rate (currently 35%).
- If we have net income from prohibited transactions, such income will be
subject to a 100% tax. Prohibited transactions, in general, are sales or
other dispositions of property held primarily for sale to customers in
the ordinary course of business, other than foreclosure property.
- If we should fail to satisfy the 75% gross income test or the 95% gross
income test (as discussed below), but nonetheless maintain our
qualification as a REIT because we meet other requirements, we will be
subject to a 100% tax on the greater of the amount by which we fail the
75% or the 95% test, multiplied by a fraction intended to reflect our
profitability.
- If we should fail to distribute for each calendar year at least the sum
of:
- 85% of our REIT ordinary income for such year,
- 95% of our REIT capital gain net income for such year, and
- any undistributed taxable income from prior periods,
we will be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed. However, to the extent
we elect to retain and pay income tax on net long-term capital gains we
received during the year, such amounts will be treated as having been
distributed for purposes of the 4% excise tax.
- If we acquire any asset from a C corporation in a transaction in which
the basis of the asset in our hands is determined by reference to the
basis of the asset (or any other property) in the hands of the C
corporation and we subsequently recognize gain on the disposition of
such asset during the ten-year period (the "Recognition Period")
beginning on the date on which the asset was acquired by us, then,
pursuant to guidelines issued by the IRS, we will be taxed on the amount
of our gain to the extent of the gain that would have been realized if
the C corporation had sold the asset on the last day before the date on
which we acquired the asset.
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Alternatively, we may elect, in lieu of the treatment described above,
to be subject to tax at the highest regular corporate tax rate on the
excess, if any, of:
- the fair market value of the asset as of the beginning of the
applicable Recognition Period, over
- our adjusted basis in such asset as of the beginning of such
Recognition Period (I.E., "built-in gain").
We also will be taxed on any recognized built-in gains during the
Recognition Period attributed to the disposition of assets of an acquired
corporation which is a "qualified REIT subsidiary." See "--Requirements for
REIT Qualification" and "--Qualified REIT Subsidiary".
We use the calendar year for both federal income tax purposes and financial
reporting purposes.
REQUIREMENTS FOR REIT QUALIFICATION.
To qualify as a REIT, we must have met and continue to meet the requirements
discussed below, relating to our organization, the sources of our gross income,
the nature of our assets, and the level of distributions to our shareholders.
ORGANIZATIONAL REQUIREMENTS.
The Internal Revenue Code requires that a REIT be a corporation, trust, or
association:
- which is managed by one or more trustees or directors;
- the beneficial ownership of which is evidenced by transferable shares or
by transferable certificates of beneficial interest;
- which would be taxable as a domestic corporation but for compliance with
the REIT requirements;
- which is neither a financial institution nor an insurance company under
the Internal Revenue Code;
- the beneficial ownership of which is held by 100 or more persons;
- which is not closely held (as described below) at any time during the
last half of each taxable year; and
- which meets other tests, described below, regarding the nature of its
income and assets and distribution requirements.
The Internal Revenue Code provides that the first four conditions above must
be met during the entire taxable year and that the fifth condition must be met
during at least 335 days of a taxable year of 12 months, or during a
proportionate part of a taxable year of less than 12 months.
We have issued sufficient shares to enough holders to allow us to satisfy
the fifth condition set forth above (the "100 holder requirement"). For purposes
of determining ongoing compliance with the 100 holder requirement, Treasury
Regulations require us to issue letters to some shareholders demanding
information regarding the amount of shares each such shareholder actually or
constructively owns. Although any failure by us to comply with the shareholder
demand letters requirement should not jeopardize our REIT status, such failure
would subject us to financial penalties. We must maintain a list of those
shareholders failing or refusing to comply with this demand as part of our
records. A shareholder who fails or refuses to comply with the demand must
submit a statement with its tax return disclosing the actual ownership of the
shares and other information.
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As set forth in the sixth condition above, to qualify as a REIT we also must
satisfy the requirement set forth in Section 856(a)(6) of the Internal Revenue
Code that we not be closely held. We will not be closely held so long as at all
times during the last half of any of our taxable years not more than 50% in
value of our outstanding shares of beneficial interest is owned, directly or
constructively under the applicable attribution rules of the Internal Revenue
Code, by five or fewer individuals (as defined in the Internal Revenue Code to
include tax-exempt entities, other than, in general, qualified domestic pension
funds). This requirement is known as the "5/50 Rule".
Although our declaration of trust contains restrictions on the ownership and
transfer of the shares, the restrictions do not ensure that we will be able to
satisfy the 5/50 Rule. If we fail to satisfy the 5/50 Rule, our status as a REIT
will terminate and we will not be able to prevent such termination. However, for
taxable years beginning after 1997, if we comply with the procedures prescribed
in Treasury Regulations for issuing shareholder demand letters and do not know,
or with the exercise of reasonable diligence would not have known, that the 5/50
Rule was violated, the requirement that we not be closely held will be deemed to
be satisfied for the year. See "--Failure to Qualify", below.
OWNERSHIP OF A PARTNERSHIP INTEREST.
We are a general partner in the operating partnership. In the case of a REIT
that is a partner in a partnership, Treasury Regulations provide that the REIT
is deemed to own its proportionate share of the assets of the partnership
corresponding to the REIT's capital interest in the partnership and is deemed to
earn its proportionate share (based on the REIT's capital interest) of the
income of the partnership. In addition, the partnership's assets and gross
income retain the same character in the hands of the REIT for purposes of the
REIT Requirements, including satisfying the gross income tests and the asset
tests. Accordingly, our proportionate share of the assets, liabilities and items
of income of the operating partnership, including The TC Operating Limited
Partnership's proportionate share of the assets, liabilities and items of income
of each of its property-owning subsidiaries, to which we refer in this
prospectus as "property partnerships", are treated as our assets, liabilities
and items of income for purposes of applying the REIT Requirements, provided
that the operating partnership and each of the property partnerships are treated
as partnerships for federal income tax purposes.
QUALIFIED REIT SUBSIDIARY.
If a REIT owns a corporate subsidiary that is a "qualified REIT subsidiary"
within the meaning of section 856(i) of the Internal Revenue Code, that
subsidiary is disregarded for federal income tax purposes, and all assets,
liabilities, and items of income, deduction, and credit of the subsidiary are
treated as assets, liabilities and such items of the REIT itself. A "qualified
REIT subsidiary" is a corporation all of the capital stock of which is owned by
the REIT. If an existing corporation is acquired by a REIT and becomes a
"qualified REIT subsidiary" of such REIT, all of its pre-acquisition earnings
and profits must be distributed before the end of the REIT's taxable year. Our
wholly-owned corporate subsidiaries that act as a general partner in the
property partnerships are "qualified REIT subsidiaries" and thus all of such
subsidiary corporations' assets, liabilities, and items of income, deduction,
and credit will be treated as our assets, liabilities, and items of income,
deduction and credit.
INCOME TESTS.
To maintain our qualification as a REIT, we must satisfy two gross income
requirements annually. First, at least 75% of our gross income (excluding gross
income from prohibited transactions) for each taxable year must be derived
directly or indirectly from investments relating to real property or mortgages
on real property (including "rents from real property" and, in some
circumstances, interest) or from some types of temporary investments. Second, at
least 95% of our gross income (excluding gross income from prohibited
transactions) for each taxable year must be derived from such real
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property investments and from dividends, interest, and gain from the sale or
disposition of stock or securities or from any combination of the foregoing.
Rents received by us will qualify as "rents from real property" in
satisfying the gross income requirements described above only if several
conditions are met:
- First, the amount of rent received or accrued with respect to any
property must not be based in whole or in part on the income or profits
derived by any person from such property, although an amount received or
accrued generally will not be excluded from the term "rents from real
property" solely by reason of being based on a fixed percentage or
percentages of gross receipts or gross sales. Rents received from a
tenant that are based on the tenant's income from the property will not
be treated as rents based on income or profits and thus will not be
excluded from the term "rents from real property" if the tenant derives
substantially all of its income with respect to such property from the
leasing or subleasing of substantially all of such property, provided
that the tenant receives from subtenants only amounts that would be
treated as rents from real property if received directly by a REIT.
- Second, rents received from a tenant will not qualify as "rents from
real property" in satisfying the gross income tests if the REIT, or an
owner of 10% or more of the REIT, directly or constructively owns 10% or
more of such tenant.
- Third, if rent attributable to personal property, leased in connection
with a lease of real property, is greater than 15% of the total rent
received under the lease, then the portion of rent attributable to such
personal property will not qualify as "rents from real property."
- Finally, a REIT generally must not operate or manage the property or
furnish or render services to the tenants of such property, other than
through an "independent contractor" from whom the REIT derives no
income. However, we (or our affiliates) are permitted directly to
perform services that are "usually or customarily rendered" in
connection with the rental of space for occupancy only and are not
otherwise considered rendered for the convenience of the occupant of the
property. A DE MINIMIS exception allows a REIT to provide non-customary
services to its tenants and not disqualify all income received with
respect to that property as rents from real property so long as the
aggregate income derived by the REIT with respect to a particular
property that is attributable to the impermissible services performed
for any and all tenants at the property does not exceed 1.0% of the
gross income derived by the REIT with respect to that property. For
these purposes, the amount we receive that is attributable to
impermissible services may not be valued at less than 150% of our direct
cost of providing these services.
Substantially all of our gross income is attributable to investments in real
property and specifically to rents attributable to and gains from the
disposition of real property. We do not receive rents based on the net income or
profits of a tenant. Moreover, we do not receive rents in excess of a DE MINIMIS
amount from a related-party tenant. We also believe that the amounts of any rent
attributable to personal property leased in connection with a lease of real
property will not cause us to fail to satisfy the 95% gross income test.
If we fail to satisfy one or both of the 75% or the 95% gross income tests
for any taxable year, we may nevertheless qualify as a REIT for such year if we
are entitled to relief under some provisions of the Internal Revenue Code. These
relief provisions generally will be available if:
- our failure to meet such test(s) was due to reasonable cause and not due
to willful neglect;
- we reported the nature and amount of each item of our income included in
the test(s) for such taxable year on a schedule attached to our tax
return; and
- any incorrect information on the schedule was not due to fraud with
intent to evade tax.
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It is not possible, however, to state whether, in all circumstances, we
would be entitled to the benefit of these relief provisions. For example, if we
fail to satisfy the gross income tests because nonqualifying income that we
intentionally earn exceeds the limits on such income, the IRS could conclude
that our failure to satisfy the tests was not due to reasonable cause. As
discussed above in "--REIT Taxation", even if these relief provisions apply, we
will still be subject to a 100% tax on the greater of the amount by which we
failed the 75% or the 95% test, multiplied by a fraction intended to reflect our
profitability. See "--Failure to Qualify", below.
ASSET TESTS.
At the close of each quarter of our taxable year, we also must satisfy three
tests relating to the nature of our assets.
- First, at least 75% of the value of our total assets, including our
allocable share of assets held by The TC Operating Limited Partnership,
must be represented by real estate assets, cash, cash items and U.S.
government securities. For this purpose, real estate assets include
stock or debt instruments purchased with proceeds of a stock offering or
a long-term (at least five years) debt offering made by us, but only
during a one-year period beginning on the date we receive such proceeds.
- Second, not more than 25% of our total assets may be represented by
securities other than those in the 75% asset class.
- Third, of the investments included in the 25% asset class, the value of
any one issuer's securities owned by us may not exceed 5% of the value
of our total assets, and we may not own more than 10% of any one
issuer's outstanding voting securities.
By virtue of our partnership interest in the operating partnership, we will
be deemed for purposes of these three asset tests to own our pro rata share of
the assets of the operating partnership.
After initially meeting the asset tests at the close of any quarter, we will
not lose our status as a REIT for failure to satisfy any of the asset tests at
the end of a later quarter solely by reason of changes in asset values. If the
failure to satisfy the asset tests results from an acquisition of securities or
other property during a quarter, the failure can be cured by disposition of
sufficient nonqualifying assets within 30 days after the close of that quarter.
ANNUAL DISTRIBUTION REQUIREMENTS.
To continue to qualify as a REIT, we are required to distribute dividends
(other than capital gain dividends) to our shareholders each year in an amount
at least equal to:
- the sum of (A) 95% of our "REIT taxable income" (computed without regard
to the dividends paid deduction and our net capital gain) plus (B) 95% of
the net income (after tax), if any, from foreclosure property, minus
- the sum of items of non-cash income.
We must pay such distributions in the taxable year to which they relate, or
in the following taxable year if declared before we timely file our tax return
for such year and if paid on or before the first regular dividend payment after
such declaration. A distribution which is not pro rata within a class of
beneficial interest entitled to a dividend or which is not consistent with the
rights to distributions between classes of beneficial interest (a "preferential
dividend") is not taken into consideration for the purpose of meeting the
distribution requirement and is not eligible for the dividends paid deduction.
Accordingly, the payment of a preferential dividend could affect our ability to
meet this distribution requirement.
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To the extent that we do not distribute all of our net capital gain or
distribute at least 95%, but less than 100%, of our "REIT taxable income," as
adjusted, we will be subject to tax on the undistributed amount at regular
corporate capital gains or ordinary corporate tax rates, as the case may be.
Furthermore, if we should fail to distribute for each calendar year at least the
sum of (A) 85% of our REIT ordinary income for such year, (B) 95% of our REIT
capital gain net income for such year, plus (C) any undistributed taxable income
from prior periods, we will be subject to a 4% excise tax on the excess of such
required distribution over the amounts actually distributed. However, to the
extent we elect to retain and pay income tax on net long-term capital gains we
received during the year such amounts will be treated as having been distributed
for purposes of the 4% excise tax.
We have and intend to continue to make timely distributions sufficient to
satisfy all of the annual distribution requirements. We anticipate that we
generally will have sufficient cash or liquid assets to enable us to satisfy
these distribution requirements. It is possible that, from time to time, we may
not have sufficient cash or other liquid assets to meet the 95% distribution
requirement due to the insufficiency of cash flow in a particular year or to
timing differences between the actual receipt of income and actual payment of
deductible expenses, on the one hand, and the inclusion of such income and
deduction of such expenses in computing our "REIT taxable income," on the other
hand. In the event that an insufficiency or timing differences occur, in order
to meet the 95% distribution requirement, we may find it necessary to borrow
funds or to liquidate assets, or to cause the operating partnership to do so.
If we fail to meet the 95% distribution requirement as a result of an
adjustment to our tax return by the IRS upon audit, we may cure the failure
retroactively by paying "deficiency dividends" to our shareholders in a later
year, which may then be included in our deduction for dividends paid for the
earlier year. We may thus be able to avoid being taxed on amounts distributed as
deficiency dividends; however, we will be required to pay interest to the IRS
based upon the amount of any deduction taken for deficiency dividends.
PENALTY TAX ON PROHIBITED TRANSACTIONS.
Our share of any gain realized on the sale of any property held as inventory
or otherwise primarily for sale to customers in the ordinary course of our trade
or business generally will be treated as income from a prohibited transaction
that is subject to a 100% penalty tax. Under existing law, whether property is
held as inventory or primarily for sale to customers in the ordinary course of a
trade or business is a question of fact that depends on all the facts and
circumstances of a particular transaction. We intend to hold our properties for
investment with a view to long-term appreciation, to engage in the business of
acquiring, owning and operating the properties and to make such occasional sales
of the properties as are consistent with our investment objectives. Based upon
those investment objectives, we believe that in general our properties should
not be considered inventory or other property held primarily for sale to
customers in the ordinary course of a trade or business and that the amount of
income from prohibited transactions, if any, will not be material.
FAILURE TO QUALIFY.
If we fail to qualify for taxation as a REIT in any taxable year and the
relief provisions do not apply, we will be subject to tax (including any
applicable alternative minimum tax) on our taxable income at regular corporate
rates. Distributions to shareholders in any year in which we fail to qualify as
a REIT will not be required and, if made, will not be deductible by us. As a
result, our failure to qualify as a REIT will reduce the cash available for
distribution by us to our shareholders. In addition, if we fail to qualify as a
REIT, all distributions to our shareholders will be taxable as ordinary dividend
income to the extent of our then-current and accumulated earnings and profits,
and, subject to limitations in the Internal Revenue Code, corporate shareholders
may be eligible for the dividends-received deduction. Unless entitled to relief
under specific statutory provisions, we also will be
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ineligible for qualification as a REIT during the four taxable years following
the year during which qualification was lost. We cannot determine whether we
would be entitled to such statutory relief in all circumstances.
TAXATION OF OUR SECURITYHOLDERS.
Any material federal income tax considerations relating to a particular
offering of securities covered by this prospectus will be described in the
applicable prospectus supplement.
POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING TAX CONSIDERATIONS.
Prospective holders should recognize that our present federal income tax
treatment may be modified by future legislative, judicial or administrative
actions or decisions at any time, which may be retroactive in effect, and, as a
result, any such action or decision may affect investments and commitments
previously made. The rules dealing with federal income taxation are constantly
under review, resulting in statutory changes as well as new, or revisions to
existing, regulations and revised interpretations of established concepts. We
can make no prediction as to the likelihood of passage of any new tax
legislation or other provisions either directly or indirectly affecting us or
our securityholders.
EACH PROSPECTIVE PURCHASER IS ADVISED TO CONSULT HIS OR HER OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES TO HIM OR HER OF THE PURCHASE,
OWNERSHIP, AND SALE OF THE SECURITIES OFFERED BY THIS PROSPECTUS AND OF OUR
ELECTION TO BE TAXED AS A REIT, INCLUDING THE FEDERAL, STATE, LOCAL, FOREIGN,
AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE, AND ELECTION AND
OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
PLAN OF DISTRIBUTION
We may sell securities:
- to or through underwriting syndicates represented by managing
underwriters;
- through one or more underwriters without a syndicate for them to offer and
sell to the public;
- through dealers or agents; and
- to investors directly in negotiated sales or in competitively bid
transactions.
Any underwriter or agent involved in the offer and sale of any issuance of
securities will be named in the prospectus supplement.
The prospectus supplement for each offering of securities will specify:
- the terms of the offering of those securities, including the name of the
agent or the name or names of any underwriters;
- the public offering or purchase price;
- any discounts and commissions to be allowed or paid to the agent or
underwriters and all other items constituting underwriting compensation;
- any discounts and commissions to be allowed or paid to dealers; and
- other specific terms of the particular securities.
Only the agents or underwriters named in a prospectus supplement are agents
or underwriters in connection with the securities being offered by that
prospectus supplement.
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Underwriters, agents and dealers may be entitled, under agreements with Town
and Country, to indemnification against certain civil liabilities, including
liabilities under the Securities Act of 1933.
Underwriters to whom securities are sold by Town and Country for public
offering and sale are obliged to purchase all of those particular securities if
any are purchased. This obligation is subject to certain conditions and may be
modified in the applicable prospectus supplement.
The common shares are listed on the NYSE under the symbol "TCT". Any other
securities offered by a prospectus supplement will be a new issue of securities
and will not have an established trading market. Unless otherwise indicated in
the applicable prospectus supplement, Town and Country will not list any of
these other securities on an exchange. No assurance can be given that you will
be able to resell any of these other securities that you may purchase.
Underwriters, dealers or agents may engage in transactions with, or perform
services for, Town and Country or its affiliates in the ordinary course of
business.
VALIDITY OF THE SECURITIES
Certain legal matters in connection with the validity of the securities
offered hereby will be passed upon for us by Berick, Pearlman & Mills Co.,
L.P.A., Cleveland, Ohio. Legal matters relating to Maryland law, including the
validity of the issuance of any common shares or preferred shares offered
hereby, will be passed upon for us by Venable, Baetjer and Howard, LLP,
Baltimore, Maryland. In addition, the description of federal income tax
considerations contained in this prospectus under "Material Federal Income Tax
Considerations" is, to the extent that it constitutes matters of law, summaries
of legal matters or legal conclusions, the opinion of Berick, Pearlman & Mills
Co., L.P.A., our special tax counsel. The validity of the securities offered by
this prospectus and the accompanying prospectus supplement will be passed upon
for any underwriters, dealers or agents by Sullivan & Cromwell, New York, New
York. Sullivan & Cromwell will rely as to all matters of Maryland law upon the
opinion of Venable, Baetjer and Howard, LLP. James H. Berick, Chairman and a
principal of Berick, Pearlman & Mills Co., L.P.A., is a member of our Board of
Trustees. Daniel G. Berick, a principal of Berick, Pearlman & Mills Co., L.P.A.,
is our Secretary (but not an executive officer). Principals and associates of
Berick, Pearlman & Mills Co., L.P.A., owned 7,500 common shares of Town and
Country as of December 6, 1999. Sullivan & Cromwell from time to time have
performed legal services for Mr. Lerner and certain of his affiliates.
EXPERTS
Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our Annual Report on Form 10-K for
the year ended December 31, 1998, as set forth in their report, which is
incorporated by reference in this prospectus and elsewhere in the registration
statement.
Ernst & Young LLP have also audited the historical statements of revenues
and certain expenses included in our Current Report on Form 8-K for the year
ended December 31, 1997, as set forth in their reports for The Fairington,
Windermere Lakes, and Twelve Oaks, and for the year ended December 31, 1998, as
set forth in their reports for Colonial Grand at Kirkman, Heron's Run, McIntosh,
and Perico which are incorporated by reference in this prospectus and elsewhere
in the registration statement. Our financial statements, financial statement
schedule, and historical statements of revenue and certain expenses are
incorporated by reference in reliance on Ernst & Young LLP's reports, given on
their authority as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may inspect and copy such reports, proxy
statements and other information at the public reference facilities maintained
by the SEC at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W, Washington,
D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information. Such
material can also be obtained from the SEC's worldwide web site at http://
www.sec.gov. Our common shares are listed on the NYSE under the symbol "TCT" and
all such reports, proxy statements and other information filed by us with the
NYSE may be inspected at the NYSE's offices at 20 Broad Street, New York, New
York 10005.
We have filed a registration statement on Form S-3, of which this prospectus
is a part, covering the securities offered hereby. As allowed by SEC rules, this
prospectus does not contain all the information set forth in the registration
statement and the exhibits, financial statements and schedules thereto. We refer
you to the registration statement, the exhibits, financial statements and
schedules thereto for further information. This prospectus is qualified in its
entirety by such other information.
The SEC allows us to "incorporate by reference" information into this
prospectus, which means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus, and later
information that we file with the SEC will automatically update and supersede
this information as well as the information included in this prospectus. We have
filed the documents listed below with the SEC under the Securities Exchange Act
of 1934, as amended, which is commonly referred to us the "Exchange Act", and
these documents are incorporated herein by reference:
a. Our Annual Report on Form 10-K for the year ended December 31, 1998;
b. Our Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999;
c. Our Current Report on Form 8-K filed December 29, 1999; and
d. The description of our common shares contained in our Registration
Statement on Form 8-A.
Any documents we file pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this prospectus and prior to the
termination of the offering of the securities to which this prospectus relates
automatically will be deemed to be incorporated by reference in this prospectus
and to be part hereof from the date of filing such documents.
Any party to whom this prospectus is delivered, including a holder in street
name, may request a copy of these filings (other than any exhibits unless
specifically incorporated by reference into this prospectus), at no cost, by
writing or telephoning us at the following address: Secretary, at The Town and
Country Trust, 100 South Charles Street, Suite 1700, Baltimore, Maryland, 21201,
telephone number (410) 539-7600.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
SEC registration fee............................................. $ 19,800
Printing and engraving expenses.................................. $ 25,000*
Legal fees and expenses.......................................... $ 75,000*
Accounting and due diligence fees and expenses................... $ 35,000*
Transfer Agent's, Depositary and Warrant Agent's Fees............ $ 10,000*
Miscellaneous.................................................... $ 10,000*
Total........................................................ $174,800*
</TABLE>
- ------------------------
* All expenses other than the SEC registration fee are estimates.
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
The Registrant's declaration of trust provides that the liability of the
trustees and officers of the Registrant for money damages shall be eliminated to
the maximum extent permitted by Maryland law. The Registrant, by provision in
its declaration of trust, limits the liability of trustees and officers so that
no trustee or officer of the Registrant shall be liable to the Registrant or to
any shareholder for money damages except for the liability of a trustee or
officer resulting from (i) acts or omissions involving active and deliberate
dishonesty established by a final judgment which acts or omissions were material
to the cause of action being adjudicated or (ii) actual receipt of an improper
benefit or profit in money, property or services.
The Registrant's bylaws require it to indemnify any present or former
trustee or officer in defense of a proceeding to which he or she was made a
party by reason of his or her service in that capacity, against all liabilities
and expenses incurred by him or her in connection with any suit, action or other
proceeding unless it is established that (i) his or her act or omission was
committed in bad faith or was the result of active and deliberate dishonesty,
(ii) he or she actually received an improper personal benefit in money, property
or services, (iii) in the case of a criminal proceeding, he or she had
reasonable cause to believe that his or her act or omission was unlawful or
(iv) in the case of an action by or in right of the Registrant, he or she is
adjudged to have breached his or her duty or loyalty to the Registrant. In
addition, the Registrant's bylaws require it to pay or reimburse, in advance of
final disposition of a proceeding, reasonable expenses incurred by a present or
former trustee or officer made a party to a proceeding by reason of his or her
status as a trustee or officer, provided that the Registrant shall have received
(i) a written affirmation by the trustee or officer of his or her good faith
belief that he or she has met the standard of conduct necessary for
indemnification by the Registrant as authorized by the bylaws and (ii) a written
undertaking by him or her or on his or her behalf to repay the amount paid or
reimbursed by the Registrant if it ultimately shall be determined that the
standard of conduct was not met. The Registrant's bylaws also (i) permit the
Registrant to provide indemnification and advance of expenses to a present or
former trustee or officer who served a predecessor of the Registrant in such
capacity, and to any employee or agent of the Registrant or a predecessor of the
Registrant, (ii) provide that any indemnification or payment or reimbursement of
the expenses permitted by the bylaws shall be furnished in accordance with the
procedures provided for indemnification and payment or reimbursement of expenses
under Section 2-418 of the MGCL for directors of Maryland corporations and
(iii) permit the Registrant to provide such other and further indemnification or
payment or reimbursement of expenses as may be permitted by Section 2-418 of the
MGCL for directors of Maryland corporations.
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In addition, pursuant to the Amended and Restated Agreement of Limited
Partnership of The TC Operating Limited Partnership ("TCOP"), of which the
Registrant and its wholly-owned subsidiary are the sole general partners, the
Registrant's officers and trustees are indemnified by TCOP to the fullest extent
permitted by law from and against all losses, damages, claims, costs,
liabilities and expenses ("Losses") incurred in connection with any claim,
action, proceeding or demand against any of them that arise out of or in any way
relate to TCOP, its properties, business or affairs, including any Losses
resulting from any such claim, action, proceeding or demand, including any
amounts paid in settlement or compromise thereof, except to the extent such
Losses arise as a result of such party's bad faith, willful misconduct, fraud or
gross negligence.
The Registrant also maintains insurance coverage relating to certain
liabilities of its officers and trustees, except for liabilities resulting from
their own malfeasance.
The forms of underwriting agreement filed as Exhibits 1.1 and 1.2 contain
certain indemnification provisions applicable to underwritten offerings.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------------- -----------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement (for Common Shares)
1.2 Form of Underwriting Agreement (for Preferred Shares)
3.1 First Amended and Restated Declaration of Trust (incorporated by reference to
Exhibit 3.1 to the Registrant's Registration Statement on Form S-11
(No. 33-63150))
3.2 Bylaws of the Registrant (incorporated by reference to Exhibit 3.2 to the
Registrant's Registration Statement on Form S-11 (No. 33-63150))
4.1 Form of Deposit Agreement
4.2 Form of Articles Supplementary for Preferred Shares
4.3 Form of Warrant Agreement
4.4 Form of depositary receipt (included in Exhibit 4.1)
4.5 Form of warrant (included in Exhibit 4.3)
5.1 Opinion of Berick, Pearlman & Mills Co., L.P.A.
5.2 Opinion of Venable, Baetjer and Howard, LLP
8 Opinion of Berick, Pearlman & Mills Co., L.P.A. regarding tax matters
23.1 Consent of Berick, Pearlman & Mills Co., L.P.A. (included in Exhibits 5.1 and 8)
23.2 Consent of Venable, Baetjer and Howard, LLP (included in Exhibit 5.2)
23.3 Consent of Ernst & Young LLP
24 Powers of Attorney
</TABLE>
ITEM 17. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant pursuant to the provisions described under Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission, such indemnification is against public policy as
expressed in the
II-2
<PAGE>
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a trustee, officer, or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such trustee, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
(b) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities
Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represents a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) may be reflected in the form of prospectus filed with the
Securities and Exchange Commission pursuant to rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
PROVIDED, HOWEVER, that paragraphs (b)(1)(i) and (b)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That for purposes of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(c) The Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Baltimore, State of Maryland, on December 27, 1999.
<TABLE>
<S> <C> <C>
THE TOWN AND COUNTRY TRUST
By: /s/ HARVEY SCHULWEIS
-----------------------------------------
Harvey Schulweis
PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons on behalf
of the Registrant and in the capacities indicated on December 27, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------ --------------------------
<S> <C>
Principal Executive
/s/ HARVEY SCHULWEIS Officer, Principal
- ------------------------------ Financial Officer and
Harvey Schulweis Trustee
/s/ JENNIFER C. MUNCH
- ------------------------------ Principal Accounting
Jennifer C. Munch Officer
/s/ ALFRED LERNER*
- ------------------------------ Trustee
Alfred Lerner*
/s/ JAMES H. BERICK*
- ------------------------------ Trustee
James H. Berick*
/s/ H. GRANT HATHAWAY*
- ------------------------------ Trustee
H. Grant Hathaway*
/s/ MILTON A. WOLF*
- ------------------------------ Trustee
Milton A. Wolf*
</TABLE>
<TABLE>
<S> <C>
*By: /s/ HARVEY SCHULWEIS
-------------------------
Harvey Schulweis
ATTORNEY-IN-FACT
</TABLE>
- ------------------------
* Powers of attorney authorizing Harvey Schulweis to sign this Registration
Statement on behalf of certain Trustees of the Registrant are being filed
with the Securities and Exchange Commission herewith (Exhibit 24).
II-4
<PAGE>
EXHIBIT 1.1
THE TOWN AND COUNTRY TRUST
Common Shares of Beneficial Interest
(par value $.01 per share)
UNDERWRITING AGREEMENT
__________________, _____
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Dear Sirs:
From time to time The Town and Country Trust, a Maryland real estate
investment trust (the "Trust") and a general partner of The TC Operating
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its common shares of beneficial interest, par
value $.01 per share (collectively, the "Shares"), specified in Schedule II
to such Pricing Agreement (with respect to such Pricing Agreement, the "Firm
Shares"). If specified in such Pricing Agreement, the Trust may grant to the
Underwriters the right to purchase at their election an additional number of
shares, specified in such Pricing Agreement as provided in Section 3 hereof
(the "Optional Shares"). The Firm Shares and the Optional Shares, if any,
which the Underwriters elect to purchase pursuant to Section 3 hereof are
herein collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares shall be
as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time to
time to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The
term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to Underwriters who act without any
firm being designated as their representative. This Underwriting Agreement
shall not be construed as an obligation of the Trust to sell any of the
Shares or as an obligation of any of the Underwriters to purchase any of the
Shares. The obligation of the Trust to issue and sell any of the Shares and
the obligation of any of the Underwriters to purchase any of the Shares shall
be evidenced by the Pricing Agreement with respect to the Designated Shares
specified therein. Each Pricing Agreement shall specify the aggregate number
of the Firm Shares, the maximum number of Optional Shares, if any, the
initial public offering price of such Firm Shares and Optional Shares or the
manner of determining such price, the purchase price to the Underwriters of
such Designated Shares, the names of the Underwriters of such Designated
Shares, the names of the Representatives of such Underwriters, the number of
such Designated Shares to be purchased by
<PAGE>
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Firm Shares and Optional Shares, if any, and payment therefor. The
Pricing Agreement shall also specify (to the extent not set forth in the
registration statement and prospectus with respect thereto) the terms of such
Designated Shares. A Pricing Agreement shall be in the form of an executed
writing (which may be in counterparts), and may be evidenced by an exchange
of telegraphic communications or any other rapid transmission device designed
to produce a written record of communications transmitted. The obligations of
the Underwriters under this Agreement and each Pricing Agreement shall be
several and not joint.
2. Each of the Trust and the Operating Partnership represents and
warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-__________) (the "Initial Registration Statement") in respect of
the Shares has been filed with the Securities and Exchange Commission
(the "Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act, each in the form heretofore delivered
to the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement, any post-effective amendment
thereto or filed with the Commission pursuant to Rule 424(a) under the
Act, is hereinafter called a "Preliminary Prospectus"; the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, each as amended at the time such part of the Initial
Registration Statement or the Rule 462(b) Registration Statement became
effective, are hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Shares, in the form in which
it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is hereinafter
called the "Prospectus"); any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any
2
<PAGE>
amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Trust filed pursuant to Section 13(a)
or 15(d) of the Exchange Act after the effective date of the
Registration Statement that is incorporated by reference in the
Registration Statement; and any reference to the Prospectus as amended
or supplemented shall be deemed to refer to the Prospectus as amended
or supplemented in relation to the applicable Designated Shares in the
form in which it is filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 5(a) hereof, including any
documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder and do not and will not, as of the applicable effective date
as to the Registration Statement and any amendment thereto and as of
the applicable filing date as to the Prospectus and any amendment or
supplement thereto, contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(d) None of the Trust, the Operating Partnership or any of
their respective partnership or corporate subsidiaries (the Operating
Partnership and the partnership and corporate subsidiaries of the Trust
and the Operating Partnership are collectively referred to herein as
"subsidiaries") has sustained, since the date the date of the latest
audited financial statements included or incorporated by reference in
the Prospectus, any material loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental
action, order or decree, otherwise than as set forth or contemplated in
the Prospectus, and, since the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (A) any material change in the beneficial interests
3
<PAGE>
of the Trust or any material increase in long-term debt of the Trust,
the Operating Partnership or any of their respective subsidiaries, (B)
any material adverse change, or any development involving a prospective
material adverse change, in or affecting the general affairs,
management, financial position, shareholders' equity (or, with respect
to the Operating Partnership and the other partnership subsidiaries,
partnership capital) or results of operations of the Trust and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; (C) any transactions entered into by
the Trust or any of the Trust's subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Trust and its subsidiaries considered as one enterprise and (D) except
for regular dividends, any dividend or distribution of any kind
declared, paid or made by the Trust on any class of its shares of
beneficial interest;
(e) The Trust and its subsidiaries have good and marketable
title in fee simple to, or good and marketable leasehold estates in,
all real property owned or leased, as the case may be, by them, and
good and marketable title to all personal property owned by them which
is material to the business of the Trust, 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 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 Trust and its subsidiaries; and any real
property and buildings held under lease by the Trust and its
subsidiaries 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
Trust and its subsidiaries, in each case as set forth or contemplated
in the Prospectus;
(f) The Trust has been duly organized and is validly existing
as a real estate investment trust in good standing under the laws of
the State of Maryland, with power and authority (trust and other) to
own its properties and conduct it business as described in the
Prospectus;
(g) Each partnership and corporate subsidiary of the Trust
which is a significant subsidiary, as defined in Rule 405 of Regulation
C of the regulations promulgated under the Act (each, a "Significant
Subsidiary") has been duly organized and is validly existing as a
partnership or a corporation in good standing under the laws of its
jurisdiction of organization, with power and authority (partnership or
corporate, as the case may be, and other) to own its properties and to
conduct its business as described in the Prospectus;
(h) The Trust and each Significant Subsidiary has been duly
qualified for the transaction of business and is in good standing under
the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require qualification;
(i) The Trust has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of beneficial interest in
the Trust have been duly and validly authorized and issued and are
fully paid and non-assessable; the Trust is a general partner of the
Operating Partnership; all of the partnership interests of each
partnership subsidiary have been duly authorized and issued and are
owned, directly or indirectly, by the Trust and/or the Operating
Partnership, free and clear of all liens, encumbrances, equities or
claims; all of the issued shares of capital stock of the corporate
subsidiaries of the Trust have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Trust, free and clear of all liens, encumbrances,
equities or claims;
4
<PAGE>
(j) The Shares have been duly and validly authorized, and,
when the Firm Shares are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Shares and, in the case of any Optional Shares, pursuant to
Over-allotment Options (as defined in Section 3 hereof) with respect to
such Shares, such Designated Shares will be duly and validly issued and
fully paid and non-assessable; the Shares conform to the description
thereof contained in the Registration Statement and the Designated
Shares will conform to the description thereof contained in the
Prospectus as amended or supplemented with respect to such Designated
Shares; and no holder of any beneficial interest in the Trust has any
pre-emptive or similar rights or has any rights to require or
participate in the registration of beneficial interests under the Act;
(k) The issue and sale of the Shares and the compliance by the
Trust and the Operating Partnership with all of the provisions of this
Agreement, any Pricing Agreement and each Over-allotment Option, if
any, and the consummation of the transactions contemplated herein and
therein will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Trust or any of its subsidiaries is a party
or by which the Trust or any of its subsidiaries is bound or to which
any of the property or assets of the Trust or any of its subsidiaries
is subject, other than such conflicts, breaches, violations or defaults
that would not have a material adverse effect on the business
operation, consolidated financial position, shareholders' equity or
results of operations of the Trust and its subsidiaries, and that would
not affect the validity of the Designated Shares nor will such action
result in any violation of the provisions of the Amended and Restated
Declaration of Trust or By-laws of the Trust or the Certificate of
Limited Partnership or partnership agreement of the Operating
Partnership (the "OP Partnership Agreement") or any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Trust or any of its subsidiaries or any of
their properties; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental
agency or body is required for the issue and sale of the Shares or the
consummation by the Trust of the transactions contemplated by this
Agreement or any Pricing Agreement or any Over-allotment Option, except
such as have been, or will have been prior to each Time of Delivery (as
defined in Section 4 hereof), obtained under the Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Designated Shares by the Underwriters;
(l) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Trust or any of
its subsidiaries is a party or of which any property of the Trust or
any of its subsidiaries is the subject, which, if determined adversely
to the Trust or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, shareholders' equity (or net assets, as the case may be) or
results of operations of the Trust and its subsidiaries; and, to the
best of the Trust's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The Trust is in substantial compliance with, and conducts
its business in substantial conformity with, all applicable laws and
governmental regulations;
(n) Neither the Trust nor any of its subsidiaries is in
violation of any material provision of its organizational documents or
in default in the performance or observance
5
<PAGE>
of any material obligation, agreement, covenant or condition contained
in any indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which it is a party or by which it or
any of its properties may be bound;
(o) The statements set forth in the Prospectus as amended or
supplemented under the caption "Description of Our Shares of Beneficial
Interest", insofar as they purport to constitute a summary of the terms
of the Shares, and under the captions "Material Federal Income Tax
Considerations", "Plan of Distribution" and "Underwriting", insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(p) Neither the Trust nor any of its subsidiaries is, and
after giving effect to the offering and sale of the Designated Shares,
will be 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 (the "Investment Company Act");
(q) Ernst & Young LLP, who have certified certain financial
statements of the Trust and its subsidiaries, are independent public
accountants as required by the Act and the rules and regulations of the
Commission thereunder; and
(r) The Trust has reviewed its operations and that of its
subsidiaries and any third parties with which the Trust or any of its
subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Trust or any of its
subsidiaries will be affected by the Year 2000 Problem. As a result of
such review, the Trust has no reason to believe, and does not believe,
that the Year 2000 Problem will have a material adverse effect on the
general affairs, management, the current or future consolidated
financial position, business prospects, shareholders' equity or results
of operations of the Trust and its subsidiaries or result in any
material loss or interference with the Trust's business or operations.
The "Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will, not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000.
3. Upon the execution of the Pricing Agreement applicable to any
Designated Shares and authorization by the Representatives of the release of
the Firm Shares, the several Underwriters propose to offer the Firm Shares
for sale upon the terms and conditions set forth in the Prospectus as amended
or supplemented.
The Trust may specify in the Pricing Agreement applicable to any
Designated Shares that the Trust thereby grants to the Underwriters the right
(an "Over-allotment Option") to purchase at their election up to the number
of Optional Shares set forth in such Pricing Agreement, on the terms set
forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised by written notice from the Representatives
to the Trust, given within a period specified in the Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Representatives and the Trust
otherwise agree in writing, earlier than or
6
<PAGE>
later than the respective number of business days after the date of such notice
set forth in such Pricing Agreement.
The number of Optional Shares to be added to the number of Firm
Shares to be purchased by each Underwriter as set forth in Schedule I to the
Pricing Agreement applicable to such Designated Shares shall be, in each
case, the number of Optional Shares which the Trust has been advised by the
Representatives have been attributed to such Underwriter; provided that, if
the Trust has not been so advised, the number of Optional Shares to be so
added shall be, in each case, that proportion of Optional Shares which the
number of Firm Shares to be purchased by such Underwriter under such Pricing
Agreement bears to the aggregate number of Firm Shares (rounded as the
Representatives may determine to the nearest 100 shares) to be purchased by
all the Underwriters pursuant to such Pricing Agreement.
4. Certificates for the Firm Shares and the Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such
authorized denominations and registered in such names as the Representatives
may request shall be delivered by or on behalf of the Trust to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer
of immediately available funds to the account specified by the Trust, (i)
with respect to the Firm Shares, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time
and date as the Representatives and the Trust may agree upon in writing, such
time and date being herein called the "First Time of Delivery" and (ii) with
respect to the Optional Shares, if any, in the manner and at the time and
date specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional
Shares, or at such other time and date as the Representatives and the Trust
may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and
date for delivery is herein called a "Time of Delivery". Certificates for the
Firm Shares and the Optional Shares shall be made available to the
Representatives at an office specified by the Representatives at least 48
hours prior to the Time of Delivery.
5. The Trust agrees with each of the Underwriters of any Designated
Shares:
(a) To prepare the Prospectus as amended and supplemented
in relation to the applicable Designated Shares in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the
Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after any Time of Delivery for such Shares and furnish
the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Trust with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Shares, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended
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Prospectus has been filed with the Commission, of the issuance by the
Commission of any stop order or of any order preventing or suspending
the use of any prospectus relating to the Shares, of the suspension of
the qualification of such Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification,
promptly to use its best efforts to obtain the withdrawal of such
order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Shares, provided that in connection therewith the
Trust shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time
to time, to furnish the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may
from time to time reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders as
soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Trust and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Trust, Rule 158);
(e) That during the period beginning from the date of the
Pricing Agreement for such Designated Shares and continuing to and
including the date 90 days after the date of the Prospectus, neither
the Trust nor any of its subsidiaries will directly or indirectly
(including by the writing or purchase of a cash-settled derivative
instrument) offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any Shares or any other securities of the
Trust that are substantially similar to the Designated Shares,
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Shares or
any such substantially similar securities
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(other than pursuant to employee stock option plans existing on, or
upon the conversion of convertible or exchangeable securities
outstanding as of, the date of the Pricing Agreement for such
Designated Shares) without the prior written consent of the
Representatives;
(f) To use its best efforts to meet the requirements to
qualify as a real estate investment trust ("REIT") under the Internal
Revenue Code of 1986, as amended (the "Code"); and
(g) If the Trust elects to rely upon Rule 462(b), the Trust
shall file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on
the date of the Pricing Agreement, and the Trust shall at the time of
filing either pay the Commission the filing fee for the Rule 462(b)
Registration Statement or give irrevocable instructions for the payment
of such fee pursuant to Rule 111(b) under the Act.
6. The Trust covenants and agrees with the several Underwriters that
the Trust will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Trust's counsel and accountants in
connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the reasonable expenses of mailing and
delivering of copies thereof to the Underwriters and dealers; (ii) the cost
of printing or producing any Agreement among Underwriters, this Agreement,
any Pricing Agreement, any Blue Sky and Legal Investment Memoranda, closing
documents (including any compilations thereof) and any other documents in
connection with the offering, purchase, sale and delivery of the Shares;
(iii) all expenses in connection with the qualification of the Shares for
offering and sale under state securities laws as provided in Section 5(b)
hereof, including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and Legal Investment survey(s); (iv) any filing fees incident to,
and the reasonable fees and disbursements of counsel for the Underwriters in
connection with, any required reviews by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (v) the cost
of preparing certificates for the Shares; (vi) the cost and charges of any
transfer agent or registrar or dividend disbursing agent; and (vii) all other
costs and expenses incident to the performance of its obligations hereunder
and under any Over-allotment Options which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated Shares
under the Pricing Agreement relating to such Designated Shares shall be
subject, in the discretion of the Representatives, to the condition that all
representations and warranties and other statements of the Trust and the
Operating Partnership in or incorporated by reference in the Pricing
Agreement relating to such Designated Shares are, at and as of each Time of
Delivery for such Designated Shares, true and correct, the condition that the
Trust shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to
such Designated Shares shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the
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Act and in accordance with Section 5(a) hereof; if the Trust has
elected to rely upon Rule 462(b), the Rule 462(b) Registration
Statement shall have become effective by 10:00 P.M., Washington, D.C.
time, on the date of the Pricing Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters, shall
have furnished to the Representatives such written opinion or opinions,
dated each Time of Delivery for such Designated Shares, with respect to
the formation of the Trust, the validity of the Designated Shares being
delivered at such Time of Delivery, the Registration Statement, the
Prospectus and such other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Berick, Pearlman & Mills Co., L.P.A. or other counsel for
the Trust satisfactory to the Representatives, shall have furnished to
the Representatives written opinions, dated each Time of Delivery for
such Designated Shares, in form and substance satisfactory to the
Representatives, to the effect that:
(i) The Trust has been duly organized and is validly
existing as a real estate investment trust in good
standing under the laws of the State of Maryland,
with trust power and authority to own its properties
and conduct its business as described in the
Prospectus as amended or supplemented;
(ii) The Operating Partnership has been duly formed and is
validly existing as a limited partnership under the
laws of the State of Maryland with partnership power
and authority to own its properties and conduct its
business as described in the Prospectus as amended or
supplemented; the Partnership Agreement has been duly
authorized, executed and delivered by the Trust and
the other parties thereto and is valid, legally
binding and enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency
and other laws of general applicability relating to
or affecting creditors' rights and to general equity
principles; all of the partnership interests of the
Operating Partnership have been duly and validly
authorized and issued, are fully paid and
non-assessable and (except as set forth in the
Prospectus) are owned, directly or indirectly, by the
Trust, free and clear of all liens, encumbrances,
equities or claims;
(iii) Each Significant Subsidiary of the Trust (other than
the Operating Partnership) has been duly organized
and is validly existing as a partnership or a
corporation in good standing under the laws of its
jurisdiction of organization, with corporate or
partnership (as the case may be) power and authority
to own its properties and conduct its business as
described in the Prospectus; the partnership
agreement of each partnership subsidiary (other than
the Operating Partnership) of the Trust has been duly
authorized, executed and delivered by the Trust and
the other parties thereto and is valid, legally
binding and enforceable in accordance with its
10
<PAGE>
terms, subject, as to enforcement, to bankruptcy,
insolvency and other laws of general applicability
relating to or affecting creditors' rights and to
general equity principles; all of the partnership
interests of each partnership subsidiary (other than
the Operating Partnership) have been duly and validly
authorized and issued, are fully paid and
non-assessable and (except as set forth in the
Prospectus) are owned, directly or indirectly, by the
Trust and/or the Operating Partnership, free and
clear of all liens, encumbrances, equities or claims;
all of the issued shares of capital stock of each
corporate subsidiary have been duly and validly
authorized and issued, are fully paid and
non-assessable and all such issued shares of capital
stock are owned, directly or indirectly, by the
Trust, free and clear of all liens, encumbrances,
equities or claims (such counsel being entitled to
rely in respect of the opinion in this clause upon
opinions of local counsel and in respect of matters
of fact upon certificates of officers of the Trust or
its subsidiaries, provided that such counsel shall
state that they believe that both you and they are
justified in relying upon such opinions and
certificates);
(iv) The Trust and each Significant Subsidiary has been
duly qualified for the transaction of business and is
in good standing under the laws of each other
jurisdiction in which it owns or leases properties or
conducts any business so as to require qualification,
or is subject to no material liability or disability
by reason of failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in
respect of the opinion in this clause upon opinions
of local counsel and in respect of matters of fact
upon certificates of officers of the Trust or its
subsidiaries, provided that such counsel shall state
that they believe that both you and they are
justified in relying upon such opinions and
certificates);
(v) The Trust has an authorized capitalization as set
forth in the Prospectus, as amended or supplemented,
and all of the issued shares of beneficial interest
in the Trust (including the Designated Shares being
delivered at such Time of Delivery) have been duly
and validly authorized and issued and are fully paid
and non-assessable; and the Designated Shares
conform, as to legal matters, in all material
respects to the description thereof in the
Prospectus, as amended or supplemented;
(vi) To such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Trust
or any of its subsidiaries is a party or of which any
property of the Trust or any of its subsidiaries is
the subject which, if determined adversely to the
Trust or any of its subsidiaries, would individually
or in the aggregate have a material adverse effect on
the consolidated financial position, shareholders'
equity or results of operations of the Trust and its
subsidiaries; and to such counsel's knowledge, no
such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(vii) This Agreement and the Pricing Agreement with respect
to the Designated Shares have been duly authorized,
executed and delivered by the Trust and
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the Operating Partnership;
(viii) The issue and sale of the Designated Shares being
delivered at such Time of Delivery and the compliance
by the Trust and the Operating Partnership with all
of the provisions of this Agreement and the Pricing
Agreement with respect to the Designated Shares and
the consummation of the transactions herein and
therein contemplated will not conflict with or result
in a breach or violation of any of the terms or
provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel
to which the Trust or any of its subsidiaries is a
party or by which the Trust or any of its
subsidiaries is bound or to which any of the property
or assets of the Trust is subject, other than such
conflicts, breaches, violations or defaults that
would not have a material adverse effect on the
condition, financial or otherwise, or in the
earnings, business affairs or business prospects of
the Trust and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary
course of business and that would not affect the
validity of the Designated Shares, nor will such
action result in any violation of the provisions of
the Amended and Restated Declaration of Trust or
By-laws of the Trust or the Certificate of Limited
Partnership or the OP Partnership Agreement or any
statute or any order, rule or regulation known to
such counsel of any court or governmental agency or
body having jurisdiction over the Trust or any of
their properties;
(ix) No consent, approval, authorization, order,
registration or qualification of or with any such
court or governmental agency or body is required for
the issue and sale of the Designated Shares being
delivered at such Time of Delivery or the
consummation by the Trust of the transactions
contemplated by this Agreement or the Pricing
Agreement, except such as have been obtained under
the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required
under state securities or Blue Sky laws in connection
with the purchase and distribution of the Designated
Shares by the Underwriters;
(x) The statements set forth in the Prospectus under the
caption "Description of Our Shares of Beneficial
Interest", insofar as they purport to constitute a
legal summary of the terms of the Shares, under the
caption "Material Federal Income Tax Considerations",
under the captions "Plan of Distribution" and
"Underwriting" and the description of Maryland laws
under the captions "Risk Factors" and "Description of
Our Shares of Beneficial Interest", insofar as they
purport to describe the provisions of the laws and
documents referred to therein, are accurate in all
material respects;
(xi) None of the Trust or any of its subsidiaries is, and
after giving effect to the issue and sale of the
Designated Shares none will be, an "investment
company", or an entity "controlled" by an "investment
company", as each such term is defined in the
Investment Company Act;
(xii) The documents incorporated by reference in the
Prospectus as amended or
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supplemented (other than the financial statements,
related schedules and other financial and statistical
data derived from accounting records contained
therein, as to which such counsel need express no
opinion), when they were filed with the Commission or
became effective, as the case may be, complied as to
form in all material respects with the requirements
of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe
that any of such documents, when they became
effective or were so filed, as the case may be,
contained in the case of a registration statement
which became effective under the Act, an untrue
statement of material fact or omitted to state a
material fact required to be stated therein necessary
in order to make the statements therein not
misleading, or, in the case of other documents which
were filed under the Act or the Exchange Act with the
Commission, an untrue statement of a material fact or
omitted to state a material fact necessary in order
to make the statements therein, in the light of the
circumstances under which they were made when such
documents were so filed, not misleading;
(xiii) The Registration Statement and the Prospectus as
amended or supplemented, and any further amendments
and supplements thereto made by the Trust prior to
such Time of Delivery (other than the financial
statements, related schedules and other financial and
statistical data derived from accounting records
contained therein, as to which such counsel need
express no opinion), comply as to form in all
material respects with the requirements of the Act
and the rules and regulations thereunder; although
such counsel has not independently verified and does
not assume any responsibility for the accuracy,
completeness or fairness of the statements contained
in the Registration Statement or the Prospectus,
except for those referred to in the opinion in
subsection (x) of this Section 7(c), such counsel has
no reason to believe that, as of its effective date
the Registration Statement or any further amendment
thereto made by the Trust prior to such Time of
Delivery (other than the financial statements,
related schedules and other financial and statistical
data derived from accounting records contained
therein, as to which such counsel need express no
opinion) contained an untrue statement of a material
fact or omitted to state a material fact required to
be stated therein or necessary to make the statements
therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further
amendment or supplement thereto made by the Trust
prior to such Time of Delivery (other than the
financial statements, related schedules and other
financial and statistical data derived from
accounting records contained therein, as to which
such counsel need express no opinion) contained an
untrue statement of a material fact or omitted to
state a material fact necessary to make the
statements therein, in the light of the circumstances
under which they were made, not misleading or that,
as of such Time of Delivery, either the Registration
Statement or the Prospectus as amended or
supplemented or any further amendment or supplement
thereto made by the Trust prior to such Time of
Delivery (other than the financial statements,
related schedules and other financial and statistical
data derived from accounting records contained
therein, as to which such counsel need express no
opinion) contains an untrue statement of a material
fact or omits to state a
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material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading; and such
counsel does not know of any amendment to the
Registration Statement required to be filed or of any
contracts or other documents of a character required
to be filed as an exhibit to the Registration
Statement or required to be incorporated by reference
into the Prospectus as amended or supplemented or
required to be described in the Registration
Statement or the Prospectus as amended or
supplemented which are not filed or incorporated by
reference or described as required;
(xiv) The Operating Partnership and each other partnership
subsidiary of the Trust is properly treated (x) as a
partnership for federal income tax purposes and (y)
not as a "publicly traded partnership" within the
meaning of Section 7704(b) of the Code; and
(xv) In the opinion of such counsel, commencing with the
Trust's taxable year ending December 31, 1993 and
assuming that the elections and other procedural
steps described in the Prospectus under the heading
"Material Federal Income Tax Considerations" are
completed by the Trust in a timely fashion, the Trust
has been organized in conformity with the
requirements for qualification as a REIT, and its
current and proposed method of operation will enable
it to meet the requirements for qualification and
taxation as a REIT under the Code;
(d) At a time prior to the execution of the Pricing
Agreement with respect to such Designated Shares and at each Time of
Delivery for such Designated Shares, the independent accountants of the
Trust who have audited the consolidated financial statements of the
Trust and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the
date of the most recent report filed with the Commission containing
consolidated financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery, respectively,
to the effect set forth in Annex II hereto, and with respect to such
letter dated such Time of Delivery, as to such other matters as the
Representatives may reasonably request and in form and substance
satisfactory to the Representatives;
(e) (i) None of the Trust, the Operating Partnership or any
of their subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in
the Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Shares any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, and, (ii) since
the respective dates as of which information is given in the
Prospectus, there shall not have been (A) any change in the beneficial
interests or increase in long-term debt of the Trust, the Operating
Partnership or any of their respective subsidiaries, (B) any change, or
any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity
(or, with respect to the Operating Partnership and the other
partnership subsidiaries, partnership capital) or results of operations
of the Trust and its
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subsidiaries, otherwise than as set forth or contemplated in the
Prospectus as amended prior to the date of the Pricing Agreement
relating to the Designated Shares, (C) any transactions entered into by
the Trust or any of its subsidiaries, other than those in the ordinary
course of business, which are material with respect to the Trust and
its subsidiaries considered as one enterprise, (D) except for regular
dividends, there shall have been any dividend or distribution of any
kind declared, paid or made by the Trust on any class of its capital
stock the effect of which, in any such case described in clause (ii) is
in the judgment of the Representatives so material and adverse as to
make it impracticable or inadvisable to proceed with the public
offering or the delivery of the Designated Shares on the terms and in
the manner contemplated in the Prospectus as first amended or
supplemented relating to the Designated Shares;
(f) On or after the date of the Pricing Agreement
relating to the Designated Shares (i) no downgrading shall have
occurred in the rating accorded the Trust's debt securities or
preferred stock by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Trust's debt
securities or preferred stock.
(g) On or after the date of the Pricing Agreement
relating to the Designated Shares there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Trust's securities on the New
York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or
(iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this clause (iv)
in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Firm Shares or Optional Shares or both on the terms and in the manner
contemplated in the Prospectus as first amended or supplemented
relating to the Designated Shares;
(h) The Shares at each Time of Delivery shall have been
duly listed, subject to notice of issuance, on the Exchange;
(i) The Trust shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses
prior to 10:00 a.m., New York City time, on the New York Business Day
next succeeding the date of this Agreement; and
(j) The Trust and the Operating Partnership shall have
furnished or caused to be furnished to the Representatives at each Time
of Delivery for the Designated Shares certificates of officers of the
Trust satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Trust and the Operating
Partnership herein at and as of such Time of Delivery, as to the
performance by the Trust and the Operating Partnership of all of their
obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (e) of
this Section and as to such other matters as the Representatives may
reasonably request.
8. (a) The Trust and the Operating Partnership, jointly and
severally, will indemnify and hold harmless each Underwriter against
any losses, claims, damages or
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liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or
are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as
amended or supplemented and any other prospectus relating to the
Shares, or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in
connection with investigating or defending any such action or claim as
such expenses are incurred; provided, however, that neither the Trust
nor the Operating Partnership shall be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, any
preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating
to the Shares, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Trust by any
Underwriter of Designated Shares through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Shares;
(b) Each Underwriter will indemnify and hold harmless the
Trust and the Operating Partnership against any losses, claims, damages
or liabilities to which the Trust or the Operating Partnership may
become subject, under the Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating
to the Shares, or any amendment or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement
or omission or alleged omission was made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating
to the Designated Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to
the Trust and the Operating Partnership by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Trust
and the Operating Partnership for any legal or other expenses
reasonably incurred by the Trust and the Operating Partnership in
connection with investigating or defending any such action or claim as
such expenses are incurred;
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect thereof is
to be made against the indemnifying party under such subsection, notify
the indemnifying party in writing of the commencement thereof; but the
omission to notify the indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise than
under such subsection. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with
any other
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indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to
such indemnified party of its election to assume the defense thereof,
the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any
other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the
written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or
claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability
arising out of such action or claim and (ii) does not include any
statement as to or an admission of fault, culpability or a failure to
act, by or on behalf of any indemnified party;
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount
paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (or actions in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received
by the Trust and the Operating Partnership on the one hand and the
Underwriters of the Designated Shares on the other from the offering of
the Designated Shares to which such loss, claim, damage or liability
(or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice
required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Trust and the Operating
Partnership on the one hand and the Underwriters of the Designated
Shares on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by the Trust and the
Operating Partnership on the one hand and such Underwriters on the
other shall be deemed to be in the same proportion as the total net
proceeds from such offering (before deducting expenses) received by the
Trust bear to the total underwriting discounts and commissions received
by such Underwriters. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Trust or
the Operating Partnership on the one hand or such Underwriters on the
other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Trust, the Operating Partnership and the Underwriters
agree that it would not be just and equitable if contributions pursuant
to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred
to above in this subsection (d) shall be deemed to include any legal or
other expenses reasonably incurred by such
17
<PAGE>
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the applicable
Designated Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The obligations of
the Underwriters of Designated Shares in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations with respect to such Shares and not joint; and
(e) The obligations of the Trust and the Operating Partnership
under this Section 8 shall be in addition to any liability which the
Trust or the Operating Partnership may otherwise have and shall extend,
upon the same terms and conditions, to each officer, director or
partner of any Underwriter and to each person, if any, who controls any
Underwriter within the meaning of the Act; and the obligations of the
Underwriters under this Section 8 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and trustee of the
Trust and to each person, if any, who controls the Trust within the
meaning of the Act.
9. (a) If any Underwriter shall default in its obligation to
purchase the Firm Shares or Optional Shares which it has agreed to
purchase under the Pricing Agreement relating to such Shares, the
Representatives may in their discretion arrange for themselves or
another party or other parties to purchase such Shares on the terms
contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such
Firm Shares or Optional Shares, as the case may be, then the Trust
shall be entitled to a further period of thirty-six hours within which
to procure another party or other parties satisfactory to the
Representatives to purchase such Shares on such terms. In the event
that, within the respective prescribed period, the Representatives
notify the Trust that they have so arranged for the purchase of such
Shares, or the Trust notifies the Representatives that it has so
arranged for the purchase of such Shares, the Representatives or the
Trust shall have the right to postpone the Time of Delivery for such
Shares for a period of not more than seven days, in order to effect
whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus as amended or supplemented, or in any other
documents or arrangements, and the Trust agrees to file promptly any
amendments or supplements to the Registration Statement or the
Prospectus which in the opinion of the Representatives may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as
if such person had originally been a party to the Pricing Agreement
with respect to such Designated Shares;
(b) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of
a defaulting Underwriter or Underwriters by the Representatives and the
Trust as provided in subsection (a) above, the aggregate number of such
Shares which remains unpurchased does not exceed one-eleventh of the
aggregate number of the Firm Shares or Optional Shares, as the case may
be, to be purchased at the respective Time of Delivery, then the Trust
shall have the right to require each non-defaulting Underwriter to
purchase the number of Firm Shares or Optional Shares, as the case may
be, which such Underwriter agreed to purchase under the Pricing
18
<PAGE>
Agreement relating to such Designated Shares and, in addition, to
require each non-defaulting Underwriter to purchase its pro rata share
(based on the number of Firm Shares or Optional Shares, as the case may
be, which such Underwriter agreed to purchase under such Pricing
Agreement) of the Firm Shares or Optional Shares, as the case may be,
of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default; and
(c) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of
a defaulting Underwriter or Underwriters by the Representatives and the
Trust as provided in subsection (a) above, the aggregate number of Firm
Shares or Optional Shares, as the case may be, which remains
unpurchased exceeds one-eleventh of the aggregate number of the Firm
Shares or Optional Shares, as the case may be, to be purchased at the
respective Time of Delivery, as referred to in subsection (b) above, or
if the Trust shall not exercise the right described in subsection (b)
above to require non-defaulting Underwriters to purchase Firm Shares or
Optional Shares, as the case may be, of a defaulting Underwriter or
Underwriters, then the Pricing Agreement relating to such Firm Shares
or the Over-allotment Option relating to such Optional Shares, as the
case may be, shall thereupon terminate, without liability on the part
of any non-defaulting Underwriter or the Trust, except for the expenses
to be borne by the Trust and the Underwriters as provided in Section 6
hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements, representations,
warranties and other statements of the Trust, the Operating Partnership and
the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of any Underwriter or any
officer, director or partner or controlling person of any Underwriter, or the
Trust or the Operating Partnership, or any officer or trustee or each
controlling person who controls the Trust or the Operating Partnership, and
shall survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, neither the Trust nor the Operating
Partnership shall then be under any liability to any Underwriter with respect
to the Firm Shares or Optional Shares with respect to which such Pricing
Agreement shall have been terminated except as provided in Sections 6 and 8
hereof; but, if for any other reason, Designated Shares are not delivered by
or on behalf of the Trust as provided herein, the Trust and the Operating
Partnership will reimburse the Underwriters through the Representatives for
all reasonable out-of-pocket expenses approved in writing by the
Representatives, including reasonable fees and disbursements of counsel,
incurred by the Underwriters in making preparations for the purchase, sale
and delivery of such Designated Shares, but the Trust and the Operating
Partnership shall then be under no further liability to any Underwriter with
respect to such Designated Shares except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Shares shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by such Representatives jointly or by such of the Representatives,
if any, as may be designated for such purpose in the Pricing Agreement. All
statements, requests, notices and
19
<PAGE>
agreements hereunder shall be in writing, and if to the Underwriters shall be
delivered or sent by mail, telex or facsimile transmission to the address of
the Representatives as set forth in the Pricing Agreement; and if to the
Trust or the Operating Partnership shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Trust set forth in the
Registration Statement, Attention: Chief Executive Officer; provided,
however, that any notice to an Underwriter pursuant to Section 8(c) hereof
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its Underwriters' Questionnaire, or
telex constituting such Questionnaire, which address will be supplied to the
Trust by the Representatives upon request. Any such statements, requests,
notices or agreements shall take effect upon receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding upon,
and inure solely to the benefit of, the Underwriters, the Trust, the
Operating Partnership and, to the extent provided in Sections 8 and 10
hereof, the officers and trustees of the Trust, the officers, directors and
partners of any Underwriters and each person who controls the Trust or any
Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any such Pricing Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As used
herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed by any
one or more of the parties hereto and thereto in any number of counterparts,
each of which shall be deemed to be an original, but all such respective
counterparts shall together constitute one and the same instrument.
20
<PAGE>
17. The Trust's First Amended and Restated Declaration of Trust,
dated June 24, 1993, a copy of which is duly filed with the Department of
Assessments and Taxation of the State of Maryland, provides that no trustee,
officer, shareholder, employee or agent of the Trust shall be held to any
personal liability, jointly or severally, for any obligation of or claim
against the Trust. All persons dealing with the Trust in any way shall look
only to the assets of the Trust for the payment of any sum or the performance
of any obligation.
Very truly yours,
THE TOWN AND COUNTRY TRUST
By:
--------------------------------------
Name:
Title:
THE TC OPERATING LIMITED PARTNERSHIP
By: The Town and Country Trust, its General
Partner
By:
--------------------------------------
Name:
Title:
21
<PAGE>
ANNEX I
PRICING AGREEMENT
[NAMES OF REPRESENTATIVE]
As Representatives of the Several
Underwriters named in Schedule I hereto,
[C/O
------------------------
- ----------------------------
- ----------------------------]
Dear Sirs:
The Town and Country Trust, a Maryland real estate investment trust
(the "Trust") and general partner of The TC Operating Limited Partnership
(the "Operating Partnership"), proposes, subject to the terms and conditions
stated herein and in the Underwriting Agreement, dated _______________, ____,
relating to the Trust's Common Shares of Beneficial Interest, par value $.01
per share (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Shares
specified in Schedule II hereto (the "Designated Shares"
[consisting of Firm Shares and any Optional Shares the Underwriters may elect
to purchase]). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set
forth therein shall be deemed to have been made at and as of the date of this
Pricing Agreement, except that each representation and warranty which refers
to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed
to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in
relation to the Prospectus as amended or supplemented relating to the
Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer
to you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated
to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Shares pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Trust
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust,
at the time and place and at the purchase price to the Underwriters set forth
in Schedule II hereto, the number of Firm Shares set forth opposite the name
of such Underwriter in Schedule I hereto [and, (b) in the event and to the
extent that the Underwriters shall exercise the election to purchase Optional
Shares, as provided below, the Trust agrees to issue and sell to each of the
Underwriters, and each of the Underwriters agrees, severally and not jointly,
to purchase from the Trust at the purchase price to the Underwriters set
forth in Schedule II hereto that portion of the number of Optional Shares as
to which such election shall have been exercised].
<PAGE>
[The Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering over-allotments in
the sale of the Firm Shares. Any such election to purchase Optional Shares may
be exercised by written notice from the Representatives to the Trust given
within a period of 30 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives, but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Trust otherwise agree in writing, no earlier
than two or later than ten business days after the date of such notice.]
<PAGE>
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Trust, one for the Operating Partnership and one
for each of the Representatives plus one for each counsel] counterparts hereof,
and upon acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters and the Trust. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement Among Underwriters,
the form of which shall be submitted to the Trust for examination, upon request,
but without warranty on the part of the Representatives as to the authority of
the signers thereof.
The Trust's First Amended and Restated Declaration of Trust, dated June
24, 1993, a copy of which is duly filed with the Department of Assessments and
Taxation of the State of Maryland, provides that no trustee, officer,
shareholder, employee or agent of the Trust shall be held to any personal
liability, jointly or severally, for any obligation of or claim against the
Trust. All persons dealing with the Trust in any way shall look only to the
assets of the Trust for the payment of any sum or the performance of any
obligation.
Very truly yours,
THE TOWN AND COUNTRY TRUST
By:
-----------------------------------------
Name:
Title:
Accepted as of the date hereof: THE TC OPERATING LIMITED PARTNERSHIP
Name(s) of Representative(s)
By: The Town and Country Trust, its General
Partner
By: By:
------------------------------ -----------------------------------------
Name: Name:
Title: Title:
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
[Maximum Number
Number of [Firm] of Optional
Shares to be Shares which may
Underwriter Purchased be Purchased]
----------- ---------------- ----------------
<S> <C> <C>
[Names of Underwriters] .......
[Total]........
</TABLE>
25
<PAGE>
SCHEDULE II
TITLE OF DESIGNATED SHARES:
Common Shares of Beneficial Interest,
par value $.01 per share
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares:
Maximum Number of Optional Shares:
INITIAL OFFERING PRICE TO PUBLIC:
[$________ per Share]
PURCHASE PRICE BY UNDERWRITERS:
[$________ per Share]
[COMMISSION PAYABLE TO UNDERWRITERS:
$________ per Share in [specify same form of funds as in Specified Funds
below]]
FORM OF DESIGNATED SHARES:
Definitive form, to be made available for checking [and packaging] at
least twenty-four hours prior to the Time of Delivery at the office of
[The Depository Trust Company or its designated custodian] [the
Representatives]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same-day) funds
TIME OF DELIVERY:
_______ a.m. (New York City time), [specify date]
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[other persons subject to Section 5(e) lockup]
[Other Terms]
<PAGE>
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Trust and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included or incorporated by reference
in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act or the Exchange Act, as applicable, and the related published
rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information, prospective financial statements and/or condensed
financial statements derived from audited financial statements of the
Trust for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been [separately] furnished to
the representatives of the Underwriters (the "Representatives") [and
are attached hereto];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Trust's quarterly
reports on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which [have been
separately furnished to the Representatives] [are attached hereto]; and
on the basis of specified procedures including inquiries of officials
of the Trust who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A) below comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them
to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Trust for the five most recent fiscal years included in
the Prospectus and included or incorporated by reference in Item 6 of
the Trust's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Trust's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the foregoing procedures
that caused them to believe that this information does not conform in
all material respects with the disclosure requirements of items 301,
302, 402 and
<PAGE>
503(d), respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Trust and its subsidiaries,
inspection of the minute books of the Trust and its subsidiaries since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Trust and its subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused them to
believe that:
(A) the unaudited condensed consolidated statements
of income, consolidated balance sheets and consolidated
statements of cash flows included in the Prospectus and/or
included or incorporated by reference in the Trust's Quarterly
Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the Exchange
Act and the related published rules and regulations thereunder
or are not in conformity with generally accepted accounting
principles applied on a basis substantially consistent with
the basis for the audited consolidated statements of income,
consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus or included or
incorporated by reference in the Trust's Annual Report on Form
10-K for the most recent fiscal year;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree
with the corresponding items in the unaudited consolidated
financial statements from which such data and items were
derived, and any such unaudited data and items were not
determined on a basis substantially consistent with the basis
for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in
the Trust's Annual Report on Form 10-K for the most recent
fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the
unaudited condensed financial statements referred to in clause
(A) and any unaudited income statement data and balance sheet
items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with
the basis for the audited financial statements included or
incorporated by reference in the Trust's Annual Report on Form
10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in
the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the
Act and the published rules and regulations thereunder or the
pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes
in the consolidated beneficial interests (other than issuances
of beneficial interests upon exercise of options which were
outstanding on the date of the latest balance sheet included
or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Trust and
its subsidiaries, or any decreases in consolidated net current
assets
<PAGE>
or net assets or other items reasonably specified by the
Representatives, or any increases in any items specified by
the Representatives, in each case as compared with amounts
shown in the latest balance sheet included or incorporated by
reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter;
and
(F) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in Clause (E)
there were any decreases in consolidated net revenues or
operating profit or the total or per share amounts of
consolidated net income or other items reasonably specified by
the Representatives, or any increases in any items reasonably
specified by the Representatives, in each case as compared
with the comparable period of the preceding year and with any
other period of corresponding length specified by the
Representatives, except in each case for increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(vii) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
of the Trust and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or
in exhibits and schedules to, the Registration Statement specified by
the Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Trust and its subsidiaries and have found
them to be in agreement.
All references in this Annex II to the Prospectus shall be deemed to
refer to the Prospectus (including the documents incorporated by reference
therein) as defined in the Underwriting Agreement as of the date of the letter
delivered on the date of the Pricing Agreement for purposes of such letter and
to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Shares for purposes of the letter delivered at the Time of Delivery for such
Designated Shares.
<PAGE>
EXHIBIT 1.2
THE TOWN AND COUNTRY TRUST
Preferred Shares of Beneficial Interest
(par value $.01 per share)
UNDERWRITING AGREEMENT
To the Representatives of the several
Underwriters named in the respective
Pricing Agreements hereinafter described.
Dear Sirs:
From time to time The Town and Country Trust, a Maryland real estate
investment trust (the "Trust") and a general partner of The TC Operating
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"), proposes to enter into one or more Pricing Agreements (each a
"Pricing Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, to issue and sell to the firms named in
Schedule I to the applicable Pricing Agreement (such firms constituting the
"Underwriters" with respect to such Pricing Agreement and the securities
specified therein) certain of its preferred shares of beneficial interest,
par value $.01 per share (collectively, the "Shares"). The Shares specified
in such Pricing Agreement are referred to as the "Firm Shares". If specified
in such Pricing Agreement, the Trust may grant to the Underwriters the right
to purchase at their election an additional number of shares, specified in
such Pricing Agreement as provided in Section 3 hereof (the "Optional
Shares"). The Firm Shares and the Optional Shares, if any, which the
Underwriters elect to purchase pursuant to Section 3 hereof are herein
collectively called the "Designated Shares".
The terms and rights of any particular issuance of Designated Shares
shall be as specified in the Pricing Agreement relating thereto.
1. Particular sales of Designated Shares may be made from time
to time to the Underwriters of such Shares, for whom the firms designated as
representatives of the Underwriters of such Shares in the Pricing Agreement
relating thereto will act as representatives (the "Representatives"). The
term "Representatives" also refers to a single firm acting as sole
representative of the Underwriters and to Underwriters who act without any
firm being designated as their representative. This Underwriting Agreement
shall not be construed as an obligation of the Trust to sell any of the
Shares or as an obligation of any of the Underwriters to purchase any of the
Shares. The obligation of the Trust to issue and sell any of the Shares and
the obligation of any of the Underwriters to purchase any of the Shares shall
be evidenced by the Pricing Agreement with respect to the Designated Shares
specified therein. Each Pricing Agreement shall specify the aggregate number
of the Firm Shares, the maximum number of Optional Shares, if any, the
initial public offering price of such Firm Shares and Optional Shares or the
manner of determining such price, the purchase price to the Underwriters of
such Designated Shares, the names of the Underwriters of such Designated
Shares, the names of the Representatives of such Underwriters, the number of
such Designated Shares to be purchased by each Underwriter and the
commission, if any, payable to the Underwriters with respect thereto and
shall set forth the date, time and manner of delivery of such Firm Shares and
Optional
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Shares, if any, and payment therefor. The Pricing Agreement shall also
specify (to the extent not set forth in the registration statement and
prospectus with respect thereto) the terms of such Designated Shares. A
Pricing Agreement shall be in the form of an executed writing (which may be
in counterparts), and may be evidenced by an exchange of telegraphic
communications or any other rapid transmission device designed to produce a
written record of communications transmitted. The obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
2. Each of the Trust and the Operating Partnership represents
and warrants to, and agrees with, each of the Underwriters that:
(a) A registration statement on Form S-3 (File No.
333-_______) (the "Initial Registration Statement") in respect of the
Shares has been filed with the Securities and Exchange Commission (the
"Commission"); the Initial Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered
or to be delivered to the Representatives and, excluding exhibits to
the Initial Registration Statement, but including all documents
incorporated by reference in the prospectus included therein, to the
Representatives for each of the other Underwriters, have been declared
effective by the Commission in such form; other than a registration
statement, if any, increasing the size of the offering (a "Rule 462(b)
Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective
upon filing, no other document with respect to the Initial Registration
Statement or document incorporated by reference therein has heretofore
been filed, or transmitted for filing, with the Commission (other than
prospectuses filed pursuant to Rule 424(b) of the rules and regulations
of the Commission under the Act, each in the form heretofore delivered
to the Representatives); and no stop order suspending the effectiveness
of the Initial Registration Statement, any post-effective amendment
thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or
threatened by the Commission (any preliminary prospectus included in
the Initial Registration Statement, any post-effective amendment
thereto or filed with the Commission pursuant to Rule 424(a) under the
Act, is hereinafter called a "Preliminary Prospectus"; the various
parts of the Initial Registration Statement and the Rule 462(b)
Registration Statement, if any, including all exhibits thereto and the
documents incorporated by reference in the prospectus contained in the
Initial Registration Statement at the time such part of the Initial
Registration Statement became effective, or such part of the Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, each as amended at the time such part of the Initial
Registration Statement or the Rule 462(b) Registration Statement became
effective, hereinafter collectively called the "Registration
Statement"; the prospectus relating to the Shares, in the form in which
it has most recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, being hereinafter
called the "Prospectus"); any reference herein to any Preliminary
Prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to the
applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any documents filed after the
date of such Preliminary Prospectus or Prospectus, as the case may be,
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and incorporated by reference in such Preliminary Prospectus or
Prospectus, as the case may be; any reference to any amendment to the
Registration Statement shall be deemed to refer to and include any
annual report of the Trust filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference in
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the Registration Statement; and any reference to the Prospectus as
amended or supplemented shall be deemed to refer to the Prospectus as
amended or supplemented in relation to the applicable Designated Shares
in the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 5(a) hereof, including
any documents incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the Act or the Exchange Act, applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder and will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust by an Underwriter of
Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(c) The Registration Statement and the Prospectus
conform, and any further amendments or supplements to the Registration
Statement or the Prospectus will conform, in all material respects to
the requirements of the Act and the rules and regulations of the
Commission thereunder and do not and will not, as of the applicable
effective date as to the Registration Statement and any amendment
thereto and as of the applicable filing date as to the Prospectus and
any amendment or supplement thereto, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Trust by an
Underwriter of Designated Shares through the Representatives expressly
for use in the Prospectus as amended or supplemented relating to such
Shares;
(d) None of the Trust, the Operating Partnership or any
of their respective partnership or corporate subsidiaries (the
Operating Partnership and the partnership and corporate subsidiaries of
the Trust and the Operating Partnership are collectively referred to
herein as "subsidiaries") has sustained, since the date the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or
governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus, and, since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, there has not been (A) any material change in the
beneficial interests of the Trust or any material increase in long-term
debt of the Trust, the Operating Partnership or any of their respective
subsidiaries, (B) any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, shareholders' equity
(or, with respect to
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the Operating Partnership and the other partnership subsidiaries,
partnership capital) or results of operations of the Trust and its
subsidiaries, taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; (C) any transactions entered into by
the Trust or any of the Trust's subsidiaries, other than those in the
ordinary course of business, which are material with respect to the
Trust and its subsidiaries considered as one enterprise and (D) except
for regular dividends, any dividend or distribution of any kind
declared, paid or made by the Trust on any class of its shares of
beneficial interest;
(e) The Trust and its subsidiaries have good and
marketable title in fee simple to, or good and marketable leasehold
estates in, all real property owned or leased, as the case may be, by
them, and good and marketable title to all personal property owned by
them which is material to the business of the Trust, 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 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 Trust and its subsidiaries;
and any real property and buildings held under lease by the Trust and
its subsidiaries 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
Trust and its subsidiaries, in each case as set forth or contemplated
in the Prospectus;
(f) The Trust has been duly organized and is validly
existing as a real estate investment trust in good standing under the
laws of the State of Maryland, with power and authority (trust and
other) to own its properties and conduct its business as described in
the Prospectus;
(g) Each partnership and corporate subsidiary of the
Trust which is a significant subsidiary, as defined in Rule 405 of
Regulation C of the regulations promulgated under the Act (each, a
"Significant Subsidiary") has been duly organized and is validly
existing as a partnership or a corporation in good standing under the
laws of its jurisdiction of organization, with power and authority
(partnership or corporate, as the case may be, and other) to own its
properties and to conduct its business as described in the Prospectus;
(h) The Trust and each Significant Subsidiary has been
duly qualified for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require qualification;
(i) The Trust has an authorized capitalization as set
forth in the Prospectus, and all of the issued shares of beneficial
interest in the Trust have been duly and validly authorized and issued
and are fully paid and non-assessable; the Trust is a general partner
of the Operating Partnership; all of the partnership interests of each
partnership subsidiary have been duly authorized and issued and are
owned, directly or indirectly, by the Trust and/or the Operating
Partnership, free and clear of all liens, encumbrances, equities or
claims; all of the issued shares of capital stock of the corporate
subsidiaries of the Trust have been duly and validly authorized and
issued, are fully paid and non-assessable and are owned directly or
indirectly by the Trust, free and clear of all liens, encumbrances,
equities or claims;
(j) The Shares have been duly and validly authorized,
and, when the Firm Shares are issued and delivered pursuant to this
Agreement and the Pricing Agreement with respect to such Designated
Shares and, in the case of any Optional Shares, pursuant to
Over-allotment Options (as defined in Section 3 hereof) with respect to
such Shares,
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such Designated Shares will be duly and validly issued and fully paid
and non-assessable; the Shares conform to the description thereof
contained in the Registration Statement and the Designated Shares will
conform to the description thereof contained in the Prospectus as
amended or supplemented with respect to such Designated Shares; and no
holder of any beneficial interest in the Trust has any pre-emptive or
similar rights or has any rights to require or participate in the
registration of beneficial interests under the Act;
(k) The issue and sale of the Shares and the compliance
by the Trust and the Operating Partnership with all of the provisions
of this Agreement, any Pricing Agreement and each Over-allotment
Option, if any, and the consummation of the transactions contemplated
herein and therein will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Trust or any of its subsidiaries
is a party or by which the Trust or any of its subsidiaries is bound or
to which any of the property or assets of the Trust or any of its
subsidiaries is subject, other than such conflicts, breaches,
violations or defaults that would not have a material adverse effect on
the business operation, consolidated financial position, shareholders'
equity or results of operations of the Trust and its subsidiaries, and
that would not affect the validity of the Designated Shares nor will
such action result in any violation of the provisions of the Amended
and Restated Declaration of Trust or By-Laws of the Trust or the
Certificate of Limited Partnership or partnership agreement of the
Operating Partnership (the "OP Partnership Agreement") or any statute
or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Trust or any of its subsidiaries or
any of their properties; and no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Shares or the consummation by the Trust of the transactions
contemplated by this Agreement or any Pricing Agreement or any
Over-allotment Option, except such as have been, or will have been
prior to each Time of Delivery (as defined in Section 4 hereof),
obtained under the Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Shares by the Underwriters;
(l) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Trust or any
of its subsidiaries is a party or of which any property of the Trust or
any of its subsidiaries is the subject, which, if determined adversely
to the Trust or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the consolidated financial
position, shareholders' equity (or net assets, as the case may be) or
results of operations of the Trust and its subsidiaries; and, to the
best of the Trust's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The Trust is in substantial compliance with, and
conducts its business in substantial conformity with, all applicable
laws and governmental regulations;
(n) Neither the Trust nor any of its subsidiaries is in
violation of its organizational documents or in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of
trust, loan agreement, lease or other agreement or instrument to which
it is a party or by which it or any of its properties may be bound;
(o) The statements set forth in the Prospectus as amended
or supplemented
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under the caption "Description of Our Shares of Beneficial Interest",
insofar as they purport to constitute a summary of the terms of the
Shares, and under the captions "Material Federal Income Tax
Considerations", "Plan of Distribution" and "Underwriting", insofar as
they purport to describe the provisions of the laws and documents
referred to therein, are accurate, complete and fair;
(p) Neither the Trust nor any of its subsidiaries is, and
after giving effect to the offering and sale of the Designated Shares,
will be 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 (the "Investment Company Act");
(q) Ernst & Young LLP, who have certified certain
financial statements of the Trust and its subsidiaries, are independent
public accountants as required by the Act and the rules and regulations
of the Commission thereunder; and
(r) The Trust has reviewed its operations and that of its
subsidiaries and any third parties with which the Trust or any of its
subsidiaries has a material relationship to evaluate the extent to
which the business or operations of the Trust or any of its
subsidiaries will be affected by the Year 2000 Problem. As a result of
such review, the Trust has no reason to believe, and does not believe,
that the Year 2000 Problem will have a material adverse effect on the
general affairs, management, the current or future consolidated
financial position, business prospects, shareholders' equity or results
of operations of the Trust and its subsidiaries or result in any
material loss or interference with the Trust's business or operations.
The "Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission,
processing, manipulation, storage, retrieval, retransmission or other
utilization of data or in the operation of mechanical or electrical
systems of any kind will, not, in the case of dates or time periods
occurring after December 31, 1999, function at least as effectively as
in the case of dates or time periods occurring prior to January 1,
2000.
3. Upon the execution of the Pricing Agreement applicable to
any Designated Shares and authorization by the Representatives of the release
of the Firm Shares, the several Underwriters propose to offer the Firm Shares
for sale upon the terms and conditions set forth in the Prospectus as amended
or supplemented.
The Trust may specify in the Pricing Agreement applicable to any
Designated Shares that the Trust thereby grants to the Underwriters the right
(an "Over-allotment Option") to purchase at their election up to the number
of Optional Shares set forth in such Pricing Agreement, on the terms set
forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised by written notice from the Representatives
to the Trust, given within a period specified in the Pricing Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery (as
defined in Section 4 hereof) or, unless the Representatives and the Trust
otherwise agree in writing, earlier than or later than the respective number
of business days after the date of such notice set forth in such Pricing
Agreement.
The number of Optional Shares to be added to the number of Firm
Shares to be purchased by each Underwriter as set forth in Schedule I to the
Pricing Agreement applicable to such Designated Shares shall be, in each
case, the number of Optional Shares which the Trust has been advised by the
Representatives have been attributed to such Underwriter; provided that, if
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the Trust has not been so advised, the number of Optional Shares to be so
added shall be, in each case, that proportion of Optional Shares which the
number of Firm Shares to be purchased by such Underwriter under such Pricing
Agreement bears to the aggregate number of Firm Shares (rounded as the
Representatives may determine to the nearest 100 shares) to be purchased by
all the Underwriters pursuant to such Pricing Agreement.
4. Certificates for the Firm Shares and Optional Shares to be
purchased by each Underwriter pursuant to the Pricing Agreement relating
thereto, in the form specified in such Pricing Agreement and in such
authorized denominations and registered in such names as the Representatives
may request, shall be delivered by or on behalf of the Trust to the
Representatives for the account of such Underwriter, against payment by such
Underwriter or on its behalf of the purchase price therefor by wire transfer
of immediately available funds to the account specified by the Trust, (i)
with respect to the Firm Shares, all in the manner and at the place and time
and date specified in such Pricing Agreement or at such other place and time
and date as the Representatives and the Trust may agree upon in writing, such
time and date being herein called the "First Time of Delivery" and (ii) with
respect to the Optional Shares, if any, in the manner and at the time and
date specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase such Optional
Shares, or at such other time and date as the Representatives and the Trust
may agree upon in writing, such time and date, if not the First Time of
Delivery, herein called the "Second Time of Delivery". Each such time and
date for delivery is herein called a "Time of Delivery". Certificates for the
Firm Shares and the Optional Shares shall be made available to the
Representatives at an office specified by the Representatives at least 48
hours prior to the Time of Delivery.
5. The Trust agrees with each of the Underwriters of any
Designated Shares:
(a) To prepare the Prospectus as amended and supplemented
in relation to the applicable Designated Shares in a form approved by
the Representatives and to file such Prospectus pursuant to Rule 424(b)
under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Shares or, if
applicable, such earlier time as may be required by Rule 424(b); to
make no further amendment or any supplement to the Registration
Statement or Prospectus as amended or supplemented after the date of
the Pricing Agreement relating to such Shares and prior to any Time of
Delivery for such Shares which shall be disapproved by the
Representatives for such Shares promptly after reasonable notice
thereof; to advise the Representatives promptly of any such amendment
or supplement after any Time of Delivery for such Shares and furnish
the Representatives with copies thereof; to file promptly all reports
and any definitive proxy or information statements required to be filed
by the Trust with the Commission pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of such
Shares, and during such same period to advise the Representatives,
promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes
effective or any supplement to the Prospectus or any amended Prospectus
has been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the use of
any prospectus relating to the Shares, of the suspension of the
qualification of such Shares for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or
supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Shares or suspending any such qualification,
promptly to use its
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best efforts to obtain the withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Shares for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of such Shares, provided that in connection therewith the
Trust shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New
York Business Day next succeeding the date of this Agreement and from
time to time, to furnish the Underwriters with copies of the Prospectus
as amended or supplemented in such quantities as the Representatives
may from time to time reasonably request, and, if the delivery of a
prospectus is required at any time in connection with the offering or
sale of the Shares and if at such time any event shall have occurred as
a result of which the Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it
shall be necessary during such same period to amend or supplement the
Prospectus or to file under the Exchange Act any document incorporated
by reference in the Prospectus in order to comply with the Act or the
Exchange Act, to notify the Representatives and upon their request to
file such document and to prepare and furnish without charge to each
Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such
statement or omission or effect such compliance;
(d) To make generally available to its security holders
as soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in
Rule 158(c) under the Act), an earnings statement of the Trust and its
subsidiaries (which need not be audited) complying with Section 11(a)
of the Act and the rules and regulations of the Commission thereunder
(including, at the option of the Trust, Rule 158);
(e) That during the period beginning from the date of the
Pricing Agreement for such Designated Shares and continuing to and
including the date specified in the Pricing Agreement, neither the
Trust nor any of its subsidiaries will directly or indirectly
(including by the writing or purchase of a cash-settled derivative
instrument) offer, sell, contract to sell or otherwise dispose of,
except as provided hereunder, any Shares or any other securities of the
Trust that are substantially similar to the Designated Shares,
including but not limited to any securities that are convertible into
or exchangeable for, or that represent the right to receive, Shares or
any such substantially similar securities, without the prior written
consent of the Representatives;
(f) To use its best efforts to meet the requirements to
qualify as a real estate investment trust ("REIT") under the Internal
Revenue Code of 1986, as amended (the "Code"); and
(g) If the Trust elects to rely upon Rule 462(b), the
Trust shall file a Rule 462(b) Registration Statement with the
Commission in compliance with Rule 462(b) by 10:00 P.M., Washington,
D.C. time, on the date of the Pricing Agreement, and the Trust
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<PAGE>
shall at the time of filing either pay the Commission the filing fee
for the Rule 462(b) Registration Statement or give irrevocable
instructions for the payment of such fee pursuant to Rule 11(b) under
the Act.
6. The Trust covenants and agrees with the several
Underwriters that the Trust will pay or cause to be paid the following: (i)
the fees, disbursements and expenses of the Trust's counsel and accountants
in connection with the registration of the Shares under the Act and all other
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the Prospectus and
amendments and supplements thereto and the mailing and delivering of copies
thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, any Pricing
Agreement, any Blue Sky and Legal Investment Memoranda, closing documents
(including any compilations thereof) and any other documents in connection
with the offering, purchase, sale and delivery of the Shares; (iii) all
expenses in connection with the qualification of the Shares for offering and
sale under state securities laws as provided in Section 5(b) hereof,
including the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky and Legal Investment survey(s); (iv) any fees charged by securities
rating services for rating the Shares; (v) any filing fees incident to, and
the reasonable fees and disbursements of counsel for the Underwriters in
connection with, any required reviews by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (vi) the
cost of preparing certificates for the Shares; (vii) the cost and charges of
any transfer agent or registrar or dividend disbursing agent and (viii) all
other costs and expenses incident to the performance of its obligations
hereunder and under any Over-allotment Options which are not otherwise
specifically provided for in this Section. It is understood, however, that,
except as provided in this Section and Sections 8 and 11 hereof, the
Underwriters will pay all of their own costs and expenses, including the fees
of their counsel, transfer taxes on resale of any of the Shares by them, and
any advertising expenses connected with any offers they may make.
7. The obligations of the Underwriters of any Designated
Shares under the Pricing Agreement relating to such Designated Shares shall
be subject, in the discretion of the Representatives, to the condition that
all representations and warranties and other statements of the Trust and the
Operating Partnership in or incorporated by reference in the Pricing
Agreement relating to such Designated Shares are, at and as of each Time of
Delivery for such Designated Shares, true and correct, the condition that the
Trust shall have performed all of its obligations hereunder theretofore to be
performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation
to such Designated Shares shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the rules and regulations under the Act and in
accordance with Section 5(a) hereof; if the Trust has elected to rely
upon Rule 462(b), the Rule 462(b) Registration Statement shall have
become effective by 10:00 P.M., Washington, D.C. time, on the date of
the Pricing Agreement; no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued
and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with
to the Representatives' reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters,
shall have furnished to the Representatives such written opinion or
opinions, dated each Time of Delivery for such Designated Shares, with
respect to the formation of the Trust, the validity of the Designated
Shares being delivered at such Time of Delivery, the Registration
Statement,
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the Prospectus and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters;
(c) Berick, Pearlman & Mills Co., L.P.A., or other
counsel for the Trust satisfactory to the Representatives, shall have
furnished the Representatives its written opinions dated each Time of
Delivery for such Designated Shares, in form and substance satisfactory
to the Representatives, to the effect that:
(i) The Trust has been duly organized and is
validly existing as a real estate investment trust in good
standing under the laws of the State of Maryland, with trust
power and authority to own its properties and conduct its
business as described in the Prospectus as amended or
supplemented;
(ii) The Operating Partnership has been duly
formed and is validly existing as a limited partnership under
the laws of the State of Maryland with partnership power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented; the
Partnership Agreement has been duly authorized, executed and
delivered by the Trust and the other parties thereto and is
valid, legally binding and enforceable in accordance with its
terms, subject, as to enforcement, to bankruptcy, insolvency
and other laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
all of the partnership interests of the Operating Partnership
have been duly and validly authorized and issued, are fully
paid and non-assessable and (except as set forth in the
Prospectus) are owned, directly or indirectly, by the Trust,
free and clear of all liens, encumbrances, equities or claims;
(iii) Each Significant Subsidiary of the Trust
(other than the Operating Partnership) has been duly organized
and is validly existing as a partnership or a corporation in
good standing under the laws of its jurisdiction of
organization, with corporate or partnership (as the case may
be) power and authority to own its properties and conduct its
business as described in the Prospectus; the partnership
agreement of each partnership subsidiary (other than the
Operating Partnership) of the Trust has been duly authorized,
executed and delivered by the Trust and the other parties
thereto and is valid, legally binding and enforceable in
accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency and other laws of general applicability
relating to or affecting creditors' rights and to general
equity principles; all of the partnership interests of each
partnership subsidiary (other than the Operating Partnership)
have been duly and validly authorized and issued, are fully
paid and non-assessable and (except as set forth in the
Prospectus) are owned, directly or indirectly, by the Trust
and/or the Operating Partnership, free and clear of all liens,
encumbrances, equities or claims; all of the issued shares of
capital stock of each corporate subsidiary have been duly and
validly authorized and issued, are fully paid and
non-assessable and all such issued shares of capital stock are
owned, directly or indirectly, by the Trust, free and clear of
all liens, encumbrances, equities or claims (such counsel
being entitled to rely in respect of the opinion in this
clause upon opinions of local counsel and in respect of
matters of fact upon certificates of officers of the Trust or
its subsidiaries, provided that such counsel shall state that
they believe that both you and they are justified in relying
upon such opinions and certificates);
(iv) The Trust and each Significant Subsidiary
has been duly qualified
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for the transaction of business and is in good standing under
the laws of each jurisdiction in which it owns or leases
properties or conducts any business so as to require
qualification or is subject to no material liability or
disability by reason of failure to be so qualified in any such
jurisdiction (such counsel being entitled to rely in respect
of the opinion in this clause upon opinions of local counsel
and in respect of matters of fact upon certificates of
officers of the Trust or its subsidiaries, provided that such
counsel shall state that they believe that both you and they
are justified in relying upon such opinions and certificates);
(v) The Trust has an authorized capitalization
as set forth in the Prospectus as amended or supplemented and
all of the issued shares of beneficial interest in the Trust
(including the Designated Shares being delivered at such Time
of Delivery) have been duly and validly authorized and issued
and are fully paid and non-assessable; and the Designated
Shares conform, as to legal matters, in all material respects
to the description thereof in the Prospectus as amended or
supplemented;
(vi) To such counsel's knowledge and other than as
set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Trust or any of
its subsidiaries is a party or of which any property of the
Trust or any of its subsidiaries is the subject which, if
determined adversely to the Trust or any of its subsidiaries,
would individually or in the aggregate have a material adverse
effect on the consolidated financial position, shareholders'
equity or results of operations of the Trust and its
subsidiaries; and to the best of such counsel's knowledge, no
such proceedings are threatened, or contemplated by
governmental authorities or threatened by others:
(vii) This Agreement and the Pricing Agreement with
respect to the Designated Shares have been duly authorized,
executed and delivered by the Trust and the Operating
Partnership;
(viii) The issue and sale of the Designated Shares
being delivered at such Time of Delivery and the compliance by
the Trust and the Operating Partnership with all of the
provisions of this Agreement and the Pricing Agreement with
respect to the Designated Shares and the consummation of the
transactions herein and therein contemplated will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Trust or any of
its subsidiaries is a party or by which the Trust or any of
its subsidiaries is bound or to which any of the property or
assets of the Trust is subject, other than such conflicts,
breaches, violations or defaults that would not have a
material adverse effect on the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Trust and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business and that would not affect the validity of the
Designated Shares, nor will such action result in any
violation of the provisions of the Amended and Restated
Declaration of Trust or By-laws of the Trust or the
Certificate of Limited Partnership or the OP Partnership
Agreement or any statute or any order, rule or regulation
known to such counsel of any court or governmental agency or
body having jurisdiction over the Trust or any of their
properties;
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(ix) No consent, approval, authorization, order,
registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale
of the Designated Shares being delivered at such Time of
Delivery or the consummation by the Trust of the transactions
contemplated by this Agreement or the Pricing Agreement,
except such as have been obtained under the Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase and distribution
of the Designated Shares by the Underwriters;
(x) The statements set forth in the Prospectus
under the caption "Description of Our Shares of Beneficial
Interest", insofar as they purport to constitute a legal
summary of terms of the Shares, under the captions "Material
Federal Income Tax Considerations", under the captions "Plan
of Distribution" and "Underwriting" and the description of
Maryland laws under the captions "Risk Factors" and
"Description of Our Shares of Beneficial Interest", insofar as
they purport to describe the provisions of the laws and
documents referred to therein, are accurate in all material
respects;
(xi) None of the Trust or any of its subsidiaries
is, and after giving effect to the issue and sale of the
Designated Shares none will be, an "investment company" or an
entity "controlled" by an investment company, as such terms
are defined in the Investment Company Act;
(xii) The documents incorporated by reference in
the Prospectus as amended or supplemented (other than the
financial statements, related schedules and other financial
and statistical data derived from accounting records contained
therein, as to which such counsel need express no opinion),
when they became effective or were filed with the Commission,
as the case may be, complied as to form in all material
respects with the requirements of the Act or the Exchange Act,
as applicable, and the rules and regulations of the Commission
thereunder; and such counsel has no reason to believe that any
of such documents, when they became effective or were so
filed, as the case may be, contained, in the case of a
registration statement which became effective under the Act,
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading, or, in the case of
other documents which were filed under the Act or the Exchange
Act with the Commission, an untrue statement of a material
fact or omitted to state a material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made when such documents were so filed,
not misleading;
(xiii) The Registration Statement and the
Prospectus as amended or supplemented and any further
amendments and supplements thereto made by the Trust prior to
such Time of Delivery (other than the financial statements,
related schedules and other financial and statistical data
derived from accounting records contained therein, as to which
such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act and the
rules and regulations thereunder; although such counsel has
not independently verified and does not assume any
responsibility for the accuracy, completeness or fairness of
the statements contained in the Registration Statement or the
Prospectus, except for those referred to in the opinion in
subsection (x) of this Section 7(c), such
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counsel has no reason to believe that, as of its effective
date, the Registration Statement or any further amendment
thereto made by the Trust prior to such Time of Delivery
(other than the financial statements, related schedules and
other financial and statistical data derived from accounting
records contained therein, as to which such counsel need
express no opinion) contained an untrue statement of a
material fact or omitted to state a material fact required to
be stated therein or necessary in order to make the statements
therein not misleading or that, as of its date, the Prospectus
as amended or supplemented or any further amendment or
supplement thereto made by the Trust prior to such Time of
Delivery (other than the financial statements, related
schedules and other financial and statistical data derived
from accounting records contained therein, as to which such
counsel need express no opinion) contained an untrue statement
of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading or that, as of such Time of Delivery, either the
Registration Statement or the Prospectus as amended or
supplemented or any further amendment or supplement thereto
made by the Trust prior to such Time of Delivery (other than
the financial statements, related schedules and other
financial and statistical data derived from accounting records
contained therein, as to which such counsel need express no
opinion) contains an untrue statement of a material fact or
omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; and such counsel does
not know of any amendment to the Registration Statement
required to be filed or any contracts or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by
reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or
incorporated by reference or described as required;
(xiv) The Operating Partnership and each other
partnership subsidiary of the Trust is properly treated (x) as
a partnership for federal income tax purposes and (y) not as a
"publicly traded partnership" within the meaning of Section
7704(b) of the Code; and
(xv) In the opinion of such counsel, commencing
with the Trust's taxable year ending December 31, 1993 and
assuming that the elections and other procedural steps
described in the Prospectus under the heading "Material
Federal Income Tax Considerations" are completed by the Trust
in a timely fashion, the Trust has been organized in
conformity with the requirements for qualification as a REIT,
and its current and proposed method of operation will enable
it to meet the requirements for qualification and taxation as
a REIT under the Code.
(d) At a time prior to the execution of the Pricing
Agreement with respect to such Designated Shares and at each Time of
Delivery for such Designated Shares, the independent accountants of the
Trust who have audited the consolidated financial statements of the
Trust and its subsidiaries included or incorporated by reference in the
Registration Statement shall have furnished to the Representatives a
letter, dated the effective date of the Registration Statement or the
date of the most recent report filed with the Commission containing
consolidated financial statements and incorporated by reference in the
Registration Statement, if the date of such report is later than such
effective date, and a letter dated such Time of Delivery, respectively,
to the effect set forth in Annex II hereto, and with respect to such
letter dated such Time of Delivery, as to
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such other matters as the Representatives may reasonably request and in
form and substance satisfactory to the Representatives;
(e) (i) None of the Trust, the Operating Partnership or
any of their subsidiaries shall have sustained since the date of the
latest audited financial statements included or incorporated by
reference in the Prospectus as amended prior to the date of the Pricing
Agreement relating to the Designated Shares any loss or interference
with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court
or governmental action, order or decree, otherwise than as set forth or
contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, and, (ii) since
the respective dates as of which information is given in the
Prospectus, there shall not have been (A) any change in the beneficial
interests or increase in long-term debt of the Trust, the Operating
Partnership or any of their respective subsidiaries, (B) any change, or
any development involving a prospective change, in or affecting the
general affairs, management, financial position, shareholders' equity
(or, with respect to the Operating Partnership and the other
partnership subsidiaries, partnership capital) or results of operations
of the Trust and its subsidiaries, otherwise than as set forth or
contemplated in the Prospectus as amended prior to the date of the
Pricing Agreement relating to the Designated Shares, (C) any
transactions entered into by the Trust or any of its subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Trust and its subsidiaries considered as one
enterprise, (D) except for regular dividends, there shall have been any
dividend or distribution of any kind declared, paid or made by the
Trust on any class of its capital stock the effect of which, in any
such case described in clause (ii) is in the judgment of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Designated Shares on the terms and in the manner contemplated in the
Prospectus as first amended or supplemented relating to the Designated
Shares;
(f) On or after the date of the Pricing Agreement
relating to the Designated Shares (i) no downgrading shall have
occurred in the rating accorded the Trust's debt securities or
preferred stock by any "nationally recognized statistical rating
organization," as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Act and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Trust's debt
securities or preferred stock;
(g) On or after the date of the Pricing Agreement
relating to the Designated Shares there shall not have occurred any of
the following (i) a suspension or material limitation in trading in
securities generally on the New York Stock Exchange; (ii) a suspension
or material limitation in trading in the Trust's securities on the New
York Stock Exchange; (iii) a general moratorium on commercial banking
activities declared by either Federal or New York State authorities; or
(iv) the outbreak or escalation of hostilities involving the United
States or the declaration by the United States of a national emergency
or war, if the effect of any such event specified in this clause (iv)
in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the
Firm Shares or Optional Shares or both on the terms and in the manner
contemplated by the Prospectus as first amended or supplemented
relating to the Designated Shares;
(h) The Shares at each Time of Delivery shall have been
duly listed, subject to notice of issuance, on the Exchange;
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(i) The Trust shall have complied with the provisions of
Section 5(c) hereof with respect to the furnishing of prospectuses
prior to 10:00 A. M., New York City time, on the Next New York Business
Day next succeeding the date of this Agreement; and
(j) The Trust and the Operating Partnership shall have
furnished or caused to be furnished to the Representatives at each Time
of Delivery for the Designated Shares certificates of officers of the
Trust satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Trust and the Operating
Partnership herein at and as of such Time of Delivery, as to the
performance by the Trust and the Operating Partnership of all of their
respective obligations hereunder to be performed at or prior to such
Time of Delivery, as to matters set forth in subsections (a) and (e) of
this Section and as to such other matters as the Representatives may
reasonably request.
8. (a) The Trust and the Operating Partnership, jointly and
severally, will indemnify and hold harmless each Underwriter against any
losses, claims, damages or liabilities, joint or several, to which such
Underwriter may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended
or supplemented and any other prospectus relating to the Shares, or any
amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such action or claim as such expenses are incurred; provided,
however, that neither the Trust nor the Operating Partnership shall be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary Prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to
the Shares, or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Trust by any Underwriter
of Designated Shares through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Shares;
(b) Each Underwriter will indemnify and hold harmless the Trust
and the Operating Partnership against any losses, claims, damages or
liabilities to which the Trust or the Operating Partnership may become
subject, under the Act or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
an untrue statement or alleged untrue statement of a material fact contained
in any Preliminary Prospectus, any preliminary prospectus supplement, the
Registration Statement, the Prospectus as amended or supplemented and any
other prospectus relating to the Shares, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Shares, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Trust and the Operating Partnership by such Underwriter through the
Representatives expressly for use therein; and will reimburse the Trust and
the Operating Partnership or any legal or other expenses reasonably incurred
by the Trust and the Operating Partnership in connection with investigating
or defending any such action or claim as such
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expenses are incurred;
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against
the indemnifying party under such subsection, notify the indemnifying party
in writing of the commencement thereof; but the omission to notify the
indemnifying party shall not relieve it from any liability which it may have
to any indemnified party otherwise than under such subsection. In case any
such action shall be brought against any indemnified party and it shall
notify the indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
shall wish, jointly with any other indemnifying party similarly notified, to
assume the defense thereof, with counsel satisfactory to such indemnified
party (who shall not, except with the consent of the indemnified party, be
counsel to the indemnifying party), and, after notice from the indemnifying
party to such indemnified party of its election to assume the defense
thereof, the indemnifying party shall not be liable to such indemnified party
under such subsection for any legal expenses of other counsel or any other
expenses, in each case subsequently incurred by such indemnified party, in
connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of
the indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action
or claim in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include any
statement as to or an admission of fault, culpability or a failure to act, by
or on behalf of any indemnified party;
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Trust and the Operating
Partnership on the one hand and the Underwriters of the Designated Shares on
the other from the offering of the Designated Shares to which such loss,
claim, damage or liability (or action in respect thereof) relates. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party
shall contribute to such amount paid or payable by such indemnified party in
such proportion as is appropriate to reflect not only such relative benefits
but also the relative fault of the Trust and the Operating Partnership on the
one hand and the Underwriters of the Designated Shares on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as
any other relevant equitable considerations. The relative benefits received
by the Trust and the Operating Partnership on the one hand and such
Underwriters on the other shall be deemed to be in the same proportion as the
total net proceeds from such offering (before deducting expenses) received by
the Trust bear to the total underwriting discounts and commissions received
by such Underwriters. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust or the Operating Partnership on
the one hand or such Underwriters on the other and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Trust, the Operating Partnership and
the Underwriters agree that it would not be just and equitable if
contributions
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pursuant to this subsection (d) were determined by pro rata allocation (even
if the Underwriters were treated as one entity for such purpose) or by any
other method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the applicable Designated Shares underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The obligations of the Underwriters of
Designated Shares in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations with respect to such
Shares and not joint; and
(e) The obligations of the Trust and the Operating Partnership
under this Section 8 shall be in addition to any liability which the Trust or
the Operating Partnership may otherwise have and shall extend, upon the same
terms and conditions, to each officer, director or partner of any Underwriter
and to each person, if any, who controls any Underwriter within the meaning
of the Act; and the obligations of the Underwriters under this Section 8
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and trustee of the Trust and to each person, if any, who controls the
Trust within the meaning of the Act.
9. (a) If any Underwriter shall default in its obligation
to purchase the Firm Shares or Optional Shares which it has agreed to
purchase under the Pricing Agreement relating to such Shares, the
Representatives may in their discretion arrange for themselves or another
party or other parties to purchase such Shares on the terms contained herein.
If within thirty-six hours after such default by any Underwriter the
Representatives do not arrange for the purchase of such Firm Shares or
Optional Shares, as the case may be, then the Trust shall be entitled to a
further period of thirty-six hours within which to procure another party or
other parties satisfactory to the Representatives to purchase such Shares on
such terms. In the event that, within the respective prescribed period, the
Representatives notify the Trust that they have so arranged for the purchase
of such Shares, or the Trust notifies the Representatives that it has so
arranged for the purchase of such Shares, the Representatives or the Trust
shall have the right to postpone the Time of Delivery for such Shares for a
period of not more than seven days, in order to effect whatever changes may
thereby be made necessary in the Registration Statement or the Prospectus as
amended or supplemented, or in any other documents or arrangements, and the
Trust agrees to file promptly any amendments or supplements to the
Registration Statement or the Prospectus which in the opinion of the
Representatives may thereby be made necessary. The term "Underwriter" as used
in this Agreement shall include any person substituted under this Section
with like effect as if such person had originally been a party to the Pricing
Agreement with respect to such Designated Shares;
(b) If, after giving effect to any arrangements for the purchase of
the Firm Shares or Optional Shares, as the case may be, of a defaulting
Underwriter or Underwriters by the Representatives and the Trust as provided
in subsection (a) above, the aggregate number of such Shares which remains
unpurchased does not exceed one-eleventh of the aggregate number of the Firm
Shares or Optional Shares, as the case may be, to be purchased at the
respective Time of Delivery, then the Trust shall have the right to require
each non-defaulting Underwriter to
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purchase the number of Firm Shares or Optional Shares, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement
relating to such Designated Shares and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
number of Firm Shares or Optional Shares, as the case may be, which such
Underwriter agreed to purchase under such Pricing Agreement) of the Firm
Shares or Optional Shares, as the case may be, of such defaulting Underwriter
or Underwriters for which such arrangements have not been made; but nothing
herein shall relieve a defaulting Underwriter from liability for its default;
and
(c) If, after giving effect to any arrangements for the
purchase of the Firm Shares or Optional Shares, as the case may be, of a
defaulting Underwriter or Underwriters by the Representatives and the Trust
as provided in subsection (a) above, the aggregate number of Firm Shares or
Optional Shares, as the case may be, which remains unpurchased exceeds
one-eleventh of the aggregate number of the Firm Shares or Optional Shares,
as the case may be, to be purchased at the respective Time of Delivery, as
referred to in subsection (b) above, or if the Trust shall not exercise the
right described in subsection (b) above to require non-defaulting
Underwriters to purchase Firm Shares or Optional Shares, as the case may be,
of a defaulting Underwriter or Underwriters, then the Pricing Agreement
relating to such Firm Shares or the Over-allotment Option relating to such
Optional Shares, as the case may be, shall thereupon terminate, without
liability on the part of any non-defaulting Underwriter or the Trust, except
for the expenses to be borne by the Trust and the Underwriters as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from
liability for its default.
10. The respective indemnities, agreements. representations,
warranties and other statements of the Trust, the Operating Partnership and
the several Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain in
full force and effect, regardless of any investigation (or any statement as
to the results thereof) made by or on behalf of any Underwriter or any
officer, director or partner or controlling person of any Underwriter, or the
Trust or the Operating Partnership, or any officer or director or each
controlling person who controls the Trust or the Operating Partnership, and
shall survive delivery of and payment for the Shares.
11. If any Pricing Agreement or Over-allotment Option shall be
terminated pursuant to Section 9 hereof, neither the Trust nor the Operating
Partnership shall then be under any liability to any Underwriter with respect
to the Firm Shares or Optional Shares with respect to which such Pricing
Agreement shall have been terminated except as provided in Sections 6 and 8
hereof; but, if for any other reason, Designated Shares are not delivered by
or on behalf of the Trust as provided herein, the Trust and the Operating
Partnership will reimburse the Underwriters through the Representatives for
all reasonable out-of-pocket expenses approved in writing by the
Representatives, including reasonable fees and disbursements of counsel,
incurred by the Underwriters in making preparations for the purchase, sale
and delivery of such Designated Shares, but the Trust and the Operating
Partnership shall then be under no further liability to any Underwriter with
respect to such Designated Shares except as provided in Sections 6 and 8
hereof.
12. In all dealings hereunder, the Representatives of the
Underwriters of Designated Shares shall act on behalf of each of such
Underwriters, and the parties hereto shall be entitled to act and rely upon
any statement, request, notice or agreement on behalf of any Underwriter made
or given by such Representatives jointly or by such of the Representatives,
if any, as may be designated for such purpose in the Pricing Agreement. All
statements, requests, notices and agreements hereunder shall be in writing,
and if to the
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Underwriters shall be delivered or sent by mail, telex or facsimile
transmission to the address of the Representatives as set forth in the
Pricing Agreement; and if to the Trust or the Operating Partnership shall be
delivered or sent by mail, telex or facsimile transmission to the address of
the Trust set forth in the Registration Statement, Attention: Chief Executive
Officer; provided, however, that any notice to an Underwriter pursuant to
Section 8(c) hereof shall be delivered or sent by mail, telex or facsimile
transmission to such Underwriter at its address set forth in its
Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Trust by the Representatives upon request.
Any such statements, requests, notices or agreements shall take effect upon
receipt thereof.
13. This Agreement and each Pricing Agreement shall be binding
upon, and inure solely to the benefit of, the Underwriters, the Trust, the
Operating Partnership and, to the extent provided in Sections 8 and 10
hereof, the officers and trustees of the Trust, the officers, directors and
partners of any Underwriters and each person who controls the Trust or any
Underwriter, and their respective heirs, executors, administrators,
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement or any such Pricing Agreement. No
purchaser of any of the Shares from any Underwriter shall be deemed a
successor or assign by reason merely of such purchase.
14. Time shall be of the essence of each Pricing Agreement. As
used herein, the term "business day" shall mean any day when the Commission's
office in Washington, D.C. is open for business.
15. This Agreement and each Pricing Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
16. This Agreement and each Pricing Agreement may be executed
by any one or more of the parties hereto and thereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
respective counterparts shall together constitute one and the same instrument.
19
<PAGE>
17. The Trust's First Amended and Restated Declaration of
Trust, dated June 24, 1993, a copy of which is duly filed with the Department
of Assessments and Taxation of the State of Maryland, provides that no
trustee, officer, shareholder, employee or agent of the Trust shall be held
to any personal liability, jointly or severally, for any obligation of or
claim against the Trust. All persons dealing with the Trust in any way shall
look only to the assets of the Trust for the payment of any sum or the
performance of any obligation.
Very truly yours,
THE TOWN AND COUNTRY TRUST
By:
------------------------------------
Name:
Title:
THE TC OPERATING LIMITED PARTNERSHIP
By: The Town and Country Trust,
its General Partner
By:
----------------------------
Name:
Title:
20
<PAGE>
ANNEX I
PRICING AGREEMENT
[Names of Representative(s)]
As Representatives of the Several Underwriters
named in Schedule I hereto,
[c/o
---------------------------------
- -------------------------------------
- -------------------------------------]
Dear Sirs:
The Town and Country Trust, a Maryland real estate investment trust
(the "Trust") and a general partner of The TC Operating Limited Partnership
(the "Operating Partnership"), proposes subject to the terms and conditions
stated herein and in the Underwriting Agreement, dated __________________,
relating to the Trust's Preferred Shares of Beneficial Interest, par value
$.01 per share (the "Underwriting Agreement"), to issue and sell to the
Underwriters named in Schedule I hereto (the "Underwriters") the Shares
specified in Schedule II hereto (the "Designated Shares"
[consisting of Firm Shares and any Optional Shares the Underwriters may elect
to purchase]). Each of the provisions of the Underwriting Agreement is
incorporated herein by reference in its entirety, and shall be deemed to be a
part of this Agreement to the same extent as if such provisions had been set
forth in full herein; and each of the representations and warranties set
forth therein shall be deemed to have been made at and as of the date of this
Pricing Agreement, except that each representation and warranty which refers
to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed
to be a representation or warranty as of the date of the Underwriting
Agreement in relation to the Prospectus (as therein defined), and also a
representation and warranty as of the date of this Pricing Agreement in
relation to the Prospectus as amended or supplemented relating to the
Designated Shares which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer
to you. Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Representatives designated
to act on behalf of the Representatives and on behalf of each of the
Underwriters of the Designated Shares pursuant to Section 12 of the
Underwriting Agreement and the address of the Representatives referred to in
such Section 12 are set forth in Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Shares, in the form
heretofore delivered to you is now proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, [(a)] the Trust agrees
to issue and sell to each of the Underwriters, and each of the Underwriters
agrees, severally and not jointly, to purchase from the Trust, at the time and
place and at the purchase price to the Underwriters set forth in Schedule II
hereto, the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule I hereto [and, (b) in the event and to the extent that
the Underwriters shall exercise the election to purchase Optional Shares, as
provided below, the Trust agrees to issue and sell to each of the Underwriters,
and each of the Underwriters agrees, severally and not jointly, to purchase from
the Trust at the purchase price to the Underwriters set forth in Schedule II
hereto that portion of the
1--
<PAGE>
number of Optional Shares as to which such election shall have been exercised].
[The Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Shares set forth
opposite the name of such Underwriter in Schedule I hereto on the terms referred
to in the paragraph above for the sole purpose of covering overallotments in the
sale of the Firm Shares. Any such election to purchase Optional Shares may be
exercised by written notice from the Representatives to the Trust given within a
period of 30 calendar days after the date of this Pricing Agreement, setting
forth the aggregate number of Optional Shares to be purchased and the date on
which such Optional Shares are to be delivered, as determined by the
Representatives but in no event earlier than the First Time of Delivery or,
unless the Representatives and the Trust otherwise agree in writing, no earlier
than two or later than ten business days after the date of such notice.]
If the foregoing is in accordance with your understanding, please sign
and return to us [one for the Trust, one for the Operating Partnership and one
for each of the Representatives plus one for each counsel] counterparts hereof,
and upon acceptance hereof by you, on behalf of each of the Underwriters, this
letter and such acceptance hereof, including the provisions of the Underwriting
Agreement incorporated herein by reference, shall constitute a binding agreement
between each of the Underwriters and the Trust. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement Among Underwriters,
the form of which shall be submitted to the Trust for examination upon request,
but without warranty on the part of the Representatives as to the authority of
the signers thereof.
The Trust's First Amended and Restated Declaration of Trust, dated June
24, 1993, a copy of which is duly filed with the Department of Assessments and
Taxation of the State of Maryland, provides that no trustee, officer,
shareholder, employee or agent of the Trust shall be held to any personal
liability, jointly or severally, for any obligation of or claim against the
Trust. All persons dealing with the Trust in any way shall look only to the
assets of the Trust for the payment of any sum or the performance of any
obligation.
Very truly yours,
THE TOWN AND COUNTRY TRUST
By:
------------------------------
Name:
Accepted as of the date hereof: Title:
Name(s) of Representative(s) THE TC OPERATING LIMITED PARTNERSHIP
By: By: The Town and Country Trust,
------------------------------- its General Partner
Name:
Title: By:
-------------------------------
Name:
Title:
2--
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
[Maximum Number
Number of of Optional
[Firm] Shares Shares Which
UNDERWRITER to be Purchased May be Purchased]
----------- --------------- -----------------
<S> <C> <C>
[Names of Underwriters]...........................
[Total.............................. -------------------
-------------------]
</TABLE>
<PAGE>
SCHEDULE II
TITLE OF DESIGNATED SHARES:
Preferred Shares of Beneficial Interest, par value $.01 per share
DATE OF BOARD RESOLUTION ESTABLISHING THE DESIGNATED SHARES:
- ---------------------, ---------
NUMBER OF DESIGNATED SHARES:
Number of Firm Shares:
Maximum Number of Optional Shares:
INITIAL OFFERING PRICE TO PUBLIC:
[$__________ Per Share]
PURCHASE PRICE BY UNDERWRITERS:
[$__________ Per Share]
[COMMISSION PAYABLE TO UNDERWRITERS:
$________ per Share in [specify same form of funds as in Specified Funds
below]]
FORM OF DESIGNATED SHARES:
Definitive form, to be made available for checking [and packaging] at
least twenty-four hours prior to the Time of Delivery at the office of
[The Depository Trust Company or its designated custodian] [the
Representatives]
[Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated
custodian, to be made available for checking by the Representatives at
least twenty-four hours prior to the Time of Delivery at the office of
DTC.]
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
Federal (same-day) funds.
DIVIDEND RATE:
[______% per annum]
<PAGE>
DIVIDEND PAYMENT DATES:
[months and dates]
DIVIDEND RIGHTS:
[Non-]cumulative
VOTING RIGHTS:
LIQUIDATION RIGHTS:
PREEMPTIVE AND CONVERSION RIGHTS:
REDEMPTION PROVISIONS:
[No provisions for redemption]
[The Designated Shares may be redeemed, [otherwise than through a
mandatory redemption,] in whole or in part at the option of the Trust,
on or after _____________, _____ at the following redemption prices:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
---- ----------
<S> <C>
</TABLE>
and thereafter at $ ______ per share, together in each case with
accrued dividends to the redemption date.]
[On any dividend payment date falling on or after ______________,_____,
at the election of the Trust, at a redemption price equal to the stated
amount thereof, plus accrued dividends to the date of redemption.]
[Other possible redemption provisions, such as mandatory redemption
upon occurrence of certain events or redemption for changes in tax law]
MANDATORY REDEMPTION PROVISIONS
[None]
[The Designated Shares are entitled to the benefit of a mandatory
redemption to retire _____ Designated Shares on __________ in each
of the years _____ through _____ at 100% of their stated amount plus
accrued dividends] [, together with [cumulative] [non-cumulative]
redemptions at the option of the Trust to retire an additional
_______ Designated Shares in the years _____ through ______ at 100%
of their stated amounts plus accrued dividends.]
TIME OF DELIVERY:
______________ A.M. (New York City time) [specify date]
<PAGE>
CLOSING LOCATION:
NAMES AND ADDRESSES OF REPRESENTATIVES:
Designated Representatives:
Address for Notices, etc.:
[other persons subject to Section 5(e) lockup]
[OTHER TERMS]
<PAGE>
ANNEX II
Pursuant to Section 7(d) of the Underwriting Agreement, the
accountants shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants
with respect to the Trust and its subsidiaries within the meaning of
the Act and the applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if
applicable, prospective financial statements and/or pro forma financial
information examined) by them and included or incorporated by reference
in the Registration Statement or the Prospectus comply as to form in
all material respects with the applicable accounting requirements of
the Act or the Exchange Act, as applicable, and the related published
rules and regulations thereunder; and, if applicable, they have made a
review in accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated interim
financial statements, selected financial data, pro forma financial
information, prospective financial statements and/or condensed
financial statements derived from audited financial statements of the
Trust for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been [separately] furnished to
the representatives of the Underwriters (the "Representatives") [and
are attached hereto];
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants
of the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included in the Trust's quarterly
reports on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon copies of which [have been
separately furnished to the Representatives] [are attached hereto]; and
on the basis of specified procedures including inquiries of officials
of the Trust who have responsibility for financial and accounting
matters regarding whether the unaudited condensed consolidated
financial statements referred to in paragraph (vi)(A) below comply as
to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them
to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act and
the related published rules and regulations;
(iv) The unaudited selected financial information with
respect to the consolidated results of operations and financial
position of the Trust for the five most recent fiscal years included in
the Prospectus and included or incorporated by reference in Item 6 of
the Trust's Annual Report on Form 10-K for the most recent fiscal year
agrees with the corresponding amounts (after restatement where
applicable) in the audited consolidated financial statements for such
five fiscal years which were included or incorporated by reference in
the Trust's Annual Reports on Form 10-K for such fiscal years;
(v) They have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation
S-K and on the basis of limited procedures specified in such letter
nothing came to their attention as a result of the
2--
<PAGE>
foregoing procedures that caused them to believe that this information
does not conform in all material respects with the disclosure
requirements of items 301, 302, 402 and 503(d), respectively, of
Regulation S-K;
(vi) On the basis of limited procedures, not constituting
an audit in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available
interim financial statements of the Trust and its subsidiaries,
inspection of the minute books of the Trust and its subsidiaries since
the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of officials of
the Trust and its subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in
such letter, nothing came to their attention that caused them to
believe that:
(A) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus and/or included or incorporated by reference in
the Trust's Quarterly Reports on Form 10-Q incorporated by reference in the
Prospectus do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act and the related
published rules and regulations thereunder or are not in conformity with
generally accepted accounting principles applied on a basis substantially
consistent with the basis for the audited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus or included or incorporated by reference in the
Trust's Annual Report on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and
balance sheet items included in the Prospectus do not agree with the
corresponding items in the unaudited consolidated financial statements from
which such data and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the basis for
the corresponding amounts in the audited consolidated financial statements
included or incorporated by reference in the Trust's Annual Report on Form
10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not
included in the Prospectus but from which were derived the unaudited
condensed financial statements referred to in clause (A) and any unaudited
income statement data and balance sheet items included in the Prospectus and
referred to in clause (B) were not determined on a basis substantially
consistent with the basis for the audited financial statements included or
incorporated by reference in the Trust's Annual Report on Form 10-K for the
most recent fiscal year;
(D) any unaudited pro forma consolidated condensed
financial statements included or incorporated by reference in the Prospectus
do not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and regulations
thereunder or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days
prior to the date of such letter, there have been any changes in the
consolidated beneficial interests (other than issuances of beneficial
interests upon exercise of options which were outstanding on the date of the
latest balance sheet included or incorporated by reference in the Prospectus)
or any increase in the consolidated long-term debt of the Trust and its
subsidiaries, or any decreases in consolidated net current assets or net
assets or other items reasonably specified by the Representatives, or any
3--
<PAGE>
increases in any items specified by the Representatives, in each case as
compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter; and
(F) For the period from the date of the latest
financial statements included or incorporated by reference in the Prospectus
to the specified date referred to in Clause (E) there were any decreases in
consolidated net revenues or operating profit or the total or per share
amounts of consolidated net income or other items reasonably specified by the
Representatives, or any increases in any items reasonably specified by the
Representatives, in each case as compared with the comparable period of the
preceding year and with any other period of corresponding length specified by
the Representatives, except in each case for increases or decreases which the
Prospectus discloses have occurred or may occur or which are described in
such letter; and
(vii) In addition to the audit referred to in their
report(s) included or incorporated by reference in the Prospectus and
the limited procedures, inspection of minute books, inquiries and other
procedures referred to in paragraphs (iii) and (vi) above, they have
carried out certain specified procedures, not constituting an audit in
accordance with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records
of the Trust and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference) or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the
Prospectus specified by the Representatives, and have compared certain
of such amounts, percentages and financial information with the
accounting records of the Trust and its subsidiaries and have found
them to be in agreement.
All references in this Annex II to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Underwriting Agreement as of the date of
the letter delivered on the date of the Pricing Agreement for purposes of such
letter and to the Prospectus as amended or supplemented (including the documents
incorporated by reference therein) in relation to the applicable Designated
Shares for purposes of the letter delivered at the Time of Delivery for such
Designated Shares.
4--
<PAGE>
EXHIBIT 4.1
THE TOWN AND COUNTRY TRUST
----------------------------------------,
as Depositary
AND
THE HOLDERS FROM TIME TO TIME OF
THE DEPOSITARY RECEIPTS DESCRIBED HEREIN
------------------------
DEPOSIT AGREEMENT
------------------------
Dated as of
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Definitions.................................................................................... 1
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF SHARES,
EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. Form and Transfer of Receipts....................................... 2
SECTION 2.02. Deposit of Stock; Execution and Delivery
of Receipts in Respect Thereof...................................... 3
SECTION 2.03. Registration of Transfer of Receipts................................ 4
SECTION 2.04. Split-ups and Combinations of Receipts;
Surrender of Receipts and Withdrawal of Shares...................... 4
SECTION 2.05. Limitations on Execution and Delivery, Transfer,
Surrender and Exchange of Receipts.................................. 5
SECTION 2.06. Lost Receipts, etc.................................................. 5
SECTION 2.07. Cancellation and Destruction of Surrendered
Receipts............................................................ 5
SECTION 2.08. Redemption of Shares................................................ 5
SECTION 2.09. Excess Depositary Shares............................................ 6
ARTICLE III
CERTAIN OBLIGATIONS OF
HOLDERS OF RECEIPTS AND THE COMPANY
SECTION 3.01. Filing Proofs, Certificates and Other Information................... 8
SECTION 3.02. Payment of Taxes or Other Governmental Charges...................... 8
SECTION 3.03. Warranty as to Shares............................................... 8
<PAGE>
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.01. Cash Distributions....................................................8
SECTION 4.02. Distributions Other than Cash, Rights, Preferences
or Privileges.........................................................9
SECTION 4.03. Subscription Rights, Preferences or Privileges........................9
SECTION 4.04. Notice of Dividends, etc.; Fixing Record Date for
Holders of Receipts...................................................10
SECTION 4.05. Voting Rights.........................................................10
SECTION 4.06. Changes Affecting Deposited Securities and
Reclassifications, Recapitalizations, etc.............................10
SECTION 4.07. Delivery of Reports...................................................11
SECTION 4.08. Lists of Receipt Holders..............................................11
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S
AGENTS, THE REGISTRAR AND THE TRUST
SECTION 5.01. Maintenance of Offices, Agencies and Transfer
Books by the Depositary; Registrar................................... 11
SECTION 5.02. Prevention of or Delay in Performance by the
Depositary, the Depositary's Agents, the Registrar
or the Trust..........................................................12
SECTION 5.03. Obligation of the Depositary, the Depositary's Agents,
the Registrar and the Trust...........................................12
SECTION 5.04. Resignation and Removal of the Depositary;
Appointment of Successor Depositary...................................13
SECTION 5.05. Corporate Notices and Reports.........................................14
SECTION 5.06. Indemnification by the Trust..........................................15
SECTION 5.07. Charges and Expenses..................................................15
SECTION 5.08. Tax Compliance........................................................15
<PAGE>
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment.............................................................15
SECTION 6.02. Termination...........................................................16
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts..........................................................16
SECTION 7.02. Exclusive Benefit of Parties..........................................16
SECTION 7.03. Invalidity of Provisions..............................................17
SECTION 7.04. Notices...............................................................17
SECTION 7.05. Appointment of Registrar..............................................17
SECTION 7.06. Holders of Receipts Are Parties.......................................18
SECTION 7.07. Governing Law.........................................................18
SECTION 7.08. Inspection of Deposit Agreement.......................................18
SECTION 7.09. Headings..............................................................18
SECTION 7.10. Trust Disclaimer......................................................18
FORM OF DEPOSITARY SHARES
Form of Face of Receipt..........................................................................A-1
Form of Reverse of Receipt.......................................................................A-3
</TABLE>
<PAGE>
DEPOSIT AGREEMENT, dated as of __________,_____ , among The Town and
Country Trust, a Maryland real estate investment trust, and its successors
(the "Trust"), ___________________ (the "Depositary"), and the holders from
time to time of the Receipts described herein.
WHEREAS, it is desired to provide, as hereinafter set forth in this
Deposit Agreement, for the deposit of [TITLE OF PREFERRED SHARES] of the Trust
with the Depositary for the purposes set forth in this Deposit Agreement and for
the issuance hereunder of Receipts evidencing Depositary Shares in respect of
the Shares so deposited; and
WHEREAS, the Receipts are to be substantially in the form of Exhibit A
annexed hereto, with appropriate insertions, modifications and omissions, as
hereinafter provided in this Deposit Agreement;
NOW, THEREFORE, in consideration of the promises contained herein, the
parties hereto agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall, for all purposes, unless otherwise
indicated, apply to the respective terms used in this Deposit Agreement:
"Articles" shall mean the Articles Supplementary filed with the
Maryland Department of Taxation and Assessments establishing the Shares as a
series of preferred stock of the Trust as such may be amended from time to time
in accordance with its terms.
"Deposit Agreement" shall mean this Deposit Agreement, as amended or
supplemented from time to time.
"Depositary" shall mean________________________and any successor as
Depositary hereunder.
"Depositary Shares" shall mean the depositary shares provided for
herein, each representing _____ of a Share evidenced by a Receipt.
"Depositary's Agent" shall mean an agent appointed by the Depositary
pursuant to Section 5.01 and shall include the Registrar if such Registrar is
not the Depositary.
"Depositary's Office" shall mean the principal office of the Depositary
at ___________, which at any particular time its depositary receipt business
shall be administered.
"Receipt" shall mean one of the Depositary Receipts, substantially in
the form set forth as Exhibit A hereto, issued hereunder, whether in definitive
or temporary form and evidencing the number of Depositary Shares held of record
by the record holder of such Depositary Shares.
"record holder" or "holder" as applied to a Receipt shall mean the
person in whose name a Receipt is registered on the books of the Depositary or
any register of any Registrar maintained for such purpose.
-1-
<PAGE>
"Registrar" shall mean the Depositary or such other bank or trust
company which shall be appointed to register ownership and transfers of Receipts
as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shares" shall mean the Trust's____% Preferred Shares of Beneficial
Interest, $_______ liquidation value per share.
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF SHARES,
EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND REDEMPTION OF RECEIPTS
SECTION 2.01. FORM AND TRANSFER OF RECEIPTS. Definitive Receipts shall
be engraved or printed or lithographed on steel-engraved borders, with
appropriate insertions, modifications and omissions, as hereinafter provided, if
required by any securities exchange on which the Receipts are listed. Pending
the preparation of definitive Receipts or if definitive Receipts are not
required by any securities exchange on which the Receipts are listed, the
Depositary, upon the written order of the Trust or any holder of Shares, as the
case may be, delivered in compliance with Section 2.02, shall execute and
deliver temporary Receipts which are printed, lithographed, typewritten,
mimeographed or otherwise substantially of the tenor of the definitive Receipts
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the persons executing such
Receipts may determine, as evidenced by their execution of such Receipts. If
temporary Receipts are issued, the Trust and the Depositary will cause
definitive Receipts to be prepared without unreasonable delay. After the
preparation of definitive Receipts, the temporary Receipts shall be exchangeable
for definitive Receipts upon surrender of the temporary Receipts at the
Depositary's Office or at such other place or places as the Depositary shall
determine, without charge to the holder. Upon surrender for cancellation of any
one or more temporary Receipts, the Depositary shall execute and deliver in
exchange therefor definitive Receipts representing the same number of Depositary
Shares as represented by the surrendered temporary Receipt or Receipts
registered in the name of the holder of the temporary Receipt. Such exchange
shall be made at the Trust's expense and without any charge to the holder
therefor. Until so exchanged, the temporary Receipts shall in all respects be
entitled to the same benefits under this Agreement, and with respect to the
Shares, as definitive Receipts.
Receipts shall be executed by the Depositary by the manual
signature of a duly authorized officer of the Depositary; PROVIDED that such
signature may be a facsimile if a Registrar for the Receipts (other than the
Depositary) shall have been appointed and such Receipts are countersigned by a
manual signature of a duly authorized officer of the Registrar. No Receipt shall
be entitled to any benefits under this Deposit Agreement or be valid or
obligatory for any purpose unless it shall have been executed manually by a duly
authorized officer of the Depositary or, if a Registrar for the Receipts (other
than the Depositary) shall have been appointed, by manual or facsimile signature
of a duly authorized officer of the Depositary and countersigned, manually, by a
duly authorized officer of such Registrar. The Depositary shall record on its
books each Receipt so signed and delivered as hereinafter provided. The manual
or facsimile signatures of individuals who were at any time authorized
signatories of the Depositary or the Registrar, as the case may be, shall
constitute adequate signatures hereunder, notwithstanding that such individuals
or any of them have ceased to hold such offices prior to the delivery of
Receipts bearing such signatures or did not hold such office on the date of
delivery of such Receipts.
-2-
<PAGE>
Receipts shall be in denominations of any number of whole
Depositary Shares. The Trust shall deliver to the Depositary from time to time
such quantities of blank Receipts as the Depositary may request to enable the
Depositary to perform its obligations under this Deposit Agreement.
Receipts may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Deposit Agreement as may be required by the Depositary or required to
comply with any applicable law or any regulation thereunder or with the rules
and regulations of any securities exchange upon which the Shares, the Depositary
Shares or the Receipts may be listed or to conform with any usage with respect
thereto, or to indicate any special limitations or restrictions to which any
particular Receipts are subject.
Title to any Receipt and to the Depositary Shares evidenced
by a Receipt, which is properly endorsed or accompanied by a properly executed
instrument of transfer, shall be transferable by delivery with the same effect
as in the case of a negotiable instrument; PROVIDED, HOWEVER, that until
transfer of a Receipt shall be registered on the books of the Depositary as
provided in Section 2.03, the Depositary may, notwithstanding any notice to the
contrary, treat the record holder thereof at such time as the absolute owner
thereof for the purpose of determining the person entitled to distributions of
dividends or other distributions or to any notice provided for in this Deposit
Agreement and for all other purposes.
The Depositary shall not lend any Shares deposited hereunder.
SECTION 2.02. DEPOSIT OF SHARES; EXECUTION AND DELIVERY OF
RECEIPTS IN RESPECT THEREOF. Subject to the terms and conditions of this Deposit
Agreement, the Trust or any holder of Shares may from time to time deposit
Shares under this Deposit Agreement by delivery to the Depositary of a
certificate or certificates for the Shares to be deposited, properly endorsed or
accompanied, if required by the Depositary, by a duly executed instrument of
transfer or endorsement in form satisfactory to the Depositary, together with
all such certifications as may be required by the Depositary in accordance with
the provisions of this Deposit Agreement, and together with a written order of
the Trust or such holder, as the case may be, directing the Depositary to
execute and deliver to, or upon the written order of, the person or persons
stated in such order a Receipt or Receipts for the number of Depositary Shares
representing such deposited Shares.
Deposited Shares shall be held by the Depositary at the
Depositary's Office or at such other place or places as the Depositary shall
determine.
If required by the Depositary, Shares presented for deposit at
any time (except for the initial deposit of Shares and any subsequent deposit by
the Trust), whether or not the register of shareholders of the Trust is closed,
shall also be accompanied by an agreement or assignment, or other instrument
satisfactory to the Depositary, that will provide for the prompt transfer to the
Depositary or its nominee of any dividend or right to subscribe for additional
shares or to receive other property that any person in whose name the Shares is
or has been registered may thereafter receive upon or in respect of such
deposited Shares, or in lieu thereof such agreement of indemnity or other
agreement as shall be satisfactory to the Depositary.
Upon receipt by the Depositary of a certificate or
certificates for Shares deposited in accordance with the provisions of this
Section, together with the other documents required as above specified, and upon
recordation of the Shares on the books of the Trust in the name of the
Depositary or its nominee, the Depositary, subject to the terms and conditions
of this Deposit Agreement, shall execute and deliver, to or upon the order of
the person or persons named in the written order
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delivered to the Depositary referred to in the first paragraph of this Section,
a Receipt or Receipts for the whole number of Depositary Shares representing the
Shares so deposited and registered in such name or names as may be requested by
such person or persons. The Depositary shall execute and deliver such Receipt or
Receipts at the Depositary's Office or such other offices, if any, as the
Depositary may designate. Delivery at other offices shall be at the risk and
expense of the person requesting such delivery.
SECTION 2.03. REGISTRATION OF TRANSFER OF RECEIPTS. Subject
to the terms and conditions of this Deposit Agreement, the Depositary shall
register on its books from time to time transfers of Receipts upon any surrender
thereof by the holder in person or by duly authorized attorney, properly
endorsed or accompanied by a properly executed instrument of transfer together
with evidence of the payment of any transfer taxes as may be required by law.
Thereupon, the Depositary shall execute a new Receipt or Receipts evidencing the
same aggregate number of Depositary Shares as those evidenced by the Receipt or
Receipts surrendered and deliver such new Receipt or Receipts to or upon the
order of the person entitled thereto.
SECTION 2.04. SPLIT-UPS AND COMBINATIONS OF RECEIPTS;
SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES. Upon surrender of a Receipt or
Receipts at the Depositary's office or at such other offices as it may designate
for the purpose of effecting a split-up or combination of such Receipt or
Receipts, and subject to the terms and conditions of this Deposit Agreement, the
Depositary shall execute and deliver a new Receipt or Receipts in the authorized
denomination or denominations requested, evidencing the aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered, provided,
however, that the Depositary shall not issue any Receipt evidencing a fractional
Depositary Share.
Any holder of a Receipt or Receipts representing any number of
whole Shares may (unless the related Depositary Shares have previously been
called for redemption) withdraw the Shares and all money and other property, if
any, represented thereby by surrendering such Receipt or Receipts, at the
Depositary's Office or at such other offices as the Depositary may designate for
such withdrawals. Thereafter, without unreasonable delay, the Depositary shall
deliver to such holder or to the person or persons designated by such holder as
hereinafter provided, the number of whole Shares and all money and other
property, if any, represented by the Receipt or Receipts so surrendered for
withdrawal, but holders of such whole Shares will not thereafter be entitled to
deposit such Shares hereunder or to receive Depositary Shares therefor. If a
Receipt delivered by the holder to the Depositary in connection with such
withdrawal shall evidence a number of Depositary Shares in excess of the number
of Depositary Shares representing the number of whole Shares to be so withdrawn,
the Depositary shall at the same time, in addition to such number of whole
shares of Shares and such money and other property, if any, to be so withdrawn,
deliver to such holder, or upon his order, a new Receipt evidencing such excess
number of Depositary Shares, provided, however, that the Depositary shall not
issue any Receipt evidencing a fractional Depositary Share. Delivery of the
Shares and money and other property being withdrawn may be made by the delivery
of such certificates, documents of title and other instruments as the Depositary
may deem appropriate which, if required by the Depositary shall be properly
endorsed or accompanied by proper instruments of transfer.
If the Shares and the money and other property being
withdrawn are to be delivered to a person or persons other than the record
holder of the Receipt or Receipts being surrendered for withdrawal of Shares,
such holders shall execute and deliver to the Depositary a written order so
directing the Depositary and the Depositary may require that the Receipt or
Receipts surrendered by such holder for withdrawal of such Shares be properly
endorsed in blank or accompanied by a properly executed instrument of transfer.
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Delivery of the Shares and the money and other property, if
any, represented by Receipts surrendered for withdrawal shall be made by the
Depositary at the Depositary's Office, except that, at the request, risk and
expense of the holder surrendering such Receipt or Receipts and for the account
of the holder thereof, such delivery may be made at such other place as may be
designated by such holder.
SECTION 2.05. LIMITATIONS ON EXECUTION AND DELIVERY, TRANSFER,
SURRENDER AND EXCHANGE OF RECEIPTS. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination, surrender or
exchange of any Receipt, the Depositary, any of the Depositary's Agents or the
Trust may require payment to it of a sum sufficient for the payment (or, in the
event that the Depositary or the Trust shall have made such payment, the
reimbursement to it) of any charges or expenses payable by the holder of a
Receipt pursuant to Sections 3.02 and 5.07, may require the production of
evidence satisfactory to it as to the identity and genuineness of any signature
and may also require compliance with such regulations, if any, as the Depositary
or the Trust may establish consistent with the provisions of this Deposit
Agreement.
The deposit of Shares may be refused, the delivery of
Receipts against Shares may be suspended, the registration of transfer of
Receipts may be refused and the registration of transfer, surrender, exchange,
split-up or combination of outstanding Receipts may be suspended (i) during any
period when the register of Shareholders of the Trust is closed or (ii) if any
such action is deemed necessary or advisable by the Depositary, any of the
Depositary's Agents or the Trust at any time or from time to time because of any
requirement of law or of any government or governmental body or commission or
under any provision of this Deposit Agreement.
SECTION 2.06. LOST RECEIPTS, ETC. In case any Receipt shall
be mutilated, destroyed, lost or stolen, the Depositary in its discretion may
execute and deliver a Receipt of like form and tenor in exchange and
substitution for such mutilated Receipt, or in lieu of and in substitution for
such mutilated, destroyed, lost or stolen Receipt, upon (i) the filing by the
holder thereof with the Depositary of evidence satisfactory to the Depositary of
such mutilation, destruction or loss or theft of such Receipt, of the
authenticity thereof and of his or her ownership thereof and (ii) the furnishing
of the Depositary with reasonable indemnification satisfactory to it and (iii)
the payment of any expense (including fees, charges and expenses of the
Depositary) in connection with such execution and delivery.
SECTION 2.07. CANCELLATION AND DESTRUCTION OF SURRENDERED
RECEIPTS. All Receipts surrendered to the Depositary or any Depositary's Agent
shall be canceled by the Depositary. Except as prohibited by applicable law or
regulation, the Trust is authorized to destroy all Receipts so canceled.
SECTION 2.08. REDEMPTION OF SHARES. Whenever the Trust shall
be permitted and shall elect to redeem Shares in accordance with the provisions
of the Articles, it shall (unless otherwise agreed to in writing with the
Depositary) give or cause to be given to the Depositary not less than 40 days'
and not more than 70 days' notice of the date of such proposed redemption (the
"Redemption Date") and of the number of such Shares held by the Depositary to be
so redeemed and the applicable redemption price, as set forth in the Articles,
which notice shall be accompanied by a certificate from the Trust stating that
such redemption of Shares is in accordance with the provisions of the Articles.
On the date of such redemption, provided that the Trust shall then have paid or
caused to be paid in full to the Depositary the redemption price of the Shares
to be redeemed, plus an amount equal to any accrued and unpaid dividends thereon
to the date fixed for redemption, in accordance with the provisions of the
Articles, the Depositary shall redeem the number of
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Depositary Shares representing such Shares. The Depositary shall mail notice of
the Trust's redemption of Shares and the proposed simultaneous redemption of the
number of Depositary Shares representing the Shares to be redeemed by first
class mail, postage prepaid, not less than 30 and not more than 60 days prior to
the Redemption Date to the record holders of the Receipts evidencing the
Depositary Shares to be so redeemed, at the address of such holders as they
appear on the records of the Depositary; but neither failure to mail any such
notice of redemption of Depositary Shares to one or more such holders nor any
defect in any notice of redemption of Depositary Shares to one or more such
holders shall affect the sufficiency of the proceedings for redemption as to the
other holders. The Trust will provide the Depositary with the information
necessary for the Depositary to prepare such notice and each such notice shall
state: (i) the Redemption Date; (ii) the number of Depositary Shares to be
redeemed and, if less than all the Depositary Shares held by any such holder are
to be redeemed, the number of such Depositary Shares held by such holder to be
so redeemed; (iii) the redemption price; (iv) the place or places where Receipts
evidencing Depositary Shares are to be surrendered for payment of the redemption
price; and (v) that dividends in respect of the Shares represented by the
Depositary Shares to be redeemed will cease to accrue on such Redemption Date,
unless the Trust shall default in delivering the money or other property payable
by the Trust at the date and place specified by such notice. In case less than
all the outstanding Depositary Shares are to be redeemed, the Depositary Shares
to be so redeemed shall be selected by the Depositary by lot or pro rata (as
nearly as may be) or by any other method, in each case, as determined by the
Depositary in its sole discretion to be equitable.
Notice having been mailed by the Depositary as aforesaid, from
and after the Redemption Date (unless the Trust shall have failed to provide the
funds necessary to redeem the Shares evidenced by the Depositary Shares called
for redemption) (i) dividends on the Shares so called for redemption shall cease
to accrue from and after such date, (ii) the Depositary Shares being redeemed
from such proceeds shall be deemed no longer to be outstanding, (iii) all rights
of the holders of Receipts evidencing such Depositary Shares (except the right
to receive the redemption price) shall, to the extent of such Depositary Shares,
cease and terminate, and (iv) upon surrender in accordance with such redemption
notice of the Receipts evidencing any such Depositary Shares called for
redemption (properly endorsed or assigned for transfer, if the Depositary or
applicable law shall so require), such Depositary Shares shall be redeemed by
the Depositary at a redemption price per Depositary Share equal to one-_________
of the redemption price per share paid with respect to the Shares plus all money
and other property, if any, represented by such Depositary Shares, including all
amounts paid by the Trust in respect of dividends which on the Redemption Date
have accumulated on the Shares to be so redeemed and have not theretofore been
paid. The foregoing shall be subject further to the terms and conditions of the
Articles.
The Depositary shall not be required (a) to issue, transfer or
exchange any Receipts for a period beginning at the close of business on the day
the Trust first publicly announces the redemption of Shares and ending at the
close of business on the day the Depositary mails the notices of redemption of
Depositary Shares or (b) to transfer or exchange for another Receipt any Receipt
evidencing Depositary Shares called or being called for redemption (except, in
the case of a redemption in part, the transfer or exchange of the unredeemed
portion of such Receipt).
If fewer than all of the Depositary Shares evidenced by a
Receipt are called for redemption the Depositary will deliver to the holder of
such Receipt upon its surrender to the Depositary, together with the redemption
payment, a new Receipt evidencing the Depositary Shares evidenced by such prior
Receipt and not called for redemption.
SECTION 2.09 EXCESS DEPOSITARY SHARES. Where Shares on
deposit with the Depositary are converted into Excess Shares under the terms of
the Trust's Declaration of Trust, as
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the same may be amended or supplemented from time to time (the "Declaration of
Trust"), a corresponding number of Depositary Shares shall be converted, without
any additional act on the part of the Trust, into a separate class of Depositary
Shares to be denominated "Excess Depositary Shares". The Depositary Shares so
converted shall be those owned by the person whose ownership of Shares in excess
of the Limit caused Shares on deposit to be converted into Excess Shares. In the
event of an ambiguity in determining which Depositary Shares have been converted
into Excess Depositary Shares, the Trust shall have the authority to make the
determination. Excess Depositary Shares shall be entitled only to those
distributions on or payments received with respect to (including the proceeds
from any redemption of) the corresponding Excess Shares held by the Depositary
and the holder of such Excess Depositary Shares shall not be entitled to
exercise voting rights in respect of such Excess Depositary Shares in excess of
the voting rights associated with the corresponding Excess Shares held by the
Depositary. For purposes of applying the provisions of Article 2, Section 7 of
the Declaration of Trust, the acquisition, holding, ownership or disposition of
Depositary Shares or Excess Depositary Shares shall be treated as the
acquisition, holding, ownership or disposition, as the case may be, of Shares or
Excess Shares and shall be subject to the provisions of Article 2, Section 7 of
the Declaration of Trust in the same manner as if the Depositary Shares or
Excess Depositary Shares were Shares or Excess Shares. Terms used but not
defined in this Section 2.09 are used herein as defined for purposes of Article
2, Section 7 of the Declaration of Trust.
Each person who is a beneficial owner or constructive owner of
Depositary Shares and each person (including the owner of record) who is holding
Depositary Shares for a beneficial or constructive owner shall provide to the
Trust such information as the Trust may in good faith request in connection with
determining the Trust's status as a real estate investment trust. The Depositary
hereby agrees to transmit written statements from the Trust requesting
information with respect to the direct, beneficial and constructive ownership of
Depositary Shares to the holders of Depositary Shares and to provide the Trust
with the responses received in connection with such requests. The Depositary
also hereby agrees to provide the Trust with a list of the record holders of the
Depositary Shares and such other information concerning the direct, beneficial
and constructive ownership of Depositary Shares as the Trust may reasonably
request.
Each Receipt shall bear the following legend:
"The Town and Country Trust (the "Trust") will furnish without
charge to each receipt holder who so requests a copy of the
Deposit Agreement and a statement or summary of the
Declaration of Trust establishing the powers, designations,
preferences and relative, participating, optional or other
specified rights of the ____% Preferred Shares and each other
class of preferred shares or series thereof or other shares
which the Trust is authorized to issue and of the
qualifications, limitations or restrictions of such
preferences and/or rights. Any such request should be
addressed to The Town and Country Trust, Suite 1700, 100 S.
Charles Street, Baltimore, Maryland 21201; Attention:
President.
This Receipt, the Depositary Shares and the Shares are
subject to restrictions on transfer for the purpose of the
Trust's maintenance of its status as a Real Estate Investment
Trust under the Internal Revenue Code of 1986, as amended (the
"Code"). With certain further restrictions and exceptions set
forth in the Declaration, no person may beneficially own
Depositary Shares, Shares and/or other shares of the Trust in
excess of 5.0% (or such greater percentage as may be
determined by the Board of Trustees of the Trust) of the
lesser of the number or value of the outstanding shares of
beneficial interest and Depositary Shares of the Trust (unless
such person specifically shall have been exempted by the Board
of Trustees). Any Receipt, Depositary Shares and/or Shares
held in excess of the above limitations may be
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subject to mandatory redemption in certain events and to
limitations on the associated rights to receive distributions
from the Trust or to exercise voting rights, and certain
purported acquisitions of Receipts, Depositary Shares and/or
Shares in excess of such limitations, or which would result in
the disqualification of the Trust as a Real Estate Investment
Trust under the Code, shall be void AB INITIO. All capitalized
terms in this legend have the meanings set forth in the
Declaration, a copy of which, including the restrictions on
transfer, will be sent without charge to each shareholder who
so requests."
ARTICLE III
CERTAIN OBLIGATIONS OF
HOLDERS OF RECEIPTS AND THE TRUST
SECTION 3.01. FILING PROOFS, CERTIFICATES AND OTHER
INFORMATION. Except for the initial deposit of Shares by the Trust and any
subsequent deposit by the Trust, any holder of a Receipt may be required from
time to time to file such proof of residence, or other matters or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Trust may reasonably deem necessary or
proper. The Depositary or the Trust may withhold the delivery, or delay the
registration of transfer, redemption or exchange, of any Receipt or the
withdrawal or conversion of the Shares represented by the Depositary Shares
evidenced by any Receipt or the distribution of any dividend or other
distribution or the sale of any rights or of the proceeds thereof until such
proof or other information is filed or such certificates are executed or such
representations and warranties are made.
SECTION 3.02. PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES.
Holders of Receipts shall be obligated to make payments to the Depositary of
certain charges and expenses, as provided in Section 5.07. Registration of
transfer of any Receipt or any withdrawal of Shares and all money or other
property, if any, represented by the Depositary Shares evidenced by such Receipt
may be refused until any such payment due is made, and any dividends or other
distributions may be withheld or any part of or all the Shares or other property
represented by the Depositary Shares evidenced by such Receipt and not
theretofore sold may be sold for the account of the holder thereof (after
attempting by reasonable means to notify such holder prior to such sale), and
such dividends, interest payments or other distributions or the proceeds of any
such sale may be applied to any payment of such charges or expenses, the holder
of such Receipt remaining liable for any deficiency.
SECTION 3.03. WARRANTY AS TO SHARES. The Trust hereby
represents and warrants that the Shares, when issued, will be duly authorized,
validly issued, fully paid and nonassessable, free of preemptive rights and any
lien, claim or encumbrance, and entitled to the rights set forth in the
Articles. Such representation and warranty shall survive the deposit of the
Shares and the issuance of Receipts.
ARTICLE IV
THE DEPOSITED SECURITIES; NOTICES
SECTION 4.01. CASH DISTRIBUTIONS. Whenever the Depositary
shall receive any cash dividend or other cash distribution on Shares, the
Depositary shall, subject to Sections 3.01 and 3.02, distribute to record
holders of Receipts on the record date fixed pursuant to Section 4.04 such
amounts of such dividend or distribution as are, as nearly as practicable, in
proportion to the
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respective numbers of Depositary Shares evidenced by the Receipts held by such
holders; PROVIDED, HOWEVER, that in case the Trust or the Depositary shall be
required to withhold and shall withhold from any cash dividend or other cash
distribution in respect of the Shares an amount on account of taxes or as
otherwise required by law, regulation or court process, the amount made
available for distribution or distributed in respect of Depositary Shares shall
be reduced accordingly. In the event that the calculation of any such cash
dividend or other cash distribution to be paid to any record holder on the
aggregate number of Depositary Receipts held by such holder results in an amount
which is a fraction of a cent, the amount the Depositary shall distribute to
such record holder shall be rounded to the next highest whole cent; and upon
request of the Depositary, the Trust shall pay the additional amount to the
Depositary for distribution.
SECTION 4.02. DISTRIBUTIONS OTHER THAN CASH, RIGHTS,
PREFERENCES OR PRIVILEGES. Whenever the Depositary shall receive any
distribution other than cash, rights, preferences or privileges upon Shares, the
Depositary shall, subject to Sections 3.01 and 3.02, distribute to record
holders of Receipts on the record date fixed pursuant to Section 4.04 such
amounts of the securities or property received by it as are, as nearly as
practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders, in any manner that the
Depositary may deem equitable and practicable for accomplishing such
distribution. If in the opinion of the Depositary such distribution cannot be
made proportionately among such record holders, or if for any other reason
(including any requirement that the Trust or the Depositary withhold an amount
on account of taxes) the Depositary deems such distribution not to be feasible,
the Depositary may adopt such method as it deems equitable and practicable for
the purpose of effecting such distribution, including the sale (at public or
private sale) of the securities or property thus received, or any part thereof,
at such place or places and upon such terms as it may deem proper. The net
proceeds of any such sale shall, subject to Sections 3.01 and 3.02, be
distributed or made available for distribution, as the case may be, by the
Depositary to record holders of Receipts as provided by Section 4.01 in the case
of a distribution received in cash.
SECTION 4.03. SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES.
If the Trust shall at any time offer or cause to be offered to the persons in
whose names Shares are recorded on the books of the Trust any rights,
preferences or privileges to subscribe for or to purchase any securities or any
rights, preferences or privileges of any other nature, such rights, preferences
or privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as the Depositary may determine,
either by the issue to such record holders of warrants representing such rights,
preferences or privileges or by such other method as may be approved by the
Depositary in its discretion with the approval of the Trust; PROVIDED, HOWEVER,
that (i) if at the time of issue or offer of any such rights, preferences or
privileges the Depositary determines that it is not lawful or (after
consultation with the Trust) not feasible to make such rights, preferences or
privileges available to holders of Receipts by the issue of warrants or
otherwise, or (ii) if and to the extent so instructed by holders of Receipts who
do not desire to exercise such rights, preferences or privileges, then the
Depositary, in its discretion (with approval of the Trust, in any case where the
Depositary has determined that it is not feasible to make such rights,
preferences or privileges available), may, if applicable laws or the terms of
such rights, preferences or privileges permit such transfer, sell such rights,
preferences or privileges at a public or private sale and upon such terms as it
may deem proper. The net proceeds of any such sale shall, subject to Sections
3.01 and 3.02, be distributed by the Depositary to the record holders of
Receipts entitled thereto as provided by Section 4.01 in the case of a
distribution received in cash.
If registration under the Securities Act of the securities to
which any rights, preferences or privileges relate is required in order for
holders of Receipts to be offered or sold the securities to which such rights,
preferences or privileges relate, the Trust will file promptly a registration
statement pursuant to such Act with respect to such rights, preferences or
privileges and
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securities and use its best efforts and take all steps available to it to cause
such registration statement to become effective sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders to
exercise such rights, preferences or privileges. In no event shall the
Depositary make available to the holders of Receipts any right, preference or
privilege to subscribe for or to purchase any securities unless and until it has
received written notice from the Trust that such registration statement shall
have become effective, or that the offering and sale of such securities to such
holders are exempt from registration under the provisions of the Securities Act
and the Trust shall have provided to the Depositary an opinion of counsel to
such effect.
If any other action under the laws of any jurisdiction or any
governmental or administrative authorization, consent or permit is required in
order for such rights, preferences or privileges to be made available to holders
of Receipts, the Trust will use its reasonable best efforts to take such action
or obtain such authorization, consent or permit sufficiently in advance of the
expiration of such rights, preferences or privileges to enable such holders to
exercise such rights, preferences or privileges.
SECTION 4.04. NOTICE OF DIVIDENDS, ETC.; FIXING RECORD DATE
FOR HOLDERS OF RECEIPTS. Whenever any cash dividend or other cash distribution
shall become payable or any distribution other than cash shall be made, or if
rights, preferences or privileges shall at any time be offered, with respect to
Shares, or whenever the Depositary shall receive notice of any meeting at which
holders of Shares are entitled to vote or of which holders of Shares are
entitled to notice, or whenever the Depositary and the Trust shall decide it is
appropriate, the Depositary shall in each such instance fix a record date (which
shall be the same date as the record date fixed by the Trust with respect to or
otherwise in accordance with the terms of the Shares) for the determination of
the holders of Receipts who shall be entitled to receive such dividend,
distribution, rights, preferences or privileges or the net proceeds of the sale
thereof, or to give instructions for the exercise of voting rights at any such
meeting, or who shall be entitled to notice of such meeting or for any other
appropriate reasons.
SECTION 4.05. VOTING RIGHTS. Upon receipt of notice of any
meeting at which the holders of Shares are entitled to vote, the Depositary
shall, as soon as practicable thereafter, mail to the record holders of Receipts
a notice which shall contain (i) such information as is contained in such notice
of meeting and (ii) a statement that the holders may, subject to any applicable
restrictions, instruct the Depositary as to the exercise of the voting rights
pertaining to the number of Shares represented by their respective Depositary
Shares (including an express indication that instructions may be given to the
Depositary to give a discretionary proxy to a person designated by the Trust)
and a brief statement as to the manner in which such instructions may be given.
Upon the written request of the holders of Receipts on the relevant record date,
the Depositary shall endeavor insofar as practicable to vote or cause to be
voted, in accordance with the instructions set forth in such requests, the
maximum number of whole Shares represented by the Depositary Shares evidenced by
all Receipts as to which any particular voting instructions are received. The
Trust hereby agrees to take all reasonable action which may be deemed necessary
by the Depositary in order to enable the Depositary to vote such Shares or cause
such Shares to be voted. In the absence of specific instructions from the holder
of a Receipt, the Depositary will not vote (but, at its discretion, may appear
at any meeting with respect to such Shares unless directed to the contrary by
the holders of all the Receipts) to the extent of the Shares represented by the
Depositary Shares evidenced by such Receipt.
SECTION 4.06. CHANGES AFFECTING DEPOSITED SECURITIES AND
RECLASSIFICATIONS, RECAPITALIZATIONS, ETC. Upon any change in par or stated
value or liquidation preference, split-up, combination or any other
reclassification of the Shares, or upon any recapitalization, reorganization,
merger, consolidation, mandatory share exchange or other similar business
combination affecting
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the Trust or to which it is a party or sale of all or substantially all of the
Trust's assets, the Depositary may in its discretion with the approval of, and
shall upon the instructions of, the Trust, and (in either case) in such manner
as the Depositary may deem equitable, (i) make such adjustments as are certified
by the Trust in (a) the fraction of an interest represented by one Depositary
Share in one Share and (b) the ratio of the redemption price per Depositary
Share to the redemption price of a share, in each case as may be necessary fully
to reflect the effects of such change in par or stated value or liquidation
preference, split-up, combination or other reclassification of Shares, or of
such recapitalization, reorganization, merger, consolidation, share exchange,
business combination or sale and (ii) treat any securities which shall be
received by the Depositary in exchange for or upon conversion of or in respect
of the Shares as new deposited securities so received in exchange for or upon
conversion or in respect of such Shares. In any such case the Depositary, may in
its discretion, with the approval of the Trust, execute and deliver additional
Receipts or may call for the surrender of all outstanding Receipts to be
exchanged for new Receipts specifically describing such new deposited
securities. Anything to the contrary herein notwithstanding, holders of Receipts
shall have the right from and after the effective date of any such change in par
or stated value or liquidation preference, split-up combination or other
reclassification of the Shares or any such recapitalization, reorganization,
merger, consolidation, share exchange, business combination or sale to surrender
such receipts to the Depositary with instructions to convert, exchange or
surrender the Shares represented thereby only into or for, as the case may be,
the kind and amount of shares of stock and other securities and property and
cash into which the Shares represented by such Receipts might have been
converted or for which such Shares might have been exchanged or surrendered
immediately prior to the effective date of such transaction.
SECTION 4.07. DELIVERY OF REPORTS. The Depositary shall
furnish to holders of Receipts any reports and communications received from the
Trust which are received by the Depositary as the holder of Shares.
SECTION 4.08. LIST OF RECEIPT HOLDERS. Promptly upon request
from time to time by the Trust, the Depositary shall furnish to it a list, as of
the most recent practicable date, of the names, addresses and holdings of
Depositary Shares of all record holders of Receipts. The Trust shall be entitled
to receive such list twice annually without charge.
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S
AGENTS, THE REGISTRAR AND THE TRUST
SECTION 5.01. MAINTENANCE OF OFFICES, AGENCIES AND TRANSFER
BOOKS BY THE DEPOSITARY; REGISTRAR. Upon execution of this Deposit Agreement,
the Depositary shall maintain at the Depositary's office, facilities for the
execution and delivery, registration and registration of transfer, surrender and
exchange of Receipts, and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration of transfer, surrender and exchange of
Receipts, all in accordance with the provisions of this Deposit Agreement.
The Depositary shall keep books at the Depositary's Office for
the registration and registration of transfer of Receipts, which books during
normal business hours shall be open for inspection by the record holders of
Receipts PROVIDED, that any such holder requesting to exercise such right shall
certify to the Depositary that such inspection shall be for a proper purpose
reasonably related to such person's interest as an owner of Depositary Shares
evidenced by the Receipts.
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The Depositary may close such books, at any time or from time
to time, when deemed expedient by it in connection with the performance of its
duties hereunder.
The Depositary may, with the approval of the Trust, appoint a
Registrar for registration of the Receipts or the Depositary Shares evidenced
thereby. If the Receipts or the Depositary Shares evidenced thereby or the
Shares represented by such Depositary Shares shall be listed on one or more
national stock exchanges, the Depositary will appoint a Registrar (acceptable to
the Trust) for registration of such Receipts or Depositary Shares in accordance
with any requirements of such exchange. Such Registrar (which may be the
Depositary if so permitted by the requirements of any such exchange) may be
removed and a substitute registrar appointed by the Depositary upon the request
or with the approval of the Trust. If the Receipts, such Depositary Shares or
such Shares are listed on one or more other stock exchanges, the Depositary
will, at the request and at the expense of the Trust, arrange such facilities
for the delivery, registration, registration of transfer, surrender and exchange
of such Receipts, such Depositary Shares or such Shares as may be required by
law or applicable stock exchange regulation.
The Depositary may from time to time appoint Depositary's
Agents to act in any respect for the Depositary for the purposes of this Deposit
Agreement and may at any time appoint additional Depositary's Agents and vary or
terminate the appointment of such Depositary's Agents.
The Depositary will notify the Trust of any such action.
SECTION 5.02. PREVENTION OF OR DELAY IN PERFORMANCE BY THE
DEPOSITARY, DEPOSITARY'S AGENT, THE REGISTRAR OR THE TRUST. Neither the
Depositary nor any Depositary's Agent nor the Registrar nor the Trust shall
incur any liability to any holder of any Receipt if by reason of any provision
of any present or future law or regulation thereunder, of the United States of
America or of any other governmental authority or, in the case of the
Depositary, the Depositary's Agent or the Registrar, by reason or any provision,
present or future, of the Trust's Amended and Restated Declaration of Trust or
by reason of any act of God or war or other circumstance beyond the reasonable
control of the relevant party, the Depositary, the Depositary's Agent, the
Registrar or the Trust shall be prevented, delayed or forbidden from, or
subjected to any penalty on account of, doing or performing any act or thing
which the terms of this Deposit Agreement provide shall be done or performed;
nor shall the Depositary, any Depositary's Agent, the Registrar or the Trust
incur liability to any holder of a Receipt (i) by reason of any nonperformance
or delay, caused as aforesaid, in the performance of any act or thing which the
terms of this Deposit Agreement shall provide shall or may be done or performed,
or (ii) by reason of any exercise of, or failure to exercise, any discretion
provided for in this Deposit Agreement except, in the case of any such exercise
or failure to exercise discretion not caused as aforesaid, if caused by the
negligence or willful misconduct of the party charged with such exercise or
failure to exercise.
SECTION 5.03. OBLIGATION OF THE DEPOSITARY, THE DEPOSITARY'S
AGENTS, THE REGISTRAR AND THE TRUST. Neither the Depositary nor any Depositary's
Agent nor the Registrar nor the Trust assumes any obligation or shall be subject
to any liability under this Deposit Agreement or any Receipt to holders of
Receipts other than for its negligence, willful misconduct or bad faith.
Neither the Depositary nor any Depositary's Agent nor the
Registrar shall be under obligation to appear in, prosecute or defend any
action, suit or other proceeding in respect of the Shares, the Depositary Shares
or the Receipts which in its opinion may involve it in expense or liability
unless indemnity satisfactory to it against all expense and liability be
furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the
Registrar shall be liable for any action or any failure to act by it in reliance
upon the written advice of legal counsel or
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accountants, or information from any person presenting Shares for deposit, any
holder of a Receipt or any other person believed by it in good faith to be
competent to give such information. The Depositary, any Depositary's Agent and
the Registrar may each rely and shall each be protected in acting upon any
written notice, request, direction or other document believed by it to be
genuine and to have been signed or presented by the proper party or parties.
The Depositary shall not be responsible for any failure to
carry out any instruction to vote any of the shares of Shares or for the manner
or effect of any such vote made, as long as any such action or non-action is in
good faith. The Depositary undertakes, and any Registrar shall be required to
undertake, to perform such duties and only such duties as are specifically set
forth in this Agreement, and no implied covenants or obligations shall be read
into this Agreement against the Depositary or any Registrar. The Depositary will
indemnify the Trust and hold it harmless from any loss, liability or expense
(including the reasonable costs and expenses of defending itself) which may
arise out of acts performed or omitted by the Depositary, including when such
Depositary acts as Registrar, or the Depositary's Agents in connection with this
Agreement due to its or their negligence, willful misconduct or bad faith.
The Depositary, its affiliates or subsidiaries, the
Depositary's Agents, and the Registrar may own, buy, sell and deal in any class
of securities of the Trust and its affiliates and in Receipts or Depositary
Shares or become pecuniarily interested in any transaction in which the Trust or
its affiliates may be interested or contract with or lend money to or otherwise
act as fully or as freely as if it were not the Depositary, parent, affiliate or
subsidiary or Depositary's Agent or Registrar hereunder. The Depositary may also
act as trustee, transfer agent or registrar of any of the securities of the
Trust and its affiliates.
It is intended that neither the Depositary nor any
Depositary's Agent nor the Registrar, acting as the Depositary Agent or
Registrar, as the case may be, shall be deemed to be an "issuer" of the
securities under the federal securities laws or applicable state securities
laws, it being expressly understood and agreed that the Depositary, any
Depositary's Agent and the Registrar are acting only in a ministerial capacity
as Depositary or Registrar for the Shares.
Neither the Depositary (or its officers, directors, employees
or agents) nor any Depositary's Agent nor the Registrar makes any representation
or has any responsibility as to the validity of the registration statement
pursuant to which the Depositary Shares are registered under the Securities Act,
the Shares, the Depositary Shares or the Receipts (except for its
countersignatures thereon) or any instruments referred to therein or herein, or
as to the correctness of any statement made therein or herein.
The Depositary assumes no responsibility for the correctness
of the description that appears in the Receipts, which can be taken as a
statement of the Trust summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Shares at any time deposited with the Depositary hereunder or
of the Depositary Shares, as to the validity or sufficiency of this Deposit
Agreement, as to the value of the Depositary Shares or as to any right, title or
interest of the record holders of Receipts in and to the Depositary Shares. The
Depositary shall not be accountable for the use or application by the Trust of
the Depositary Shares or the Receipts or the proceeds thereof.
SECTION 5.04. RESIGNATION AND REMOVAL OF THE DEPOSITARY;
APPOINTMENT OF SUCCESSOR DEPOSITARY. The Depositary may at any time resign as
Depositary hereunder by delivering notice of its election to do so to the Trust,
such resignation to take effect upon the appointment of a successor Depositary
and its acceptance of such appointment as hereinafter provided.
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The Depositary may at any time be removed by the Trust by
notice of such removal delivered to the Depositary, such removal to take effect
upon the appointment of a successor Depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall
resign or be removed, the Trust shall, within 60 days after the delivery of the
notice of resignation or removal, as the case may be, appoint a successor
Depositary, which shall be a bank or trust company having its principal office
in the United States of America and having a combined capital and surplus of at
least $50,000,000. If no successor Depositary shall have been so appointed and
have accepted appointment within 60 days after delivery of such notice, the
resigning or removed Depositary may petition any court of competent jurisdiction
for the appointment of a successor Depositary. Every successor Depositary shall
execute and deliver to its predecessor and to the Trust an instrument in writing
accepting its appointment hereunder and agreeing to become a party to this
Deposit Agreement, and thereupon such successor Depositary, without any further
act or deed, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor and for all purposes shall be the Depositary
under this Deposit Agreement, and such predecessor, upon payment of all sums due
it and on the written request of the Trust, shall execute and deliver an
instrument transferring to such successor all rights and powers of such
predecessor hereunder, shall duly assign, transfer and deliver all right, title
and interest in the Shares and any moneys or property held hereunder to such
successor, and shall deliver to such successor a list of the record holders of
all outstanding Receipts and such records, books and other information in its
possession relating thereto. Any successor Depositary shall promptly mail notice
of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be
merged, consolidated or converted, or to which the Depositary may sell all or
substantially all of its trust business, shall be the successor of such
Depositary without the execution or filing of any document or any further act,
and notice thereof shall not be required hereunder. Such successor Depositary
may authenticate the Receipts in the name of the predecessor Depositary or in
the name of the successor Depositary.
If at any time the Depositary shall be adjudged a bankrupt or
insolvent, or shall file a petition seeking relief under any applicable Federal
or State bankruptcy or insolvency law or similar law, or make an assignment for
the benefit of its creditors or consent to the appointment of a receiver,
conservator or custodian of all or any substantial part of its property, or
shall admit in writing its inability to pay or to meet its debts as they mature,
or if a receiver or custodian of it or of all or any substantial part of its
property shall be appointed, or if an order of any court shall be entered for
relief against it under the provisions of any applicable Federal or State
bankruptcy or similar law, or if any public officer shall have taken charge or
control of the Depositary or of its property or affairs, for the purpose of
rehabilitation, conservation or liquidation, a successor Depositary, qualified
as set forth above, shall be appointed by the Trust by an instrument in writing,
filed with the successor Depositary. Upon the appointment as herein provided of
a successor Depositary and acceptance by the latter of such appointment, the
Depositary so superseded shall cease to be Depositary under this Agreement.
SECTION 5.05. CORPORATE NOTICES AND REPORTS. The Trust agrees
that it will deliver to the Depositary, and the Depositary will, promptly after
receipt thereof transmit to the record holders of Receipts, in each case at the
addresses recorded in the Depositary's books, copies of all notices and reports
(including without limitation financial statements) required by law or by the
rules of any national securities exchange upon which the Shares, the Depositary
Shares or the Receipts are listed, to be furnished to the record holders of
Receipts or otherwise determine to furnish. Such transmission will be at the
Trust's expense and the Trust will provide the Depositary with such number of
copies of such documents as the Depositary may reasonably request.
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SECTION 5.06. INDEMNIFICATION BY THE TRUST. The Trust shall
indemnify the Depositary, any Depositary's Agent and the Registrar against, and
hold each of them harmless from, any loss, liability or expense (including the
reasonable costs and expenses of defending itself) which may arise out of (i)
acts performed or omitted in connection with this Deposit Agreement and the
Receipts (A) by the Depositary, any Registrar or any of their respective agents
(including a Depositary's Agent), except for any liability arising out of
negligence, willful misconduct or bad faith on the respective parts of any such
person or persons, or (B) by the Trust or any of its agents or (ii) the offer,
sale or registration of the Depositary Shares or the Shares pursuant to the
provisions hereof. The obligations of the Trust set forth in this Section 5.06
shall survive any succession of any Depositary or Depositary's Agent.
SECTION 5.07. CHARGES AND EXPENSES. The Trust shall pay all
transfer and other taxes and governmental charges arising solely from the
existence of the depositary arrangements. The Trust shall pay all charges of the
Depositary in connection with the initial deposit of the Shares and the initial
issuance of the Depositary Shares, all withdrawals of Shares by owners of
Depositary Shares, and any redemption or exchange of the Shares at the option of
the Trust. All other transfer and other taxes and governmental charges shall be
at the expense of holders of Depositary Shares. If, at the request of a holder
of Receipts, the Depositary incurs charges or expenses for which neither it nor
the Trust is otherwise liable hereunder, such holder will be liable for such
charges and expenses. All other charges and expenses of the Depositary and any
Depositary's Agent hereunder (including, in each case, reasonable fees and
expenses of counsel) incident to the performance of their respective obligations
hereunder will be paid upon consultation and agreement between the Depositary
and the Trust as to the amount and nature of such charges and expenses. The
Depositary shall present its statement for charges and expenses to the Trust at
such intervals as the Trust and the Depositary may agree.
SECTION 5.08. TAX COMPLIANCE. The Depositary, on its own
behalf and on behalf of the Trust will comply with all applicable certification,
information reporting and withholding (including "backup" withholding)
requirements imposed by applicable tax laws, regulations or administrative
practice with respect to (i) any payments made with respect to the Depositary
Shares or (ii) the issuance, delivery, holding, transfer, redemption or exercise
of rights under the Depositary Receipts or the Depositary Shares. Such
compliance shall include, without limitation, the preparation and timely filing
of required returns and the timely payment of all amounts required to be
withheld to the appropriate taxing authority or its designated agent.
The Depositary shall comply with any direction received from
the Trust with respect to the application of such requirements to particular
payments or holders or in other particular circumstances, and may for purposes
of this Agreement rely on any such direction in accordance with the provisions
of Section 5.03 hereof.
The Depositary shall maintain all appropriate records
documenting compliance with such requirements, and shall make such records
available on request to the Trust or to its authorized representatives.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. AMENDMENT. The form of the Receipts and any
provisions of this Deposit Agreement may at any time and from time to time be
amended by agreement between the Trust and the Depositary in any respect which
they may deem necessary or desirable; PROVIDED, HOWEVER, that no such amendment
which shall materially and adversely alter the rights of the holders
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of Receipts shall be effective unless such amendment shall have been approved by
the holders of at least a majority of the Depositary Shares then outstanding.
Every holder of an outstanding Receipt at the time any such amendment becomes
effective shall be deemed, by continuing to hold such Receipt, to consent and
agree to such amendment and to be bound by the Deposit Agreement as amended
thereby. In no event shall any amendment impair the right, subject to the
provisions of Sections 2.05, 2.08 and Article III, of any owner of Depositary
Shares to surrender the Receipt evidencing such Depositary Shares with
instructions to the Depositary to deliver to the such holder the Shares and all
money and other property, if any, represented thereby, except in order to comply
with mandatory provisions of applicable law.
SECTION 6.02. TERMINATION. This Deposit Agreement may be
terminated by the Trust or the Depositary only after (i)(A) all outstanding
Depositary Shares shall have been redeemed and any accumulated but unpaid
dividends on the Shares represented by the Depositary Shares, together with all
other moneys and property, if any, to which holders of the related Receipts are
entitled under the terms of such Receipts or this Deposit Agreement, have been
paid or distributed as provided in this Deposit Agreement or provision therefor
has been duly made pursuant to Section 2.08, or (B) there shall have been made a
final distribution in respect of the Shares in connection with any liquidation,
dissolution or winding up of the Trust and such distribution shall have been
distributed to the holders of Receipts pursuant to Section 4.01 or 4.02, as
applicable and (ii) reasonable notice has been given to any holders of Receipts.
If any Receipts shall remain outstanding after the date of
termination of this Deposit Agreement, the Depositary thereafter shall
discontinue the transfer of Receipts, shall suspend the distribution of
dividends to the holders thereof and shall not give any further notices (other
than notice of such termination) or perform any further acts under this Deposit
Agreement except that the Depositary shall continue to collect dividends and
other distributions pertaining to Shares, shall sell rights, preferences or
privileges as provided in this Deposit Agreement and shall continue to deliver
the Shares and any money and other property represented by Receipts upon
surrender thereof by the holders thereof. At any time after the expiration of
two years from the date of termination, the Depositary may sell Shares then held
hereunder at public or private sale, at such places and upon such terms as it
deems proper and may thereafter hold the net proceeds of any such sale, together
with any money and other property held by it hereunder, without liability for
interest, for the benefit, pro rata in accordance with their holdings, of the
holders of Receipts that have not theretofore been surrendered. After making
such sale, the Depositary shall be discharged from all obligations under this
Deposit Agreement except to account for such net proceeds and money and other
property.
Upon the termination of this Deposit Agreement, the Trust
shall be discharged from all obligations under this Deposit Agreement except for
its obligations to the Depositary, the Registrar and any Depositary's Agent
under Sections 5.06 and 5.07.
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. COUNTERPARTS. This Deposit Agreement may be
executed in any number of counterparts, and by each of the parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed an original, but all such counterparts taken together
shall constitute one and the same instrument.
SECTION 7.02. EXCLUSIVE BENEFIT OF PARTIES. This Deposit
Agreement is for the exclusive benefit of the parties hereto, and their
respective successors hereunder, and shall not be deemed to give any legal or
equitable right, remedy or claim to any other person whatsoever.
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SECTION 7.03. INVALIDITY OF PROVISIONS. In case any one or
more of the provisions contained in this Deposit Agreement or in the Receipts
should be or become invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein or therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. NOTICES. Any and all notices to be given to the
Trust hereunder or under the Receipts shall be in writing and shall be deemed to
have been duly given if personally delivered or sent by mail, postage pre-paid,
or by telegram or facsimile transmission confirmed by letter, addressed to the
Trust at
The Town and Country Trust
Suite 1700
100 S. Charles Street
Baltimore, Maryland 21201
Attention: President
Facsimile No.: 410-547-0789
or at any other address of which the Trust shall have notified the Depositary
in writing.
Any and all notices to be given to the Depositary hereunder or
under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail, postage pre-paid, or by telegram
or facsimile transmission confirmed by letter, addressed to the Depositary at
the Depositary's office, at:
Attention:
Facsimile No.:
or at any other address of which the Depositary shall have notified the Trust
and the holders of the Receipts in writing.
Any and all notices to be given to any record holder of a Receipt hereunder or
under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail, postage pre-paid, or by telegram
or facsimile transmission confirmed by letter, addressed to such record holder
at the address of such record holder as it appears on the books of the
Depositary, or if such holder shall have filed with the Depositary a written
request that notices intended for such holder be mailed to some other address,
at the address designated in such request.
Delivery of a notice sent by mail or by telegram or facsimile transmission shall
be deemed to be effected at the time when a duly addressed letter containing the
same (or a confirmation thereof in the case of a telegram or facsimile
transmission) is deposited, postage prepaid, in a post office letter box. The
Depositary or the Trust may, however, act upon any telegram or facsimile
transmission received by it from the other or from any holder of a Receipt,
notwithstanding that such telegram or facsimile transmission shall not
subsequently be confirmed by letter or as aforesaid.
SECTION 7.05. APPOINTMENT OF REGISTRAR. The Trust hereby also
appoints the Depositary as Registrar in respect of the Receipts and the
Depositary hereby accepts such appointment.
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SECTION 7.06. HOLDERS OF RECEIPTS ARE PARTIES. The holders of
Receipts from time to time shall be parties to this Deposit Agreement and shall
be bound by all of the terms and conditions hereof and of the Receipts by
acceptance of delivery thereof.
SECTION 7.07. GOVERNING LAW. THIS DEPOSIT AGREEMENT AND
THE RECEIPTS AND ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF
AND THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
SECTION 7.08. INSPECTION OF DEPOSIT AGREEMENT. Copies of this
Deposit Agreement shall be filed with the Depositary and the Depositary's Agent
and shall be open to inspection during business hours at the Depositary's Office
or respective offices of the Depositary's Agent, if any, by any holder of a
Receipt.
SECTION 7.09. HEADINGS. The headings of articles and sections
in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A
hereto have been inserted for convenience only and are not to be regarded as a
part of this Deposit Agreement or the Receipts or to have any bearing upon the
meaning or interpretation of any provision contained herein or in the Receipts.
SECTION 7.10. TRUST DISCLAIMER. The Trust's First Amended and
Restated Declaration of Trust, dated June 24, 1993, a copy of which is duly
filed with the Department of Assessments and Taxation of the State of Maryland,
provides that no trustee, officer, shareholder, employee or agent of the Trust
shall be held to any personal liability, jointly or severally, for any
obligation of or claim against the Trust. All persons dealing with the Trust in
any way shall look only to the assets of the Trust for the payment of any sum or
the performance of any obligation.
IN WITNESS WHEREOF, the Trust and the Depositary have duly
executed this Agreement as of the day and year first above set forth, and all
holders of Receipts shall become parties hereto by and upon acceptance by them
of delivery of Receipts issued in accordance with the terms hereof.
THE TOWN AND COUNTRY TRUST
By: __________________________________
Attested
__________________________________
[SEAL] [DEPOSITARY]
By: __________________________________
Attested by
__________________________________
[SEAL]
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ANNEX A
TEMPORARY RECEIPT EXCHANGEABLE FOR DEFINITIVE CERTIFICATE FOR
ENGRAVED RECEIPT WHEN READY FOR DELIVERY
____________________
DEPOSITARY SHARES
TRANSFERABLE
DEPOSITARY RECEIPT
This Certificate is
transferable in
New York, New York
CUSIP_______________
SEE REVERSE FOR
CERTAIN DEFINITIONS
DEPOSITARY RECEIPT FOR DEPOSITARY SHARE, EACH
DEPOSITARY SHARE REPRESENTING A __________ INTEREST
IN ONE ________% PREFERRED SHARE OF
BENEFICIAL INTEREST
THE TOWN AND COUNTRY TRUST
A MARYLAND REAL ESTATE INVESTMENT TRUST
___________________, as Depositary (the "Depositary"), hereby certifies that
is the registered owner of ____________________________DEPOSITARY SHARES
("Depositary Shares"), each Depositary Share representing a _____ interest in
one _____% Preferred Share of Beneficial Interest, par value $.01 per share,
$_________ liquidation value per preferred share (the "Shares"), of The Town and
Country Trust, a Maryland real estate investment trust (the "Trust"), on deposit
with the Depositary, subject to the terms and entitled to the benefits of the
Deposit Agreement, dated as of _____________, ______(the "Deposit Agreement"),
between the Trust and the Depositary. By accepting this Depositary Receipt, the
holder hereof becomes a party to and agrees to be bound by all the terms and
conditions of the Deposit Agreement. This Depositary Receipt shall not be valid
or obligatory for any purpose or be entitled to any benefits under the Deposit
Agreement unless it shall have been executed by the Depositary by the manual
signature of a duly authorized officer, or if executed in facsimile by the
Depositary, countersigned by a Registrar in respect of the Depositary Receipts
by a duly authorized officer thereof.
Dated:
Countersigned
Depositary and Registrar
By
Authorized officer
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THE TOWN AND COUNTRY TRUST
THE TOWN AND COUNTRY TRUST (THE "TRUST") WILL FURNISH WITHOUT CHARGE TO EACH
RECEIPT HOLDER WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A STATEMENT
OR SUMMARY OF THE DECLARATION OF TRUST ESTABLISHING THE POWERS, DESIGNATIONS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIFIED RIGHTS OF
THE % PREFERRED SHARES AND EACH OTHER CLASS OF PREFERRED SHARES OR SERIES
THEREOF OR OTHER SHARES WHICH THE TRUST IS AUTHORIZED TO ISSUE AND OF THE
QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS.
ANY SUCH REQUEST SHOULD BE ADDRESSED TO THE TOWN AND COUNTRY TRUST, SUITE 1700,
100 S. CHARLES STREET, BALTIMORE, MARYLAND 21201; ATTENTION: PRESIDENT.
THIS RECEIPT, THE DEPOSITARY SHARES AND THE SHARES ARE SUBJECT TO RESTRICTIONS
ON TRANSFER FOR THE PURPOSE OF THE TRUST'S MAINTENANCE OF ITS STATUS AS A REAL
ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE
"CODE"). WITH CERTAIN FURTHER RESTRICTIONS AND EXCEPTIONS SET FORTH IN THE
DECLARATION, NO PERSON MAY BENEFICIALLY OWN DEPOSITARY SHARES, SHARES AND/OR
OTHER SHARES OF THE TRUST IN EXCESS OF 5.0% (OR SUCH GREATER PERCENTAGE AS MAY
BE DETERMINED BY THE BOARD OF TRUSTEES OF THE TRUST) OF THE LESSER OF THE NUMBER
OR VALUE OF THE OUTSTANDING SHARES OF BENEFICIAL INTEREST AND DEPOSITARY SHARES
OF THE TRUST (UNLESS SUCH PERSON SPECIFICALLY SHALL HAVE BEEN EXEMPTED BY THE
BOARD OF TRUSTEES). ANY RECEIPT, DEPOSITARY SHARES AND/OR SHARES HELD IN EXCESS
OF THE ABOVE LIMITATIONS MAY BE SUBJECT TO MANDATORY REDEMPTION IN CERTAIN
EVENTS AND TO LIMITATIONS ON THE ASSOCIATED RIGHTS TO RECEIVE DISTRIBUTIONS FROM
THE TRUST OR TO EXERCISE VOTING RIGHTS, AND CERTAIN PURPORTED ACQUISITIONS OF
RECEIPTS, DEPOSITARY SHARES AND/OR SHARES IN EXCESS OF SUCH LIMITATIONS, OR
WHICH WOULD RESULT IN THE DISQUALIFICATION OF THE TRUST AS A REAL ESTATE
INVESTMENT TRUST UNDER THE CODE, SHALL BE VOID AB INITIO. ALL CAPITALIZED TERMS
IN THIS LEGEND HAVE THE MEANINGS SET FORTH IN THE DECLARATION, A COPY OF WHICH,
INCLUDING THE RESTRICTIONS ON TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH
SHAREHOLDER WHO SO REQUESTS.
ABBREVIATIONS
The following abbreviations, when sued in the inscription on
the face of this Depositary Receipt, shall be construed as though they were
written out in full according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right
of survivorship and not as
tenants in common
UNIF GIFT MIN ACT - ________Custodian_________
(Cust) (Minor)
under Uniform Gifts to
Minors Act _______________
(State)
<PAGE>
UNIF TRANS MIN ACT - __________Custodian (until age _____)
(Cust)
_______ under Uniform Transfers
(Minor)
to Minors Act ______________
(State)
Additional abbreviations may also be used
though not in the above list.
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<PAGE>
EXHIBIT 4.2
FORM OF ARTICLES SUPPLEMENTARY
THE TOWN AND COUNTRY TRUST, a Maryland real estate investment trust having
its principal Maryland office in the City of Baltimore, State of Maryland
(hereinafter called the "Trust"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Trustees of
the Trust by Article Two, Section 1 of the First Amended and Restated
Declaration of Trust (the "Declaration") of the Trust, the Board of Trustees has
authorized the classification of ______ unissued shares of the 500,000,000
shares of beneficial interest (the "Shares") which the Trust now has authority
to issue into a series designated [SERIES DESIGNATION] and has provided for the
issuance of such series.
SECOND: The number of shares and terms of the [SERIES DESIGNATION] as set
by the Board of Trustees are as follows:
1. DESIGNATION OF SERIES. _______ Shares of the Trust, par value $.01
per share, are hereby constituted as the original number of shares of a series
of Shares designated as [SERIES DESIGNATION] (hereinafter sometimes called the
"[SERIES DESIGNATION]"). [The [SERIES DESIGNATION] are issuable in whole shares
only.] The term "Declaration" when used herein shall include all articles or
certificates filed pursuant to law in respect of any series of the Shares.
2. DIVIDENDS. [INSERT SERIES-SPECIFIC DIVIDEND PROVISIONS, IF ANY.]
3. CONVERSION. [INSERT SERIES-SPECIFIC CONVERSION PROVISIONS, IF ANY.]
4. VOTING RIGHTS.
(i) Holders of Shares of the [SERIES DESIGNATION] shall have no voting
rights, either general or special, except as expressly required by applicable
law, the Declaration[ and as specified in this paragraph 4].
(ii) [INSERT SERIES-SPECIFIC VOTING PROVISIONS, IF ANY.]
5. RANK. For the purposes of these Articles Supplementary, any class or
classes of Shares of the Trust shall be deemed to rank:
(a) prior to the [SERIES DESIGNATION] as to dividends or as to
distribution of assets upon liquidation, dissolution or winding up of the
Trust if the holders of such class 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
Shares of the [SERIES DESIGNATION];
(b) on a parity with the [SERIES DESIGNATION] as to dividends or as
to distribution of assets upon liquidation, dissolution or winding up of
the Trust ("Parity Shares"), whether or not the dividend rates, dividend
payment dates, or redemption or liquidation preference per share thereof be
different from those of the [SERIES DESIGNATION], if the holders of such
class of Shares and the Shares of the [SERIES DESIGNATION] shall be
entitled to the receipt of
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<PAGE>
dividends or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in proportion to their respective dividend
rates or liquidation preference, without preference or priority one over
the other; and
(c) junior to the [SERIES DESIGNATION], either as to dividends or as
to distribution of assets upon liquidation, dissolution or winding up of
the Trust, or both, if such class shall be Common Shares or if the holders
of the [SERIES DESIGNATION] shall be entitled to the receipt of dividends
or of amounts distributable upon liquidation, dissolution or winding up of
the Trust, as the case may be, in preference or priority to the holders of
Shares of such class or classes.
The [SERIES DESIGNATION] shall rank prior, as to dividends and upon
liquidation, dissolution or winding up, to the Common Shares.
6. REDEMPTION. [INSERT SERIES-SPECIFIC REDEMPTION PROVISIONS, IF ANY.]
7. LIQUIDATION.
(i) Upon any liquidation, dissolution or winding up of the Trust, whether
voluntary or involuntary, the holders of Shares of the [SERIES DESIGNATION]
shall be entitled, whether from capital or surplus, before any assets of the
Trust shall be distributed among or paid over to holders of Common Shares or any
other class or series of Shares of the Trust junior to the [SERIES DESIGNATION]
as to liquidation preference, to be paid the amount of $____ per Share (the
"liquidation preference") of the [SERIES DESIGNATION], plus an amount equal to
all accrued and unpaid dividends, thereon (whether or not earned or declared) to
and including the date of final distribution. The holders of Shares of the
[SERIES DESIGNATION] will not be entitled to receive the liquidation preference
until the liquidation preference of any other class of Shares of the Trust
ranking senior to the [SERIES DESIGNATION] as to rights upon liquidation,
dissolution or winding up shall have been paid (or a sum set aside therefor
sufficient to provide for payment) in full. After any such liquidation
preference payment, the holders of the [SERIES DESIGNATION] shall not be
entitled to any further participation in any distribution of assets of the
Trust.
(ii) If upon any such liquidation, dissolution or winding up of the Trust
the assets of the Trust shall be insufficient to make such full payments to the
holders of the [SERIES DESIGNATION] and the holders of any Shares ranking as to
liquidation, dissolution of winding up on a parity with the [SERIES
DESIGNATION], then such assets shall be distributed among the holders of the
[SERIES DESIGNATION] ratably in accordance with the respective amounts which
would be payable on such Shares of the [SERIES DESIGNATION] or any other such
Shares if all amounts thereon were paid in full.
(iii) Neither the sale, lease or exchange (for cash, shares of stock,
securities or other consideration) of all or substantially all of the property
and assets of the Trust nor the merger or consolidation of any other corporation
into or with the Trust nor a reorganization of the Trust, shall be deemed to be
a liquidation, dissolution or winding up of the Trust.
8. PARITY SHARES. So long as any Shares of the [SERIES DESIGNATION]
shall remain outstanding, in case the [stated dividends or ]amounts payable on
liquidation, dissolution or winding up of the Trust are not paid in full in
respect of all outstanding shares of Parity Shares, all such shares shall
ratably [(x) in the payment of dividends, including accumulations (if any) in
accordance with the sums which would be payable in respect of all outstanding
shares of Parity Shares if all dividends were paid in full and (y)] in any
distribution of assets upon liquidation, dissolution or
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<PAGE>
winding up of the Trust, in accordance with the sums which would be payable in
respect of all outstanding Parity Shares if all sums payable were discharged in
full.
9. [RESTRICTIONS ON CONVERSION TO COMMON SHARES. No Shares of the
[SERIES DESIGNATION] may be converted into Common Shares if such conversion
would result in any violation of the restrictions set forth in the Declaration,
and holders of Shares of the [SERIES DESIGNATION] shall have no right to acquire
Common Shares (through conversion or otherwise) which would be prohibited under
the Declaration.]
10. RESTRICTIONS ON OWNERSHIP.
(a) RESTRICTION ON OWNERSHIP AND TRANSFER. Except as provided in
subparagraph 10(d), prior to the Restriction termination Date (as such term is
defined below):
(i) No person shall beneficially own or constructively own Shares of
the [SERIES DESIGNATION] in excess of the Limit (as such term is defined in
the Declaration).
(ii) Any transfer (whether or not such transfer is the result of a
transaction entered into through the facilities of the NYSE), that, if
effective, would result in any person beneficially or constructively owning
Shares of the [SERIES DESIGNATION] in excess of the Limit shall be void AB
INITIO as to the transfer of such Shares of the [SERIES DESIGNATION] which
otherwise would be beneficially or constructively owned by such person in
excess of the Limit; and the intended transferee shall acquire no rights in
such Shares of the [SERIES DESIGNATION].
(iii) Any transfer (whether or not such transfer is the result of a
transaction entered into through the facilities of the NYSE) or other event
that, if effective, would result in the Trust being "closely held" within
the meaning of Section 856(h) of the Internal Revenue Code of 1986, as
amended (the "Code"), or would otherwise result in the Trust failing to
qualify as a REIT (including, but not limited to, a transfer or other event
that would result in the Trust owning (directly or constructively) an
interest in a tenant that is described in Section 856(d)(2)(B) of the Code
if the income derived by the Trust from such tenant would cause the Trust
to fail to satisfy any of the gross income requirements of Section 856(c)
of the Code), shall be void ab initio as to the transfer of Shares of the
[SERIES DESIGNATION] or other event which would cause the Trust to be
"closely held" within the meaning of Section 856(h) of the Code or would
otherwise result in the Trust failing to qualify as a real estate
investment trust ("REIT") under applicable provisions of the Code; and the
intended transferee or owner or constructive or beneficial owner shall
acquire or retain no rights in such Shares of the [SERIES DESIGNATION].
For purposes hereof, "Restriction Termination Date" shall mean the first
day on which the Board of Trustees determines it is no longer in the best
interests of the Trust to attempt to, or continue to, qualify as a REIT.
(b) REMEDIES FOR BREACH. Any Shares of the [SERIES DESIGNATION] which
violate the provisions of subparagraph 10(a) shall be converted, with any
additional act on the part of the Trust, into a separate class of Shares of the
[SERIES DESIGNATION] to be denominated "Excess Shares of the [SERIES
DESIGNATION] ". Excess Shares of the [SERIES DESIGNATION] shall be subject to
redemption by the Trust in the same manner as Excess Shares pursuant to Article
2, Section 7(d) of the Declaration.
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<PAGE>
(c) NOTICE OF RESTRICTED TRANSFER. Any person who acquires or attempts to
acquire Shares of the [SERIES DESIGNATION] [or other Securities] in violation of
subparagraph 10(a), or any person whose Shares of the [SERIES DESIGNATION] will
be redeemed under subparagraph 11(b), shall immediately give written notice to
the Trust of such event and shall provide to the Trust such other information as
the Trust may request in order to determine the effect, if any, of such transfer
or attempted transfer or other event on the Trust's status as a REIT. Each
person who is a beneficial owner or constructive owner of Shares of the [SERIES
DESIGNATION] and each person (including the shareholder of record) who is
holding Shares of the [SERIES DESIGNATION] for a beneficial owner or
constructive owners shall provide to the Trust such information that the Trust
may request, in good faith, in order to determine the Trust's status as a REIT.
Nothing contained in this Paragraph 10 shall limit the authority of the Board of
Trustees to take such other action as it deems necessary or advisable to protect
the Trust and the interests of its shareholders by preservation of the Trust's
status as a REIT. In the case of an ambiguity in the application of any of the
provisions of this paragraph 10, the Board of Trustees shall have the power to
determine the application of the provisions of this paragraph 10 with respect to
any situation based on the facts known to it.
(d) EXCEPTIONS. The Board of Trustees, in its sole and absolute
discretion, may exempt a person from the limitation on a person beneficially
owning Shares of the [SERIES DESIGNATION] in excess of the Limit if:
(i) Such person is not an individual or treated as the owner of
Shares for purposes of Section 542(a)(2) of the Code (as modified by
Section 856(h) of the Code) and the Board of Trustees obtains such
representations and undertakings from such person as are reasonably
necessary to ascertain that no individual's beneficial ownership of such
Shares of the [SERIES DESIGNATION] will violate the Limit and such person
agrees that any violation of such representations or undertaking (or other
action which is contrary to the restrictions contained in this Paragraph
10) will result in such Shares of the [SERIES DESIGNATION] being redeemed
by the Trust in accordance with these Articles Supplementary; or
(ii) Such person does not and represents that it will not own,
directly or constructively (by virtue of the application of Section 318 of
the Code, as modified by Section 856(d)(5) of the Code), more than a 9.8%
interest (as set forth in Section 856(d)(2)(B)) in a tenant of the Trust
and the Board of Trustees obtains such representations and undertakings
from such person as are reasonably necessary to ascertain this fact and
such person agrees that any violation or attempted violation will result in
such Shares of the [SERIES DESIGNATION] being redeemed by the Trust.
Prior to granting any exception pursuant to subparagraph 10(e), the Board of
Trustees may require a ruling from the Internal Revenue Service, or an opinion
of counsel, in either case in form and substance satisfactory to the Board of
Trustees in its sole discretion as it may deem necessary or advisable in order
to determine or ensure the Trust's status as a REIT, provided, however, that
obtaining a favorable ruling or opinion shall not be required for the Board of
Trustees to grant an exception hereunder.
(e) LEGEND. Each certificate for Shares of the [SERIES DESIGNATION] shall
bear the following legend:
"The Town and Country Trust (the "Trust") will furnish, without
charge, to any shareholder making a written request therefor, a copy of the
Trust's First Amended and Restated Declaration of Trust, as amended or
supplemented from time to time (the "Declaration"), containing a statement
of the designations, preferences, conversion and other
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<PAGE>
rights, voting powers, restrictions, limitations as to dividends,
qualifications, terms and conditions of redemption and relative rights and
preferences applicable to each class of shares of the Trust, including the
Shares of the [SERIES DESIGNATION] represented hereby. Such requests may
be directed to The Town and Country Trust, 100 South Charles Street,
Baltimore, Maryland 21201. The Board of Trustees is authorized to
determine the designations, preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications,
terms and conditions of redemption and relative rights and preferences
applicable to each class and series of Preferred Shares before the issuance
of any such Preferred Shares.
"The Shares of the [SERIES DESIGNATION] represented by this
Certificate are subject to restrictions on transfer for the purpose of the
Trust's maintenance of its status as a Real Estate Investment Trust under
the Internal Revenue Code of 1986, as amended (the "Code"). With certain
further restrictions and exceptions set forth in the Declaration, no person
may beneficially own Shares in excess of 5.0% (or such greater percentage
as may be determined by the Board of Trustees of the Trust) of the lesser
of the number or value of the outstanding Shares of the Trust (unless such
person specifically shall have been exempted by the Board of Trustees).
Any Shares of the [SERIES DESIGNATION] held in excess of the above
limitations may be subject to mandatory redemption in certain events, and
certain purported acquisitions of Shares of the [SERIES DESIGNATION] in
excess of such limitations, or which would result in the disqualification
of the Trust as a Real Estate Investment Trust under the Code, shall be
void AB INITIO. All capitalized terms in this legend have the meanings set
forth in the Declaration, a copy of which, including the restrictions on
transfer, will be sent without charge to each shareholder who so requests."
11. TRUST INDUCED EVENTS; REDEMPTION OF SHARES OF THE [SERIES DESIGNATION]
IN CERTAIN CIRCUMSTANCES.
Notwithstanding anything to the contrary above:
(a) Prior to the Restriction Termination Date, if a purported transfer
(whether or not such transfer is the result of a transaction entered into
through the facilities of the NYSE), change in the capital structure of the
Trust or other event would result in a violation of the Ownership Limit and such
violation would not occur but for the occurrence of one or more Trust Induced
Events then, immediately prior to the occurrence of such transfer, change in the
capital structure of the Trust or other event, an amount of Shares of the
[SERIES DESIGNATION] (rounded up to the nearest tenth of a share) automatically
shall be redeemed by the Trust from the actual owner of Shares of the [SERIES
DESIGNATION] which is beneficially or constructively owned by any person who
(but for this Paragraph 11) would beneficially or constructive own Shares of the
[SERIES DESIGNATION] in excess of the Ownership Limit after the occurrence of
the Transfer, change in the capital structure of the Trust or other event. The
redemption price of each Share of the [SERIES DESIGNATION] automatically
redeemed pursuant to this Paragraph 11 shall be (i) the price per share paid for
the Shares of the [SERIES DESIGNATION] in the purported transfer that resulted
in the redemption, or (ii) if the transfer or other event that resulted in the
redemption was not a transaction in which the full value was paid for such
Shares of the [SERIES DESIGNATION] a price per share equal to the Market Price
on the date of the purported transfer or other event that resulted in the
redemption. [In either case, dividends which are accrued but unpaid with
respect to the redeemed shares as of the date of the purported transfer or other
event that resulted in the redemption shall be paid (except as limited by the
next succeeding sentence). Any dividend or other distribution paid prior to the
discovery that the Shares of the [SERIES DESIGNATION] have been redeemed by the
Trust shall be repaid to the Trust upon demand.] For purposes hereof, the term
"Trust Induced Event" shall mean [either (x) the election
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<PAGE>
by one or more holders of Shares of the [SERIES DESIGNATION] to convert all or a
portion of such Shares of the [SERIES DESIGNATION] into Common Shares, or (y)]
the redemption or purchase by the Trust of all or a portion of the outstanding
Shares of the [SERIES DESIGNATION].
(b) Prior to the Restriction Termination Date, if (i) there is a purported
transfer (whether or not such transfer is the result of a transaction entered
into through the facilities of the NYSE), change in the capital structure of the
Trust or other event (a "Non-Voidable Event") to which Paragraph 11(a) would not
otherwise apply, and (ii) one or more of the restrictions on ownership and
transfers described in subparagraph 10(a) would be violated upon the occurrence
of such Non-Voidable Event then, if and only if such Non-Voidable Event cannot
be voided pursuant to subparagraph 10(a)(ii), (iii) or (iv) (as applicable),
subparagraph (11)(a) shall apply to such Non-Voidable Event as if it were a
Trust Induced Event.
12. SETTLEMENT. Nothing in these Articles Supplementary shall preclude
the settlement of any transaction entered into through facilities of the NYSE.
13. CERTAIN DEFINITIONS.
(a) The term "outstanding", when used in reference to Shares, shall mean
issued Shares. Any Shares of the [SERIES DESIGNATION] which are [redeemed by
the Trust, purchased and delivered in satisfaction of any sinking fund
requirements provided for Shares of the [SERIES DESIGNATION], converted in
accordance with the terms thereof, or otherwise] acquired by the Trust, shall
cease to be deemed to be "outstanding" for all purposes hereof and shall resume
the status of authorized but unissued Shares.
(b) [INSERT SERIES-SPECIFIC DEFINITIONS, IF ANY.]
14. EXCLUSION OF OTHER RIGHTS. Unless otherwise required by law, Shares
of the [SERIES DESIGNATION] shall not have any rights, including preemptive
rights, or preferences other than those specifically set forth herein, in the
Declaration or as provided by applicable law.
15. NOTICE. All notices or communications unless otherwise specified in
the Bylaws of the Trust or these Articles Supplementary shall be sufficiently
given if in writing and delivered in person or mailed by first-class mail,
postage prepaid. Notice shall be deemed given on the earlier of the date
received or the date such notice is mailed.
16. INTERPRETATION OR ADJUSTMENT BY BOARD OF TRUSTEES. The Board of
Trustees of the Trust, consistent with Maryland law, may interpret or adjust the
provisions of these Articles Supplementary to resolve any inconsistency or
ambiguity, remedy any formal defect or make any other change or modification
which does not affect adversely the rights of beneficial owners of Shares of the
[SERIES DESIGNATION] and if such inconsistency or ambiguity reflects any
typographical error, error in transcription or other error the Board of Trustees
may authorize the filing of a Certificate of Correction.
IN WITNESS WHEREOF, The Town and Country Trust has caused these presents to
be signed in its name and on its behalf by its ______________ and attested by
its [Assistant] Secretary, and the said officers of the Trust further
acknowledge said instrument to be the act of the Trust and state under the
penalties of perjury that to the best of their knowledge, information and belief
the matters and facts therein set forth in respect of approval are true in all
material respects, all on __________, 20__.
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<PAGE>
THE TOWN AND COUNTRY TRUST
By:
---------------------------
Name:
Title:
Attest:
- -------------------------
Name:
[Assistant] Secretary
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<PAGE>
EXHIBIT 4.3
[FORM OF WARRANT AGREEMENT]
THE TOWN AND COUNTRY TRUST
AND
______________________________, AS WARRANT AGENT
[COMMON SHARE][PREFERRED SHARE] [DEPOSITARY SHARE]
WARRANT AGREEMENT
DATED AS OF ______________, ____
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
SECTION 1. APPOINTMENT OF WARRANT AGENT. . . . .. . . . . . . . . . . . . . . . . .1
SECTION 2. FORM OF WARRANT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
SECTION 3. COUNTERSIGNATURE AND REGISTRATION. . . . . . . . . . . . . . . . . . . .2
SECTION 4. TRANSFERS AND EXCHANGES. . . . . . . . . . . . . . . . . . . . . . . . .2
SECTION 5. EXERCISE OF WARRANTS . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 6. PAYMENT OF TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
SECTION 7. MUTILATED OR MISSING WARRANTS. . . . . . . . . . . . . . . . . . . . . .4
SECTION 8. RESERVATION OF SHARES, ETC . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 9. WARRANT PRICE; ADJUSTMENTS . . . . . . . . . . . . . . . . . . . . . . .4
SECTION 10. NOTICE TO WARRANT HOLDERS. . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 11. CERTAIN COVENANTS OF THE TRUST . . . . . . . . . . . . . . . . . . . . 10
SECTION 12. DISPOSITION OF PROCEEDS, ETC . . . . . . . . . . . . . . . . . . . . . 11
SECTION 13. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT . . . . . . 11
SECTION 14. DUTIES OF WARRANT AGENT. . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 15. CHANGE OF WARRANT AGENT. . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 16. IDENTITY OF TRANSFER AGENT . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 17. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 18. SUPPLEMENTS AND AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 19. MERGER, CONSOLIDATION, SALE, TRANSFER OR CONVEYANCE. . . . . . . . . . 15
SECTION 20. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 21. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 22. BENEFITS OF THIS AGREEMENT . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 23. HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 24. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 25. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>
<PAGE>
<TABLE>
<S> <C>
SECTION 26. INSPECTION OF AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 27. ACCELERATION OF WARRANTS BY THE TRUST. . . . . . . . . . . . . . . . . 16
SECTION 28. OWNERSHIP LIMITATIONS . . . . . . . . . . . . . . . . . .. . . . . . . 16
SECTION 28. TRUST DISCLAIMER . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
<PAGE>
[COMMON SHARE] [PREFERRED SHARE] [DEPOSITARY SHARE]
WARRANT AGREEMENT
[COMMON SHARE] [PREFERRED SHARE] [DEPOSITARY SHARE] WARRANT AGREEMENT
(this "Agreement"), dated as of __________________, _____, between The Town
and Country Trust, a Maryland real estate investment trust (hereinafter
called the "Trust"), and ____________________, having a corporate trust
office in __________________, as warrant agent (hereinafter called the
"Warrant Agent").
WHEREAS, the Trust proposes to issue [Class __] Purchase Warrants
(hereinafter called the "Warrants", which term shall also include such
warrant certificates evidencing such warrants) entitling the holders thereof
to purchase an aggregate of ______ [Common Share] [Preferred Share]
[Depositary Shares each representing a 1/_____th interest] of beneficial
interest of the Trust [(par value $.01 per share)] (hereinafter called the
"Shares") at an initial cash purchase price of $_____ per Share at any time
[after __________ and] before [____] p.m., [City] time, on ________, ____
(hereinafter called the "Expiration Date") (unless extended as provided in
Section 9.A. hereof); and
[IF SECURITIES AND WARRANTS ARE TO BE OFFERED TOGETHER:
WHEREAS, the Trust proposes to sell [title of Securities being offered]
(the "Securities") together with warrants (each, a "Warrant") representing
the right to purchase [title of Securities purchasable upon exercise of
Warrants] [IF WARRANTS FOR DEPOSITARY SHARES ARE TO BE OFFERED:, each
representing a 1/_____th interest in a share of [title of securities
represented by Depositary Shares] (the "Warrant Securities" [IF WARRANTS FOR
DEPOSITARY SHARES ARE TO BE OFFERED:, which term shall also refer, as
appropriate, to such [title of securities represented by Depositary Shares]),
such warrant certificates and other warrant certificates issued pursuant to
this Agreement being herein called the "Warrant Certificates"; and]
WHEREAS, the Trust desires the Warrant Agent to act on behalf of the
Trust, and the Warrant Agent is willing so to act, in connection with the
issuance, registration, transfer, exchange and exercise of Warrants to be
issued from time to time by the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Trust hereby appoints the
Warrant Agent to act as agent for the Trust in accordance with the
instructions hereinafter in this Agreement set forth, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. FORM OF WARRANT. The text of the Warrants and the form of
election to purchase Shares to be set forth on the reverse thereof shall be
substantially as set forth in Exhibit A attached hereto. Each Warrant shall,
subject to the terms of this Warrant Agreement, entitle the registered holder
thereof initially to purchase the number of Shares specified therein at an
initial exercise price of $_____ per Share; PROVIDED, HOWEVER, that the
Warrant Exercise Price and the number of Shares issuable upon exercise of
Warrants are subject to adjustment upon the occurrence of certain events, all
as hereinafter provided. The Warrants shall be executed on behalf of the
Trust by the manual or facsimile signature of the present or any future
Chairman of the Board, President or Vice President of the Trust, under its
seal, affixed or in facsimile, and by
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the manual or facsimile signature of the present or any future Secretary or
Assistant Secretary of the Trust.
The Trust promptly shall notify the Warrant Agent from time to time in
writing of the number of Warrants to be issued and furnish written
instructions in connection therewith signed by an executive officer of the
Trust; such notification and instructions may, but need not be, in the form
of a general or continuing authorization to the Warrant Agent.
The Warrants shall be dated by the Warrant Agent as of the date of each
initial issuance, and as of the date of issuance thereof upon any transfer or
exchange thereof.
SECTION 3. COUNTERSIGNATURE AND REGISTRATION. The Warrant Agent shall
maintain books for the transfer and registration of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and register
the Warrants in the names of the respective registered holders thereof. The
Warrants shall be countersigned by the Warrant Agent (or by any successor to
the Warrant Agent then acting as warrant agent under this Agreement) and
shall not be valid or obligatory for any purpose unless so countersigned.
Such Warrants may be so countersigned, however, by the Warrant Agent (or by
its successor as warrant agent) and be delivered by the Warrant Agent,
notwithstanding that the persons whose manual or facsimile signatures appear
thereon as proper officers of the Trust shall have ceased to be such officers
at the time of such countersignature or delivery. Upon issuance of any
Warrant, the Trust will present the same, or cause the same to be presented,
to the Warrant Agent for countersignature of such Warrant.
The Trust may deem and treat the registered holder of the Warrant
certificate as the absolute owner thereof (notwithstanding any notation of
ownership or other writing thereon made by anyone) for the purpose of any
exercise thereof, any distribution to the holder thereof, and for all other
purposes, and neither the Warrant Agent nor the Trust shall be affected by
any notice to the contrary.
SECTION 4. TRANSFERS AND EXCHANGES. The Warrant Agent shall transfer,
from time to time, any outstanding Warrants upon the books to be maintained
by the Warrant Agent for that purpose, upon the surrender thereof for
transfer properly endorsed or accompanied by appropriate instructions for
transfer. Upon any such transfer, a new Warrant of like tenor shall be issued
to the transferee and the surrendered Warrant shall be canceled by the
Warrant Agent. All such Warrants so canceled shall be delivered by the
Warrant Agent to the Trust from time to time. The Warrants may be exchanged
at the option of the holder thereof, when surrendered at the office in
____________________ of the Warrant Agent, for another Warrant, or other
Warrants of different denominations, of like tenor and representing in the
aggregate the right to purchase a like number of Shares. The Warrant Agent
hereby is irrevocably authorized to countersign and deliver, in accordance
with the provisions of this Section and Section 3 of this Agreement, such new
Warrants required pursuant to the provisions of this Section, and the Trust,
whenever required by the Warrant Agent, will supply the Warrant Agent with
Warrants duly executed on behalf of the Trust for such purpose.
[IF THE WARRANTS ARE ATTACHED TO OTHER SECURITIES, INSERT:
Notwithstanding the foregoing, until ________________________, the
Warrants shall not be transferable apart from the _______________________ to
which they are attached, any transfer of the _____________________________
shall be deemed a transfer of the Warrants attached thereto, and any attempt
to transfer the Warrants apart from the _________ shall be void and of no
effect. Each Warrant shall contain a legend to the foregoing effect.]
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SECTION 5. EXERCISE OF WARRANTS. The registered holder of each
Warrant shall have the right, subject to the terms and conditions provided in
the Warrant, to purchase from the Trust (and the Trust shall issue and sell
to such registered holder) the number of fully paid and non-assessable Shares
specified in such Warrant, upon surrender to the Trust, at the office in
_________________ of the Warrant Agent of such Warrant, with the form of
election to purchase on the reverse thereof duly filled in and signed, and
upon payment to the Warrant Agent for the account of the Trust of the Warrant
Exercise Price, determined in accordance with the provisions of Section 9 of
this Agreement, for the number of Shares in respect of which such Warrant is
then exercised. Payment of such Warrant Exercise Price may be made in cash,
or by certified check or bank draft or postal or express money order, payable
in United States dollars, to the order of the Warrant Agent. No adjustment
shall be made for any dividends or distributions on any Shares issuable upon
exercise of any Warrant so long as the record date for such dividend or
distribution is prior to the effective time of such exercise. Subject to
Section 6, upon such surrender of Warrants, and payment of the Warrant
Exercise Price as aforesaid, the Trust shall issue and cause to be delivered
with all reasonable dispatch to or upon the written order of the registered
holder of such Warrants, and in such name or names as such registered holder
may designate, a certificate or certificates for the number of full Shares so
purchased upon the exercise of such Warrants, together with cash, as provided
in Section 9 of this Agreement, in respect of any fraction of a Share
otherwise issuable upon such surrender. Such certificate or certificates
shall be deemed to have been issued and any person so designated to be named
therein shall be deemed to have become a holder of record of such Shares as
of the date of the surrender of such Warrants and payment of the Warrant
Exercise Price as aforesaid; provided, however, that if, at the date of
surrender of such Warrants and payment of such Warrant Exercise Price, the
transfer books for the Shares purchasable upon the exercise of such Warrants
shall be closed, no such surrender of such Warrants and no such payment of
such Warrant Exercise Price shall be effective to constitute the person so
designated to be named therein as the holder of record of such Shares on such
date, but shall be effective to constitute such person as the holder of
record of such Shares for all purposes at the opening of business on the next
succeeding day on which the transfer books for the Shares purchasable upon
the exercise of such Warrants shall be open, and the certificates for the
Shares in respect of which such Warrants are then exercised shall be issuable
as of the date on which such books next shall be open, and until such date
the Trust shall be under no duty to deliver any certificate for such Shares.
The rights of purchase represented by the Warrants shall be exercisable, at
the election of the registered holders thereof, either as an entirety or from
time to time for part only of the Shares specified therein and, in the event
that any Warrant is exercised in respect of less than all of the Shares
specified therein at any time before the Expiration Date of the Warrants, a
new Warrant or Warrants of like tenor will be issued for the remaining number
of Shares specified in the Warrant so surrendered, and the Warrant Agent
hereby is irrevocably authorized to countersign and to deliver the required
new Warrants pursuant to the provisions of this Section and of Section 3 of
this Agreement, and the Trust, whenever required by the Warrant Agent, will
supply the Warrant Agent with Warrants duly executed on behalf of the Trust
for such purpose.
SECTION 6. PAYMENT OF TAXES. The Trust will pay any documentary
stamp taxes attributable to the initial issuance of Shares issuable upon the
exercise of Warrants; provided, however, that the Trust shall not be required
to pay any tax or taxes which may be payable in respect of any transfer
involved in the issue or delivery of any certificates for Shares in a name
other than that of the registered holder of Warrants in respect of which such
Shares are issued and the Trust shall not be required to issue and deliver
the certificates for such Shares unless and until the holder has paid to the
Trust the amount of any tax which may be payable in respect of any transfer
involved in such issuance or shall establish to the satisfaction of the Trust
that such tax has been paid.
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SECTION 7. MUTILATED OR MISSING WARRANTS. In case any of the
Warrants shall be mutilated, lost, stolen or destroyed, the Trust will issue
and the Warrant Agent will countersign and deliver in exchange and
substitution for and upon cancellation of the mutilated Warrant, or in lieu
of and substitution for the Warrant lost, stolen or destroyed, a new Warrant
of like tenor and representing an equivalent right or interest, but only upon
receipt of evidence satisfactory to the Trust and the Warrant Agent of the
mutilation, loss, theft or destruction of such Warrants and indemnity, if
requested, also satisfactory to them. Applicants for such substitute Warrants
also shall comply with such other reasonable regulations and pay such other
reasonable charges as the Trust or the Warrant Agent may prescribe. Any such
new Warrant shall constitute an original contractual obligation of the Trust
whether or not the allegedly mutilated, lost, stolen or destroyed Warrant
shall be at any time enforceable by anyone.
SECTION 8. RESERVATION OF SHARES, ETC. Before the issuance of any
Warrants there shall have been reserved, and the Trust shall at all times
through the Expiration Date keep reserved, free from preemptive rights, out
of its authorized and unissued [Common Shares] [Preferred Shares], a number
of Shares sufficient to provide for the exercise of the rights of purchase
represented by the Warrants and upon issuance and delivery of such Shares to
the holder exercising the Warrant and upon payment of the Warrant Exercise
Price, good and valid title to such Shares for which the Warrant is exercised
free and clear of all liens, encumbrances, equities or claims will pass to
such holder or, if a different person, the person in whose name the Shares
are registered, and the transfer agent for such Shares and every subsequent
transfer agent for such Shares hereby are irrevocably authorized and directed
at all times to reserve such number of authorized and unissued Shares as
shall be requisite for such purpose. The Trust will keep a copy of this
Agreement on file with the transfer agent for such Shares and with every
subsequent transfer agent for such Shares. The Warrant Agent is hereby
irrevocably authorized to requisition from time to time from such transfer
agent certificates required to honor outstanding Warrants that have been
exercised. The Trust will supply such transfer agent with duly executed
certificates for such purpose and will itself provide or otherwise make
available any cash and other shares of capital stock so distributed which may
be issuable as provided in Section 9 of this Agreement. All Warrants
surrendered in the exercise of the rights thereby evidenced or surrendered
for transfer, exchange or partial exercise shall be canceled by the Warrant
Agent and shall thereafter be delivered to the Trust.
SECTION 9. WARRANT PRICE; ADJUSTMENTS.
A. The price per share at which the Shares shall be purchasable
upon exercise of Warrants (herein called the "Warrant Exercise Price") to and
including the Expiration Date (unless the Expiration Date is extended as
provided below in this Section 9.A.) shall be $____ per Share, or, if
adjusted as provided in this Section, shall be such price as so adjusted. The
Warrants will not be exercisable before [the close of business on the date of
any initial issuance thereof] [_________________] and will expire at
[_______] p.m., [City]time, on the Expiration Date; PROVIDED, HOWEVER, that
the Trust reserves the right to, and may, in its sole discretion, at any time
and from time to time, at such time or times as the Trust so determines,
extend the Expiration Date of the Warrants for such periods of time as it
chooses; FURTHER PROVIDED that in no case may the Expiration Date of the
Warrants (as extended) be extended beyond five years from the original
Expiration Date set forth above. Whenever the Expiration Date of the Warrants
is so extended, the Trust shall, at least 20 days before the then current
Expiration Date, cause to be mailed to the Warrant Agent and the registered
holders of the Warrants in accordance with the provisions of Section 18
hereof a notice stating that the Expiration Date has been extended and setting
forth the new Expiration Date.
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<PAGE>
B. The above provision is, however, subject to the following:
(1) The Warrant Exercise Price, the number of Shares purchasable
upon exercise of each Warrant and the number of Warrants outstanding shall be
subject to adjustment as follows:
(a) In case the Trust shall at any time after the date of this
Agreement (i) pay a dividend, or make a distribution, on shares
of its [Common Shares] [Preferred Shares] which is payable in
shares of its capital stock (whether [Common Shares] [Preferred
Shares] or of capital stock of any other class), (ii) subdivide
or reclassify its outstanding [Common Shares] [Preferred Shares]
into a greater number of securities (including [Common Shares]
[Preferred Shares]), or (iii) combine or reclassify outstanding
[Common Shares] [Preferred Shares] into a smaller number of
Shares (including [Common Shares] [Preferred Shares]), the
number of Shares purchasable upon exercise of each Warrant
immediately before the occurrence of such event shall be
adjusted so that the holder of each Warrant shall be entitled
to receive upon payment of the Warrant Exercise Price the
aggregate number of Shares and other shares of capital stock so
distributed of the Trust which, if such Warrant had been
exercised immediately before the occurrence of such event, such
holder would have owned or would have been entitled to receive
immediately after the occurrence of such event. An adjustment
made pursuant to this subparagraph (a) shall become effective
immediately after the record date in the case of a dividend or
distribution and shall become effective immediately after the
effective date in the case of a subdivision or combination. If,
as a result of an adjustment made pursuant to this paragraph
(a), the holder of any Warrant thereafter exercised shall become
entitled to receive shares of two or more classes of capital
stock of the Trust, the Board of Trustees of the Trust (whose
determination shall be conclusive) shall determine the allocation
between or among shares of such classes of capital stock. In the
event that at any time, as a result of an adjustment made
pursuant to this subparagraph (a), the holder of any Warrant
thereafter exercised shall become entitled to receive any shares
or other securities of the Trust other than [Common Shares]
[Preferred Shares], thereafter the number of such other shares so
received upon exercise of any Warrant shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
[Common Shares] [Preferred Shares] contained in this paragraph,
and the other provisions of this paragraph 9.B.(1) with respect
to the [Common Shares] [Preferred Shares] shall apply on like
terms to any such other shares or other securities.
(b) In case the Trust shall fix a record date for the issuance of
rights or warrants to all holders of its [Common Shares]
[Preferred Shares] entitling them (for a period expiring within
45 days after such record date) to subscribe for or purchase
[Common Shares] [Preferred Shares] at a price per share less
than the current market price per share of [Common Shares]
[Preferred Shares] (as defined in subparagraph (e) below) at
such record date, the Warrant Exercise Price shall be determined
by multiplying the Warrant Exercise Price in effect immediately
before such record date by a fraction, the numerator of which
shall be the number of [Common Shares] [Preferred Shares]
outstanding on such record date plus the number of [Common
Shares] [Preferred Shares] which the aggregate offering price of
the total number of shares so offered would purchase at such
current market price, and the denominator of which shall be the
number of [Common Shares] [Preferred Shares] outstanding on such
record date plus the number of
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additional [Common Shares] [Preferred Shares] offered for
subscription or purchase. Such adjustment shall be made
successively whenever such a record date is fixed, and shall
become effective immediately after such record date. In
determining whether any rights or warrants entitle the holders
to subscribe for or purchase [Common Shares] [Preferred Shares]
at less than such current market price, and in determining the
aggregate offering price of such Shares, there shall be taken
into account any consideration received by the Trust for such
rights or warrants, the value of such consideration, if other
than cash, to be determined by the Board of Trustees of the
Trust. [Common Shares] [Preferred Shares] owned by or held for
the account of the Trust or any majority-owned subsidiary shall
not be deemed outstanding for the purpose of any adjustment
required under this subparagraph (b).
(c) In case the Trust shall fix a record date for making a
distribution to all holders of its [Common Shares] [Preferred
Shares] of evidences of its indebtedness or assets (excluding
regular quarterly or other periodic cash dividends or
distributions and cash dividends or distributions paid from
retained earnings or referred to in subparagraph (a) above) or
rights or warrants to subscribe or warrants to purchase
(excluding those referred to in subparagraph (b) above), then in
each such case the Warrant Exercise Price shall be determined by
multiplying the Warrant Exercise Price in effect immediately
before such record date by a fraction (x) the numerator of which
shall be such current market price (as defined in subparagraph
(e) below) per [Common Share] [Preferred Share] on such record
date, less the then current fair market value (as determined in
good faith by the Board of Trustees, whose determination shall
be conclusive) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights or
warrants applicable to one [Common Share] [Preferred Share] and
(y) the denominator of which shall be the current market price
per [Common Share] [Preferred Share] on such record date. Such
adjustment shall be made successively whenever such a record
date is fixed and shall become effective immediately after such
record date. Notwithstanding the foregoing, in the event that
the Trust shall distribute any rights or warrants to acquire
capital stock ("Rights") pursuant to this subparagraph (c), that
are represented by and not separable from, the [Common Shares]
[Preferred Shares] the distribution of separate certificates
representing such Rights after their initial distribution
(whether or not such distribution shall have occurred before the
date of the issuance of such Warrants) shall be deemed to be the
distribution of such Rights for purposes of this subparagraph
(c), PROVIDED, HOWEVER, that the Trust may, in lieu of making
any adjustment pursuant to this subparagraph (c) upon a
distribution of separate certificates representing such Rights,
make proper provision so that each holder of such Warrants who
exercises such Warrants (or any portion thereof) (A) before the
record date for such distribution of separate certificates shall
be entitled to receive upon such exercise [Common Shares]
[Preferred Shares] [Depositary Shares] issued with Rights and (B)
after such record date and before the expiration, redemption or
termination of such Rights shall be entitled to receive upon such
exercise, in addition to the [Common Shares] [Preferred Shares]
[Depositary Shares] issuable upon such exercise, the same number
of such Rights as would a holder of the number of [Common Shares]
[Preferred Shares] [Depositary Shares] that such Warrants so
exercised would have entitled the holder thereof to purchase in
accordance with the terms and provisions of and applicable to the
Rights if such Warrants were exercised immediately before the
record date for such distribution.
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[Common/Preferred Stock] [Depositary Shares] owned by or held
for the account of the Trust or any majority owned subsidiary
shall not be deemed outstanding for the purpose of any
adjustment required under this subparagraph (c).
(d) There will be no adjustments to the Warrant Exercise Price to
reflect cash dividends paid with respect to [Common Shares]
[Preferred Shares] other than Extraordinary Dividends. A cash
dividend with respect to [Common Shares] [Preferred Shares] will
be deemed to be an "Extraordinary Dividend" if such dividend
exceeds the immediately preceding non-Extraordinary Dividend for
[Common Shares] [Preferred Shares] by an amount equal to at least
10% of the closing price (as determined in accordance with Section
9.B(1)(g)) of [Common Shares] [Preferred Shares] on the first
Trading Day (as defined in Section 9.B.(1)(g)) immediately
preceding the date on which [Common Shares] [Preferred Shares]
trade without the right to receive such Extraordinary Dividend
(the "ex-dividend date"). If an Extraordinary Dividend occurs
with respect to [Common Shares] [Preferred Shares], the Warrant
Exercise Price will be adjusted at the opening of business on the
ex-dividend date by multiplying such Warrant Exercise Price by a
fraction, the numerator of which shall be the closing price of
[Common Shares] [Preferred Shares] on the Trading Day (as defined
in Section 9.B.(1)(g)) immediately preceding such ex-dividend date
and the denominator of which shall be the difference between such
closing price and the Extraordinary Dividend Amount. The
"Extraordinary Dividend Amount" with respect to an Extraordinary
Dividend for [Common Shares] [Preferred Shares] will equal (i) in
the case of cash dividends that constitute quarterly dividends,
the amount per share of such Extraordinary Dividends minus the
amount per share of the immediately preceding non-Extraordinary
Dividend for [Common Shares] [Preferred Shares] or (ii) in the
case of cash dividends that do not constitute quarterly dividends,
the amount per share of such Extraordinary Dividend.
(e) In case a tender or exchange offer made by the Trust or any of its
subsidiaries for all or any portion of the Trust's [Common Shares]
[Preferred Shares] shall expire and such tender or exchange offer
shall involve the payment by the Trust or such subsidiary of
consideration per share of [Common Shares] [Preferred Shares]
having a fair market value (as determined in good faith by the
Board of Trustees of the Trust, whose determination shall be
conclusive) at the last time (the "Expiration Time") tender or
exchanges may be made pursuant to such tender or exchange offer
(as it shall have been amended) that exceeds 10% of the closing
price (as determined in accordance with Section 9.B.(1)(g)) of the
[Common Shares] [Preferred Shares] on the Trading Day (as defined
in Section 9.B.(1)(g)) next succeeding the Expiration Time, the
Warrant Exercise Price shall be reduced so that the same shall
equal the price determined by multiplying the Warrant Exercise
Price in effect immediately prior to the effectiveness of the
Warrant Exercise Price reduction contemplated by this subparagraph
(e) by a fraction of which the numerator shall be the number of
[Common Shares] [Preferred Shares] outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by
the closing price (as determined in accordance with Section
9.B.(1)(g)) of the [Common Shares] [Preferred Shares] on the
Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable
to shareholders based on the acceptance (up to any maximum
specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged
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<PAGE>
and not withdrawn as the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of
[Common Shares] [Preferred Shares]outstanding (less any
Purchased Shares) at the Expiration Time and the closing price
(as determined in accordance with Section 9.B.(1)(g)) of the
[Common Shares] [Preferred Shares] on the Trading Day next
succeeding the Expiration Time, such reduction to become
immediately effective prior to the opening of business on the
day following the Expiration Time. Notwithstanding anything
contained in this subparagraph (e) to the contrary, no
adjustment shall be made to the Warrant Exercise Price in the
case of a tender offer that complies with Rule 13e-4(h)(5) of
the Securities Exchange Act of 1934, as amended, or any
successor rule thereto.
(f) After each adjustment of the number of Shares purchasable upon
exercise of each Warrant pursuant to subparagraphs 9.B.(1)(a),
(b) and (c) above the Warrant Exercise Price shall be adjusted by
multiplying such Warrant Exercise Price immediately before such
adjustment by a fraction of which the numerator shall be the
number of Shares purchasable upon exercise of each Warrant
immediately before such adjustment, and the denominator of which
shall be the number of Shares and other shares of capital stock so
purchasable immediately thereafter. After each adjustment of the
Warrant Exercise Price pursuant to subparagraph 9.B.(1)(b), (c),
(d) or (e), the total number of Shares or fractional part thereof
purchasable upon the exercise of each Warrant shall be adjusted
proportionately to reflect such number of Shares or fractional
parts thereof as the adjusted Warrant Exercise Price will buy.
(g) For the purpose of any computation under subparagraphs 9.B.(1)(b)
and (c) above, the current market price per [Common Shares]
[Preferred Shares] [Depositary Share] at any date shall be deemed
to be the average of the daily closing prices for the five
consecutive Trading Days selected by the Trust commencing more
than 20 Trading Days before, and ending not later than, the
earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such
computation. The closing price for each day shall be (i) if the
[Common Shares] [Preferred Shares] [Depositary Shares] are listed
or admitted for trading on the New York Stock Exchange, the last
sale price (regular way), or the average of the closing bid and
asked prices (regular way), if no sale occurred, of [Common
Shares] [Preferred Share] [Depositary Shares], in either case as
reported on the New York Stock Exchange Composite Tape or, if the
[Common Shares] [Preferred Shares] [Depositary Shares] are not
listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which the [Common
Shares] [Preferred Shares] [Depositary Shares] are listed or
admitted to trading or, if not listed or admitted to trading on
any national securities exchange, on the National Market System of
the National Association of Securities Dealers, Inc. Automated
Quotations System ("Nasdaq") or (ii) if not listed or quoted as
described in (i), the mean between the closing high bid and low
asked quotations of [Common Shares] [Preferred Shares] [Depositary
Shares] reported by Nasdaq, or any similar system for automated
dissemination of quotations of securities prices then in common
use, if so quoted, or (iii) if not quoted as described in clause
(ii), the mean between the high bid and low asked quotations for
[Common Shares] [Preferred Shares] [Depositary Shares] as reported
by the National Quotation Bureau Incorporated if at least two
securities dealers have inserted both bid and asked quotations for
[Common
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Shares] [Preferred Shares] [Depositary Shares] on at least
5 of the 10 preceding trading days. If none of the conditions set
forth above is met, the closing price of [Common Shares]
[Preferred Shares] [Depositary Shares] on any day or the average
of such closing prices for any period shall be the fair market
value of [Common/Preferred Stock] [Depositary Shares] as
determined by a member firm of the New York Stock Exchange
selected by the Trust. For the purposes of this subparagraph (g),
the term "Trading Day" shall mean each Monday through Friday,
other than any day on which securities are not traded in the
system or on the exchange that is the principal market for the
[Common Shares][Preferred Shares][Depositary Shares], as
determined by the Board of Trustees of the Trust, and the term
"'ex' date", when used with respect to any issuance or
distribution, shall mean the first date on which the [Common
Shares][Preferred Shares][Depositary Shares] trade regular way on
such exchange or in such market without the right to receive such
issuance or distribution.
(h) (A) Nothing contained herein shall be construed to require an
adjustment as a result of the issuance of Common Shares pursuant
to, or the granting or exercise of any rights under, the Trust's
Amended and Restated 1993 Long Term Incentive Plan or 1997 Long
Term Incentive Plan; and (B) in addition, no adjustment in the
Warrant Exercise Price shall be required unless and until the
earlier of the following shall have occurred: (x) such adjustment
would require an increase or decrease of at least 1% in the
Warrant Exercise Price or (y) a period of three years shall have
elapsed from the date of the occurrence of any event requiring any
such adjustment pursuant to subparagraphs 9.B.(1)(a), (b), (c),
(d) or (e) above. All adjustments shall be made to the nearest one
hundredth of a share and the nearest cent, and any adjustments
which by reason of this subparagraph (h) are not required to be
made shall be carried forward cumulatively and taken into account
in any subsequent adjustment which (including such carry forward)
is required to be made under this subparagraph (h).
(i) The Trust may, at its option, at any time until the Expiration
Date, reduce the then current Warrant Exercise Price to any amount
deemed appropriate by the Board of Trustees of the Trust for any
period not exceeding 20 consecutive business days (as evidenced in
a resolution adopted by such Board of Trustees), but only upon
giving the notices required by subparagraph 9.B.(5) 20 business
days before taking such action.
(j) Except as herein otherwise expressly provided, no adjustment in
the Warrant Exercise Price shall be made by reason of the issuance
of Shares, or securities convertible into or exchangeable for
Shares, or securities carrying the right to purchase any of the
foregoing or for any other reason whatsoever.
(k) Irrespective of any of the adjustments in the Warrant Exercise
Price or the number of Shares, Warrant Certificates theretofore
issued may continue to express the
same prices and number of Shares as are stated in a similar
Warrant Certificate issuable initially, or at some subsequent
time, pursuant to this Agreement and such exercise price and
number of Shares specified therein shall be deemed to have been so
adjusted.
(2) No fractional [Common Shares] [Preferred Shares] [Depositary
Shares] shall be issued upon the exercise of Warrants. If more than one Warrant
shall be exercised at one time by
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the same holder, the number of full Shares which shall be issuable upon such
exercise shall be computed on the basis of the aggregate number of Shares
purchased pursuant to the Warrants so exercised. Instead of any fractional
[Common Shares] [Preferred Shares] [Depositary Share] which would otherwise be
issuable upon exercise of any Warrant, the Trust shall pay a cash adjustment
in respect of such fraction in an amount equal to the same fraction of the
last sales price (or bid price if there were no sales), regular way, per
[Common Share] [Preferred Share] [Depositary Share], in either case as
reported on the New York Stock Exchange Composite Tape on the trading day
which next precedes the day of exercise or, if the [Common Shares]
[Preferred Shares][Depositary Shares] are not then listed or admitted to
trading on the New York Stock Exchange, an amount equal to the same fraction
of the market price per [Common Shares] [Preferred Shares] [Depositary Shares]
(as determined in a manner described by the Board of Trustees of the Trust)
at the close of business on the trading day which next precedes the day of
exercise.
(3) In case any of the following shall occur while any Warrants are
outstanding: (a) any reclassification or change of the outstanding shares of
[Common Shares] [Preferred Shares] (other than a change in par value, or from
par value to no par value, or from no par value to par value); or (b) any
consolidation, merger, mandatory share exchange or similar business
combination to which the Trust is a party (other than a consolidation,
merger, share exchange or other business combination in which the Trust is
the continuing entity and which does not result in any reclassification of,
or change in, the outstanding Shares issuable upon exercise of the Warrants
and does not give the holders of Shares the right to exchange such Shares for
cash or securities or other property of another entity); or (c) any sale or
conveyance of the property of the Trust as an entirety or substantially as an
entirety; then the Trust, or such successor or purchaser, as the case may be,
shall make appropriate provision by amendment of this Agreement or otherwise
so that the holders of the Warrants then outstanding shall have the right at
any time thereafter, upon exercise of such Warrants, to purchase the kind and
amount of shares of stock and other securities and property receivable upon
such reclassification, change, consolidation, merger, share exchange,
business combinations, sale or conveyance as would be received by a holder of
the number of [Common Shares] [Preferred Shares] [Depositary Shares] issuable
upon exercise of such Warrant immediately before such reclassification,
change, consolidation, merger, share exchange, business combination, sale or
conveyance. Such provision shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in
this Section 9. The above provisions of this subparagraph 9.B.(3) shall
similarly apply to successive reclassifications, changes, consolidations,
mergers, share exchanges, business combinations, sales or conveyances.
(4) Before taking any action which would cause an adjustment
decreasing the Warrant Exercise Price so that the Warrant Exercise Price is
below the then par value of the [Common Shares] [Preferred Shares], the Trust
will take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Trust may validly and legally issue fully paid
and nonassessable [Common Shares] [Preferred Shares] [Depositary Shares] at
the Warrant Exercise Price as so adjusted.
(5) Whenever the Warrant Exercise Price then in effect is adjusted
as herein provided, the Trust shall mail to each holder of the Warrants at
such holder's address as it shall appear on the books of the Trust a
statement setting forth the adjusted Warrant Exercise Price then and
thereafter effective under the provisions hereof, together with the facts, in
reasonable detail, upon which such adjustment is based.
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(6) In case (i) the Trust shall declare a dividend (or any other
distribution) on its [Common Shares] [Preferred Shares] payable otherwise
than in cash out of its current or retained earnings, or (ii) the Trust shall
authorize the granting to the holders of its [Common Shares]
[Preferred Shares] of rights to subscribe for or purchase any shares of
capital stock of any class or of any other rights, or (iii) there is to be
any reclassification of the [Common Shares] [Preferred Shares] of the Trust
(other than a subdivision or combination of its outstanding shares of
[Common Shares] [Preferred Shares], or any consolidation, merger, mandatory
share exchange or other business combination to which the Trust is a party
and for which approval of any stockholders of the Trust is required, or (iv)
any distribution is to be made on or in respect of the [Common Shares]
[Preferred Shares] in connection with the dissolution, liquidation or winding
up of the Trust, then the Trust shall mail to each holder of Warrants at such
holder's address as it shall appear on the books of the Trust, at least 20
days (or 10 days in any case specified in clause (i) or (ii) above) before
the applicable record date hereinafter specified, a notice stating (x) the
record date for such dividend, distribution or rights, or, if a record is not
to be taken, the date as of which the holders of [Common Shares]
[Preferred Shares] of record to be entitled to such dividend, distribution or
rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, mandatory share exchange, business combination,
dissolution, liquidation or winding up is expected to become effective, and
the date as of which it is expected that holders of [Common Shares]
[Preferred Shares] of record shall be entitled to exchange their
[Common Shares] [Preferred Shares] for securities or other property
deliverable upon such reclassification, consolidation, merger, mandatory
share exchange, business combination, dissolution, liquidation or winding up.
No failure to mail such notice nor any defect therein or in the mailing
thereof shall affect any such transaction or any adjustment in the Warrant
Exercise Price required by this Section 9.
SECTION 10. NOTICE TO WARRANT HOLDERS. Nothing contained in this
Agreement or in any of the Warrants shall be construed as conferring upon the
holders thereof the right to vote or to consent or to receive notice as
shareholders in respect of the meetings of shareholders or the election of
trustees of the Trust or any other matter, or any rights whatsoever as
shareholders of the Trust.
Any holder of any Warrant, without the consent of the Warrant Agent or
any other holder of any Warrant, on such holder's own behalf and for his own
benefit, may enforce, and may institute and maintain a suit, action or
proceeding against the Trust or the Warrant Agent to enforce, or otherwise in
respect of, such holder's right to exercise the Warrants in the manner
provided in this Agreement and such Warrant.
SECTION 11. CERTAIN COVENANTS OF THE TRUST.
A. So long as any unexpired Warrants remain outstanding and if
required in order to comply with the Securities Act of 1933, as amended (the
"Act"), the Trust covenants and agrees that it will file such post-effective
amendments to the registration statement filed pursuant to the Act with
respect to the Warrants (or such other registration statements or
post-effective amendments or supplements) as may be necessary to permit the
Trust to deliver to each person exercising a Warrant a prospectus meeting the
requirements of Section 10(a) of the Act and otherwise complying therewith,
and will deliver such a prospectus to each such person. The Trust further
covenants and agrees that it will obtain and keep effective all permits,
consents and approvals of governmental agencies and authorities, and will use
its best efforts to take all action which may be necessary to qualify the
Shares for sale under the securities laws of such states, as may be necessary
to permit the free exercise of the Warrants, and the issuance, sale, transfer
and
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delivery of the Shares issued upon exercise of the Warrants, and to maintain
such qualifications during the entire period in which the Warrants are
exercisable.
B. The Trust covenants and agrees that it shall take all such
action as may be necessary to ensure that all Shares will, at the time of
delivery of certificates for such Shares (subject to payment of the Warrant
Exercise Price), be duly and validly authorized and issued and fully paid and
nonassessable Shares, free from any preemptive rights and taxes, liens,
charges and security interests created by or imposed upon the Trust.
C. The Trust represents and warrants that it has all requisite
trust power and authority to enter into this Agreement and to perform its
duties and obligations hereunder; prior to the date hereof, the Warrants will
have been duly and validly authorized by the Trust and, when delivered
pursuant to the terms hereof, will have been duly executed, issued and
delivered and will constitute valid and legally binding obligations of the
Trust entitled to the benefits of this Agreement; prior to the date hereof,
this Agreement will have been duly authorized and, when duly executed and
delivered by the Warrant Agent, this Agreement will constitute a valid and
legally binding obligation of the Trust enforceable in accordance with its
terms, subject as to enforcement to bankruptcy, insolvency, reorganization
and other laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
D. The Trust covenants and agrees that it will take all action
which may be necessary to cause the Shares to be duly listed on the New York
Stock Exchange or another securities exchange or the interdealer quotation
system on which the other [Common Shares] [Preferred Shares]
[Depositary Shares] of the Trust are listed at the dates of exercise of the
Warrants.
SECTION 12. DISPOSITION OF PROCEEDS, ETC.
A. The Warrant Agent shall account promptly to the Trust with
respect to Warrants exercised and shall concurrently pay to the Trust all
moneys received by the Warrant Agent for the purchase of Shares through the
exercise of such Warrants.
B. The Warrant Agent shall keep copies of this Agreement available
for inspection by holders of Warrants during normal business hours at its
principal office in the City of __________________, ____________.
SECTION 13. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT
AGENT. Any entity into which the Warrant Agent may be merged or with which it
may be consolidated, or any entity resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any entity succeeding to the
corporate trust business of the Warrant Agent, shall be the successor to the
Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
entity would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 15 of this Agreement. In case at the time such
successor to the Warrant Agent shall succeed to the agency created by this
Agreement, and if any of the Warrants shall have been countersigned but not
delivered, any such successor to the Warrant Agent may adopt the
countersignature of the original Warrant Agent and deliver such Warrants so
countersigned; and in case at that time any of the Warrants shall not have
been countersigned, any successor to the Warrant Agent may countersign such
Warrants either in the name of the predecessor Warrant Agent or in the name
of the successor Warrant Agent; and in all such cases such Warrant shall have
the full force provided in the Warrants and in this Agreement.
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In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignature under its prior
name and deliver Warrants so countersigned; and in case at that time any of
the Warrants shall not have been countersigned, the Warrant Agent may
countersign such Warrants either in its prior name or in its changed name;
and in all such cases such Warrants shall have the full force provided in the
Warrants and in this Agreement.
The surviving Warrant Agent (if not the original Warrant Agent) or the
original Warrant Agent (in the event of a name change) shall, at its expense,
promptly cause to be mailed (by first class mail, postage prepaid) to each
holder of then outstanding Warrants at such holder's last address as shown on
the register of the Trust maintained by the Warrant Agent, notices of the
succession or name change as the case may be.
SECTION 14. DUTIES OF WARRANT AGENT. The Warrant Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Trust and the holders of Warrants, by their
acceptance thereof, shall be bound:
A. The statements contained herein and in the Warrants shall be
taken as statements of the Trust, and the Warrant Agent assumes no
responsibility for the correctness of any of the same except such as describe
the Warrant Agent or action taken or to be taken by it. The Warrant Agent
assumes no responsibility with respect to the distribution of the Warrants
except as herein otherwise provided.
B. The Warrant Agent shall not be responsible for any failure of
the Trust to comply with any of the covenants contained in this Agreement or
in the Warrants to be complied with by the Trust.
C. The Warrant Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys, agents or employees, and the Warrant Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys, agents or employees or for any loss to the Trust
resulting from such neglect or misconduct, provided reasonable care shall
have been exercised in the selection and continued employment thereof.
D. The Warrant Agent may consult at any time with counsel
satisfactory to it (who may be counsel for the Trust), and the Warrant Agent
shall incur no liability or responsibility to the Trust or to any holder of
any Warrant in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with the opinion or the advice of
such counsel.
E. The Warrant Agent shall incur no liability or responsibility to
the Trust or to any holder of any Warrant for any action taken in reliance on
any notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument believed by it to be genuine and to have been signed,
sent or presented by the proper party or parties.
F. The Trust agrees to pay to the Warrant Agent reasonable
compensation for all services rendered by the Warrant Agent in the
performance of this Agreement, to reimburse the Warrant Agent for all
expenses, taxes and governmental charges and other charges of any kind and
nature incurred by the Warrant Agent in the performance of this Agreement and
to indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and counsel fees, for anything done
or omitted by the Warrant Agent in the performance of this Agreement except
as a result of the Warrant Agent's negligence or bad faith.
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G. The Warrant Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Trust or one or more registered holders of
Warrants shall furnish the Warrant Agent with reasonable security and
indemnity for any costs and expenses which may be incurred, but this
provision shall not affect the power of the Warrant Agent to take such action
as the Warrant Agent may consider proper, whether with or without any such
security or indemnity. All rights of action under this Agreement or under any
of the Warrants may be enforced by the Warrant Agent without the possession
of any of the Warrants or the production thereof at any trial or other
proceeding relative thereto, and any such action, suit or proceeding
instituted by the Warrant Agent shall be brought in its name as Warrant
Agent, and any recovery of judgment shall be for the ratable benefit of the
registered holders of the Warrants, as their respective rights or interests
may appear.
H. The Warrant Agent and any shareholder, director, officer or
employee of the Warrant Agent may buy, sell or deal in any of the Warrants,
Shares, or other securities of the Trust or become pecuniarily interested in
any transaction in which the Trust may be interested, or contract with or
lend money to or otherwise act as fully and freely as though it were not
Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant
Agent from acting in any other capacity for the Trust or for any other legal
entity.
I. The Warrant Agent shall act hereunder solely as agent and not
in a ministerial capacity, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which
it may do or refrain from doing in connection with this Agreement except for
its own negligence or bad faith.
J. The Warrant Agent shall be obligated to perform such duties as
are specifically set forth herein and no implied duties or obligations shall
be read into this Agreement against the Warrant Agent.
SECTION 15. CHANGE OF WARRANT AGENT. A. The Warrant Agent may resign
and be discharged from its duties under this Agreement by giving to the Trust
notice in writing, and to the holders of the Warrants notice by publication,
of such resignation, specifying a date when such resignation shall take
effect, which notice shall be published at the expense of the Trust at least
once a week for two consecutive weeks in a newspaper of general circulation
in the City of [New York] before the date so specified. The Warrant Agent may
be removed by the Trust by like notice from the Trust to the Warrant Agent
and the holders of Warrants at the expense of the Trust. If the Warrant Agent
shall resign or be removed or shall otherwise become incapable of acting, the
Trust shall appoint a successor to the Warrant Agent. If the Trust shall fail
to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by
the resigning or incapacitated Warrant Agent or by the registered holder of a
Warrant (who shall, with such notice, submit his Warrant for inspection by
the Trust), then, at the expense of the Trust, the Warrant Agent or the
registered holder of any Warrant may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Any
successor Warrant Agent, whether appointed by the Trust or by such a court,
shall be a bank or trust company, in good standing, incorporated under the
laws of any State or of the United States of America, having at the time of
its appointment as Warrant Agent a combined capital and surplus of at least
$50,000,000. After, appointment the successor Warrant Agent shall be vested
with the same powers, rights, duties and responsibilities as if it originally
had been named as Warrant Agent without further act or deed; but the former
Warrant Agent shall deliver and transfer to the successor Warrant Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed
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necessary for the purpose. Failure to file or publish any notice provided for
in this Section, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Warrant Agent or
the appointment of the successor Warrant Agent, as the case may be.
B. If at any time the Warrant Agent shall be adjudged a bankrupt
or insolvent, or shall file a petition seeking relief under any applicable
Federal or State bankruptcy or insolvency law or similar law, or make an
assignment for the benefit of its creditors or consent to the appointment of
a receiver, conservator or custodian of all or any substantial part of its
property, or shall admit in writing its inability to pay or to meet its debts
as they mature, or if a receiver or custodian of it or of all or any
substantial part of its property shall be appointed, or if an order of any
court shall be entered for relief against it under the provisions of any
applicable Federal or State bankruptcy or similar law, or if any public
officer shall have taken charge or control of the Warrant Agent or of its
property or affairs, for the purpose of rehabilitation, conservation or
liquidation, a successor Warrant Agent, qualified as set forth in
subparagraph 15.A. above, shall be appointed by the Trust by an instrument in
writing, filed with the successor Warrant Agent. Upon the appointment as
herein provided of a successor Warrant Agent and acceptance by the latter of
such appointment, the Warrant Agent so superseded shall cease to be Warrant
Agent under this Agreement.
SECTION 16. IDENTITY OF TRANSFER AGENT. Forthwith upon the
appointment of any transfer agent for the Shares or of any subsequent
transfer agent for Shares issuable upon the exercise of the rights of
purchase represented by the Warrants, the Trust will file with the Warrant
Agent a statement setting forth the name and address of such transfer agent.
SECTION 17. NOTICES. Any notice pursuant to this Agreement to be
given or made by the Warrant Agent or by the registered holder of any Warrant
to or on the Trust shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing
by the Trust with the Warrant Agent) as follows:
The Town and Country Trust
100 South Charles Street
Baltimore, MD 21201
Attn: President
Any notice pursuant to this Agreement to be given or made by the Trust
or by the registered holder of any Warrant to or on the Warrant Agent shall
be sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing by the Warrant Agent
with the Trust) as follows:
---------------------------
---------------------------
---------------------------
---------------------------
Any notice pursuant to this Agreement to be given or made by the Trust
or the Warrant Agent to the registered holder of any Warrant shall be
sufficiently given or made (unless otherwise specifically provided for
herein) if sent by first-class mail, postage prepaid, addressed to said
registered holder at his address appearing on the Warrant register.
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SECTION 18. SUPPLEMENTS AND AMENDMENTS. A. This Agreement and any
Warrant may be amended by the Trust and the Warrant Agent by executing a
supplemental warrant agreement (a "Supplemental Agreement"), without the
consent of the holder of any Warrant, for the purpose of (i) curing any
ambiguity, or curing, correcting or supplementing any defective provision
contained herein, or making any other provisions with respect to matters or
questions arising under this Agreement that is not inconsistent with the
provisions of this Agreement and the Warrants, (ii) evidencing the succession
of another entity to the Trust and the assumption by any such successor of
the covenants of the Trust contained in this Agreement and the Warrants,
(iii) evidencing and providing for the acceptance of appointment by a
successor Warrant Agent with respect to the Warrants, (iv) adding to the
covenants of the Trust for the benefit of the holders or surrendering any
right or power conferred upon the Trust under this Agreement, (v) appointing
a successor Warrant Agent, or (vi) amending this Agreement and the Warrants
in any manner that the Trust may deem to be necessary or desirable and that
will not adversely affect the interests of the holders of the Warrants in any
material respect.
B. The Trust and the Warrant Agent may amend this Agreement and
the Warrants by executing a Supplemental Agreement with the consent of the
holders of not fewer than a majority of the unexercised Warrants affected by
such amendment, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the holders of the Warrants under this
Agreement; PROVIDED, HOWEVER, that, without the consent of each holder of
Warrants affected thereby, no such amendment may be made that (i) changes the
Warrants so as to reduce the number of Shares or other securities purchasable
upon exercise of the Warrants or so as to increase the Warrant Exercise
Price, (ii) shortens the period of time during which the Warrants may be
exercised, (iii) otherwise adversely affects the exercise rights of the
holders of the Warrants in any material respect, or (iv) reduces the number
of unexercised Warrants the consent of the holders of which is required for
amendment of this Agreement or the Warrants.
SECTION 19. MERGER, CONSOLIDATION, SALE, TRANSFER OR CONVEYANCE. The
Trust may consolidate, merge or enter into a similar business combination
with or into any other entity or sell, lease, transfer or convey all or
substantially all of its assets to any other entity, PROVIDED that (i) either
(x) the Trust is the continuing entity or (y) the entity (if other than the
Trust) that is formed by or results from any such consolidation, merger or
business combination or that receives such assets is an entity organized and
existing under the laws of the United States of America or a state thereof
and such entity assumes the obligations of the Trust with respect to the
performance and observance of all of the covenants and conditions of this
Agreement to be performed or observed by the Trust and (ii) the Trust or such
successor entity, as the case may be, must not be in default under this
Agreement either immediately before or after such consolidation, merger,
business combination, sale, lease, transfer or conveyance. If at any time
there shall be any consolidation, merger or business combination or any sale,
lease, transfer, conveyance or other disposition of all or substantially all
of the assets of the Trust, then in any such event the successor or assuming
entity shall succeed to and be substituted for the Trust, with the same
effect as if it had been named herein and in the Warrant as the Trust; the
Trust shall, except in the case of a sale, lease or conveyance, thereupon be
relieved of any further obligation hereunder or under the Warrants. Such
successor or assuming entity thereupon may cause to be signed, and may issue
either in its own name or in the name of the Trust, Warrants not theretofore
exercised, in exchange and substitution for the Warrant theretofore issued.
Such Warrants shall in all respects have the same legal rank and benefit
under this Agreement as the Warrants theretofore issued in accordance with
the terms of this Agreement as though such new Warrants had been issued at
the date of the execution hereof. In any case of any such merger,
consolidation or business combination or sale, lease, transfer,
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conveyance or other disposition of all or substantially all of the assets of
the Trust, such changes in phraseology and form (but not in substance) may be
made in the new Warrants, as may be appropriate.
SECTION 20. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Trust or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 21. GOVERNING LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of
the State of [New York].
SECTION 22. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any person or entity other than the Trust and
the Warrant Agent and the holders of Warrants any legal or equitable right,
remedy or claim under this Agreement, but this Agreement shall be for the
sole and exclusive benefit of the Trust and the Warrant Agent and the holders
of Warrants.
SECTION 23. HEADINGS. The descriptive headings of the several
Articles and Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
SECTION 24. SEVERABILITY. If any provision in this Agreement or in any
Warrant shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions, or of such
provisions in any other jurisdiction, shall not in any way be affected or
impaired thereby.
SECTION 25. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
SECTION 26. INSPECTION OF AGREEMENT. A copy of this Agreement shall
be available at all reasonable times at the principal corporate trust office
of the Warrant Agent and at the office of the Trust, for inspection by any
holder of a Warrant. The Warrant Agent may require any such holder to submit
satisfactory proof of ownership for inspection by it.
[IF THE WARRANTS ARE SUBJECT TO ACCELERATION BY THE TRUST, INSERT:
SECTION 27. ACCELERATION OF WARRANTS BY THE TRUST.
A. At any time on or after ____________________, the Trust shall
have the right to accelerate any or all Warrants at any time by causing them
to expire at the close of business on the day next preceding a specified date
(the "Acceleration Date"), if the Market Price (as hereinafter defined) of
the Shares equals or exceeds _________ percent (____%) of the then effective
Warrant Exercise Price on any 20 Trading Days (as hereinafter defined) within
a period of 30 consecutive Trading Days ending no more than five Trading Days
before the date on which the Trust gives notice to the Warrant Agent of its
election to accelerate the Warrants.
B. "Market Price" for each Trading Day shall be, if the
[Common Shares] [Preferred Shares] [Depositary Shares] are listed or admitted
for trading on the New York Stock Exchange, the last reported sale price,
regular way (or, if no such price is reported, the average of the reported
closing bid and asked prices, regular way) of [Common Shares]
[Preferred Shares]
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[Depositary Shares], in either case as reported on the New York Stock
Exchange Composite Tape or, if the [Common Shares] [Preferred Shares]
[Depositary Shares] are not listed or admitted to trading on the New York
Stock Exchange, on the principal national securities exchange on which
[Common Shares] [Preferred Shares][Depositary Shares] are listed or admitted
to trading or, if not listed or admitted to trading on any national
securities exchange, on Nasdaq or, if not listed or admitted to trading on
any national securities exchange or quoted Nasdaq, the average of the closing
high bid and low asked prices in the over-the-counter market, as reported by
Nasdaq, or such other system then in use, or if on any such date the
[Common Shares] [Preferred Shares] [Depositary Shares]are not quoted by any
such organization, the average of the closing bid and asked prices as
furnished by any New York Stock Exchange firm selected from time to time by
the Trust for that purpose. "Trading Day" shall be each Monday through
Friday, other than any day on which securities are not traded in the system
or on the exchange that is the principal market for the [Common Shares]
[Preferred Shares] [Depositary Shares], as determined by the Board of
Trustees of the Trust.
C. In the event of an acceleration of less than all of the
Warrants, the Warrant Agent shall select the Warrants to be accelerated by
lot, pro rata or in such other manner as it deems, in its discretion, to be
fair and appropriate.
D. Notice of an acceleration specifying the Acceleration Date
shall be sent by mailing first class, postage prepaid, to each registered
holder of a Warrant Certificate representing a Warrant accelerated at such
holder's address appearing on the Warrant register not more than 60 days nor
less than 30 days before the Acceleration Date. Such notice of an
acceleration also shall be given no more than 20 days, and no less than 10
days, before the mailing of notice to registered holders of Warrants pursuant
to this Section, by publication at least once in a newspaper of general
circulation in the City of [New York].
E. Any Warrant accelerated may be exercised until [_______] p.m.,
[City] time, on the business day next preceding the Acceleration Date. The
Warrant Exercise Price shall be payable as provided in Section 5.]
SECTION 28. OWNERSHIP LIMITATIONS.
A. Except as provided in the Trust's Declaration of Trust, as the
same may be amended or supplemented from time to time (the "Declaration of
Trust"), no person shall beneficially own or constructively own Warrants,
together with the Shares owned beneficially or constructively by such person, in
excess of the Limit (as such term is defined in the Declaration of Trust). Any
Warrants which violate the Limit shall be converted, without any additional act
on the part of the Trust, into a separate class of warrants to be denominated
"Excess Warrants". For purposes of applying the provisions of Article 2,
Section 7 of the Declaration of Trust, the acquisition, holding, ownership or
disposition of Warrants or Excess Warrants shall be treated as the acquisition,
holding, ownership or disposition, as the case may be, of Shares or Excess
Shares and shall be subject to the provisions of Article 2, Section 7 of the
Declaration of Trust in the same manner as if the Warrants or Excess Warrants
were Shares or Excess Shares. Terms used but not defined in this Section 28 are
used herein as defined for purposes of Article 2, Section 7 of the Declaration
of Trust.
B. Each person who is a beneficial owner or constructive owner of
Warrants and each person (including the shareholder of record) who is holding
Warrants for a beneficial owner or constructive owners shall provide to the
Trust such information that the Trust may request, in good faith, in order to
determine the Trust's status as a real estate investment trust.
-18-
<PAGE>
C. Each Warrant Certificate shall bear the following legend:
"The Town and Country Trust (the "Trust") will furnish, without
charge, to any shareholder making a written request therefor, a copy of
the Trust's First Amended and Restated Declaration of Trust, as amended
or supplemented from time to time (the "Declaration"), containing a
statement of the designations, preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications,
terms and conditions of redemption and relative rights and preferences
applicable to each class of shares of the Trust, including the Warrant
Securities. Such requests may be directed to The Town and Country Trust,
100 South Charles Street, Baltimore, Maryland 21201. The Board of
Trustees is authorized to determine the designations, preferences,
conversion and other rights, voting powers, restrictions, limitations as
to dividends, qualifications, terms and conditions of redemption and
relative rights and preferences applicable to each class and series of
Warrant Securities before the issuance of any such Warrant Securities.
This Warrant and the Warrant Securities are subject to
restrictions on transfer for the purpose of the Trust's maintenance of
its status as a Real Estate Investment Trust under the Internal Revenue
Code of 1986, as amended (the "Code"). With certain further restrictions
and exceptions set forth in the Declaration, no person may beneficially
own Warrants, Shares and/or other shares of the Trust in excess of 5.0
percent (or such greater percentage as may be determined by the Board of
Trustees of the Trust) of the lesser of the number or value of the
outstanding Shares, Warrants and other shares of the Trust (unless such
person specifically shall have been exempted by the Board of Trustees).
Any Warrants and/or Shares held in excess of the above limitations may be
subject to mandatory redemption in certain events and to limitations on
the associated rights to receive distributions from the Trust or to
exercise voting rights, and certain purported acquisitions of Warrants
and/or Shares in excess of such limitations, or which would result in the
disqualification of the Trust as a Real Estate Investment Trust under the
Code, shall be void AB INITIO. All capitalized terms in this legend have
the meanings set forth in the Declaration, a copy of which, including the
restrictions on transfer, will be sent without charge to each shareholder
who so requests."
SECTION 29. TRUST DISCLAIMER. The Trust's First Amended and Restated
Declaration of Trust, dated June 24, 1993, a copy of which is duly filed with
the Department of Assessments and Taxation of the State of Maryland, provides
that no trustee, officer, shareholder, employee or agent of the Trust shall be
held to any personal liability, jointly or severally, for any obligation of or
claim against the Trust. All persons dealing with the Trust in any way shall
look only to the assets of the Trust for the payment of any sum or the
performance of any obligation.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
THE TOWN AND COUNTRY TRUST
By:
-----------------------------
Its:
----------------------------
Attest:
-------------------------- ------------------------, as Warrant Agent
By:
-----------------------------
Its:
----------------------------
Attest:
--------------------------
<PAGE>
Exhibit A
FORM OF WARRANT CERTIFICATE
[Face of Warrant Certificate]
[IF WARRANTS ARE ATTACHED TO Before _______________, this
OTHER SECURITIES AND ARE NOT Warrant Certificate cannot be
IMMEDIATELY DETACHABLE. transferred or exchanged unless
attached to a [Title of Other
Securities].]
[FORM OF LEGEND IF WARRANTS ARE Before _______________,
NOT IMMEDIATELY EXERCISABLE. Warrants evidenced by this
Warrant Certificate cannot be
exercised.]
EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT
AGENT AS PROVIDED HEREIN
VOID AFTER [______] P.M., [CITY] TIME, ON ____________, ____
THE TOWN AND COUNTRY TRUST
Warrants to Purchase
[Title of Warrant Securities]
No. __________ Warrant Certificate Representing___________
Warrants
This certifies that ____________________________ or registered assigns
is the registered owner of the above indicated number of Warrants, each
Warrant entitling such owner [IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND
ARE NOT IMMEDIATELY DETACHABLE -, subject to the registered owner qualifying as
a "Holder" of this Warrant Certificate, as hereinafter defined) to purchase, at
any time [after [___] p.m., [City] time, on _______________ and] on or before
[___] p.m., [City] time, on _________________, ____________ shares of [Title of
Warrant Securities] (the "Warrant Securities"), of The Town and Country Trust
(the "Trust") on the following basis: during the period from _______________,
through and including ______________, the exercise price of each Warrant will
be ___________; during the period from ________, through and including
________, the exercise price of each warrant will be ________ (the "Warrant
Price"). No adjustment shall be made for any dividends on any Warrant
Securities issuable upon exercise of any Warrant so long as the record date
for such dividend is prior to the effective time of the exercise of this
Warrant. The Holder may exercise the Warrants evidenced hereby by providing
certain information set forth on the back hereof and by paying in full
[in lawful money of the United States of America] [in cash or by certified
check or official bank check or by bank wire transfer, in each case,] [by bank
wire transfer] in immediately available funds, the Warrant Price for each
Warrant exercised to the Warrant Agent (as hereinafter defined) and by
surrendering this Warrant Certificate, with the purchase form on the back
hereof duly executed, at the corporate trust office of [name of
A-1
<PAGE>
Warrant Agent], or its successor as warrant agent (the "Warrant Agent"), [or
_______________], which is, on the date hereof, at the address specified on the
reverse hereof, and upon compliance with and subject to the conditions set
forth herein and in the Warrant Agreement (as hereinafter defined).
The term "Holder" as used herein shall mean [IF WARRANTS ARE ATTACHED
TO OTHER SECURITIES AND ARE NOT IMMEDIATELY DETACHABLE - before ___________, __
(the "Detachable Date"), the registered owner of the Trust's [title of Other
Securities] to which this Warrant Certificate was initially attached, and after
such Detachable Date,] the person in whose name at the time this Warrant
Certificate shall be registered upon the books to be maintained by the Warrant
Agent for that purpose pursuant to Section 4 of the Warrant Agreement.
Any whole number of Warrants evidenced by this Warrant Certificate may be
exercised to purchase Warrant Securities in registered form. Upon any exercise
of fewer than all of the Warrants evidenced by this Warrant Certificate, there
shall be issued to the Holder hereof a new Warrant Certificate evidencing the
number of Warrants remaining unexercised.
This Warrant Certificate is issued under and in accordance with the
Warrant Agreement dated as of __________ __, ____ (the "Warrant Agreement")
between the Trust and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which terms and
provisions the Holder of this Warrant Certificate consents by acceptance hereof.
Copies of the Warrant Agreement are on file at the above-mentioned office of the
Warrant Agent [and at _________________].
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES AND ARE NOT IMMEDIATELY
DETACHABLE - Before the Detachable Date, this Warrant Certificate may be
exchanged or transferred only together with the [Title of Other Securities] (the
"Other Securities") to which this Warrant Certificate was initially attached,
and only for the purpose of effecting, or in conjunction with, an exchange or
transfer of such Other Security. Additionally, on or before the Detachable Date,
each transfer of such Other Securities or register of transfer of the Other
Securities shall operate also to transfer or register the transfer of this
Warrant Certificate. After such date, transfer of this] [IF WARRANTS ARE NOT
ATTACHED TO OTHER SECURITIES, - Transfer of this] Warrant Certificate may be
registered when this Warrant Certificate is surrendered at the corporate trust
office of the Warrant Agent [or _________________________] by the registered
owner or such owner's assigns, in person or by an attorney duly authorized in
writing, in the manner and subject to the limitations provided in the Warrant
Agreement.
[IF WARRANTS ARE ATTACHED TO OTHER SECURITIES ARE NOT IMMEDIATELY
DETACHABLE - - Except as provided in the immediately preceding paragraph, after]
[IF WARRANTS ARE NOT ATTACHED TO OTHER SECURITIES- After] countersignature by
the Warrant Agent and before the expiration of this Warrant Certificate, this
Warrant Certificate may be exchanged at the corporate trust office of the
Warrant Agent [or ____________] for Warrant Certificates representing the same
aggregate number of Warrants.
This Warrant Certificate shall not entitle the Holder hereof to any of
the rights of a holder of the Warrant Securities, including, without limitation,
the right to receive payments of dividends or distributions, if any, on the
Warrant Securities or to exercise any voting rights.
A-2
<PAGE>
This Warrant Certificate shall not be valid or obligatory for any
purpose until countersigned by the Warrant Agent.
IN WITNESS WHEREOF, the Trust has caused this Warrant to be executed
in its name and on its behalf by the facsimile signatures of its duly
authorized officers.
Dated: ______________ ___, ________ THE TOWN AND COUNTRY TRUST
By:_____________________________
Its:____________________________
ATTEST:_____________________________
Countersigned:______________________
As Warrant Agent
By:____________________________(Authorized Signature)
A-3
<PAGE>
[Reverse of Warrant Certificate]
The Town and Country Trust (the "Trust") will furnish, without
charge, to any shareholder making a written request therefor, a
copy of the Trust's First Amended and Restated Declaration of
Trust, as amended or supplemented from time to time (the
"Declaration"), containing a statement of the designations,
preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, terms
and conditions of redemption and relative rights and preferences
applicable to each class of shares of the Trust, including the
Warrant Securities. Such requests may be directed to The Town and
Country Trust, 100 South Charles Street, Baltimore, Maryland
21201. The Board of Trustees is authorized to determine the
designations, preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications,
terms and conditions of redemption and relative rights and
preferences applicable to each class and series of Warrant
Securities before the issuance of any such Warrant Securities.
This Warrant and the Warrant Securities are subject to
restrictions on transfer for the purpose of the Trust's
maintenance of its status as a Real Estate Investment Trust under
the Internal Revenue Code of 1986, as amended (the "Code"). With
certain further restrictions and exceptions set forth in the
Declaration, no person may beneficially own Warrants, Shares
and/or other shares of the Trust in excess of 5.0 percent (or such
greater percentage as may be determined by the Board of Trustees
of the Trust) of the lesser of the number or value of the
outstanding Shares, Warrants and other shares of the Trust (unless
such person specifically shall have been exempted by the Board of
Trustees). Any Warrants and/or Shares held in excess of the above
limitations may be subject to mandatory redemption in certain
events and to limitations on the associated rights to receive
distributions from the Trust or to exercise voting rights, and
certain purported acquisitions of Warrants and/or Shares in excess
of such limitations, or which would result in the disqualification
of the Trust as a Real Estate Investment Trust under the Code,
shall be void AB INITIO. All capitalized terms in this legend
have the meanings set forth in the Declaration, a copy of which,
including the restrictions on transfer, will be sent without
charge to each shareholder who so requests.
(Instructions for Exercise of Warrant)
To exercise the Warrants evidenced hereby, the Holder must pay [in
United States dollars] [in cash or by certified check or official bank check
or by bank wire transfer, in each case] [by bank wire transfer in immediately
available funds], the Warrant Price in full for Warrants exercised, to
[Warrant Agent][address of Warrant Agent], Attn: ________________, which
payment must specify the name of the Holder and the number of Warrants
exercised by such Holder. In addition, the Holder must complete the
information required below and present this Warrant Certificate in person or
by mail (certified or registered mail is recommended) to the Warrant Agent at
the appropriate address set forth below. This Warrant Certificate, completed
and duly executed, must be received by the Warrant Agent within five business
days of the payment.
To Be Executed Upon Exercise of Warrant
The undersigned hereby irrevocably elects to exercise ______ Warrants,
evidenced by this Warrant Certificate, to purchase ______ of the
[Title of Warrant Securities] (the "Warrant
A-4
<PAGE>
Securities") of The Town and Country Trust and represents that he or she has
tendered payment for such Warrant Securities [in Dollars]
[in cash or by certified check or official bank check or by bank wire transfer,
in each case] [by bank wire transfer in immediately available funds] to the
order of The Town and Country Trust c/o [insert name and address of Warrant
Agent], in the amount of ________ in accordance with the terms hereof. The
undersigned requests that said Warrant Securities be in fully registered form
in the authorized denominations, registered in such names and delivered all as
specified in accordance with the instructions set forth below.
If the number of Warrants exercised is less than all of the Warrants
evidenced hereby, the undersigned requests that a new Warrant Certificate
representing the remaining Warrants evidenced hereby be issued and delivered
to the undersigned unless otherwise specified in the instructions below.
Dated: ___________________________ Name_________________________________
(Please Print)
_________________________________ Address______________________________
(Insert Social Security or Other
Identifying Number of Holder)
______________________________
Signature Guaranteed
______________________________ Signature____________________________
[FOR REGISTERED WARRANTS -- Signature must conform in all respects to
name of holder as specified on the face of this Warrant Certificate and must
bear a signature guarantee by any member of the New York Stock Exchange
Medallion signature program]
This Warrant may be exercised at the following addresses:
By hand at ___________________________________________
By hand at ___________________________________________
[Instructions as to form and delivery of Warrant Securities and, if applicable,
Warrant Certificates evidencing unexercised Warrants - complete as appropriate.]
A-5
<PAGE>
ASSIGNMENT
(Form of assignment to be executed if Warrant Holder desires to transfer
Warrant)
FOR VALUE RECEIVED, _________________________ hereby sells, assigns and
transfers unto
_____________________________________
Print or Type Name
_____________________________________
Street Address
_________________________ _______ __________
City State Zip Code
___________________________________________
Social Security or other Identifying Number
the right represented by the within Warrant to purchase ___________________
[Common Shares] [Preferred Shares] [($.01 par value)] of The Town and Country
Trust to which the within Warrant relates and appoints
________________________________________ attorney to transfer such right on the
books of the Warrant Agent with full power of substitution in the premises.
Dated: _________________________ ___________________________________________
Signature (Signature must conform in all
respects to name of holder as specified on
the face of the Warrant)
Signature Guaranteed
________________________________
A-6
<PAGE>
EXHIBIT 5.1
December 30, 1999
The Town and Country Trust
100 South Charles Street
Baltimore, Maryland 21201
Ladies and Gentlemen:
We are familiar with the proceedings taken and proposed to be taken by
The Town and Country Trust, a Maryland real estate investment trust (the
"Trust"), in connection with the registration under the Securities Act of 1933,
as amended (the "Act"), of securities, including Common Shares of Beneficial
Interest, $.01 par value per share (the "Common Shares"), Preferred Shares of
Beneficial Interest, $.01 par value per share (the "Preferred Shares"),
Depositary Shares representing Preferred Shares of Beneficial Interest (the
"Depositary Shares"), warrants to purchase Common Shares, Preferred Shares or
Depositary Shares, or any combination of the foregoing (the "Warrants", and
together with the Common Shares, Preferred Shares, and Depositary Shares, the
"Registered Securities"). As your counsel, we have collaborated in the
preparation of the Registration Statement on Form S-3 (the "Registration
Statement") to be filed by you with the Securities and Exchange Commission as of
the date hereof to effect the registration pursuant to the Act of the Registered
Securities.
In this connection, we have examined such Trust records, certificates
and all other documents, and have made such examination of law, which we deem
necessary to render the opinions set forth below. Each capitalized term used
herein, unless otherwise defined herein, has the meaning ascribed to it in the
Registration Statement.
Attorneys involved in the preparation of this opinion are admitted to
practice law only in the States of Ohio and New York and we express no opinion
herein concerning any law other than the laws of the United States of America
and the State of Ohio and the New York Business Corporation Law. To the extent
that the opinions set forth herein concern the laws of the State of
<PAGE>
The Town and Country Trust
December 30, 1999
Page 2
Maryland, we have relied without independent investigation on the opinion of
Venable, Baetjer and Howard, LLP, special Maryland counsel to the Trust,
addressed to us and dated December 29, 1999. For the purpose of giving the
opinions set forth below, we have assumed the following with respect to the sale
of each Registered Security: (i) that each sale will be pursuant to the terms
and conditions as contemplated in the Registration Statement, which will have
become and will remain effective under the Act; (ii) that all necessary Trust
actions, approvals, and authorizations will have been taken or obtained, and
that such actions will be in conformity with applicable law; (iii) that all
necessary filings and approvals with any regulatory authority will have been
made and obtained, including, without limitation, the fixing of terms with
respect to any security, and that such actions will be in conformity with
applicable law; (iv) that any actions, approvals or authorizations required by
any applicable Deposit Agreement or Warrant Agreement will have been taken or
obtained; (v) that the required consideration will have been received by the
Trust; and (vi) that all parties, other than the Trust, will have taken or
obtained any and all necessary actions, authorizations and approvals, that such
parties will be in conformity with applicable law and that any document executed
and delivered by such parties will be enforceable against such parties.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Common Shares and Preferred Shares, when authorized for issuance
and when issued and paid for as set forth in the Prospectus constituting a part
of the Registration Statement (the "Prospectus"), will have been legally issued
by the Trust and will be fully paid and nonassessable; and
2. The Depositary Shares and Warrants, when authorized for issuance and
paid for as set forth in the Prospectus, will have been legally issued by the
Trust and will be valid and legally binding obligations of the Trust,
enforceable in accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
The opinions set forth herein are rendered as of the date hereof, and
we assume no obligation to update such opinions to reflect any facts or
circumstances which hereafter may come to our attention or any changes of law
which hereafter may occur.
<PAGE>
The Town and Country Trust
December 30, 1999
Page 3
We consent to the reference to our Firm wherever appearing in the
Registration Statement and to the inclusion of this opinion as an exhibit to the
Registration Statement. James H. Berick, a Trustee of the Trust, and Daniel G.
Berick, Secretary (but not an executive officer) of the Trust, are principals of
this Firm.
Very truly yours,
/s/ Berick, Pearlman & Mills
BERICK, PEARLMAN & MILLS
<PAGE>
December 29, 1999
Berick, Pearlman & Mills Co., L.P.A.
1350 Eaton Center
1111 Superior Avenue
Cleveland, Ohio 44114
Re: $75,000,000 Aggregate Offering Price of
Securities of The Town and Country Trust
----------------------------------------
Ladies and Gentlemen:
We are acting as special Maryland counsel for The Town and
Country Trust, a Maryland real estate investment trust (the "Trust"), in
connection with the registration statement on Form S-3 (the "Registration
Statement") being filed by the Trust with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, (the "Act") relating to the
offering from time to time, as set forth in the prospectus contained in the
Registration Statement (the "Prospectus") and as to be set forth in one or more
supplements to the Prospectus (each a "Prospectus Supplement"), by the Trust of
up to $75,000,000 aggregate offering price of securities, including Common
Shares of Beneficial Interest, $.01 par value per share (the "Common Shares"),
Preferred Shares of Beneficial Interest, $.01 par value per share (the
"Preferred Shares"), Depositary Shares Representing Preferred Shares of
Beneficial Interest, warrants to purchase Common Shares, Preferred Shares or
Depositary Shares, or any combination of the foregoing.
For the purpose of giving the opinions set forth below, we
have assumed the following with respect to the sale of Common Shares and
Preferred Shares pursuant to the Registration Statement: (i) that each sale will
be pursuant to the terms and conditions as contemplated in the Registration
Statement, which will have become and will remain effective under the Act; (ii)
that all necessary Trust actions, approvals, and authorizations (collectively,
"Trust Proceedings") will have been taken or obtained, and that such actions
will be in conformity with applicable law; (iii) that all necessary filings and
approvals with any regulatory authority will have been made and obtained,
including, without limitation, the fixing of terms with respect to any security
and the filing of any necessary
<PAGE>
Berick, Pearlman & Mills Co., L.P.A.
December 29, 1999
Page 2
Articles Supplementary with the Maryland State Department of Assessments and
Taxation ("SDAT") (collectively, "Regulatory Approvals"); and (iv) that the
required consideration will have been received by the Trust.
We have reviewed the Trust's First Amended and Restated
Declaration of Trust and its Bylaws. We have also examined and relied upon a
certificate of SDAT to the effect that the Trust is duly formed and existing
under the laws of the State of Maryland and is in good standing as a Maryland
real estate investment trust and duly authorized to transact business in
Maryland. In addition, we have made such legal and factual examinations and
inquiries, including an examination of originals or copies, certified or
otherwise, identified to our satisfaction, of such documents, trust records and
instruments as we have deemed necessary or appropriate for purposes of this
opinion.
In our examination, we have assumed the genuineness of all
signatures on documents submitted to us, the authenticity of all documents
submitted to us as originals, and the conformity to authentic original documents
of all documents submitted to us as copies.
The opinions set forth herein are rendered as of the date
hereof, and we assume no obligation to update such opinions to reflect any facts
or circumstances which hereafter may come to our attention or any changes of law
which hereafter occur. Our opinion is limited to the laws of the State of
Maryland, and we express no opinion with respect to the laws of any other
jurisdiction.
Subject to the foregoing and the other matters set forth
herein, it is our opinion that, as of the date hereof:
1. When appropriate Trust Proceedings have been taken by the
Trust to authorize the issuance of the Common Shares, upon issuance, delivery
and payment therefor in the manner contemplated by the Registration Statement
and the applicable Prospectus Supplement, the Common Shares will be validly
issued, fully paid and nonassessable.
2. When appropriate Regulatory Approvals have been obtained
and appropriate Trust Proceedings have been taken by the Trust to authorize the
issuance of the Preferred Shares, upon issuance, delivery and payment therefor
in the manner
<PAGE>
Berick, Pearlman & Mills Co., L.P.A.
December 29, 1999
Page 3
contemplated by the Registration Statement and the applicable Prospectus
Supplement, the Preferred Shares will be validly issued, fully paid and
nonassessable.
You may rely on this opinion in rendering your opinion to the
Trust that is to be filed as an exhibit to the Registration Statement. We
consent to the reference to our firm under the caption "Validity of the
Securities" in the Prospectus and to the inclusion of this opinion as an exhibit
to the Registration Statement. By giving the foregoing consent, we do not admit
that we are "experts" within the meaning of the Act and the regulations
thereunder.
Very truly yours,
/s/ Venable, Baetjer and Howard, LLP
<PAGE>
EXHIBIT 8
December 30, 1999
The Town and Country Trust
100 South Charles Street
Baltimore, MD 21201
Gentlemen:
This opinion is delivered to you in connection with the registration of
Securities, including Common Shares of Beneficial Interest, Preferred Shares of
Beneficial Interest, Depositary Shares Representing Preferred Shares of
Beneficial Interest, Common Share Warrants, Preferred Share Warrants and
Depositary Share Warrants in an aggregate principal amount equal to up to
$75,000,000 of The Town and Country Trust (the "Trust") pursuant to the Trust's
Registration Statement on Form S-3 in the form which you have represented to us
it will be filed with the Securities and Exchange Commission on or about the
date hereof (the "Registration Statement").
For purposes of this opinion:
1. We have examined the First Amended and Restated Declaration of Trust
(the "Declaration of Trust") of the Trust, the limited partnership agreement of
The TC Operating Limited Partnership and the general partnership agreement of
each partnership subsidiary thereof, each as amended to date.
2. We have relied, as to matters of fact necessary to this opinion, on
certificates and representations of officers or employees of the Trust.
3. We have reviewed the information in the Registration Statement under
the caption "MATERIAL FEDERAL INCOME TAX CONSIDERATIONS".
4. We have made no independent investigation of the facts represented
or set forth in any of the foregoing paragraphs of this letter and are relying
for purposes hereof on said Declaration of Trust, partnership agreements,
certificates, representations and advice.
This opinion is based on the Internal Revenue Code of 1986, as amended
(the "Code"), applicable current and proposed Treasury Regulations, current
published administrative positions of the Internal Revenue Service contained in
Revenue Rulings and Revenue Procedures, and judicial decisions, all of which are
subject to change prospectively or retroactively. No assurance can be given that
statutory, administrative or judicial changes would not modify the conclusions
expressed in this opinion.
<PAGE>
The Town and Country Trust
December 30, 1999
Page 2
Based on the foregoing, it is our opinion that:
(i) The information in the Registration Statement under the caption
"MATERIAL FEDERAL INCOME TAX CONSIDERATIONS," to the extent that it constitutes
matters of law or legal conclusions, has been reviewed by us and is correct.
(ii) The Trust has been organized in conformity with the requirements
for qualification as a real estate investment trust ("REIT") within the meaning
Sections 856 through 860 of the Code and has qualified as a REIT for each of its
taxable years through calendar year 1998.
(iii) The Trust's proposed method of operation will allow the Trust to
continue to qualify as a REIT under Sections 856 through 860 of the Code.
However, as with all REITs, we are unable to render an opinion that the Trust in
fact will qualify as a REIT for any taxable year after 1998 inasmuch as such
qualification will depend upon (x) the Trust having satisfied the various
qualification requirements for a REIT in its actual operations for the year
involved, and (y) the Trust not revoking or terminating its election to be
treated as a REIT.
(iv) The TC Operating Limited Partnership and each partnership
subsidiary thereof is properly treated (x) as a partnership for federal income
tax purposes and (y) not as a "publicly traded partnership" within the meaning
of Section 7704(b) of the Code.
Attorneys involved in the preparation of this opinion are licensed to
practice law only in the State of Ohio. We express no opinion as to any laws
other than the Federal laws of the United States of America. The opinions set
forth herein are rendered as of the date hereof and we assume no obligation to
update such opinions to reflect any facts or circumstances which hereafter may
occur. James H. Berick, a principal of this firm, is a Trustee of the Trust.
Daniel G. Berick, a principal of this firm, is the Secretary (but not an
executive officer) of the Trust.
<PAGE>
The Town and Country Trust
December 30, 1999
Page 3
We consent to the filing of this opinion as an exhibit to the
Registration Statement referred to above and to the use of our name wherever
appearing in such Registration Statement, including the prospectus forming a
part thereof, and any amendment or supplement thereto.
Very truly yours,
/s/ Berick, Pearlman & Mills
BERICK, PEARLMAN & MILLS
<PAGE>
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 333-_____) and related Prospectus of The
Town and Country Trust for the registration of $75,000,000 of Common Shares
of Beneficial Interest, Preferred Shares of Beneficial Interest, Depositary
Shares Representing Preferred Shares of Beneficial Interest, Common Share
Warrants, Preferred Share Warrants and Depositary Share Warrants and to the
incorporation by reference therein of our reports dated January 29, 1999,
with respect to the consolidated financial statements of The Town and Country
Trust incorporated by reference in its Annual Report (Form 10-K) for the year
ended December 31, 1998 and the related financial statement schedules
included therein, filed with the Securities and Exchange Commission.
We also consent to the incorporation by reference therein of our reports
dated September 11, 1998, October 8, 1998, October 8, 1998, February 12,
1999, August 26, 1999, August 26, 1999, and August 26, 1999 on the historical
statements of revenue and certain expenses for The Fairington, Windermere
Lakes, Twelve Oaks, Colonial Grand at Kirkman, Heron's Run, McIntosh, and
Perico, respectively, included in the Current Report on Form 8-K filed
December 29, 1999.
/s/ Ernst & Young LLP
Baltimore, Maryland
December 30, 1999
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned Trustee and officer of The Town and Country Trust, a
Maryland real estate investment trust, which anticipates filing with the
Securities and Exchange Commission, Washington, D.C. under the provisions of the
Securities Act of 1933, as amended, a Registration Statement on Form S-3 for the
purpose of registering Common Shares of Beneficial Interest, Preferred Shares of
Beneficial Interest, Depositary Shares, Warrants to purchase Common Shares of
Beneficial Interest, Warrants to purchase Preferred Shares of Beneficial
Interest, and Warrants to purchase Depositary Shares, or any combination of the
foregoing, hereby constitutes and appoints JAMES H. BERICK and HARVEY SCHULWEIS,
and each of them, with full power of substitution and resubstitution, as
attorneys or attorney to sign for the undersigned and in my name, place and
stead, as Trustee and Chairman of the Board of said Trust, said Registration
Statement and any and all amendments (including post-effective amendments and
any related registration statements pursuant to Rule 462(b)) and exhibits
thereto, and any and all applications and documents to be filed with the
Securities and Exchange Commission pertaining thereto, with full power of
authority to do and perform any and all acts and things whatsoever requisite,
necessary or advisable to be done in the premises, as fully and for all intents
and purposes as the undersigned could do if personally present, hereby ratifying
and approving the acts of said attorneys, and any of them, and any such
substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of
November, 1999.
/s/ Alfred Lerner
-------------------------------
Alfred Lerner
<PAGE>
POWER OF ATTORNEY
The undersigned Trustee of The Town and Country Trust, a Maryland real
estate investment trust, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C. under the provisions of the Securities Act
of 1933, as amended, a Registration Statement on Form S-3 for the purpose of
registering Common Shares of Beneficial Interest, Preferred Shares of Beneficial
Interest, Depositary Shares, Warrants to purchase Common Shares of Beneficial
Interest, Warrants to purchase Preferred Shares of Beneficial Interest, and
Warrants to purchase Depositary Shares, or any combination of the foregoing,
hereby constitutes and appoints ALFRED LERNER and HARVEY SCHULWEIS, and each of
them, with full power of substitution and resubstitution, as attorneys or
attorney to sign for the undersigned and in my name, place and stead, as Trustee
of said Trust, said Registration Statement and any and all amendments (including
post-effective amendments and any related registration statements pursuant to
Rule 462(b)) and exhibits thereto, and any and all applications and documents to
be filed with the Securities and Exchange Commission pertaining thereto, with
full power and authority to do and perform any and all acts and things
whatsoever requisite, necessary or advisable to be done in the premises, as
fully and for all intents and purposes as the undersigned could do if personally
present, hereby ratifying and approving the acts of said attorneys, and any of
them, and any such substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of
November, 1999.
/s/ James H. Berick
-------------------------------
James H. Berick
<PAGE>
POWER OF ATTORNEY
The undersigned Trustee of The Town and Country Trust, a Maryland real
estate investment trust, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C. under the provisions of the Securities Act
of 1933, as amended, a Registration Statement on Form S-3 for the purpose of
registering Common Shares of Beneficial Interest, Preferred Shares of Beneficial
Interest, Depositary Shares, Warrants to purchase Common Shares of Beneficial
Interest, Warrants to purchase Preferred Shares of Beneficial Interest, and
Warrants to purchase Depositary Shares, or any combination of the foregoing,
hereby constitutes and appoints ALFRED LERNER, JAMES H. BERICK and HARVEY
SCHULWEIS, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for the undersigned and in my name, place and
stead, as Trustee of said Trust, said Registration Statement and any and all
amendments (including post-effective amendments and any related registration
statements pursuant to Rule 462(b)) and exhibits thereto, and any and all
applications and documents to be filed with the Securities and Exchange
Commission pertaining thereto, with full power and authority to do and perform
any and all acts and things whatsoever requisite, necessary or advisable to be
done in the premises, as fully and for all intents and purposes as the
undersigned could do if personally present, hereby ratifying and approving the
acts of said attorneys, and any of them, and any such substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of
November, 1999.
/s/ H. Grant Hathaway
--------------------------------
H. Grant Hathaway
<PAGE>
POWER OF ATTORNEY
The undersigned Trustee of The Town and Country Trust, a Maryland real
estate investment trust, which anticipates filing with the Securities and
Exchange Commission, Washington, D.C. under the provisions of the Securities Act
of 1933, as amended, a Registration Statement on Form S-3 for the purpose of
registering Common Shares of Beneficial Interest, Preferred Shares of Beneficial
Interest, Depositary Shares, Warrants to purchase Common Shares of Beneficial
Interest, Warrants to purchase Preferred Shares of Beneficial Interest, and
Warrants to purchase Depositary Shares, or any combination of the foregoing,
hereby constitutes and appoints ALFRED LERNER, JAMES H. BERICK and HARVEY
SCHULWEIS, and each of them, with full power of substitution and resubstitution,
as attorneys or attorney to sign for the undersigned and in my name, place and
stead, as Trustee of said Trust, said Registration Statement and any and all
amendments (including post-effective amendments and any related registration
statements pursuant to Rule 462(b)) and exhibits thereto, and any and all
applications and documents to be filed with the Securities and Exchange
Commission pertaining thereto, with full power and authority to do and perform
any and all acts and things whatsoever requisite, necessary or advisable to be
done in the premises, as fully and for all intents and purposes as the
undersigned could do if personally present, hereby ratifying and approving the
acts of said attorneys, and any of them, and any such substitute.
IN WITNESS WHEREOF, I have hereunto set my hand this 3rd day of
November, 1999.
/s/ Milton A. Wolf
--------------------------------
Milton A. Wolf
<PAGE>
BERICK, PEARLMAN & MILLS CO., L.P.A.
1111 Superior Avenue
Suite 1350
Cleveland, Ohio 44114
Telephone: (216) 861-4900
Fax: (216) 861-4929
December 30, 1999
VIA EDGAR TRANSMISSION
Filer Support
Securities and Exchange Commission
Operations Center, Stop 0-7
6432 General Green Way
Alexandria, VA 22312
Re: The Town and Country Trust - Form S-3
-------------------------------------
Dear Sir or Madam:
On behalf of The Town and Country Trust, I am transmitting herewith via
EDGAR a copy of its Registration Statement on Form S-3 in respect of its shelf
registration of $75,000,000 of equity securities. A wire transfer in the amount
of $19,800, in payment of the requisite filing fee, has been made by The Town
and Country Trust to the Mellon Bank in Pittsburgh, Pennsylvania.
Very truly yours,
/s/Daniel G. Berick
Daniel G. Berick
cc: Mrs. Jennifer C. Munch
