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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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APRIL 17, 1998
(Date of Report (Date of Earliest Event Reported))
CHATEAU COMMUNITIES, INC.
(Exact Name of Registrant as Specified in Its Charter)
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MARYLAND 001-12496 38-3132038
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification Number)
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6430 SO. QUEBEC STREET, ENGLEWOOD, COLORADO 80111
(Address of Principal Executive Offices) (Zip Code)
(303) 741-3707
(Registrant's Telephone Number, Including Area Code)>
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On April 17, 1998, Chateau Communities, Inc. (the "Registrant"), through
its operating partnership, CP Limited Partnership (the "Operating
Partnership"), completed the acquisition of a portfolio of properties from an
unrelated and unaffiliated Seller. The portfolio contains 12 manufactured home
properties, 10 of which are located in Michigan, and two of which are located
in North Carolina (the "Williams Portfolio"). The Williams Portfolio consists
of an aggregate of 3,036 home sites with an additional 381 sites available for
future expansion. The Registrant funded the aggregate purchase price of
$79,370,000 (exclusive of acquisition costs) by borrowing $44,669,216 under its
line of credit, by issuing 551,251 units of limited partner interest in the
Operating Partnership ("Units") and by assuming liabilities in the amount of
$12,471,000.
The factors considered by the Registrant in determining the price to be
paid for the Williams Portfolio properties included their historical and/or
expected cash flow, the local and regional economy and market, nature of the
tenants and terms of leases in place, occupancy rates, opportunities for
alternative and new tenancies, current operating costs and taxes on the
acquired properties and anticipated changes therein under the Registrant's
ownership, the expansion areas available, the physical condition and location
of the acquired properties, the anticipated effect on the Registrant's
financial results and other factors. The Registrant took into consideration
the capitalization rates of the Williams Portfolio properties, going-in and
longer term, at which it believes other similar properties have recently sold,
but determined the prices it was willing to pay primarily on the factors
discussed above and the fit of the properties with the Registrant's operations.
ITEM 5. OTHER EVENTS.
On April 20, 1998, the Operating Partnership issued 1,500,000 8.125%
Series A Cumulative Redeemable Preferred Units ("Series A Preferred Units") to
an unrelated and unaffiliated purchaser in consideration for a capital
contribution of $75,000,000 in cash to the Operating Partnership. In
connection with the issuance of the Series A Preferred Units, the holders of
such Units were granted an exchange right, upon the happening of specific
conditions, to exchange the Series A Preferred Units for 8.125% Series A
Cumulative Redeemable Preferred Stock ("Series A Preferred Stock") of the
Registrant. The terms of the Series A Preferred Stock providing for the
rights, preferences, exchange and other rights, voting powers and restrictions,
limitations as to distributions, qualifications and conditions of the Series A
Preferred Stock are more fully described in the Articles Supplementary to the
Registrant's Articles of Amendment and Restatement, filed as Exhibit 1.1 to
this Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA Financial Information and Exhibits.
(a) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
It is impracticable to file with this Form 8-K the financial statements
and PRO FORMA financial information required by this Item 7 with regard to the
Williams Portfolio. Those financial statements and that PRO FORMA financial
information will be filed by an amendment to this Form 8-K as soon as
practicable and, in any event, within 60 days after the required filing date
for this Form 8-K.
(b) PRO FORMA FINANCIAL INFORMATION.
See Item 7(a).
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(c) EXHIBITS
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EXHIBIT NO. DESCRIPTION OF DOCUMENT
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1.1 Articles of Supplementary, dated April 20, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: May 1, 1998
CHATEAU COMMUNITIES, INC.
By: /S/TAMARA D. FISCHER
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Tamara D. Fischer
Chief Financial Officer
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CHATEAU COMMUNITIES, INC.
ARTICLES SUPPLEMENTARY
1,500,000 SHARES
8.125% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
Chateau Communities, Inc., a Maryland corporation, having its
principal office in Baltimore City, Maryland (the "CORPORATION"), hereby
certifies to the State Department of Assessments and Taxation of Maryland
that:
FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Article IV of the Articles of Amendment
and Restatement of the Corporation filed with the Department on November 8,
1993, as amended on July 12, 1995 and Mary 23, 1997 (the "CHARTER"), and
Section 2-105 of the Maryland General Corporation Law (the "MGCL"), the
Board of Directors of the Corporation (the "BOARD OF DIRECTORS"), by
resolutions duly adopted on April 15, 1998 has classified 1,500,000 shares
of the authorized but unissued Preferred Stock par value $.01 per share
("PREFERRED STOCK"), as 1,500,000 shares of a class designated as 8.125%
Series A Cumulative Redeemable Preferred Stock, par value $.01 per share
("SERIES A PREFERRED STOCK") to the extent not set by the Board of
Directors in the resolutions of the Corporation, and authorized the
issuance of up to 1,500,000 shares of Series A Preferred Stock. The
reclassification increases the number of shares classified as Series A
Preferred Stock from no shares immediately prior to the reclassification to
1,500,000 shares immediately after the reclassification. The
reclassification decreases the number of shares classified as Preferred
Stock (par value $0.01 per share) from 2,000,000 shares immediately prior
to the reclassification to 500,000 shares immediately after the
reclassification.
SECOND: Subject in all cases to the ownership limitation
provisions of Article VI of the Charter of the Corporation, the following
is a description of the preferences, conversion and other rights, voting
powers, restrictions and limitations as to dividends, qualifications, terms
and conditions of redemption and other terms and conditions of Series A
Preferred Stock:
SECTION 1. DESIGNATION AND NUMBER: A series of Preferred
Stock, designated the "8.125% Series A Cumulative Redeemable Preferred
Stock" (the "SERIES A PREFERRED STOCK") is hereby established. The number
of shares of Series A Preferred Stock shall be 1,500,000.
SECTION 2. RANK. The Series A Preferred Stock will, with
respect to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Corporation, or both, rank
senior to all classes or series of Common Stock (as defined in the Charter)
and to all classes or series of equity securities of the Corporation now or
hereafter authorized, issued or outstanding, other than any class or series
of equity securities of the Corporation expressly designated as ranking on
a parity with or senior to the Series A Preferred Stock as to distributions
or rights upon voluntary or involuntary liquidation, winding-up or
dissolution of the Corporation, or both. For purposes of these Articles
Supplementary, the term "PARITY PREFERRED STOCK" shall be used to refer to
any class or series of equity securities of the Corporation now or
hereafter authorized, issued or outstanding expressly designated by the
Corporation to rank on a parity with Series A Preferred Stock with respect
to distributions or rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Corporation, or both, as the context may
require. The term "equity securities" does not include debt securities,
which will rank senior to the Series A Preferred Stock prior to conversion.
<PAGE>
SECTION 3. DISTRIBUTIONS. (a) PAYMENT OF DISTRIBUTIONS.
Subject to the rights of holders of Parity Preferred Stock as to the
payment of distributions and holders of equity securities ranking senior to
the Series A Preferred Stock as to payment of distributions, holders of
Series A Preferred Stock shall be entitled to receive, when, as and if
declared by the Board of Directors of the Corporation, out of funds legally
available for the payment of distributions, cumulative preferential cash
distributions at the rate per annum of 8.125% of the $50.00 liquidation
preference per share of Series A Preferred Stock provided; however, that in
the event Moody's shall upgrade the Corporation's preferred stock rating to
not lower than "baa3" within 90 days after the date hereof, the rate per
annum shall be 7.80% of the $50.00 liquidation preference per share of
Series A Preferred Stock, in which case the designation of the Series A
Preferred Stock will change accordingly to reflect such new dividend rate.
Such distributions shall be cumulative, shall accrue from the original date
of issuance and will be payable (A) quarterly in arrears, on or before May
15, August 15 and February 15 of each year commencing on the first of such
dates to occur after the original date of issuance and, (B) in the event of
a redemption, on the redemption date (each a "PREFERRED STOCK DISTRIBUTION
PAYMENT DATE"). The amount of the distribution payable for any period will
be computed on the basis of a 360-day year of twelve 30-day months and for
any period shorter than a full quarterly period for which distributions are
computed, the amount of the distribution payable will be computed on the
basis of the actual number of days elapsed in such a 30-day month. If any
date on which distributions are to be made on the Series A Preferred Stock
is not a Business Day (as defined herein), then payment of the distribution
to be made on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date. Distributions on the Series A Preferred Stock will be made to
the holders of record of the Series A Preferred Stock on the relevant
record dates to be fixed by the Board of Directors of the Corporation,
which record dates shall in no event exceed 15 Business Days prior to the
relevant Preferred Stock Distribution Payment Date (each a "DISTRIBUTION
RECORD DATE"). Notwithstanding anything to the contrary set forth herein,
each share of Series A Preferred Stock shall also continue to accrue all
accrued and unpaid distributions, whether or not declared, up to the
exchange date on any Series A Preferred Unit (as defined in the CP Limited
Partnership's Amendment to the Amended and Restated Agreement of Limited
Partnership, dated as of the date hereof (the "AMENDMENT")) validly
exchanged into such share of Series A Preferred Stock in accordance with
the provisions of such Amendment and for purposes of these Articles
Supplementary such accrued and unpaid distributions on such Series A
Preferred Units shall be deemed to constitute accrued and unpaid dividends
with respect to past dividends periods on Series A Preferred Stock.
The term "BUSINESS DAY" shall mean each day, other than a
Saturday or a Sunday, which is not a day on which banking institutions in
New York, New York are authorized or required by law, regulation or
executive order to close.
(b) DISTRIBUTIONS CUMULATIVE. Distributions on the Series A
Preferred Stock will accrue whether or not the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions,
whether or not the Corporation has earnings, whether or not there are funds
legally available for the payment of such distributions and whether or not
such distributions are authorized or declared. Accrued but unpaid
distributions on the Series A Preferred Stock will accumulate as of the
Preferred Stock Distribution Payment Date on which they first become
payable. Distribution on account of arrears for any past distribution
periods may be declared and paid at any time, without reference to a
regular Preferred Stock Distribution Payment Date to holders of record of
the Series A Preferred Stock on the record date fixed by the Board of
Directors which date shall not exceed 15 Business Days prior to the payment
date. Accumulated and unpaid distributions will not bear interest.
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(c) PRIORITY AS TO DISTRIBUTIONS. So long as any Series A
Preferred Stock is outstanding, no distribution of cash or other property
shall be authorized, declared, paid or set apart for payment on or with
respect to any class or series of Common Stock or any class or series of
other stock of the Corporation ranking junior as to the payment of
distributions to the Series A Preferred Stock (such Common Stock or other
junior stock, collectively, "JUNIOR STOCK"), nor shall any cash or other
property be set aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series A Preferred Stock, any Parity
Preferred Stock with respect to distributions or any Junior Stock, unless,
in each case, all distributions accumulated on all Series A Preferred Stock
and all classes and series of outstanding Parity Preferred Stock as to
payment of distributions have been paid in full. The foregoing sentence
will not prohibit (i) distributions payable solely in Junior Stock, (ii)
the conversion of Series A Preferred Stock, Junior Stock or Parity
Preferred Stock into stock of the Corporation ranking junior to the Series
A Preferred Stock as to distributions, and (iii) purchase by the
Corporation of such Series A Preferred Stock, Parity Preferred Stock (where
there is parity with respect to distributions) or Junior Stock pursuant to
Article VI of the Charter to the extent required to preserve the
Corporation's status as a real estate investment trust.
(ii) So long as distributions have not been paid in full (or
a sum sufficient for such full payment is not irrevocably deposited in
trust for payment) upon the Series A Preferred Stock, all distributions
authorized and declared on the Series A Preferred Stock and all classes or
series of outstanding Parity Preferred Stock with respect to distributions
shall be authorized and declared so that the amount of distributions
authorized and declared per share of Series A Preferred Stock and such
other classes or series of Parity Preferred Stock shall in all cases bear
to each other the same ratio that accrued distributions per share on the
Series A Preferred Stock and such other classes or series of Parity
Preferred Stock (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such class or series
of Parity Preferred Stock do not have cumulative distribution rights) bear
to each other.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain distributions" (as defined in Section 857 of the
Internal Revenue Code of 1986, as amended, or any successor revenue code or
section (the "CODE")) any portion (the "CAPITAL GAINS AMOUNT") of the total
distributions (as determined for federal income tax purposes) paid or made
available for the year to holders of all classes of capital stock (the
"TOTAL DISTRIBUTIONS"), then the portion of the Capital Gains Amount that
shall be allocable to holders of Series A Preferred Stock shall be in the
same portion that the Total Distributions paid or made available to the
holders of Series A Preferred Stock for the year bears to the Total
Distributions.
(e) NO FURTHER RIGHTS. Holders of Series A Preferred Stock
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions
described herein.
SECTION 4. LIQUIDATION PREFERENCE. (a) PAYMENT OF
LIQUIDATING DISTRIBUTIONS. Subject to the rights of holders of Parity
Preferred Stock with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation and subject to
equity securities ranking senior to the Series A Preferred Stock with
respect to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Corporation, the holders of Series A
Preferred Stock shall be entitled to receive out of the assets of the
Corporation legally available for distribution or the proceeds thereof,
after payment or provision for debts and other liabilities of the
Corporation, but before any payment or distributions of the assets shall be
made to holders of Common Stock or any other class or series of shares of
the Corporation that ranks junior to the Series A Preferred Stock as to
rights upon liquidation, dissolution or winding-up of the Corporation, an
amount equal to the sum of (i) a liquidation preference of $50 per share of
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Series A Preferred Stock, and (ii) an amount equal to any accumulated and
unpaid distributions thereon, whether or not declared, to the date of
payment. In the event that, upon such voluntary or involuntary
liquidation, dissolution or winding-up, there are insufficient assets to
permit full payment of liquidating distributions to the holders of Series A
Preferred Stock and any Parity Preferred Stock as to rights upon
liquidation, dissolution or winding-up of the Corporation, all payments of
liquidating distributions on the Series A Preferred Stock and such Parity
Preferred Stock shall be made so that the payments on the Series A
Preferred Stock and such Parity Preferred Stock shall in all cases bear to
each other the same ratio that the respective rights of the Series A
Preferred Stock and such other Parity Preferred Stock (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such Parity Preferred Stock do not have cumulative
distribution rights) upon liquidation, dissolution or winding-up of the
Corporation bear to each other.
(b) NOTICE. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Corporation, stating the
payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i)
fax and (ii) by first class mail, postage pre-paid, not less than 15 and
not more than 60 days prior to the payment date stated therein, to each
record holder of the Series A Preferred Stock at the respective addresses
of such holders as the same shall appear on the share transfer records of
the Corporation.
(c) NO FURTHER RIGHTS. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Series
A Preferred Stock will have no right or claim to any of the remaining
assets of the Corporation.
(d) CONSOLIDATION, MERGER OR CERTAIN OTHER TRANSACTIONS. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares
of stock, securities or other consideration) of all or substantially all of
the property or assets of the Corporation to, or the consolidation or
merger or other business combination of the Corporation with or into, any
corporation, trust or other entity (or of any corporation, trust or other
entity with or into the Corporation) shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Corporation.
SECTION 5. OPTIONAL REDEMPTION. (a) RIGHT OF OPTIONAL
REDEMPTION. The Series A Preferred Stock may not, subject to SECTION 7
hereof, be redeemed prior to April 20, 2003. On or after such date, the
Corporation shall have the right to redeem the Series A Preferred Stock, in
whole or in part, at any time or from time to time, upon not less than 30
nor more than 60 days' written notice, at a redemption price, payable in
cash, equal to $50 per share of Series A Preferred Stock plus accumulated
and unpaid distributions, whether or not declared, to the date of
redemption. If fewer than all of the outstanding shares of Series A
Preferred Stock are to be redeemed, the shares of Series A Preferred Stock
to be redeemed shall be selected PRO RATA among the holders (as nearly as
practicable without creating fractional units).
(b) LIMITATION ON REDEMPTION. (i) The redemption price of the
Series A Preferred Stock (other than the portion thereof consisting of
accumulated but unpaid distributions) will be payable solely out of the
sale proceeds of capital stock of the Corporation and from no other source.
For purposes of the preceding sentence, "capital stock" means any equity
securities (including Common Stock and Preferred Stock), shares,
participation or other ownership interests (however designated) and any
rights (other than debt securities convertible into or exchangeable for
equity securities) or options to purchase any of the foregoing.
(ii) Subject to the ownership limitations in the
Corporation's Charter, the Corporation may not redeem fewer than all of the
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outstanding shares of Series A Preferred Stock unless all accumulated and
unpaid distributions have been paid on all Series A Preferred Stock for all
quarterly distribution periods terminating on or prior to the date of
redemption.
(c) PROCEDURES FOR REDEMPTION. (i) Notice of Redemption will be
(i) faxed, and (ii) mailed by the Corporation, postage prepaid, not less
than 30 nor more than 60 days prior to the redemption date, addressed to
the respective holders of record of the Series A Preferred Stock to be
redeemed at their respective addresses as they appear on the transfer
records of the Corporation. No failure to give or defect in such notice
shall affect the validity of the proceedings for the redemption of any
Series A Preferred Stock except as to the holder to whom such notice was
defective or not given. In addition to any information required by law or
by the applicable rules of any exchange upon which the Series A Preferred
Stock may be listed or admitted to trading, each such notice shall state:
(i) the redemption date, (ii) the redemption price, (iii) the number of
shares of Series A Preferred Stock to be redeemed, (iv) the place or places
where such shares of Series A Preferred Stock are to be surrendered for
payment of the redemption price, (v) that distributions on the Series A
Preferred Stock to be redeemed will cease to accumulate on such redemption
date and (vi) that payment of the redemption price and any accumulated and
unpaid distributions will be made upon presentation and surrender of such
Series A Preferred Stock. If fewer than all of the shares of Series A
Preferred Stock held by any holder are to be redeemed, the notice mailed to
such holder shall also specify the number of shares of Series A Preferred
Stock held by such holder to be redeemed.
(ii) If the Corporation gives a notice of redemption in
respect of Series A Preferred Stock (which notice will be irrevocable)
then, by 12:00 noon, New York City time, on the redemption date, the
Corporation will deposit irrevocably in trust for the benefit of the Series
A Preferred Stock being redeemed funds sufficient to pay the applicable
redemption price, plus any accumulated and unpaid distributions, whether or
not declared, if any, on such shares to the date fixed for redemption,
without interest, and will give irrevocable instructions and authority to
pay such redemption price and any accumulated and unpaid distributions, if
any, on such shares to the holders of the Series A Preferred Stock upon
surrender of the certificate evidencing the Series A Preferred Stock by
such holders at the place designated in the notice of redemption. If fewer
than all Series A Preferred Stock evidenced by any certificate is being
redeemed, a new certificate shall be issued upon surrender of the
certificate evidencing all Series A Preferred Stock, evidencing the
unredeemed Series A Preferred Stock without cost to the holder thereof. On
and after the date of redemption, distributions will cease to accumulate on
the Series A Preferred Stock or portions thereof called for redemption,
unless the Corporation defaults in the payment thereof. If any date fixed
for redemption of Series A Preferred Stock is not a Business Day, then
payment of the redemption price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business
Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If payment of the
redemption price or any accumulated or unpaid distributions in respect of
the Series A Preferred Stock is improperly withheld or refused and not paid
by the Corporation, distributions on such Series A Preferred Stock will
continue to accumulate from the original redemption date to the date of
payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the applicable redemption
price and any accumulated and unpaid distributions.
(d) STATUS OF REDEEMED OR REPURCHASED STOCK. Any Series A
Preferred Stock that shall at any time have been redeemed or repurchased
shall after such redemption or repurchase, have the status of authorized
but unissued shares of Series A Preferred Stock available for future
issuance and reclassification by the Corporation.
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SECTION 6. VOTING RIGHTS. (a) GENERAL. Holders of the
Series A Preferred Stock will not have any voting rights, except as set
forth below.
(b) RIGHT TO ELECT DIRECTORS. (i) If at any time distributions
shall be in arrears with respect to six (6) prior quarterly distribution
periods (including quarterly periods on the Series A Preferred Units prior
to the exchange into Series A Preferred Stock), whether or not consecutive,
and shall not have been paid in full (a "PREFERRED DISTRIBUTION DEFAULT"),
the authorized number of members of the Board of Directors shall
automatically be increased by two and the holders of record of such Series
A Preferred Stock, voting together as a single class with the holders of
each class or series of Parity Preferred Stock upon which like voting
rights have been conferred and are exercisable, will be entitled to fill
the vacancies so created by electing two additional directors to serve on
the Corporation's Board of Directors (the "PREFERRED STOCK DIRECTORS") at a
special meeting called in accordance with SECTION 6(B)(II), at the next
annual meeting of stockholders, and at each subsequent annual meeting of
stockholders or special meeting held in place thereof, until all such
distributions in arrears and distributions for the current quarterly period
on the Series A Preferred Stock and each such class or series of Parity
Preferred Stock have been paid in full.
(ii) At any time when such voting rights shall have vested, a
proper officer of the Corporation shall call or cause to be called, upon
written request of holders of record of at least 10% of the outstanding
Shares of Series A Preferred Stock, a special meeting of the holders of
Series A Preferred Stock and all the series of Parity Preferred Stock upon
which like voting rights have been conferred and are exercisable
(collectively, the "PARITY SECURITIES") by mailing or causing to be mailed
to such holders a notice of such special meeting to be held not less than
ten and not more than 45 days after the date such notice is given. The
record date for determining holders of the Parity Securities entitled to
notice of and to vote at such special meeting will be the close of business
on the third Business Day preceding the day on which such notice is mailed.
At any such special meeting, all of the holders of the Parity Securities,
by plurality vote, voting together as a single class without regard to
series will be entitled to elect two directors on the basis of one vote per
$50.00 of liquidation preference to which such Parity Securities are
entitled by their terms (excluding amounts in respect of accumulated and
unpaid dividends) and not cumulatively. The holder or holders of one-third
of the Parity Securities then outstanding, present in person or by proxy,
will constitute a quorum for the election of the Preferred Stock Directors
except as otherwise provided by law. Notice of all meetings at which
holders of the Series A Preferred Stock shall be entitled to vote will be
given to such holders at their addresses as they appear in the transfer
records. At any such meeting or adjournment thereof in the absence of a
quorum, subject to the provisions of any applicable law, a majority of the
holders of the Parity Securities present in person or by proxy shall have
the power to adjourn the meeting for the election of the Preferred Stock
Directors, without notice other than an announcement at the meeting, until
a quorum is present. If a Preferred Distribution Default shall terminate
after the notice of a special meeting has been given but before such
special meeting has been held, the Corporation shall, as soon as
practicable after such termination, mail or cause to be mailed notice of
such termination to holders of the Series A Preferred Stock that would have
been entitled to vote at such special meeting.
(iii) If and when all accumulated distributions and the
distribution for the current distribution period on the Series A Preferred
Stock shall have been paid in full or a sum sufficient for such payment is
irrevocably deposited in trust for payment, the holders of the Series A
Preferred Stock shall be divested of the voting rights set forth in SECTION
6(B) herein (subject to revesting in the event of each and every Preferred
Distribution Default) and, if all distributions in arrears and the
distributions for the current distribution period have been paid in full or
set aside for payment in full on all other classes or series of Parity
Preferred Stock upon which like voting rights have been conferred and are
exercisable, the term and office of each Preferred Stock Director so
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elected shall terminate. Any Preferred Stock Director may be removed at
any time with or without cause by the vote of, and shall not be removed
otherwise than by the vote of, the holders of record of a majority of the
outstanding Series A Preferred Stock when they have the voting rights set
forth in SECTION 6(B) (voting separately as a single class with all other
classes or series of Parity Preferred Stock upon which like voting rights
have been conferred and are exercisable). So long as a Preferred
Distribution Default shall continue, any vacancy in the office of a
Preferred Stock Director may be filled by written consent of the Preferred
Stock Director remaining in office, or if none remains in office, by a vote
of the holders of record of a majority of the outstanding Series A
Preferred Stock when they have the voting rights set forth in SECTION 6(B)
(voting separately as a single class with all other classes or series of
Parity Preferred Stock upon which like voting rights have been conferred
and are exercisable). The Preferred Stock Director shall each be entitled
to one vote per director on any matter.
(c) CERTAIN VOTING RIGHTS. So long as any Series A Preferred
Stock remains outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least two-thirds of the Series A
Preferred Stock outstanding at the time (i) designate or create, or
increase the authorized or issued amount of, any class or series of shares
ranking prior to the Series A Preferred Stock with respect to payment of
distributions or rights upon liquidation, dissolution or winding-up or
reclassify any authorized shares of the Corporation into any such shares,
or create, authorize or issue any obligations or security convertible into
or evidencing the right to purchase any such shares, (ii) designate or
create, or increase the authorized or issued amount of, any Parity
Preferred Stock or reclassify any authorized shares of the Corporation into
any such shares, or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such shares, but
only to the extent such Parity Preferred Stock is issued to an affiliate of
the Corporation, or (iii) either (A) consolidate, merge into or with, or
convey, transfer or lease its assets substantially as an entirety, to any
corporation or other entity, or (B) amend, alter or repeal the provisions
of the Corporation's Charter (including these Articles Supplementary) or
By-laws, whether by merger, consolidation or otherwise, in each case that
would materially or adversely affect the powers, special rights,
preferences, privileges or voting power of the Series A Preferred Stock or
the holders thereof; provided, however, that with respect to the occurrence
of a merger, consolidation or a sale or lease of all of the Corporation's
assets as an entirety, so long as (a) the Corporation is the surviving
entity and the Series A Preferred Stock remains outstanding with the terms
thereof unchanged, or (b) the resulting, surviving or transferee entity is
a corporation organized under the laws of any state and substitutes the
Series A Preferred Stock for other preferred stock having substantially the
same terms and the same rights as the Series A Preferred Stock, including
with respect to distributions, voting rights and rights upon liquidation,
dissolution or winding-up, then the occurrence of any such event shall not
be deemed materially or adversely affect such rights, privileges or voting
powers of the holders of a Series A Preferred Stock and provided further
that any increase in the amount of authorized Preferred Stock or the
creation or issuance of any other class or series of Preferred Stock, or
any increase in an amount of authorized shares of each class or series, in
each case ranking either (a) junior to the Series A Preferred Stock with
respect to payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up, or (b) on a parity with the Series
A Preferred Stock with respect to payment of distributions or the
distribution of assets upon liquidation, dissolution or winding-up to the
extent such Preferred Stock is not issued to an affiliate of the
Corporation, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
SECTION 7. NO CONVERSION RIGHTS. The holders of the Series A
Preferred Stock shall not have any rights to convert such shares into
shares of any other class or series of stock or into any other securities
of, or interest in, the Corporation.
SECTION 8. NO SINKING FUND. No sinking fund shall be
established for the retirement or redemption of Series A Preferred Stock.
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THIRD: The Series A Preferred Stock has been classified and
designated by the Board of Directors under the authority contained in the
Charter.
FOURTH: These Articles Supplementary have been approved by the
Board of Directors int he manner and by the vote required by law.
FIFTH: The undersigned President of the Corporation
acknowledges these Articles Supplementary to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under
oath, the undersigned President acknowledges that to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties for
perjury.
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IN WITNESS WHEREOF, CHATEAU COMMUNITIES, INC. has caused these
presents to be signed in its name and on its behalf by its President and
witnessed by its Secretary on April 20, 1998.
WITNESS: CHATEAU COMMUNITIES, INC.
/S/ Tamara Fischer /S/C.G. Kellogg
________________________ By:_________________________
Name: Tamara Fischer Name: C.G. Kellogg
Title: Secretary Title: President
THE UNDERSIGNED, President of CHATEAU COMMUNITIES, INC., who executed
on behalf of the Corporation the Articles Supplementary of which this
certificate is made a part, hereby acknowledges in the name and on behalf
of said Corporation the foregoing Articles Supplementary to be the
corporate act of said Corporation and hereby certifies that the matters and
facts set forth herein with respect to the authorization and approval
thereof are true in all material respects under the penalties of perjury.
/S/ C.G. Kellogg
_________________________
C.G. Kellogg
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