SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report(Date of earliest event reported):March 3, 1998(February 6, 1998)
ESSEX PROPERTY TRUST, INC.
(Exact name of Registrant as
Specified in its Charter)
Maryland
(State or Other Jurisdiction
of Incorporation)
1-13106
(Commission File Number)
77-0369576
(IRS Employer Identification No.)
777 California Avenue
Palo Alto, CA 94304
(650) 494-3700
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
<PAGE>
Item 5. OTHER EVENTS.
On February 6, 1998, Essex Portfolio, L.P., a California limited
partnership (the "Operating Partnership"), as to which Essex Property Trust,
Inc., a Maryland corporation (the "Company") is the general partner, completed
the private placement of 1,200,000 units of 7.875% Series B Preferred Limited
Partnership Units (the "Series B Preferred Units"), representing a limited
partnership interest in the Operating Partnership, to an institutional investor
in return for a contribution to the Operating Partnership of $60 million. The
Series B Preferred Units will become exchangeable, on a one for one basis, in
whole or in part at any time on or after the tenth anniversary of the date of
this private placement (or earlier under certain circumstances) for shares of
the Company's 7.875% Series B Cumulative Redeemable Preferred Stock, par value
$.0001 per share (the "Series B Preferred Stock"). Pursuant to the terms of a
registration rights agreement, entered into in connection with this private
placement, the holders of Series B Preferred Stock will have certain rights to
cause the Company to register such shares of Series B Preferred Stock. On
February 10, 1998, the Company filed Articles Supplementary reclassifying
2,000,000 shares of its Common Stock, par value $.0001 per share, as 2,000,000
shares of Series B Preferred Stock and setting forth the rights, preferences and
privileges of the Series B Preferred Stock.
The Operating Partnership plans to use the proceeds from this private
placement to repay indebtedness, to fund acquisition and development activities
and for general partnership purposes.
<PAGE>
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.
ESSEX PROPERTY, INC.
March 3, 1998 By: /s/ Mark J. Mikl
----------------------------
Mark J. Mikl
Controller
<PAGE>
EXHIBIT INDEX
Exhibit Description
- ------------- ------------------------------------------------------
3.1 Articles Supplementary reclassifying 2,000,000 shares of
Common Stock as 2,000,000 shares of 7.875% Series B
Cumulative Redeemable Preferred Stock, filed with the
State Department of Assessments and Taxation of Maryland
on February 10, 1998.
10.1 First Amendment to First Amended and Restated Agreement
of Limited Partnership of Essex Portfolio, L.P., dated
February 6,1998.
<PAGE>
Exhibit 3.1
ESSEX PROPERTY TRUST, INC.
ARTICLES SUPPLEMENTARY
Reclassifying 2,000,000 shares of Common Stock
as 2,000,000 shares of
7.875% SERIES B CUMULATIVE REDEEMABLE PREFERRED STOCK
Essex Property Trust, Inc., a corporation organized and
existing under the laws of Maryland (the "Corporation"), does hereby certify to
the State Department of Assessments and Taxation of Maryland that:
FIRST: Pursuant to authority conferred upon the Board of
Directors of the Corporation by Article FIFTH of its Charter (the "Charter") in
accordance with Section 2-105 of the Maryland General Corporation Law (the
"MGCL"), the Board of Directors of the Corporation, at a meeting held on January
29, 1998, duly adopted a resolution reclassifying 2,000,000 authorized but
unissued shares of Common Stock (par value $.0001 per share) as Preferred Stock
(par value $.0001 per share), designating such newly reclassified Preferred
Stock as Series B Cumulative Redeemable Preferred Stock, the preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions of
redemption as set forth below and authorizing the issuance of such series of
Preferred Stock as set forth below. Upon any restatement of the Charter,
Sections 1 through 9 of Article THIRD shall become subsection (f) of Article
FIFTH of the Charter.
SECOND: The reclassification increases the number of shares
classified as 7.875% Series B Cumulative Redeemable Preferred Stock from no
shares immediately prior to the reclassification to 2,000,000 shares immediately
after the reclassification. The reclassification decreases the number of shares
classified as Common Stock (par value $.0001 per share) from 668,400,000 shares
immediately prior to the reclassification to 666,400,000 shares immediately
after the reclassification.
THIRD: Subject in all cases to the provisions of Article
EIGHTH of the Charter of the Corporation with respect to Excess Stock, the
following is a description of the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications and
terms and conditions of redemption of 7.875% Series B Cumulative Redeemable
Preferred Stock of the Corporation:
7.875% Series B Cumulative Redeemable Preferred Stock
Section 1. Designation and Amount.
Of the 668,400,000 authorized shares of Common Stock,
2,000,000 shares are reclassified and designated "7.875% Series B Cumulative
Redeemable Preferred Stock (par value $.0001 per share)" (the "Series B
Preferred Stock").
Section 2. Rank. The Series B 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 the 8.75% Convertible Preferred Stock, Series
1996A (the "Series A Preferred Stock") with which it shall be on a parity and
any other class or series of equity securities of the Corporation expressly
designated as ranking on a parity with or senior to the Series B 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
terms of the Series B Preferred Stock, the term "Parity Preferred Stock" shall
be used to refer to the Series A Preferred Stock and any other 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 B 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.
Section 3. Distributions.
(a) Payment of Distributions. Subject to the rights of holders
of Parity Preferred Stock as to the payment of distributions, holders of Series
B Preferred Stock will be entitled to receive, when, as and if declared by the
Corporation, out of funds legally available for the payment of distributions,
cumulative preferential cash distributions at the rate per annum of 7.875% of
the $50.00 liquidation preference per share of Series B Preferred Stock. Such
distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable quarterly in arrears, on or before the 15th of
February, May, August and November of each year (each a "Preferred Stock
Distribution Payment Date"), commencing in each case on the first Preferred
Stock Distribution Payment Date after the original date of issuance. 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 B 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 B Preferred Stock will be made to the
holders of record of the Series B Preferred Stock on the relevant record dates,
which, unless otherwise provided by the Corporation with respect to any
distribution, will be 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 B Preferred
Stock shall also continue to accrue all accrued and unpaid distributions to the
exchange date on any Series B Preferred Unit (as defined in the First Amendment
to First Amended and Restated Agreement of Limited Partnership of Essex
Portfolio, L.P., dated as of February 6, 1998 (the "First Amendment")) validly
exchanged into such share of Series B Preferred Stock in accordance with the
provisions of such First Amendment.
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) Limitations on Distributions. No distributions on the
Series B Preferred Stock shall be declared or paid or set apart for payment by
the Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to its indebtedness, prohibits
such declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law.
(c) Distributions Cumulative. Notwithstanding the foregoing,
distributions on the Series B Preferred Stock will accrue whether or not the
terms and provisions set forth in Section 3(b) hereof 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. Accrued but
unpaid distributions on the Series B Preferred Stock will accumulate as of the
Preferred Stock Distribution Payment Date on which they first become payable.
Accumulated and unpaid distributions will not bear interest.
(d) Priority as to Distributions.
(i) So long as any Series B 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 B 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 B Preferred Stock, any Parity Preferred Stock with
respect to distributions or any Junior Stock, unless, in each
case, all distributions accumulated on all Series B 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 Junior Stock or
Parity Preferred Stock into stock of the Corporation ranking
junior to the Series B Preferred Stock as to distributions, (iii)
the redemption, purchase or other acquisition of Junior Stock
made for purposes of and in compliance with requirements of an
employee incentive or benefit plan of the Corporation or any
subsidiary of the Corporation, and (iv) purchase by the
Corporation of such Series B Preferred Stock, Parity Preferred
Stock with respect to distributions or Junior Stock pursuant to
Article EIGHTH 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 so set apart) upon
the Series B Preferred Stock, all distributions authorized and
declared on the Series B 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 B
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 B
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.
(e) No Further Rights. Holders of Series B 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, the holders of Series B 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 B 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
Series B Preferred Stock, and (ii) an amount equal to any accumulated and unpaid
distributions thereon 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 B 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 B Preferred Stock and such Parity
Preferred Stock shall be made so that the payments on the Series B 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 B 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 30 and not more
that 60 days prior to the payment date stated therein, to each record holder of
the Series B 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 B
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
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), or the effectuation by the
Corporation of a transaction or series of related transactions in which more
than 50% of the voting power of the Corporation is disposed of 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 B Preferred Stock
may not be redeemed prior to February 6, 2003. On or after such date, subject to
the terms and conditions of any Parity Preferred Stock, the Corporation shall
have the right to redeem the Series B 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 B Preferred Stock plus accumulated and unpaid distributions to the
date of redemption. If fewer than all of the outstanding shares of Series B
Preferred Stock are to be redeemed, the shares of Series B Preferred Stock to be
redeemed shall be selected pro rata (as nearly as practicable without creating
fractional units). Further, in order to ensure that the Corporation remains a
qualified real estate investment trust for federal income tax purposes, the
Series B Preferred Stock will also be subject to the provisions of Article
EIGHTH of the Charter pursuant to which Series B Preferred Stock owned by a
stockholder in excess of the Ownership Limit (as defined in the Charter) will be
automatically transferred to a Trust (as defined in the Charter) and the
Corporation shall have the right to purchase such shares, as provided in Article
EIGHTH of the Charter.
(b) Limitation on Redemption.
(i) The redemption price of the Series B 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 of the Corporation and units of partnership interest of
Essex Portfolio, L.P., as to which the Corporation is the general
partner), 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) The Corporation may not redeem fewer than all of the
outstanding shares of Series B Preferred Stock unless all
accumulated and unpaid distributions have been paid on all Series
B Preferred Stock for all quarterly distribution periods
terminating on or prior to the date of redemption; provided,
however, that the foregoing shall not prevent the purchase or
acquisition of shares of Series B Preferred Stock or Parity
Preferred Stock pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding shares of Series B
Preferred Stock or Parity Preferred Stock, as the case may be.
(c) Rights to Distributions on Stock Called for Redemption.
Immediately prior to any redemption of Series B Preferred Stock, the Corporation
shall pay, in cash, any accumulated and unpaid distributions through the
redemption date, unless a redemption date falls after a Distribution Record Date
and prior to the corresponding Preferred Stock Distribution Payment Date, in
which case each holder of Series B Preferred Stock at the close of business on
such Distribution Record Date shall be entitled to the distributions payable on
such shares on the corresponding Distribution Payment Date notwithstanding the
redemption of such shares before the Distribution Payment Date.
(d) 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 B 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 B 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 B 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 B Preferred Stock to be redeemed, (iv)
the place or places where such shares of Series B Preferred Stock
are to be surrendered for payment of the redemption price, (v)
that distributions on the Series B 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 B Preferred Stock. If fewer than all of the shares of
Series B 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 B Preferred Stock held by such holder to be
redeemed.
(ii) If the Corporation gives a notice of redemption in
respect of Series B 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 B Preferred Stock being
redeemed funds sufficient to pay the applicable redemption price,
plus any accumulated and unpaid distributions, 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 B Preferred
Stock upon surrender of the Series B Preferred Stock by such
holders at the place designated in the notice of redemption. On
and after the date of redemption, distributions will cease to
accumulate on the Series B Preferred Stock or portions thereof
called for redemption, unless the Corporation defaults in the
payment thereof. If any date fixed for redemption of Series B
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 B
Preferred Stock is improperly withheld or refused and not paid by
the Corporation, distributions on such Series B 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.
(e) Status of Redeemed Stock. Any Series B Preferred Stock
that shall at any time have been redeemed shall after such redemption have the
status of authorized but unissued Preferred Stock, without designation as to
class or series, until such shares are once more designated as part of a
particular class or series by the Board.
Section 6. Voting Rights.
(a) General. Holders of the Series B Preferred Stock will
not have any voting rights, except as set forth below.
(b) Right to Elect Directors. If at any time full
distributions shall not have been made on any Series B Preferred Stock with
respect to any six (6) prior quarterly distribution periods, whether or not
consecutive, (a "Preferred Distribution Default"), such that distributions for
such six (6) distribution periods have not been fully paid and are outstanding
in whole or in part at the same time, the holders of such Series B 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 (other than holders of Parity Preferred Stock who
are deemed to be "affiliates" of the Corporation as such term is defined in Rule
144 of the General Rules and Regulations Under the Securities Act of 1933), will
have the right to elect two additional directors to serve on the Corporation's
Board (the "Preferred Stock Directors"), which shall be in addition to the
rights of holders of Series A Preferred Stock to elect directors pursuant to the
articles supplementary pertaining to the Series A Preferred Stock, at a special
meeting called by the holders of record of at least 10% of the outstanding
shares of Series B Preferred Stock or any such class or series of Parity
Preferred Stock or 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 B Preferred Stock and each such class or
series of Parity Preferred Stock have been paid in full. If and when all
accumulated distributions and the distribution for the current distribution
period on the Series B Preferred Stock shall have been paid in full or set aside
for payment in full, the holders of the Series B 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 elected shall immediately 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 B 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 B 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 Directors shall each be
entitled to one vote per director on any matter.
(c) Certain Voting Rights. (i) While any shares of the Series
B Preferred Stock are outstanding, the Corporation shall not, without the
affirmative vote of the holders of at least two-thirds (2/3) of the Series B
Preferred Stock outstanding at the time (i) authorize or create, or increase the
authorized or issued amount of, any class or series of shares ranking prior to
the Series B 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) either amend, alter or repeal the provisions of the
Corporation's Charter (including these Articles Supplementary) or Bylaws, that
would materially and adversely affect the preferences, other rights, voting
powers, restrictions, limitations as to dividends and other distributions,
qualifications, or terms and conditions of redemption, of any outstanding shares
of the Series B Preferred Stock; provided 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 junior or on a parity to the Series B
Preferred Stock with respect to payment of distributions or the distribution of
assets upon liquidation, dissolution or winding-up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers. While any shares of the Series B Preferred Stock are outstanding, the
Corporation shall not, without the affirmative vote of the holders of at least
two-thirds (2/3) of the Series B Preferred Stock outstanding at the time
consolidate, amalgamate, merge with or into, or convey, transfer or lease its
assets substantially as an entirety to, any corporation or other entity, unless
(a) the Corporation is the surviving entity and the shares of the Series B
Preferred Stock remain outstanding with the terms thereof unchanged, (b) the
resulting, surviving or transferee entity is a corporation or other entity
organized under the laws of any state and substitutes for the Series B Preferred
Stock other preferred stock having substantially the same terms and same rights
as the Series B Preferred Stock, including with respect to distributions, voting
rights and rights upon liquidation, dissolution or winding-up, or (c) such
merger, consolidation, amalgamation or asset transfer does not adversely affect
the powers, special rights, preferences and privileges of the holders of the
Series A Preferred Stock in any material respect. However, the Corporation may
create additional classes of Parity Preferred Stock and Junior Stock, increase
the authorized number of shares of Parity Preferred Stock and Junior Stock and
issue additional series of Parity Preferred Stock and Junior Stock without the
consent of any holder of Series B Preferred Stock.
Section 7. Transfer Restrictions. The Series B Preferred
Stock shall be subject to the provisions of Article EIGHTH of the
Charter.
Section 8. No Conversion Rights. The holders of the Series B
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 9. No Sinking Fund. No sinking fund shall be
established for the retirement or redemption of Series B
Preferred Stock.
FOURTH: The Series B Preferred Stock have been classified and designated by
the Board under the authority contained in the Charter.
FIFTH: These Articles Supplementary have been approved by the Board in the
manner and by the vote required by law.
SIXTH: 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.
<PAGE>
IN WITNESS WHEREOF, these Articles Supplementary are executed
on behalf of the Corporation by its President and attested by its Assistant
Secretary this 3rd day of March, 1998.
ESSEX PROPERTY TRUST, INC.
By: /s/ Keith R. Guericke
-------------------------
Keith R. Guericke
President
Attest:
/s/ Michael J. Schall
- ---------------------
Michael J. Schall
Executive Vice President,
Chief Financial Officer and
Assistant Secretary
THE UNDERSIGNED, President of ESSEX PROPERTY TRUST, 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.
By:/s/ Keith R. Guericke
------------------------
Keith R. Guericke
` President
<PAGE>
Exhibit 10.1
FIRST AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
ESSEX PORTFOLIO, L.P.
Dated as of February 6, 1998
This First Amendment to the First Amended and Restated Agreement of
Limited Partnership of Essex Portolio, L.P. (the "Partnership Agreement"), dated
as of the date shown above (the "Amendment"), is executed by Essex Property
Trust, Inc. a Maryland Corporation (the "Company"), as the General Partner and
on behalf of the existing Limited Partners of Essex Portfolio, L.P. (the
"Partnership") and Belair Capital Fund LLC, a Massachusetts limited liability
company (the Contributor").
RECITALS
WHEREAS, the Partnership was formed pursuant to the Partnership
Agreement, which has been amended and restated as of September 30, 1997;
WHEREAS, on the date hereof, Contributor has made a Capital
Contribution of $60,000,000.00, in cash, to the Partnership in exchange for
which Contributor is entitled to receive an aggregate of 1,200,000 of 7.875%
Series B Cumulative Redeemable Preferred Units of limited partnership interests
in the Partnership with rights, preferences, exchange and other rights, voting
powers and restrictions, limitations as to distributions, qualifications and
terms and conditions as set forth herein (the "Series B Preferred Units");
WHEREAS, pursuant to the authority granted to the General Partner under
the Partnership Agreement, the General Partner desires to amend the Partnership
Agreement to reflect (i) the issuance of the Series B Preferred Units, (ii) the
admission of the Contributor as an Additional Limited Partner and holder of a
certain number of Series B Preferred Units and (iii) certain other matters
described herein;
WHEREAS, Contributor desires to become a party to the Partnership
Agreement as a Limited Partner and to be bound by all terms, conditions and
other provisions of this Amendment and the Partnership Agreement.
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the General Partner hereby amends the Partnership Agreement as
follows:
1. Definitions. Capitalized terms used herein, unless otherwise defined
herein, shall have the same meanings as set forth in the Partnership Agreement.
2. Admission of Contributor. Contributor is hereby admitted as an
Additional Limited Partner in accordance with Section 4.6 of the Partnership
Agreement holding such number of Series B Preferred Units as is set forth on
Exhibit A, as amended. Contributor hereby agrees to become a party to the
Partnership Agreement as a Limited Partner and to be bound by all the terms,
conditions and other provisions of the Partnership Agreement, as amended by this
Amendment. Pursuant to Section 4.6(b) of the Partnership Agreement, the General
Partner hereby consents to the admission of Contributor as an Additional Limited
Partner of the Partnership. The admission of Contributor shall become effective
as of the date of this Amendment, which shall also be the date on which the name
of Contributor is recorded on the books and records of the Partnership.
3. Percentage Interest. Section 1.1 of the Partnership Agreement is hereby
amended to delete the definition of "Percentage Interest" in its entirety and
the following definition of "Percentage Interest" is hereby substituted in its
place:
"Percentage Interest" shall mean, with respect to any Partner
other than holders of Series B Preferred Units, the undivided
percentage ownership interest of such Partner in the Partnership, as
determined by dividing the number of Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding
(excluding the Series A Preferred Interest, the Series B Preferred
Interest and the Series B Partnership Units).
4. Restatement of Exhibit A and Exhibit M. Exhibit A to the Partnership
Agreement is amended and restated by replacing such Exhibit A with Exhibit A
attached to this Amendment. Exhibit M to the Partnership Agreement is amended
and restated by replacing such Exhibit M with Exhibit M attached to this
Amendment.
5. Preferred Interest. Section 1.1 of the Partnership Agreement is hereby
amended to delete the definition of "Preferred Interest" in its entirety and the
following definitions of "Series A Preferred Interest" and "Series B Preferred
Interest" are hereby inserted after the definition of "Securities Act" and
before the definition of "Series A Preferred Stock," and all references in the
Partnership Agreement to Preferred Interests are hereby deemed to be a reference
to "Series A Preferred Interest."
"Series A Preferred Interest" shall mean the interest in the
Partnership received by the General Partner in exchange for additional
Capital Contributions made by the General Partner in connection with
the issuance of shares of Series A Preferred Stock, as and when issued,
which Series A Preferred Interest includes and shall include the right
to receive preferential distributions and certain other rights as set
forth in this Agreement.
"Series B Preferred Interest" shall mean the interest in the
Partnership received by the General Partner in connection with the
issuance of shares of Series B Preferred Stock, as and when issued,
which Series B Preferred Interest includes and shall include the right
to receive preferential distributions and certain other rights as set
forth in this Agreement.
6. Series B Preferred Stock. Section 1.1 of the Partnership Agreement is
hereby amended to include the following definitions of "Series B Preferred
Stock" and "Series B Preferred Units" which are hereby inserted after the
definition of "Series A Preferred Stock" and before the definition of "Stock
Incentive Plans":
"Series B Preferred Stock" shall mean the preferred stock of
the General Partner described in Article FIRST of the Articles
Supplementary reclassifying 2,000,000 shares of Common Stock as
2,000,000 shares of 7 875% Series B Cumulative Redeemable Preferred
Stock to be filed with the Department on or about February 10, 1998.
"Series B Preferred Units" shall mean the 7 875% Series B
Cumulative Redeemable Preferred Units of limited partnership interests
in the Partnership with rights, preferences, exchange and other rights,
voting powers and restrictions, limitations as to distributions,
qualifications and terms and conditions as set forth in Exhibit N.
7. Distributions. Section 6.2(a) of the Partnership Agreement is hereby
deleted in its entirety, and the following is hereby substituted in the place
thereof:
(a) Distributions shall be made in accordance with the following order
of priority:
(i) First, on a pro rata basis, (based upon the same
ratio that accrued distributions per share of Series A Preferred Stock,
Series B Preferred Stock and per unit of Series B Preferred Units
(which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such stock or units do
not have cumulative distribution rights) bear to each other) (x) to the
General Partner, on account of the Series A Preferred Interest and
Series B Preferred Interest until the total amount of distributions
made pursuant to this Section 6.2(a)(i)(x) equals the total amount of
accrued but unpaid dividends (if any) payable with respect to the
Series A Preferred Stock and the Series B Preferred Stock as of the
date of such distribution; and (y) to the Limited Partners, holding
Series B Preferred Units, on account of the Series B Preferred Units
until the total amount of distributions made pursuant to this Section
6.2(a)(i)(y) equals the total amount of accrued but unpaid dividends
(if any) payable with respect to the Series B Preferred Units, in
accordance with Exhibit N of the Partnership Agreement, as of the date
of such distribution.
(ii) Next, to the Partners, pro rata in accordance with the Partners'
then Percentage Interests.
Neither the Partnership nor the Limited Partners shall have
any obligation to see that any funds distributed to the General Partner
pursuant to subparagraph (a)(i) of this Section 6.2 are in turn used by
the General Partner to pay dividends on the Series A Preferred Stock or
the Series B Preferred Stock (or any other Preferred Stock) or that
funds distributed to the General Partner pursuant to subparagraph
(a)(ii) of this Section 6.2 are in turn used by the General Partner to
pay dividends on the Common Stock or for any other purpose."
8. Timing Requirements. Section 8.4 of the Partnership Agreement is hereby
deleted in its entirety, and the following is hereby substituted in the place
thereof:
"In the event that the Partnership is "liquidated" within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations and a
Liquidation Event has occurred, any and all distributions to the
Partners pursuant to Section 8.3(d) hereof shall be made no later than
the later to occur of (i) the last day of the taxable year of the
Partnership in which such liquidation occurs or (ii) ninety (90) days
after the date of such liquidation. If the Partnership is liquidated
within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations
and no Liquidating Event has occurred and is continuing, the
Partnership property shall not be liquidated, the Partnership's debts
and liabilities shall not be paid or discharged (except to the extent
due and payable in the ordinary course) and the Partnership's affairs
shall not be wound up. Instead, solely for federal income tax purposes,
the Partnership shall be deemed to have contributed the Partnership
property in-kind to a "new partnership," which shall be deemed to have
taken the Partnership property subject to all debts and liabilities of
the Partnership. Immediately thereafter, the Partnership shall be
deemed to have been liquidated, distributing new partnership interests
to the Partners, all in accordance with their respective Capital
Accounts. The new partnership shall operate in accordance with this
Agreement."
9. Distributions in Kind. Section 8.5 of the Partnership Agreement is
hereby amended by adding the following sentence to the end of such section:
"Notwithstanding the foregoing, the Liquidating Trustee shall
not distribute to the holders of Series B Partnership Units, Series A
Preferred Interest and Series B Preferred Interest Partnership assets
other than cash."
10. Exhibit E. Exhibit E to the Partnership Agreement is hereby deleted in
its entirety, and the attached Exhibit E is hereby inserted in the place
thereof.
11. Exhibit N. The Partnership Agreement is hereby amended by adding a new
exhibit, Exhibit N, a copy of which is attached hereto. Exhibit N is hereby
inserted into the Partnership Agreement following Exhibit M.
12. Continuing Effect of Partnership Agreement. Except as modified herein,
the Partnership Agreement is hereby ratified and confirmed in its entirety and
shall remain and continue in full force and effect, provided, however, that to
the extent there shall be a conflict between the provisions of the Partnership
Agreement and this Amendment the provisions in this Amendment will prevail. All
references in any document to the Partnership Agreement shall mean the
Partnership Agreement, as amended hereby.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same agreement. Facsimile signatures shall be
deemed effective execution of this Agreement and may be relied upon as such by
the other party. In the event facsimile signatures are delivered, originals of
such signatures shall be delivered to the other party within three (3) business
days after execution.
<PAGE>
IN WITNESS WHEREOF, the General Partner and the Contributor have
executed this Amendment as of the date indicated above.
GENERAL PARTNER
ESSEX PROPERTY TRUST, INC.,
a Maryland Corporation as General Partner of Essex
Portfolio, L.P. and on behalf of the existing Limited
Partners
By: /s/ Keith R. Guericke
-------------------------
Name: Keith R. Guericke
Title: Chief Executive Officer & President
CONTRIBUTOR:
BELAIR CAPITAL FUND LLC
By: Eaton Vance Management, as its Manager
By:/s/Stan R. Dynner
--------------------
Name: Stan R. Dynner
Title:Vice President
