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):April 23, 1998 (April 20,1998)
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.)
925 E. Meadow Drive
Palo Alto, CA 94303
(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 April 20, 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 400,000 units of 7.875% Series B Cumulative Redeemable
Preferred 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 $20 million. The
sale of 400,000 Series B Preferred Units was on substantially the same terms as
the sale by the Operating Partnership of 1.2 million Series B Preferred Units in
February 1998 to the same institutional investor. 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 February 6, 2008 (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, 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 TRUST, INC.
April 23, 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 Stock (incorporated by reference
to Exhibit 3.1 to the Company's Current Report on Form
8-K, filed March 3, 1998).
10.1 Second Amendment to First Amended and Restated Agreement
of Limited Partnership of Essex Portfolio, L.P., dated
April 20, 1998.
99.1 Press Release.
<PAGE>
Exhibit 10.1
SECOND AMENDMENT TO
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
ESSEX PORTFOLIO, L.P.
Dated as of April 20, 1998
This Second Amendment to the First Amended and Restated Agreement of
Limited Partnership of Essex Portolio, L.P. 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 First Amended and
Restated Agreement of Limited Partnership of Essex Portfolio, L.P. dated
September 30, 1997, which has been amended by the First Amendment to First
Amended and Restated Agreement of Limited Partnership, dated February 6, 1998
(collectively referred to herein as the "Partnership Agreement");
WHEREAS, on February 6, 1998, Contributor made a Capital Contribution
of $60,000,000.00, in cash, to the Partnership in exchange for which Contributor
received 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 condition as set
forth in Exhibit N of the Partnership Agreement (the "Series B Preferred
Units");
WHEREAS, on the date hereof, Contributor has made an additional Capital
Contribution of $20,000,000.00, in cash, to the Partnership in exchange for an
aggregate of 400,000 Series B Preferred Units; and
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 the additional capital contribution of Contributor.
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. Restatement of Exhibit A. Exhibit A to the Partnership Agreement is
amended and restated by replacing such Exhibit A with Exhibit A attached to
this Amendment.
3. Amendment of Exhibit N. Exhibit N to the Partnership Agreement is
hereby amended as follows.
(a) Section 2.A. of Exhibit N is hereby deleted in its entirety,
and the following is hereby substituted in the place thereof:
"A. Number. The number of authorized Series B Preferred Units
shall be 1,600,000."
(b) Section 2.C.(i) of Exhibit N is hereby amended by inserting
the following language at the end thereof:
"For purposes of determining the amounts of distributions
hereunder, with regard to the Series B Preferred Units issued pursuant
to the Contribution Agreement dated February 6, 1998, the Issue Date
shall be February 6, 1998, and with regard to the Series B Preferred
Units issued pursuant to the Contribution Agreement dated April 20,
1998, the Issue Date shall be April 20, 1998."
(c) Section 2.G.(i) of Exhibit N is hereby amended by inserting
the following language at the end thereof:
"Furthermore, the Series B Preferred Units may be exchanged in whole or
in part for Series B Preferred Stock at any time, if both (a) based on
results or projected results, there exists, in the reasonable judgement
of the holder an imminent and substantial risk that such holder's
interest in the Partnership represents or will represent more than
19.5% of the total profits or capital interests in the Partnership for
a taxable year, and (b) the holder thereof delivers to the Company an
opinion of nationally recognized independent counsel to the effect that
there is a substantial risk that such holder's interest in the
Partnership represents or will represent more than 19.5% of the total
profits or capital interests in the Partnership (determined in
accordance with Treasury Regulations Section 1.731-2(e)(4)) for a
taxable year; for purposes of this provision, as of the date of this
Amendment and giving effect to the Contributor's receipt of 400,000
Series B Preferred Units as of such date, it is deemed that there is
presently not a substantial risk that the Contributor's interest in the
Partnership will represent more than such 19.5% and such a substantial
risk shall be deemed to occur only if there is a material increase,
from the Contributor's present level, in the percentage of total
profits or capital interests in the Partnership represented by the
holder's interest. For purposes of the exchange rights granted
hereunder, with regard to all Series B Preferred Units issued pursuant
to the Contribution Agreement dated February 6, 1998 and all Series B
Preferred Units issued pursuant to the Contribution Agreement dated
April 20, 1998, the Issue Date shall be deemed to be February 6, 1998."
4. 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.
5. 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.
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/ Thomas Otis
----------------------
Name: Thomas Otis
Title: Vice President
<PAGE>
EXHIBIT A
PARTNERSHIP UNITS
(As of April 20, 1998)
PARTNERSHIP UNITS
General Partner: Units
Essex Property Trust, Inc. 16,629,845
Limited Partners: Units
1. Essex Portfolio Management Company 15,941
2. Essex Property Corporation 9,909
3. GMMS Partners 43,414
4. M & M Projects, Inc. 128,138
5. SummerHill Homes 163,447
6. Paula Amanda 1,785
7. Robert and Margaret Arnold 2,242
8. Randall I. Barkan 2,564
9. David Bernstein Revocable Trust 5,771
10. John D. and Robbin Eudy 7,457
11. Kenneth and Angeliki Frangadakis 2,675
12. George and Katherine Frangadakis, Trustees
Frangadakis Family Revocable Trust 4,697
13. Kenneth and Angeliki Frangadakis, Trustees
Frangadakis Family Revocable Trust 24,334
14. Harvey Friedman 4,042
15. Harvey and Margaret Green 16,735
16. Keith R. and Thelma Guericke 48,116
17. George P. Katsoulis 5,000
18. Gerald E. and Annette Kelly 5,643
19. Nancy Kukkola 11,637
20. George M. Marcus 1,136,227
21. Meistrich Family Trust UTA 12/6/90 4,042
22. Charles E. Martin 1,785
23. William A. and Sherrie Millichap 73,099
24. J. Peter and Cherie Otten 9,447
25. Milton Pagonis 10,267
26. Gary Pagonis Family Trust 10,267
27. G. Michael Roark 54,740
28. Michael and Ann Schall 26,388
29. J. Lawrence Schnadig 1,729
30. J.A. Shafran 2,889
31. Swanson Survivors Trust 7,687
32. Marcus & Millichap 2,564
33. The Way 1994 Living Trust Dtd. 11/2/94 2,226
34. Gay A. Yamagiwa 10,720
35. Craig K. Zimmerman 15,849
7.875% SERIES B PREFERRED UNITS
Limited Partner:
Belair Capital Fund LLC 1,600,000
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TOTAL PARTNERSHIP UNITS: 20,103,318
<PAGE>
Exhibit 99.1
Essex Property Trust, Inc.
925 East Meadow Drive, Palo Alto, California 94303, (650) 494-3700,
(650) 494-8743 fax
Contact: Keith Guericke, President or Wendy Carhart, Investor Relations
FOR IMMEDIATE RELEASE
Essex Sells an Additional $20 Million of
Perpetual Preferred Units
Palo Alto, California -- April 21, 1998 -- Essex Property Trust, Inc.
(NYSE: "ESS"), today announced that Essex Portfolio, L.P., (the "Operating
Partnership"), sold an additional $20 million of its 7.875% Series B Cumulative
Redeemable Preferred Units to an institutional investor in a private placement.
The 400,000 Preferred Units are identical in structure to the 1.2 million
Preferred Units sold to the same institutional investor by the Operating
Partnership in February. The Preferred Units are being sold for $50.00 per unit,
and may be called by Essex at par on or after February 6, 2003. The Preferred
Units have no stated maturity or mandatory redemption and pay a cumulative,
quarterly dividend at an annualized rate of 7.875%. The Preferred Units are not
convertible into common stock of Essex Property Trust, Inc.
Essex intends to use the net proceeds to reduce the outstanding
indebtedness on the Company's line of credit, and to further fund its West Coast
acquisition and development activities.
Essex Property Trust, Inc., located in Palo Alto and traded on the New
York Stock Exchange (ESS), is a fully integrated Real Estate Investment Trust
(REIT). Self-administered and self-managed, Essex focuses on multifamily
properties in targeted West Coast markets, specifically the San Francisco,
Seattle, Southern California and Portland metropolitan areas. Currently, Essex
has ownership interests in 58 multifamily properties (12,389 units), and has
1,332 units in various stages of development. Additional information can be
located on the world wide web at www.essexproperties.com.
