EXHIBIT 3.5
EQUITY RESIDENTIAL PROPERTIES TRUST
ARTICLES SUPPLEMENTARY
TO THE
SECOND AMENDED AND RESTATED DECLARATION OF TRUST
Equity Residential Properties Trust, a Maryland real estate investment
trust (the "Trust"), hereby certifies to the State Department of Assessments and
Taxation of Maryland, pursuant to section 8-203(b) of the Corporations and
Associations Article of the Annotated Code of Maryland, that:
FIRST: Pursuant to the authority granted by the Second Amended and
Restated Declaration of Trust of the Trust, as amended and supplemented (the
"Declaration of Trust"), the Board of Trustees adopted a resolution classifying
and designating up to 1,100,000 preferred shares of beneficial interest of the
Trust, $.01 par value per share (the "Preferred Shares"), as 8.50% Series M-1
Cumulative Redeemable Preferred Shares of Beneficial Interest, $.01 par value
per share (Liquidation Preference $50.00 Per Share) (the "Series M-1 Preferred
Shares"), with the following preferences, rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption, which, upon any restatement of the Declaration of
Trust, may be made a part of Article XIII of the Declaration of Trust, with any
appropriate changes in the enumeration or lettering of any section or subsection
hereof:
SERIES M-1 PREFERRED SHARES
1. A. CERTAIN DEFINITIONS.
Unless the context otherwise requires, the terms defined in
this subparagraph A of paragraph 1 shall have, for all purposes of these terms
of the Series M-1 Preferred Shares, the meanings herein specified (with terms
defined in the singular having comparable meanings when used in the plural).
"Business Day" shall mean any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in New York City are authorized or required by law, regulation or executive
order to close.
"Common Shares" shall mean the common shares of beneficial
interest, $.01 par value per share, of the Trust.
"Distribution Period" shall have the meaning set forth in
subparagraph (3) of paragraph B.
"Junior Shares" shall have the meaning set forth in
subparagraph (2) of paragraph B.
"Person" shall mean an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of
the Code), a portion of a trust permanently set aside for or to be used
exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the Code
joint stock company or other entity, and also includes a group as that term is
used for purposes
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended; but does
not include an underwriter which participates in a public offering of the Series
M-1 Preferred Shares provided that the ownership of Series M-1 Preferred Shares
by such Underwriter would not result in the Trust being "closely held" within
the meaning of Section 856(h) of the Code, or would otherwise result in the
Trust failing to qualify as a REIT.
"Preferred Shares" shall mean shares of beneficial interest of
the Trust designated as or otherwise on a parity with the Series M-1 Preferred
Shares as to distributions and rights upon voluntary or involuntary liquidation,
winding up or dissolution of the Trust as may be issued and outstanding from
time to time, including Series A Preferred Shares and Series B Preferred Shares,
Series C Preferred Shares, Series D Preferred Shares, Series E Preferred Shares,
Series F Preferred Shares, Series G Preferred Shares, Series H Preferred Shares,
Series J Preferred Shares, Series K Preferred Shares, Series L Preferred Shares,
Series M Preferred Shares, and any other shares so designated.
"Quarterly Distribution Date" shall have the meaning set forth
in subparagraph (3) of paragraph B below.
"Record Date" shall have the meaning set forth in subparagraph
(3) of paragraph B below.
"REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
"Series M-1 Redemption Date" shall have the meaning set forth
in subparagraph (5) of paragraph B below.
"Series M-1 Redemption Price" shall have the meaning set forth
in subparagraph (5) of paragraph B below.
All other capitalized terms used but not defined herein shall have the meanings
ascribed to them in the Declaration of Trust.
B. SERIES M-1 PREFERRED SHARES
(1) NUMBER AND DESIGNATION. A series of Preferred Shares,
consisting of 1,100,000 Preferred Shares designated as 8.50% Series M-1
Cumulative Redeemable Preferred Shares of Beneficial Interest, $.01 par value
per share (liquidation preference $50.00 per share) (the "Series M-1 Preferred
Shares"), is hereby established.
(2) RANKING. In respect of rights to receive distributions and
to participate in distributions or payments in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Trust, the Series M-1
Preferred Shares shall rank pari passu with any other Preferred Shares of the
Trust, and will rank senior to the Common Shares and any other class or series
of shares of beneficial interest of the Trust ranking, as to distributions and
upon liquidation, junior (collectively, the "Junior Shares") to the Preferred
Shares.
(3) DISTRIBUTIONS. The holders of the then outstanding Series
M-1 Preferred Shares shall be entitled to receive, when and as authorized by the
Board of Trustees and declared by the Trust out of any funds legally available
therefor, cumulative distributions at the rate of $4.25 per share per year,
payable in equal amounts of $1.0625 per share quarterly in
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arrears in cash on the fifteenth day, or if not a Business Day, the next
succeeding Business Day, of January, April, July and October in each year (each
such day being hereinafter called a "Quarterly Distribution Date" and each
period ending on a Quarterly Distribution Date being hereinafter called a
"Distribution Period"), beginning on the first Quarterly Distribution Date
following the issuance of the Series M-1 Preferred Shares, to shareholders of
record at the close of business on such date as shall be fixed by the Board of
Trustees at the time of declaration of the distribution (the "Record Date"),
which shall not be less than 10 nor more than 30 days preceding the Quarterly
Distribution Date. The amount of any distribution payable for the initial
Distribution Period and for any other Distribution Period shorter than a full
Distribution Period shall be prorated and computed on the basis of a 360-day
year of twelve 30-day months. Distributions on each Series M-1 Preferred Share
shall accrue and be cumulative from and including the date of original issue
thereof, whether or not (i) distributions on such shares are earned or declared
or (ii) on any Quarterly Distribution Date there shall be funds legally
available for the payment of distributions. Distributions paid on the Series M-1
Preferred Shares in an amount less than the total amount of such distributions
at the time accrued and payable on such shares shall be allocated pro rata on a
per share basis among all such shares at the time outstanding.
The amount of any distributions accrued on any Series M-1 Preferred
Shares at any Quarterly Distribution Date shall be the amount of any unpaid
distributions accumulated thereon, to and including such Quarterly Distribution
Date, whether or not earned or declared, and the amount of distributions accrued
on any Series M-1 Preferred Shares at any date other than a Quarterly
Distribution Date shall be equal to the sum of the amount of any unpaid
distributions accumulated thereon, to and including the last preceding Quarterly
Distribution Date, whether or not earned or declared, plus an amount calculated
on the basis of the annual distribution rate of $4.25 for the period after such
last preceding Quarterly Distribution Date to and including the date as of which
the calculation is made based on a 360-day year of twelve 30-day months.
In determining whether a distribution (other than upon voluntary or
involuntary liquidation), by dividend, redemption or other acquisition of shares
of beneficial interest of the Trust or otherwise, is permitted under Maryland
law, amounts that would be needed, if the Trust were to be dissolved at the time
of the distribution, to satisfy the preferential rights upon dissolution of
holders of Series M-1 Preferred Shares will not be added to the Trust's total
liabilities.
Except as provided in these terms of the Series M-1 Preferred Shares,
the Series M-1 Preferred Shares shall not be entitled to participate in the
earnings or assets of the Trust.
(4) LIQUIDATION RIGHTS.
(a) Upon the voluntary or involuntary dissolution,
liquidation or winding up of the Trust, the holders of
the Series M-1 Preferred Shares then outstanding shall be
entitled to receive and to be paid out of the assets of
the Trust available for distribution to its shareholders,
before any payment or distribution shall be made on any
Junior Shares, the amount of $50.00 per Series M-1
Preferred Share, plus accrued and unpaid distributions
thereon.
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(b) After the payment to the holders of the Series M-1
Preferred Shares of the full preferential amounts
provided for in this paragraph B, the holders of the
Series M-1 Preferred Shares as such shall have no right
or claim to any of the remaining assets of the Trust.
(c) If, upon any voluntary or involuntary dissolution,
liquidation, or winding up of the Trust, the amounts
payable with respect to the preference value of the
Series M-1 Preferred Shares and any other shares of
beneficial interest of the Trust ranking as to any such
distribution on parity with the Series M-1 Preferred
Shares are not paid in full, the holders of the Series
M-1 Preferred Shares and of such other shares will share
ratably in any such distribution of assets of the Trust
in proportion to the full respective preference amounts
to which they are entitled.
(d) Neither the sale of all or substantially all the property
or business of the Trust, nor the merger or consolidation
of the Trust into or with any other entity or the merger
or consolidation of any other entity into or with the
Trust, shall be deemed to be a dissolution, liquidation
or winding up, voluntary or involuntary, for the purposes
of this paragraph B.
(5) REDEMPTION.
(a) OPTIONAL REDEMPTION. On and after March 3, 2005, the
Trust may, at its option, redeem at any time all or, from
time to time, part of the Series M-1 Preferred Shares at
a price per share (the "Series M-1 Redemption Price"),
payable in cash, of $50.00 per Series M-1 Preferred
Share, together with all accrued and unpaid distributions
to and including the date fixed for redemption (the
"Series M-1 Redemption Date").
(b) PROCEDURES FOR REDEMPTION.
(i) Notice of any redemption will be mailed by the Trust,
postage prepaid, not less than 30 days nor more than 60 days
prior to the Series M-1 Redemption Date, addressed to the
holders of record of the Series M-1 Preferred Shares to be
redeemed at their addresses as they appear on the share
transfer records of the Trust. No failure to give such notice
or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for the redemption of any
Series M-1 Preferred Shares except as to the holder to whom
the Trust has failed to give notice or except as to the holder
to whom notice was defective. In addition to any information
required by law or by the applicable rules of any exchange
upon which Series M-1 Preferred Shares may be listed or
admitted to trading, such notice shall state: (a) the Series
M-1 Redemption Date; (b) the Series M-1 Redemption Price; (c)
the number of Series M-1 Preferred Shares to be redeemed; (d)
the place or places where certificates for such shares are to
be surrendered for payment of the Series M-1 Redemption Price;
and (e) that distributions on the
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shares to be redeemed will cease to accumulate on the Series
M-1 Redemption Date.
(ii) If notice has been mailed in accordance with
subparagraph (5)(b)(i) above and provided that on or before
the Series M-1 Redemption Date specified in such notice all
funds necessary for such redemption shall have been
irrevocably set aside by the Trust, separate and apart from
its other funds in trust for the pro rata benefit of the
holders of the Series M-1 Preferred Shares so called for
redemption, so as to be, and to continue to be available
therefor, then, from and after the Series M-1 Redemption Date,
distributions on the Series M-1 Preferred Shares so called for
redemption shall cease to accumulate, and said shares shall no
longer be deemed to be outstanding and shall not have the
status of Series M-1 Preferred Shares and all rights of the
holders thereof as shareholders of the Trust (except the right
to receive the Series M-1 Redemption Price) shall cease. Upon
surrender, in accordance with said notice, of the certificates
for any Series M-1 Preferred Shares so redeemed (properly
endorsed or assigned for transfer, if the Trust shall so
require and the notice shall so state), such Series M-1
Preferred Shares shall be redeemed by the Trust at the Series
M-1 Redemption Price. In case fewer than all the Series M-1
Preferred Shares evidenced by any such certificate are
redeemed, a new certificate or certificates shall be issued
evidencing the unredeemed Series M-1 Preferred Shares without
cost to the holder thereof.
(iii) Any funds deposited with a bank or trust company
for the purpose of redeeming Series M-1 Preferred Shares shall
be irrevocable except that:
(A) the Trust shall be entitled to receive from
such bank or trust company the interest or
other earnings, if any, earned on any money
so deposited in trust, and the holders of any
shares redeemed shall have no claim to such
interest or other earnings; and
(B) any balance of monies so deposited by the
Trust and unclaimed by the holders of the
Series M-1 Preferred Shares entitled thereto
at the expiration of two years from the
applicable Series M-1 Redemption Date shall
be repaid, together with any interest or
other earnings earned thereon, to the Trust,
and after any such repayment, the holders of
the shares entitled to the funds so repaid to
the Trust shall look only to the Trust for
payment without interest or other earnings.
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(iv) No Series M-1 Preferred Shares may be redeemed
except with funds legally available for the payment of the
Series M-1 Redemption Price.
(v) Unless full accumulated distributions on all Series
M-1 Preferred Shares shall have been or contemporaneously are
declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past
Distribution Periods and the then current Distribution Period,
no Series M-1 Preferred Shares shall be redeemed (unless all
outstanding Series M-1 Preferred Shares are simultaneously
redeemed) or purchased or otherwise acquired directly or
indirectly (except by conversion into or exchange for shares
of beneficial interest of the Trust ranking junior to the
Series M-1 Preferred Shares as to distributions and upon
liquidation); provided, however, that the foregoing shall not
prevent the redemption of Series M-1 Preferred Shares pursuant
to Article VII of the Declaration of Trust or the purchase or
acquisition of Series M-1 Preferred Shares pursuant to a
purchase or exchange offer made on the same terms to holders
of all outstanding Series M-1 Preferred Shares.
(vi) If the Series M-1 Redemption Date is after a Record
Date and before the related Quarterly Distribution Date, the
distribution payable on such Quarterly Distribution Date shall
be paid to the holder in whose name the Series M-1 Preferred
Shares to be redeemed are registered at the close of business
on such Record Date notwithstanding the redemption thereof
between such Record Date and the related Quarterly
Distribution Date or the Trust's default in the payment of the
distribution due.
(vii) In case of redemption of less than all Series M-1
Preferred Shares at the time outstanding, the Series M-1
Preferred Shares to be redeemed shall be selected pro rata
from the holders of record of such shares in proportion to the
number of Series M-1 Preferred Shares held by such holders
(with adjustments to avoid redemption of fractional shares) or
by any other equitable method determined by the Trust.
(6) VOTING RIGHTS. Except as provided in these terms of the Series M-1
Preferred Shares, the holders of the Series M-1 Preferred Shares shall not be
entitled to vote at any meeting of the shareholders for election of trustees or
for any other purposes or otherwise to participate in any action taken by the
Trust or the shareholders thereof, or to receive notice (except for such notice
as required by law) of any meeting of shareholders.
(a) In any matter in which the Series M-1 Preferred Shares
are entitled to vote (as expressly provided herein),
including any action by written consent, each Series M-1
Preferred Share shall be entitled to 10 votes, each of
which 10 votes may be directed separately by the holder
thereof (or by any proxy or proxies of such holder). With
respect to each Series M-1 Preferred Share, the holder
thereof may designate up to 10 proxies, with each such
proxy having the right to vote a whole
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number of votes (totaling 10 votes per Series M-1
Preferred Share).
(b) Whenever distributions on any Series M-1 Preferred Shares
shall be in arrears for six or more quarterly periods,
the Board of Trustees of the Trust shall be increased by
the two trustees and the holders of such Series M-1
Preferred Shares, voting separately as a class with all
other series of Preferred Shares upon which like voting
rights have been conferred and are exercisable, will be
entitled to vote for the election of two additional
Trustees of the Trust at a special meeting called by the
holders of record of at least ten percent (10%) of any
series of Preferred Shares so in arrears (unless such
request is received less than 90 days before the date
fixed for the next annual or special meeting of the
shareholders) or at the next annual meeting of
shareholders, and at each subsequent annual meeting until
all distributions accumulated on such Series M-1
Preferred Shares for the past distribution periods and
the then current distribution period shall have been
fully paid or declared and a sum sufficient for the
payment thereof set aside for payment.
(c) So long as any Series M-1 Preferred Shares remain
outstanding, the Trust will not, without the affirmative
vote or consent of the holders of at least two-thirds of
the Series M-1 Preferred Shares outstanding at the time,
given in person or by proxy, either in writing or at a
meeting (such series voting separately as a class), (i)
authorize or create, or increase the authorized or issued
amount of, any class or series of shares of beneficial
interest ranking senior to the Series M-1 Preferred
Shares with respect to the payment of distributions or
the distribution of assets upon liquidation, dissolution
or winding up or reclassify any authorized shares of
beneficial interest of the Trust into such shares, or
create, authorize or issue any obligation or security
convertible into or evidencing the right to purchase any
such shares; or (ii) amend, alter or repeal the
provisions of the Trust's Declaration of Trust or the
terms of the Series M-1 Preferred Shares whether by
merger, consolidation or otherwise (an "Event"), so as to
materially and adversely affect any right, preference,
privilege or voting power of the Series M-1 Preferred
Shares or the holders thereof; provided, however, with
respect to the occurrence of any Events set forth in (ii)
above, so long as the Series M-1 Preferred Shares remain
outstanding with the terms thereof materially unchanged,
taking into account that upon the occurrence of an Event,
the Trust may not be the surviving entity or the Series
M-1 Preferred Shares that remain outstanding may bear a
new title, designation and/or be issued by a different
issuer, the occurrence of any such Event shall not be
deemed to materially and adversely affect such rights,
preferences, privileges or voting power of holders of
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Series M-1 Preferred Shares and provided further that (x)
any increase in the amount of the authorized Preferred
Shares or the creation or issuance of any other Series
M-1 Preferred Shares, or (y) any increase in the amount
of authorized Series M-1 Preferred Shares or any other
Preferred Shares, in each case ranking on a parity with
or junior to the Series M-1 Preferred Shares 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.
The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding Series M-1 Preferred Shares shall have been
redeemed or called for redemption and sufficient funds shall have been deposited
in trust to effect such redemption.
(7) CONVERSION. The Series M-1 Preferred Shares are not convertible
into or exchangeable for any other property or securities of the Trust, except
into Excess Shares in connection with maintaining the ability of the Trust to
qualify as a REIT.
C. RESTRICTIONS ON TRANSFER. The Series M-1 Preferred Shares shall
be subject to the restrictions on transfer and ownership of Shares in Article
VII of the Declaration of Trust, as supplemented below.
(1) CERTAIN DEFINITIONS.
For purposes of the Series M-1 Preferred Shares the following
terms shall have the following meanings:
"Closing Date of the Series M-1 Preferred Shares Offering"
shall mean the time and date of payment for and delivery of Series
M-1 Preferred Shares issued pursuant to the exchange of Series B
Preference Units of Lexford Properties, L.P.
"Special Triggering Event" shall mean either (i) the
redemption or purchase by the Trust of all or a portion of the
outstanding shares of beneficial interest in the Trust, or (ii) a
change in the value of the Series M-1 Preferred Shares relative to
any other class of beneficial interest in the Trust.
(2) SPECIAL TRIGGERING EVENT. If during the period commencing on the
Closing Date of the Series M-1 Preferred Shares Offering and prior to
the Restriction Termination Date, a Special Triggering Event (if
effective) or other event or occurrence (if effective) would result in
any violation of section 7.2(a) of the Trust's Declaration of Trust (or
would result in the Trust being "closely held" within the meaning of
Section 856(h) of the Code or would otherwise cause the Trust to fail
to qualify as a REIT), then (i) the number of Series M-1 Preferred
Shares (rounded up to the nearest whole share) that would (but for this
section) cause any Person to Beneficially Own either Series M-1
Preferred Shares, or to Beneficially Own Series M-1 Preferred Shares
and any other shares of beneficial interest in the Trust, in violation
of section 7.2(a) (or would result in the Trust being "closely held" or
otherwise fail to qualify as a REIT) shall constitute "Excess Shares"
and shall be treated as provided in Article VII. Such designation and
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treatment shall be effective as of the close of business on the
Business Day prior to the date of the Special Triggering Event or other
event or occurrence.
(3) AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of this section, including any definition contained
in paragraph (1), the Board of Trustees shall have the power to
determine the application of this section with respect to any situation
based on the facts known to it (subject, however, to the provisions of
Section 7.2(a)).
(4) EXCLUSION OF OTHER RIGHTS.
The Series M-1 Preferred Shares shall not have any voting
powers, preferences and relative, participating, optional or other
special rights, other than those specifically set forth in these terms
of the Series M-1 Preferred Shares (as such terms may be amended from
time to time) and in the Declaration of Trust. The Series M-1 Preferred
Shares shall have no preemptive or subscription rights.
(5) HEADINGS OF SUBDIVISIONS.
The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation
of any of the provisions hereof.
(6) SEVERABILITY OF PROVISIONS.
If any voting powers, preferences and relative, participating,
optional and other special rights of the Series M-1 Preferred Shares
and qualifications, limitations and restrictions thereof set forth in
these terms of the Series M-1 Preferred Shares (as such terms may be
amended from time to time) is invalid, unlawful or incapable of being
enforced by reason of any rule of law or public policy, all other
voting powers, preferences and relative, participating, optional and
other special rights of Series M-1 Preferred Shares and qualifications,
limitations and restrictions thereof set forth in these terms of the
Series M-1 Preferred Shares (as so amended) which can be given effect
without the invalid, unlawful or unenforceable voting powers,
preferences, and relative, participating, optional or other special
rights of Series M-1 Preferred Shares and qualifications, limitations
and restrictions thereof herein set forth shall be deemed dependent
upon any other such voting powers, preferences and relative,
participating, optional or other special right of Series M-1 Preferred
Shares and qualifications, limitations and restrictions thereof unless
so expressed herein.
SECOND: The Series M-1 Preferred Shares have been classified and
designated by the Board of Trustees under the authority contained in the
Declaration of Trust.
THIRD: These Articles Supplementary have been approved by the Board of
Trustees in the manner and by the vote required by law.
FOURTH: The undersigned Executive Vice President of the Trust
acknowledges these Articles Supplementary to be the trust act of the Trust and,
as to all matters or facts required to be verified under oath, the undersigned
Executive Vice 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, the Trust has caused these Articles Supplementary
to be signed in its name and on its behalf by its Executive Vice President and
attested to by the Assistant Secretary this 3rd day of March, 2000.
ATTEST: EQUITY RESIDENTIAL PROPERTIES TRUST
/s/ Lisa Currie /s/ Michael J. McHugh
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Lisa Currie, Assistant Secretary Michael J. McHugh, Executive Vice President
Chief Accounting Officer and Treasurer
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