EXHIBIT 99.2
FORM OF
SUBSCRIPTION AGENCY AGREEMENT
This SUBSCRIPTION AGENCY AGREEMENT (this "Agreement") is entered into as of
this 29th day of December, 1997 among Homestead Village Incorporated, a Maryland
corporation ("Homestead"), BankBoston, N.A., as subscription agent (the
"Subscription Agent"), and The First National Bank of Boston, as transfer agent
and registrar.
WHEREAS, Homestead has caused a Registration Statement on Form S-3 (File
No. 333-37803) (the "Registration Statement") to be filed with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Act"), relating to the sale of up to $300,0000,000 of shares of
common stock, par value $.01 per share (the "Shares"), of Homestead;
WHEREAS, Homestead has caused the prospectus (the "Prospectus") contained
in the Registration Statement to be prepared and filed with the Commission under
the Act and will cause a prospectus supplement (together with the prospectus,
the "Prospectus") relating to a distribution by Homestead of transferable
subscription rights (the "Rights") and the sale of newly issued Shares upon the
exercise of such Rights or otherwise (the "Rights Offering");
WHEREAS, the Rights will be distributed to holders of record of Shares as
of the close of business on December 29, 1997 (the "Record Date"), at a ratio of
one Right for each Share held on the Record Date;
WHEREAS, Rights holders will be entitled to purchase one Share at a price
of $_____(the "Subscription Price") for every four Rights held; and
WHEREAS, Homestead has authorized the issuance of an aggregate number of
authorized and unissued or treasury Shares (the "Underlying Shares") equal to
one-fourth of the aggregate bumber of Rights to be distributed pursuant to the
Rights Offering as well as _________ additional Shares which may be sold to
cover excess oversubscriptions or to third parties (the "Additional Shares");
and
WHEREAS, Homestead desires the Subscription Agent and the transfer agent
and registrar to act on its behalf in connection with the Rights Offering as set
forth herein, and the Subscription Agent and the transfer agent and registrar
are willing so to act;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
SECTION 1. Appointment of Subscription Agent. Homestead hereby appoints the
Subscription Agent to act as agent for Homestead in accordance with the
instructions set forth in this Agreement, and the Subscription Agent hereby
accepts such appointment. Homestead may from time to time appoint such co-
subscription agents as it may deem necessary or desirable.
SECTION 2. Issuance of Securities.
(a) Homestead has authorized the issuance of the Rights and, following the
Record Date, will issue such Rights to holders of record of Shares as of the
close of business on the Record Date at a ratio of one Right for each Share held
on the Record Date. The Subscription Agent shall provide the transfer agent and
registrar such assistance as Homestead may require in order to effect the
distribution of the Rights to holders of record of Shares as of the close of
business on the Record Date, including assistance in determining the number of
Rights to be distributed to each such record holder and assistance in
distributing the Rights Certificates (as defined below) evidencing the Rights
and all other ancillary documents.
(b) Homestead has authorized the issuance of and will hold in reserve the
Underlying Shares, and upon the valid exercise of Rights, Homestead will issue
Underlying Shares to validly exercising Rights holders as set forth in the
Prospectus.
(c) Homestead has authorized the issuance of and will hold in reserve the
Additional Shares, and if Homestead determines, in its sole and absolute
discretion, to accept subscriptions for Additional Shares, it will issue
Additional Shares upon the receipt of valid subscriptions therefor as set forth
in the Prospectus.
SECTION 3. Subscription Right; Rights Certificates.
(a) Each holder of Rights, upon the valid exercise thereof pursuant to
Section 7 hereof, is entitled to purchase from Homestead one Share at the
Subscription Price for every four Rights held.
(b) The Rights shall be evidenced by certificates (the "Rights
Certificates"). The Rights Certificates (and the form of election to exercise or
transfer Rights to be printed on the reverse thereof) shall be substantially in
the form attached as Exhibit A hereto. The Rights Certificates shall be fully
transferable.
SECTION 4. Signature and Registration.
(a) The Rights Certificates shall be executed on behalf of Homestead by a
Co-Chairman and by its Secretary by facsimile signature. Any Rights Certificate
may be signed on behalf of Homestead by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper officer of Homestead
to sign such Rights Certificate, even if at the date of the execution of this
Agreement or the date of the actual issuance of such Rights Certificate, any
such person is not such an officer.
(b) The transfer agent and registrar will keep or cause to be kept, at its
office designated for such purpose, books for registration and transfer of the
Rights issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights and the number of Rights evidenced by each
outstanding Rights Certificate.
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SECTION 5. Division, Combination and Exchange of Rights Certificates; Lost,
Stolen, Destroyed or Mutilated Rights Certificates.
(a) Subject to the provisions of Section 9 hereof, any Rights Certificate,
or any two or more Rights Certificates, may be divided, combined or exchanged
for any number of Rights Certificates or for a single Rights Certificate of
different denomination; provided, however, that the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates so issued shall not
exceed the aggregate number of Rights evidenced by the Rights Certificate or
Rights Certificates surrendered in exchange therefor. Notwithstanding the
preceding sentence, a bank, trust company, securities dealer or broker holding
Shares on the Record Date for more than one beneficial owner may, by submitting
a written request prior to 5:00 p.m., Eastern Standard Time, on January 8, 1998
and upon proper showing to the Subscription Agent, exchange its Rights
Certificate to obtain Rights Certificates for the number of Rights which each
such beneficial owner would have been entitled to receive pursuant to Section
2(a) hereof had each such beneficial owner been the holder of record of such
beneficial owner's Shares on the Record Date; provided, however, that Homestead
reserves the right to refuse to issue any such Rights Certificate or Rights
Certificates if such issuance would be inconsistent with the principle that each
beneficial owner's holding will be rounded up to the nearest whole Right. No
Rights Certificates evidencing fractional Rights will be issued upon division,
combination or exchange of other Rights Certificates, and any instructions to
divide, combine or exchange Rights Certificates which would result in the
issuance of Rights Certificates evidencing fractional Rights shall be rejected.
(b) Any holder desiring to divide, combine or exchange any Rights
Certificate or Rights Certificates shall make such requests in writing to the
Subscription Agent, and shall surrender the Rights Certificate or Rights
Certificates to be divided, combined or exchanged to the Subscription Agent.
Thereupon the Subscription Agent shall deliver to the person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so requested.
In all cases of transfer by an attorney-in-fact, the original power of attorney,
duly approved, or a copy thereof, duly certified, shall be deposited and remain
with the Subscription Agent. In all cases of transfer by executors,
administrators, guardians or other legal representatives, duly authenticated
evidence of their authority satisfactory to the Subscription Agent shall be
produced and may be required to be deposited and to remain with the Subscription
Agent in its discretion. Homestead may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
division, combination or exchange of Rights Certificates.
(c) Upon receipt by Homestead and the Subscription Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Rights Certificate, and, in case of loss, theft or destruction, of indemnity
and/or security satisfactory to them, which may be in the form of an open
penalty bond, and reimbursement to Homestead and the Subscription Agent of all
reasonable expenses incidental thereto, and upon surrender and cancellation of
the Rights Certificate if mutilated, the transfer agent and registrar will make
and deliver a new Rights Certificate of like denomination to the Subscription
Agent for delivery to the registered
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owner in lieu of the Rights Certificate so lost, stolen, destroyed or mutilated.
If required by Homestead or the Subscription Agent an indemnity bond must be
sufficient in the judgment of both to protect Homestead, the Subscription Agent
or any agent thereof from any loss which any of them may suffer if a Rights
Certificate is replaced.
SECTION 6. Subsequent Issuance of Rights Certificates. Subsequent to their
original issuance, no Rights Certificates shall be issued except: (a) Rights
Certificates issued upon any transfer, division, combination or exchange of
Rights pursuant to Section 5(a), 5(b) or 10 hereof, (b) Rights Certificates
issued in replacement of lost, stolen, destroyed or mutilated Rights
Certificates pursuant to Section 5(c) hereof and (c) Rights Certificates issued
pursuant to Section 7(h) hereof upon the partial exercise of any Rights
Certificate to evidence the unexercised portion of such Rights Certificate.
SECTION 7. Exercise of Rights; Exercise Price; Expiration Date.
(a) The holder of any Rights Certificate may exercise some or all of the
Rights evidenced thereby (but not in amounts other than four Rights or integral
multiples thereof) by delivering to the Subscription Agent, prior to 5:00 p.m.,
Eastern Standard Time, on January 15, 1998 (the "Expiration Date"), the properly
completed and duly executed Rights Certificate, together with payment of the
full Subscription Price for each Share subscribed for pursuant to the exercise
of such Rights. In the case of holders of Rights that are held of record through
The Depository Trust Company ("DTC"), such Rights may be exercised by
instructing DTC to transfer Rights from the DTC account of such holder to the
DTC account of the Subscription Agent, together with payment of the Subscription
Price for each Share subscribed for pursuant to the exercise of such Rights.
Alternatively, the holder of any Rights Certificate may exercise the Rights
evidenced thereby by effecting compliance with the procedures for guaranteed
delivery set forth in Section 7(b) hereof.
(b) If, prior to 5:00 p.m., Eastern Standard Time, on the Expiration Date,
the Subscription Agent has received a properly completed and duly executed
Notice of Guaranteed Delivery substantially in the form distributed with the
Rights Certificates specifying the name of the holder of Rights and the number
of Shares subscribed for (stating separately the number of Shares subscribed for
pursuant to the exercise of Rights and the number of Shares subscribed for
pursuant to the Oversubscription Privilege (as defined below)) and guaranteeing
that the properly completed and duly executed Rights Certificate and payment of
the full Subscription Price for each Share subscribed for will be delivered to
the Subscription Agent within three business days after the Expiration Date,
such subscription may be accepted; however, the Subscription Agent shall
withhold the certificates for the Shares until receipt of the properly completed
and duly executed Rights Certificate and payment of such amount within such time
period. The Notice of Guaranteed Delivery must be guaranteed by a commercial
bank or a trust company having an office, branch or agency in the United States,
or by a member of a Stock Transfer Association approved medallion program such
as STAMP, SEMP or MSP (an "Eligible Institution").
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(c) The Rights shall expire at 5:00 p.m., Eastern Standard Time, on the
Expiration Date.
(d) The Subscription Price shall be payable in United States currency (i)
by personal check, cashier's check, bank draft or money order drawn on a bank
located in the United States payable to "Homestead Rights Offering" or (ii) by
wire transfer of funds to the account maintained by the Subscription Agent for
such purpose at BankBoston, N.A., ABA No. 000000000. The Subscription Price
shall be deemed to have been received by the Subscription Agent only upon (i)
clearance of any personal check, (ii) receipt by the Subscription Agent of any
cashier's check, bank draft or money order or (iii) receipt of good funds in the
Subscription Agent's account designated above, in payment of the Subscription
Price.
(e) If an exercising Rights holder has not indicated the number of Rights
being exercised, or if the Subscription Price payment forwarded by such holder
to the Subscription Agent is not sufficient to purchase the number of Shares
subscribed for, the Rights holder will be deemed to have exercised the maximum
number of whole Rights which may be exercised for the Subscription Price
delivered to the Subscription Agent and, to the extent that the Subscription
Price payment delivered by an exercising Rights holder exceeds the Subscription
Price multiplied by the maximum number of whole Rights which may be exercised
(such excess being the "Subscription Excess"), the Subscription Agent, as soon
as practicable after such exercise of Rights, shall mail to such Rights holder
the Subscription Excess paid by such holder without interest or deduction.
(f) A holder of Shares on the Record Date who validly exercises all of such
holder's Rights will have the further right (the "Oversubscription Privilege")
to oversubscribe for additional Shares, at the Subscription Price, to the extent
(i) all of the Underlying Shares have not been purchased through the exercise of
Rights or otherwise or (ii) Homestead determines, in its sole and absolute
discretion, to accept subscriptions for the Additional Shares pursuant to the
Oversubscription Privilege. Holders of Shares so entitled to exercise the
Oversubscription Privilege may oversubscribe for as many additional Shares as
desired (subject to the maximum number of Underlying Shares and Additional
Shares that Homestead has determined to accept subscriptions for pursuant to the
Oversubscription Privilege) in the manner set forth in this Section 7. If the
demand for Shares pursuant to the Oversubscription Privilege exceeds the number
of Shares available, holders of Shares on the Record Date shall participate in
the Oversubscription Privilege (up to, but not exceeding, the number of Shares
oversubscribed for by each such holder) pro rata based upon the number of Rights
exercised by each such person (without regard to the number of Shares
oversubscribed for by each such person under the Oversubscription Privilege),
with fractional Shares adjusted in any manner Homestead deems appropriate.
(g) The Subscription Agent shall pay to, credit to the account of, or
otherwise transfer to, Homestead all funds received by the Subscription Agent in
payment of the Subscription Price for Shares subscribed for pursuant to the
exercise of Rights as soon as practicable after the receipt of all required
documents and payment in full of the Subscription Price and pursuant to
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the Oversubscription Privilege as soon as practicable following the Expiration
Date and any funds received pursuant to the Oversubscription Privilege or from
subscribers as provided in Section 8(b) which are not used to purchase Shares
shall be returned to the appropriate subscriber. If the Rights Offering is
withdrawn or terminated for any reason, the Subscription Agent will return to
each subscriber all funds received from such subscriber without interest. No
interest will be paid on funds returned due to the proration of
oversubscriptions (either pursuant to the Oversubscription Privilege or the sale
to third-party purchasers of Shares for which subscriptions are not received or
accepted) or otherwise. Any interest accumulated on funds held pending
proration of oversubscriptions (either pursuant to the Oversubscription
Privilege or the sale to third-party purchasers of Shares for which
subscriptions are not received or accepted) or otherwise, shall be paid to the
Company.
(h) In case the holder of any Rights Certificate shall exercise less than
all the Rights evidenced thereby, a new Rights Certificate evidencing the number
of Rights remaining unexercised shall be issued by the Subscription Agent to the
registered holder of such Rights Certificate or to his duly authorized assigns,
subject to the provisions of Section 9 hereof.
(i) The Subscription Agent is authorized to accept Rights Certificates
(other than Rights Certificates delivered in accordance with the procedure for
guaranteed delivery set forth in Section 7(b)), or transfers of Rights to its
account at DTC, received prior to 5:00 p.m., Eastern Standard Time, on the
Expiration Date.
(j) Once a holder of Rights has exercised a Right, such exercise may not be
revoked.
(k) Unless a Rights Certificate (i) provides that the Shares to be issued
pursuant to the exercise of Rights represented thereby are to be registered in
the name and delivered to the holder of such Rights or (ii) is submitted for the
account of an Eligible Institution, signatures on such Rights Certificate must
be guaranteed by an Eligible Institution.
SECTION 8. Delivery of Share Certificates.
(a) As soon as practicable after the receipt of all required documents and
payment in full of the Subscription Price, the Subscription Agent shall deliver
to each exercising Rights holder certificates representing the Shares purchased
pursuant to the exercise of Rights. As soon as practicable after the Expiration
Date and the receipt of all required documents and payment in full of the
Subscription Price, the Subscription Agent shall deliver to each exercising
Rights holder certificates representing the Shares purchased pursuant to the
Oversubscription Privilege.
(b) In the event that Homestead or Security Capital Markets Group
Incorporated, a Delaware corporation ("Capital Markets Group"), place with
third-party purchasers any of the Underlying Shares not subscribed for pursuant
to the exercise of Rights or the Oversubscription Privilege or any of the
Additional Shares, Homestead and Capital Markets Group will give the
Subscription Agent not less than forty-eight hours' notice in writing as to the
number of Shares which are to be issued, together with a list of the names and
denominations in which certificates
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for such Shares are to be issued. As soon as practicable thereafter, the
Subscription Agent shall deliver to each such third-party purchaser certificates
representing such Shares.
SECTION 9. Fractional Rights and Shares.
(a) Homestead shall not issue fractions of Rights nor shall the
Subscription Agent distribute Rights Certificates which evidence fractional
Rights. All questions as to the validity and eligibility of any rounding of
fractional Rights shall be determined by Homestead in its sole discretion, which
determinations shall be final and binding.
(b) Homestead shall not issue fractional Shares to exercising Rights
holders upon the exercise of Rights. Homestead may adjust for fractional Shares
resulting from the exercise of the Oversubscription Privilege in any manner it
deems appropriate.
SECTION 10. Transfer of Rights. Any holder may transfer (a) all of the
Rights evidenced by a Rights Certificate by properly endorsing the Rights
Certificate for transfer in accordance with the instructions accompanying the
Rights Certificate or (b) part of the Rights evidenced by a Rights Certificate
(but not fractional Rights) by delivering to the Subscription Agent such Rights
Certificate properly endorsed for transfer, with instructions to register the
Rights to be transferred in the name of the transferee (and to issue a new
Rights Certificate to the transferee evidencing such transferred Rights), and
with signatures guaranteed by an Eligible Institution. In such event, the
Subscription Agent shall issue a new Rights Certificate evidencing the balance
of the Rights to the holder or, if so instructed, to an additional transferee.
SECTION 11. Foreign Shareholders. The Subscription Agent shall not mail
Rights Certificates to holders of Shares whose addresses are outside the United
States, Mexico and the province of Ontario, Canada. The Subscription Agent shall
hold such Rights Certificates for the account of such holders and upon notice
from such holders shall sell the Rights, if feasible, on their behalf. If no
instructions have been received prior to 10:00 a.m., Eastern Standard Time, on
the fifth business day immediately preceding the Expiration Date, the
Subscription Agent shall sell such Rights, if feasible, and shall remit the net
proceeds, if any, to such holders promptly following the Expiration Date. If
such Rights can be sold, sales of such Rights will be deemed to have been
effected at the weighted-average price received by the Subscription Agent for
the sale of all Rights sold by the Subscription Agent on that day pursuant to
this Section 11, less any applicable brokerage commissions, taxes and other
expenses, provided that Homestead shall pay the fees of the Subscription Agent
in respect of such sales. In connection therewith, the Subscription Agent agrees
that it (a) is acting solely on behalf and for the benefit of such holders who
wish to sell their Rights and not as agent, or on behalf, of Homestead, (b)
shall not accept any instructions from Homestead with respect to the timing of
such sales, (c) shall effect all such sales in accordance with applicable law
and (d) shall not effect any such sales in a manner that would cause a material
adverse change in the market for the Rights.
SECTION 12. Reports. The Subscription Agent shall notify both Homestead and
its designated representatives by telephone as requested during the period
commencing with the
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mailing of Rights Certificates and ending on the Expiration Date (and in the
case of guaranteed deliveries pursuant to Section 7(b), the period ending three
business days after the Expiration Date), which notice shall thereafter be
confirmed in writing, of: (a) the number of Rights exercised on the day of such
request, (b) the number of Shares subscribed for pursuant to the exercise of
Rights and the number of such Shares for which payment has been received on such
day, (c) the number of Shares subscribed for pursuant to the Oversubscription
Privilege on such day, (d) the number of Shares subject to guaranteed delivery
pursuant to Section 7(b) on such day, (e) the number of Rights for which
defective exercises have been received on such day, (f) the number of Shares for
which subscription forms have been received from third-party purchasers as
contemplated by Section 8(b) on such day and (g) cumulative totals derived from
the information set forth in clauses (a) through (f) above. At or before 5:00
p.m., Eastern Standard Time, on the first business day following the Expiration
Date, the Subscription Agent shall certify in writing to Homestead the
cumulative totals through the Expiration Date derived from the information set
forth in clauses (a) through (f) above. The Subscription Agent shall also
maintain and update a listing of holders who have fully or partially exercised
their Rights, holders who have transferred their Rights and their transferees
and holders who have not exercised their Rights. The Subscription Agent shall
provide Homestead or its designated representatives with the information
compiled pursuant to this Section 12 as any of them shall request. The
Subscription Agent hereby represents, warrants and agrees that the information
contained in each notification referred to in this Section 12 shall be accurate
in all material respects.
SECTION 13. Future Instructions and Interpretation.
(a) All questions as to the timeliness, validity, form and eligibility of
any exercise of Rights will be determined by Homestead, which determinations
shall be final and binding. Homestead in its sole discretion may waive any
defect or irregularity, permit a defect or irregularity to be corrected within
such time as it may determine or reject the purported exercise of any Right.
Subscriptions will not be deemed to have been received or accepted until all
irregularities have been waived or cured within such time as Homestead
determines in its sole discretion. Neither Homestead nor the Subscription Agent
shall be under any duty to give notification of any defect or irregularity in
connection with the submission of Rights Certificates or incur any liability for
failure to give such notification.
(b) The Subscription Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
authorized officer of Homestead and to apply to such officers for advice or
instructions in connection with its duties and it shall not be liable for any
action taken or omitted by it in good faith in accordance with the instructions
of any such officer.
SECTION 14. Payment of Taxes. Homestead covenants and agrees that it will
pay when due and payable all documentary, stamp and other taxes, if any, which
may be payable in respect of the issuance or delivery of any Rights or Shares;
provided, however, that Homestead shall not be liable for any tax liability
arising out of any transaction which results in, or is
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deemed to be, an exchange of Rights or Shares or a constructive dividend with
respect to the Rights or Shares; and provided, further, that Homestead shall not
be required to pay any tax or other governmental charge which may be payable in
respect of any transfer involved in the transfer or delivery of any Rights
Certificate or the issuance or delivery of certificates for Shares in a name
other than that of the registered holder of the Rights Certificate evidencing
the Rights exercised or transferred, and the Subscription Agent shall not
register any such transfer or issue any such certificate until such tax or
governmental charge, if required, shall have been paid.
SECTION 15. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, division, combination,
exchange or transfer shall be canceled by the Subscription Agent, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
this Agreement. Homestead shall deliver to the Subscription Agent for
cancellation, and the Subscription Agent shall cancel, any other Rights
Certificate purchased or acquired by Homestead otherwise than upon the exercise
thereof. The Subscription Agent shall deliver all canceled Rights Certificates
to Homestead, or shall, at the written request of Homestead, destroy such
canceled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to Homestead.
SECTION 16. Right of Action. All rights of action in respect of this
Agreement are vested in Homestead and the respective registered holders of the
Rights Certificates, and any registered holder of any Rights Certificate,
without the consent of the Subscription Agent or the holder of any other Rights
Certificate, may, on his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against Homestead to
enforce, or otherwise act in respect of, his or her right to exercise the Rights
evidenced by such Rights Certificate in the manner provided in such Rights
Certificate and in this Agreement.
SECTION 17. Concerning the Subscription Agent; Indemnification.
(a) Homestead agrees to pay to the Subscription Agent compensation in
accordance with the schedule of fees attached hereto as Exhibit B for all
services rendered by it hereunder and, from time to time, on demand of the
Subscription Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder.
(b) Homestead also agrees to indemnify and hold the Subscription Agent
harmless against any losses, claims, damages, liabilities, costs or expenses
(including reasonable fees and disbursements of legal counsel) which the
Subscription Agent may incur or become subject to arising from or out of any
claim or liability resulting from actions taken as Subscription Agent pursuant
to this Agreement; provided, however, that such covenant and agreement does not
extend to, and the Subscription Agent shall not be indemnified or held harmless
with respect to, losses, claims, damages, liabilities, costs or expenses
incurred or suffered by the Subscription Agent as a result, or arising out, of
the Subscription Agent's negligence, misconduct, bad faith or breach of this
Agreement. In connection therewith: (i) in no case shall Homestead be liable
with respect to any claim against the Subscription Agent unless the Subscription
Agent shall have
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notified Homestead in writing of the assertion of such claim against it or of
any action commenced against it with respect to such claim, promptly after the
Subscription Agent shall have notice of a claim or shall have been served with
the summons or other legal process giving information as to the nature and basis
of the claim; (ii) Homestead shall be entitled to participate at its own expense
in the defense of any suit brought to enforce any such claim and, if Homestead
so elects, it shall assume the defense of any such suit, in which event
Homestead shall not be liable for the fees and expenses of any additional
counsel that the Subscription Agent may retain, so long as Homestead shall
retain counsel reasonably satisfactory to the Subscription Agent, in the
exercise of the Subscription Agent's reasonable judgment, to defend such suit;
and (iii) the Subscription Agent agrees not to settle any litigation in
connection with any claim or liability with respect to which it may seek
indemnification from Homestead without the prior written consent of Homestead.
(c) The Subscription Agent shall be protected and shall incur no liability
for or in respect of any action taken or omitted by it without negligence,
misconduct, bad faith or breach of this Agreement in connection with its
administration of this Agreement in reliance upon any document reasonably
believed by it to be genuine and to be executed and, where necessary,
acknowledged or guaranteed by the proper person or persons.
(d) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Subscription Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Subscription Agent has been advised of the likelihood of
such loss or damage and regardless of the form of action.
SECTION 18. Merger or Consolidation of Subscription Agent. Any corporation
into which the Subscription Agent or any successor Subscription Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Subscription Agent or any successor
Subscription Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Subscription Agent or any
successor Subscription Agent, shall be the successor to the Subscription Agent
under this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto.
SECTION 19. Duties of Subscription Agent. The Subscription Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which Homestead and the holders of Rights Certificates
by their acceptance thereof shall be bound:
(a) The Subscription Agent may consult with legal counsel (who may be, but
is not required to be, legal counsel for Homestead), and the advice or opinion
of such counsel shall be full and complete authorization and protection to the
Subscription Agent as to any action taken or omitted by it in good faith and in
accordance with such advice or opinion.
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(b) Whenever in the performance of its duties under this Agreement the
Subscription Agent shall deem it necessary or desirable that any fact or matter
be proved or established by Homestead prior to taking or omitting to take any
action hereunder, such fact or matter (unless other evidence in respect thereof
is specifically prescribed herein) may be deemed to be conclusively proved and
established by a certificate signed by a Co-Chairman, or Vice President
(including any Senior Vice President) and by the Treasurer or any Assistant
Treasurer or the Secretary or any Assistant Secretary of Homestead and delivered
to the Subscription Agent; and such certificate shall be full authorization to
the Subscription Agent for any action taken or omitted in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Subscription Agent shall be liable hereunder only for its own
negligence, misconduct or bad faith.
(d) The Subscription Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same, and all such statements and
recitals are and shall be deemed to have been made by Homestead only.
(e) The Subscription Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof (except
the due execution and delivery hereof by the Subscription Agent) or in respect
of the validity or execution of any Rights Certificate; nor shall it be
responsible for any breach by Homestead of any covenant or condition contained
in this Agreement or in any Rights Certificate; nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Shares to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any Shares will, when
issued, be duly authorized, validly issued, fully paid and nonassessable.
(f) Homestead agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such further
acts, instruments and assurances as may reasonably be required by the
Subscription Agent for the carrying out or performing by the Subscription Agent
of the provisions of this Agreement.
(g) Nothing herein shall preclude the Subscription Agent from acting in any
other capacity for Homestead.
(h) The Subscription Agent shall comply with the information and backup
withholding requirements of the Internal Revenue Code of 1986, as amended (the
"Code"), including, without limitation, where appropriate, on a timely basis,
filing with the Internal Revenue Service and furnishing to holders of Rights
duly completed Forms 1099B. The Subscription Agent shall also collect and duly
preserve Forms W-8 and W-9 and other forms or information necessary to comply
with the backup withholding requirements of the Code. The Subscription Agent
shall
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have no obligation to furnish distributees of Rights with Forms 1099DIV or to
withhold any taxes with respect to the distribution of Rights.
(i) The Subscription Agent shall withhold from payments made to record
owners amounts sufficient to comply with the backup withholding requirements of
the Code. For purposes of backup withholding that may be applicable in respect
of Rights distributed to record owners other than foreign holders, the
Subscription Agent shall withhold and sell Rights on behalf of such record
owners in amounts necessary to satisfy such backup withholding requirements.
SECTION 20. Notices. All notices and other communications provided for or
permitted hereunder shall be made by hand delivery, prepaid first-class mail, or
telecopier:
(a) if to Homestead, to:
Homestead Village Incorporated
0000 XxxxxXxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
(b) if to the Subscription Agent, to:
BankBoston, N.A.
000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx
Telecopier: (000) 000-0000
(c) if to a registered holder, at the address shown on the share
register of Homestead.
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; three business days
after being deposited in the mail, postage prepaid, if mailed as aforesaid; and
when receipt is acknowledged, if telecopied.
SECTION 21. Supplements and Amendments. Homestead and the Subscription
Agent may from time to time supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to cure any ambiguity or
to correct or supplement any provision contained herein which may be defective
or inconsistent with any other provision contained herein, or to make any other
provisions in regard to matters or questions arising hereunder which Homestead
and the Subscription Agent may deem necessary or desirable and which shall not
adversely affect the interests of the holders of the Rights Certificates.
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SECTION 22. Successors. All the covenants and provisions of this Agreement
by or for the benefit of Homestead or the Subscription Agent shall bind and
inure to the benefit of their respective successors and assigns hereunder.
SECTION 23. Termination. This Agreement shall terminate at 5:00 p.m.,
Eastern Standard Time, on the thirtieth day following the Expiration Date. Upon
termination of this Agreement, and provided that all subscriptions for Shares
accepted prior to such termination are issued and delivered by Homestead,
Homestead shall be discharged from all obligations under this Agreement except
for its obligation to the Subscription Agent under Section 17 hereof and except
with respect to the obligation of Homestead to provide instructions and
directions to the Subscription Agent as provided in this Agreement.
SECTION 24. Governing Law. This Agreement and each Rights Certificate shall
be deemed to be a contract made under the laws of the Commonwealth of
Massachusetts and for all purposes shall be construed in accordance with the
internal laws of such Commonwealth.
SECTION 25. Benefits of This Agreement. Nothing in this Agreement shall be
construed to give to any person or corporation other than Homestead, the
Subscription Agent and the holders of the Rights Certificates any legal or
equitable right, remedy or claim under this Agreement; and this Agreement shall
be for the sole and exclusive benefit of Homestead, the Subscription Agent and
the holders of the Rights Certificates.
SECTION 26. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
SECTION 27. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be duly executed as of the date first above written.
HOMESTEAD VILLAGE INCORPORATED
By:_________________________________
Xxxxxx X. Xxxxxxxx
Senior Vice President and Chief Financial Officer
BANKBOSTON, N.A., Subscription Agent
By:_________________________________
Name:_______________________________
Title:______________________________
BANKBOSTON, N.A., transfer agent and registrar
By:_________________________________
Name:_______________________________
Title:______________________________
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