EXHIBIT F
SERIES A PREFERRED SHARES PURCHASE AGREEMENT
DATED AS OF JANUARY 18, 1996
BETWEEN
AMLI RESIDENTIAL PROPERTIES TRUST
AND
UNITED GROUP REINSURANCE, INC.
TABLE OF CONTENTS
PAGE
----
I. PURCHASE AND SALE OF SHARES.. . . . . . . . . . . . . . . . . 1
1.1 Sale and Issuance of Preferred Shares. . . . . . . . . . 1
1.2 Closing. . . . . . . . . . . . . . . . . . . . . . . . . 1
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . 2
2.1 Organization, Good Standing and Qualification. . . . . . 2
2.2 Power, Authority and Enforceability. . . . . . . . . . . 3
2.3 Capitalization . . . . . . . . . . . . . . . . . . . . . 3
2.4 Valid Issuance of Shares . . . . . . . . . . . . . . . . 3
2.5 Compliance with Other Instruments. . . . . . . . . . . . 3
2.6 Registration Statement and Prospectus. . . . . . . . . . 4
2.7 Conformity to Securities Act; No Misstatement or
Omission. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.8 Financial Statements . . . . . . . . . . . . . . . . . . 5
2.9 No Material Changes. . . . . . . . . . . . . . . . . . . 6
2.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . 6
2.11 Title to Properties; Leasehold Interests . . . . . . . . 6
2.12 Environmental Compliance . . . . . . . . . . . . . . . . 7
2.13 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.14 Employees; ERISA . . . . . . . . . . . . . . . . . . . . 9
2.15 Legal Compliance . . . . . . . . . . . . . . . . . . . . 10
2.16 Regulation G; Use of Proceeds. . . . . . . . . . . . . . 10
2.17 Governmental Consent. . . . . . . . . . . . . . . . . . 11
III. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. . . . . . . . 11
3.1 Power, Authority and Enforceability. . . . . . . . . . . 11
3.2 Compliance with Other Instruments. . . . . . . . . . . . 11
3.3 Ownership Limitations. . . . . . . . . . . . . . . . . . 12
IV. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING . . . . . 12
4.1 Series A Preferred Articles Supplementary. . . . . . . . 12
4.2 Representations and Warranties . . . . . . . . . . . . . 12
4.3 Performance. . . . . . . . . . . . . . . . . . . . . . . 12
4.4 No Stop Order. . . . . . . . . . . . . . . . . . . . . . 12
4.5 No Material Adverse Change . . . . . . . . . . . . . . . 13
4.6 Opinion of Company Counsel . . . . . . . . . . . . . . . 13
4.7 Officer's Certificate. . . . . . . . . . . . . . . . . . 13
4.8 Proceedings. . . . . . . . . . . . . . . . . . . . . . . 13
V. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. . . . . . 13
5.1 Representations and Warranties . . . . . . . . . . . . . 13
5.2 Additional Commitments . . . . . . . . . . . . . . . . . 14
VI. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.1 Filing of Prospectus Supplement. . . . . . . . . . . . . 14
6.2 Amendments to Registration Statement . . . . . . . . . . 14
-i-
6.3 Notice of Certain Actions. . . . . . . . . . . . . . . . 14
6.4 Filing of Exchange Act Reports . . . . . . . . . . . . . 15
6.5 Stock Exchange Listing . . . . . . . . . . . . . . . . . 15
VII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 15
7.1 Survival of Warranties . . . . . . . . . . . . . . . . . 15
7.2 Successors and Assigns . . . . . . . . . . . . . . . . . 16
7.3 Governing Law. . . . . . . . . . . . . . . . . . . . . . 16
7.4 Counterparts . . . . . . . . . . . . . . . . . . . . . . 16
7.5 Titles and Subtitles . . . . . . . . . . . . . . . . . . 16
7.6 Notices. . . . . . . . . . . . . . . . . . . . . . . . . 16
7.7 No Finder's Fees . . . . . . . . . . . . . . . . . . . . 17
7.8 Expenses . . . . . . . . . . . . . . . . . . . . . . . . 18
7.9 Amendments and Waivers . . . . . . . . . . . . . . . . . 18
7.10 Severability . . . . . . . . . . . . . . . . . . . . . . 18
7.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . 18
7.12 Limitation of Liability of Shareholders
of the Company . . . . . . . . . . . . . . . . . . . . . 18
-ii-
SCHEDULES AND EXHIBITS
----------------------
Schedule 2.1 Subsidiaries
Schedule 2.5 Compliance with Other Instruments
Schedule 3.2 Compliance with Other Instruments
Schedule 7.7 Finder's Fee
Exhibit A Series A Preferred Articles Supplementary
Exhibit B Opinion of Company Counsel
Exhibit C Prospectus
- iii -
SERIES A PREFERRED SHARES PURCHASE AGREEMENT
--------------------------------------------
This SERIES A PREFERRED SHARES PURCHASE AGREEMENT (this
"Agreement") is made as of the 18th day of January, 1996 by and between
Amli Residential Properties Trust, a Maryland real estate investment trust
(the "Company"), and United Group Reinsurance, Inc. (the "Investor").
W I T N E S S E T H
-------------------
WHEREAS, the Company wishes to issue and sell to the Investor
an aggregate of 100,000 shares of Series A Cumulative Convertible Preferred
Shares of Beneficial Interest, $.01 par value per share, of the Company
(the "Series A Preferred Shares"), the terms of which shall be as set forth
in the Series A Preferred Articles Supplementary in the form of Exhibit A
(the "Series A Preferred Articles Supplementary") in accordance with and
subject to the terms and conditions set forth herein; and
WHEREAS, the Investor wishes to purchase the Series A Preferred
Shares on the terms and subject to the conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants, agreements and warranties herein contained, the parties
hereby agree as follows:
I. PURCHASE AND SALE OF SHARES.
1.1 SALE AND ISSUANCE OF PREFERRED SHARES.
(a) The Company shall adopt and file with the State
Department of Assessments and Taxation of Maryland (the "SDAT") on or
before the Closing Date (as defined below) the Series A Preferred Articles
Supplementary.
(b) Subject to the terms and conditions of this Agreement,
the Company agrees to issue and sell to the Investor (or one or more of its
affiliates) and the Investor (either directly or through one or more of its
affiliates) agrees to purchase from the Company at the Closing (as defined
below), 100,000 Series A Preferred Shares, at a per-share price of $20.00
(the "Per-Share Price"), resulting in an aggregate purchase price of
$2,000,000 million (the "Purchase Price").
1.2 CLOSING.
The closing (the "Closing") of the purchase and sale of the
Series A Preferred Shares shall take place at the offices of Xxxxx, Xxxxx &
Xxxxx, 000 Xxxxx XxXxxxx, Xxxxxxx, Xxxxxxxx 00000 at 10:00 a.m. on January
25, 1996, or at such other location, date and time as may be agreed upon by
the Company and the Investor (such
1
date being hereinafter referred to as the "Closing Date"). At the Closing,
the Company shall issue and deliver to the Investor a stock certificate or
certificates in definitive form, registered in the name of the Investor,
representing the Series A Preferred Shares being purchased by the Investor
hereunder, and the Investor shall deliver to the Company, against delivery
of the stock certificate or certificates representing the Series A
Preferred Shares, a cashier's or certified check or wire transfer payable
to the Company's order for the Purchase Price.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants, as of the date of this Agreement
and as of the Closing Date, that:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION.
(a) The Company has been duly organized and is validly
existing as a real estate investment trust in good standing under the laws
of the State of Maryland with full power and authority to own lease and
operate its properties and conduct its business as now being conducted, and
has been duly qualified to transact business and is in good standing under
the laws of each other jurisdiction in which it owns or leases properties,
or conducts any business, so as to require such qualification, except where
the failure to so qualify would not have a Material Adverse Effect.
"Material Adverse Effect" means any material adverse effect on the
operations, assets, business, affairs, properties or financial or other
condition of the Company and its subsidiaries taken as a whole.
(b) Amli Residential Properties, L.P. (the "Operating
Partnership") has been duly formed and is validly existing as a limited
partnership in good standing under the Delaware Revised Uniform Limited
Partnership Act with partnership power and authority to own, lease and
operate its properties and conduct its business as now being conducted and
has been duly qualified to transact business and is in good standing under
the laws of each jurisdiction in which it owns or leases properties, or
conducts any business, so as to require such qualification, except where
the failure to so qualify would not have a Material Adverse Effect.
(c) The subsidiaries of the Company set forth on Schedule
2.1 (the "Subsidiaries") have each been duly organized and are validly
existing and in good standing under the laws of their respective
jurisdictions of incorporation and have full power and authority to own,
lease and operate their properties and to conduct their businesses as now
being conducted, and each Subsidiary has been duly qualified to transact
business and is in good standing under the laws of each other jurisdiction
in which it owns or
2
leases properties, or conducts any business, so as to require such
qualification, except where the failure to so qualify would not have a
Material Adverse Effect.
2.2 POWER, AUTHORITY AND ENFORCEABILITY
(a) The Company has all requisite power and authority, and
has taken all required action necessary, to execute, deliver and perform
this Agreement and to issue and sell the Series A Preferred as herein
provided.
(b) This Agreement has been duly executed and delivered by
the Company and constitutes the legal, valid and binding obligation of the
Company enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting enforcement of creditors' rights
generally, and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.
2.3 Capitalization.
The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and, except as set forth the Prospectus, are nonassessable.
2.4 Valid Issuance of Shares.
The Series A Preferred Shares which are being purchased by
the Investor hereunder, when issued, sold and delivered in accordance with
the terms hereof for the consideration expressed herein, will be duly and
validly issued, fully paid and, except as described in the Prospectus,
nonassessable and will be issued in compliance with all applicable federal
and state securities laws. The Common Shares (as hereinafter defined)
issuable upon the conversion of the Series A Preferred Shares issued and
sold hereunder will be duly and validly reserved for such issuance and,
when issued upon such conversion in accordance with the Series A Preferred
Articles Supplementary, will be duly and validly issued, fully paid and,
except as provided in the Prospectus, nonassessable and will be issued in
compliance with all applicable federal and state securities laws.
2.5 Compliance with Other Instruments.
Except as set forth on Schedule 2.5, the execution, delivery
and performance of this Agreement by the Company and the consummation by
the Company of the transactions contemplated hereby do not (i) result in a
violation of the Company's Declaration of
3
Trust or Bylaws or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or result in a violation of
any law, rule, regulation, order, judgment or decree applicable to the
Company, any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have a
Material Adverse Effect or materially impair the Company's ability to
perform its obligations under this Agreement).
2.6 REGISTRATION STATEMENT AND PROSPECTUS.
The Company meets the requirements for use of Form S-3 under
the Securities Act of 1933, as amended (herein called the "Securities Act")
and of Rule 415 pursuant to the Securities Act, and filed with the
Securities and Exchange Commission (herein called the "Commission") on June
6, 1995, a Registration Statement on Form S-3 (33-93120) relating to
$200,000,000 aggregate principal amount of the Company's unsecured senior
debt securities (the "Debt Securities"), preferred shares of beneficial
interest, par value $.01 per share (the "Preferred Shares"), common shares
of beneficial interest, $.01 par value per share (the "Common Shares") and
warrants to purchase any of the foregoing (the "Securities Warrants"),
under the Securities Act. Such Registration Statement was declared
effective by the Commission on July 20, 1995. No stop order suspending the
effectiveness of such Registration Statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission, and no amendment or supplement thereto or to any document
incorporated by reference therein has heretofore been filed with the
Commission. Such Registration Statement is herein called the "Registration
Statement". As used herein, the term "Registration Statement" means the
Registration Statement, including all exhibits thereto (other than the
Statement of Eligibility and Qualification under the Trust Indenture Act
(Form T-1) of the Trustee), as amended to the date of this Agreement; the
term "Basic Prospectus" means the prospectus included in the Registration
Statement in the form on file with the Commission on the date the
Registration Statement became effective; and the term "Prospectus" means
the Basic Prospectus, together with the Prospectus Supplement, dated
January 18, 1996, delivered to the Investor in connection with the purchase
of the Series A Preferred Shares, in the form to be filed with the
Commission pursuant to Rule 424(b) under the Securities Act. Any reference
herein to the Registration Statement, the Basic Prospectus or the
Prospectus shall be deemed to refer to and include the documents or
portions thereof incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the
4
Securities Exchange Act of 1934, as amended (herein called the "Exchange
Act"), on or before the date of this Agreement, or the issue date of the
Basic Prospectus or the Prospectus, as the case may be; and any reference
to any amendment or supplement to the Registration Statement, the Basic
Prospectus or the Prospectus shall be deemed to refer to and include any
documents filed after such date or issue date, as the case may be, under
the Exchange Act which are incorporated or deemed to be incorporated by
reference in such amendment or supplement.
2.7 CONFORMITY TO SECURITIES ACT; NO MISSTATEMENT OR OMISSION.
As of the date hereof, as of the time the Prospectus is filed
with the Commission pursuant to Rule 424(b) under the Securities Act, at
any time prior to the Closing Date that any subsequent amendment or
supplement to the Registration Statement or the Prospectus is filed with
the Commission and at the Closing Date: (i) the Registration Statement, as
amended as of any such time and the Prospectus, as amended or supplemented
as of any such time will comply in all material respects with the
applicable requirements of the Securities Act and the Exchange Act, and the
respective rules and regulations of the Commission thereunder, (ii) the
Registration Statement, as amended as of any such time, will not contain
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading and (iii) the Prospectus, as amended or supplemented as of
any such time, will not contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
2.8 FINANCIAL STATEMENTS.
The financial statements incorporated by reference in the
Registration Statement and the Prospectus are complete and correct in all
material respects and present fairly the consolidated financial position of
the Company and its consolidated subsidiaries as at the dates specified and
the consolidated results of their operations for the periods specified;
such financial statements were prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the
periods involved, except as indicated therein or in the notes thereto; and
the supporting schedules included in the Registration Statement present
fairly the information required to be stated therein.
5
2.9 NO MATERIAL CHANGES.
Since the date as of which information is given in the
Prospectus, except as otherwise stated therein or contemplated thereby:
(i) there has been no material adverse change in the business, operations
or condition, financial or otherwise, of the Company and its subsidiaries
considered as one enterprise, or in the earnings or the ability to continue
to conduct business in the usual and ordinary course of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business; (ii) there has been no material transaction
entered into by the Company or any of its subsidiaries other than
transactions in the ordinary course of business or transactions which are
not material in relation to the Company and its subsidiaries considered as
one enterprise; and there have not been any changes in the capital stock
(other than issuances of Common Shares pursuant to employee benefit or
other similar plans described in the Prospectus) or any material increases
in the debt of the Company or any of its subsidiaries.
2.10 LITIGATION.
Except as set forth in the Prospectus, there is no action,
suit or proceeding (whether or not purportedly on behalf of the Company or
any of its subsidiaries) before or by any court or governmental agency or
body, domestic or foreign, now pending or, to the best knowledge and belief
of the Company, threatened against or affecting the Company or any of its
subsidiaries which, either alone or in the aggregate, involve the
possibility of any material and adverse change in the business, operations,
properties, assets, financial condition or income of the Company and its
subsidiaries considered as one enterprise, the consummation of the
transactions contemplated by this Agreement or the compliance by the
Company with the terms, conditions and provisions of the Series A Preferred
Shares.
2.11 TITLE TO PROPERTIES; LEASEHOLD INTERESTS.
(a) Except as disclosed in the Prospectus, or except to the
extent that the inaccuracy of any of the following, either individually or
in the aggregate, would not have a Material Adverse Effect: (i) the
Company, through one or more subsidiaries, has good and marketable title
(or, with respect to any Communities (as hereinafter defined) located in
Texas, good and indefeasible title, or such substantially equivalent
quality of title as provided by the applicable title insurance policy) to
the land underlying each of the multi-family apartment communities
described in the Prospectus (the "Communities") and good and marketable
title (or, with respect to any Communities located in Texas, good and
indefeasible title) to the improvements thereon (in each case with title
insurance thereon in full force and effect and which is
6
adequate in accordance with industry standards) and all other assets that
are required for the effective operation of such Communities in the manner
in which they currently are operated, in each case, subject only to
Permitted Exceptions (as herein defined); (ii) all leases under which the
Company, or any of its subsidiaries leases any property is in full force
and effect, and neither the Company nor any such subsidiary is in default
in any material respect of any of the terms or provisions of any of such
leases and no claim has been asserted by anyone adverse to any such
entity's rights as lessee under any of such leases, or affecting or
questioning any such entity's right to the continued possession or use of
the properties under any such leases or asserting a default under any such
leases; and (iii) all liens, charges or encumbrances on or affecting any of
the Communities or the other property and assets of the Company and its
subsidiaries which are required to be disclosed in the Prospectus are
disclosed therein;
(b) As used in this Agreement, "Permitted Exceptions" means: (i)
real estate taxes and assessments not yet delinquent; (ii) covenants,
restrictions, easements and other similar agreements, provided that the
same are not violated by existing improvements or the current use and
operation of a Community or other property; (iii) zoning laws, ordinances
and regulations, building codes, rules and other governmental laws,
regulations, rules and orders affecting each Community or other property,
provided that the same are not violated by existing improvements or the
current use and operation of a Community or other property; (iv) any state
of facts disclosed by the surveys relating to the Communities; (v) any
imperfection of title which does not affect the current use, operation or
enjoyment of a Community or other property and does not render title to
such Community or other property unmarketable or uninsurable and does not
materially impair the value of such Community; and (iv) mortgage financing
as described in the Prospectus.
2.12 ENVIRONMENTAL COMPLIANCE.
(a) Except as specifically described in the Prospectus, the
Company and each of its subsidiaries has complied and is in compliance in
all material respects with all Environmental Statutes (as hereinafter
defined).
(b) Neither the Company nor any of its subsidiaries intends
to use the properties or assets described in the Prospectus or any other
real property owned or occupied by any such party for the purpose of
handling, burying, storing, retaining, refining, transporting, processing,
manufacturing, generating, producing, spilling, seeping, leaking, escaping,
leaching, pumping, poring, emitting, emptying, discharging, injecting,
dumping, transferring or otherwise disposing of or dealing with Hazardous
Materials, except for materials utilized in the ordinary course of business
of
7
the Communities, provided such use would not, in the ordinary course of
business, give rise to liability under any Environmental Statute.
(c) Except as would not, individually or in the aggregate,
have a material adverse effect on the condition, financial or otherwise, or
the earnings, assets, business affairs or business prospects of the
Company, neither the Company nor any of its subsidiaries is aware of any
seepage, leak, escape, xxxxx, discharge, injection, release, emission,
spill, pumping, pouring, emptying or dumping of Hazardous Materials into
waters on or adjacent to the properties described in the Prospectus or any
other real property owned or occupied by any such party, or onto lands from
which Hazardous Materials might seep, flow or drain into such waters.
(d) The Company is not aware of any occurrence or
circumstance that, with notice or passage of time or both, would give rise
to a claim under or pursuant to any federal, state or local Environmental
Statute pertaining to Hazardous Materials on or originating from any
properties or assets described in the Prospectus or any other real property
owned or occupied by the Company or any of its Subsidiaries arising out of
the conduct of any such party, including without limitation pursuant to any
Environmental Statute.
(e) Neither the properties described in the Prospectus nor
any other land owned by the Company or any of its subsidiaries is included
or, to the knowledge of the Company, proposed for inclusion on the National
priorities List issued pursuant to CERCLA (as hereinafter defined) by the
United States Environmental Protection Agency (the "EPA") or on the
inventory of other potential "Problem" sites issued by the EPA and has not
otherwise been publicly identified by the EPA as a potential CERCLA site or
included or, to the best knowledge of the Company, proposed for inclusion
on any list or inventory issued pursuant to any other Environmental Statute
or issued by any other Governmental Authority (as hereinafter defined).
(f) As used herein, "Hazardous Material" shall include
without limitation any flammable explosives, radioactive materials,
hazardous materials, hazardous wastes, toxic substances or related
materials, asbestos or any hazardous material as defined by any federal,
state or local environmental law, ordinance, rule or regulation, including
without limitation the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended, 42 U.S.C. Section Sec. 9601 et seq.
("CERCLA"), the Hazardous Materials Transportation Act, as amended, 49
U.S.C. Section Sec. 1801 et seq., the Resource Conservation and Recovery
Act, as amended, 42 U.S.C. Section Sec. 9601 et seq., the Emergency
Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section Sec.
11001 et seq., the Toxic
8
Substances Control Act, 15 U.S.C. Section Sec. 2601 et seq., the Federal
Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. Section Sec. 136 et
seq., the Clean Air Act, 42 U.S.C. Section Sec. 7401 et seq., the Clean
Water Act (Federal Water Pollution Control Act), 33 U.S.C. Section Sec.
1251 et seq., the Safe Drinking Water Act, 42 U.S.C. Section Sec. 300F to
300j-11, and the Occupational Safety and Health Act, 29 U.S.C. Section Sec.
651 et seq., as any of the above statutes may be amended from time to time,
and in the regulations adopted and publications promulgated pursuant to
each of the foregoing (individually, an "Environmental Statute") or by any
federal, state or local governmental authority having or claiming
jurisdiction over the properties and assets described in the Prospectus (a
"Governmental Authority").
2.13 TAXES.
The Company has filed all federal, state, local and other tax
returns and reports (except for foreign returns and reports the failure to
file which will not result in any material liability to the Company), and
any other material returns and reports with any governmental authorities
(federal, state or local), required to be filed by it. The Company has
paid or caused to be paid all taxes (including interest and penalties) that
are due and payable, except those which are being contested by it in good
faith by appropriate proceedings and in respect of which adequate reserves
are being maintained on its books in accordance with generally accepted
accounting principles consistently applied. The Company does not have any
material liabilities for taxes other than those incurred in the ordinary
course of business and in respect of which adequate reserves are being
maintained by it in accordance with generally accepted accounting
principles consistently applied. Federal and state income tax returns for
the Company have not been audited by the Internal Revenue Service or state
authorities. No deficiency assessment with respect to or proposed
adjustment of the Company's federal, state, local or other tax returns is
pending or, to the best of the Company's knowledge, threatened. There is
no tax lien, whether imposed by any federal, state, local or other tax
authority outstanding against the assets, properties or business of the
Company. There are no applicable taxes, fees or other governmental charges
payable by the Company in connection with the execution and delivery of
this Agreement or the issuance by the Company of the Series A Preferred
Shares or the Common Shares issuable upon conversion of the Series A
Preferred Shares, except for governmental fees paid in connection with
securities law filings.
2.14 EMPLOYEES; ERISA.
The Company has good relationships with its employees and has
not had any substantial labor problems. The Company does not have any
knowledge as to any intentions of any key employee or any group of
employees to leave the employ of the Company. Other
9
than as disclosed in the Prospectus, the Company has not established,
sponsored, maintained, made any contributions to or been obligated by law
to establish, maintain, sponsor or make any contributions to any "employee
pension benefit plan" or "employee welfare benefit plan" (as such terms are
defined in ERISA), including, without limitation, any "multi-employer
plan." The Company is in compliance with all applicable laws relating to
the employment of labor, including provisions relating to wages, hours,
equal opportunity, collective bargaining and the payment of Social Security
and other taxes, and with ERISA, except where the failure to so comply
would not have a Material Adverse Effect.
2.15 LEGAL COMPLIANCE.
(a) The Company has complied with all applicable laws,
rules, regulations, orders, licenses, judgments, writs, injunctions,
decrees or demands, except to the extent that failure to comply would not
have a Material Adverse Effect. The Company has all necessary permits,
licenses and other authorizations required to conduct its business as
currently conducted, and as proposed to be conducted, in all material
respects.
(b) There are no adverse orders, judgments, writs,
injunctions, decrees or demands of any court or administrative body,
domestic or foreign, or of any other governmental agency or
instrumentality, domestic or foreign, outstanding against the Company which
may result in a Material Adverse Effect.
(c) There is no existing law, rule, regulation or order,
and the Company is not aware of any proposed law, rule, regulation or
order, which would prohibit or materially restrict the Company from, or
otherwise materially adversely affect the Company in, conducting its
business as now being conducted and as proposed to be conducted.
2.16 REGULATION G; USE OF PROCEEDS.
The proceeds from the issue and sale of the Series A
Preferred Shares will be applied by the Company as set forth in the
Prospectus under the caption "Use of Proceeds". Neither the Company nor
any subsidiary of the Company will, directly or indirectly, use any of such
proceeds for the purpose, whether immediate, incidental or ultimate, of
buying a "margin stock" or of maintaining, reducing or retiring any
indebtedness originally incurred to purchase stock that is currently a
"margin stock", or for any other purpose which might constitute this
transaction a "purpose credit", in each case within the meaning of
Regulation G of the Board of Governors of the Federal Reserve System (12
C.F.R. 207, as amended), or otherwise take or permit to be taken any action
which would involve a violation of such Regulation G or of Regulation X (12
C.F.R. 224, as amended) or any other regulation of
10
such Board. No indebtedness being reduced or retired out of such proceeds
was incurred for the purpose of purchasing or carrying any such "margin
stock" and neither the Company nor any subsidiary of the Company owns, or
has any present intention of acquiring, any such "margin stock" in an
amount sufficient to cause more than 20% of the value of the consolidated
assets of the Company and its Subsidiaries considered as one enterprise to
be "margin stock".
2.17 GOVERNMENTAL CONSENT.
Other than such consents as have already been obtained or
made or which will be made at or prior to the Closing Date in connection
with the Registration Statement, the Prospectus and the Series A Preferred
Shares, no consent, approval or authorization of, or declaration or filing
with, any governmental authority on the part of the Company is required for
the valid execution and delivery of this Agreement or performance
thereunder or the valid offer, issue, sale and delivery of the Series A
Preferred Shares pursuant to this Agreement and the Articles Supplementary;
PROVIDED that the Company makes no representation or warranty as to any
consents, approvals, authorizations, declarations or filings required under
laws regulating insurance companies as such.
III. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR.
The Investor represents and warrants, as of the date of this
Agreement and as of the Closing Date, that:
3.1 POWER, AUTHORITY AND ENFORCEABILITY.
(a) The Investor has a requisite power and authority, and
has taken all required action necessary, to execute, deliver and perform
this Agreement and to purchase the Series A Preferred Shares hereunder.
(b) This Agreement has been duly executed and delivered by
the Investor and constitutes the legal, valid and binding obligation of the
Investor enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, and other
laws of general application affecting enforcement of creditors' rights
generally, and (ii) as limited by laws relating to the availability of
specific performance, injunctive relief, or other equitable remedies.
3.2 COMPLIANCE WITH OTHER INSTRUMENTS.
Except as set forth in Schedule 3.2, the execution delivery
and performance of this Agreement by the Investor and the consummation by
the Investor of the transactions contemplated hereby do not (i) result in a
violation of the Investor's
11
constituent documents or (ii) conflict with, or constitute a default under
(or an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to
which the Investor is a party, or result in a violation of any law, rule,
regulation, order, judgment or decree applicable to the Investor or by
which any property or asset of the Investor is bound or affected (except
for such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not materially impair the Investor's
ability to perform its obligations under this Agreement).
3.3 OWNERSHIP LIMITATIONS.
The Investor has received a copy of the Company's Amended and
Restated Declaration of Trust and understands the restrictions on transfer
and ownership of the Company included therein related to the qualification
by the Company as a real estate investment trust for federal income tax
purposes pursuant to Sections 856 through 860 of the Internal Revenue Code
of 1986, as amended.
IV. CONDITIONS OF THE INVESTOR'S OBLIGATIONS AT CLOSING.
The Investor's obligations at the Closing under subsection 1.1(b) of
this Agreement are subject to the fulfillment on or before the Closing of
each of the following conditions:
4.1 SERIES A PREFERRED ARTICLES SUPPLEMENTARY.
The Series A Preferred Articles Supplementary shall have been
filed with and accepted for recording by the SDAT.
4.2 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company contained
in Section 2 shall be true on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of the
date of such Closing.
4.3 PERFORMANCE.
The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
4.4 NO STOP ORDER.
12
No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings therefor
instituted or threatened by the Commission.
4.5 NO MATERIAL ADVERSE CHANGE.
After the date of this Agreement and through the Closing
Date, there shall not have occurred any material adverse change in the
business or financial condition of the Company and its subsidiaries
considered as one enterprise.
4.6 OPINION OF COMPANY COUNSEL.
The Investor shall have received from Xxxxx, Xxxxx & Xxxxx,
counsel for the Company, an opinion, dated as of the Closing, in the form
attached hereto as Exhibit B.
4.7 OFFICER'S CERTIFICATE.
The Company shall have delivered to the Investor on the
Closing Date a certificate or certificates, signed by an authorized officer
of the Company to the effect that the facts required to exist by Sections
4.1, 4.2, 4.3, 4.4 and 4.5 exist on such Closing Date.
4.8 PROCEEDINGS.
All proceedings to be taken in connection with the
transactions contemplated by this Agreement, including all filings with the
Commission, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to the Investor; and the Investor shall
have received copies of all documents which the Investor may reasonably
request in connection with said transactions and copies of the records of
all proceedings of the Company in connection therewith in form and
substance satisfactory to the Investor.
V. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.
The obligations of the Company under subsection 1.1(b) of this
Agreement are subject to the fulfillment on or before the Closing of each
of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Investor contained
in Section 3 shall be true on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of the
Closing.
13
5.2 ADDITIONAL COMMITMENTS.
The Company shall have received commitments from investors,
including the Investor, to purchase an aggregate of $20,000,000 of Series A
Preferred Shares on substantially the terms set forth in this Agreement.
VI. COVENANTS.
6.1 FILING OF PROSPECTUS SUPPLEMENT.
Promptly following the execution of this Agreement, the
Company will file with the Commission pursuant to Rule 424(b) under the
Securities Act, the Prospectus Supplement to the Basic Prospectus (setting
forth, inter alia, the amount of the Series A Preferred Shares sold
hereunder, the terms thereof, the method of distribution of the Series A
Preferred Shares sold hereunder and the price at which the Series A
Preferred Shares sold hereunder are to be purchased by the Investor) in the
form attached as Exhibit C hereto, with only such changes as shall be
approved by the Investor and the Company. The Investor hereby acknowledges
receipt of two copies of the Prospectus.
6.2 AMENDMENTS TO REGISTRATION STATEMENT.
If at any time after the date of this Agreement and through
the Closing Date any event shall have occurred or any condition shall exist
as a result of which, in the reasonable opinion of the Investor or the
Company, it shall be necessary to amend or supplement the Prospectus, as
then amended or supplemented, so that the Prospectus will not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances then existing, not misleading, or if, in the reasonable
opinion of the Investor or the Company, it shall be necessary at any time
to amend or supplement the Registration Statement or the Prospectus in
order to comply with the requirements of the Securities Act or the Exchange
Act or the respective rules and regulations of the Commission thereunder,
the Company shall promptly prepare and file with the Commission such
amendment or supplement, whether by filing documents pursuant to the
Exchange Act, the Securities Act or otherwise, as shall be necessary to
correct such untrue statement or omission or to effect such compliance.
6.3 NOTICE OF CERTAIN ACTIONS.
After the date of this Agreement and through the Closing
Date, the Company will notify the Investor immediately (and confirm such
notice in writing) (i) of the effectiveness of any amendment
14
to the Registration Statement, (ii) of the receipt of any comments from the
Commission with respect to the Registration Statement, the Basic Prospectus
or the Prospectus, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the
Prospectus or for additional information and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceedings
for such purpose. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order shall be
issued, to obtain the lifting thereof at the earliest possible time. After
the date of this Agreement and through the Closing Date, the Company will
promptly, upon mailing or delivery to the Commission, provide the Investor
with copies of any amendment or supplement to the Prospectus, any amendment
to the Registration Statement or any other document to be filed with the
Commission.
6.4 FILING OF EXCHANGE ACT REPORTS.
After the date of this Agreement and through the Closing
Date, the Company will file promptly all documents required to be filed
with the Commission pursuant to Section 13 or 14 of the Exchange Act, and
so long as the Series A Preferred Shares remain issued and outstanding,
shall provide to the Investor copies of all such documents, including,
without limitation, all financial statements of the Company required to be
filed with the Commission.
6.5 STOCK EXCHANGE LISTING.
The Company will use its best efforts to obtain the listing
on the New York Stock Exchange of all Common Shares which the Investor may
acquire upon conversion of the Series A Preferred Shares issued and sold
hereunder.
VII. MISCELLANEOUS
7.1 SURVIVAL OF WARRANTIES.
The warranties, representations and covenants of the Company
and the Investor contained in or made pursuant to Sections 2.1, 2.2, 2.3
and 2.4 of this Agreement shall survive the Closing indefinitely. All
other representations and warranties contained in or made in this Agreement
shall survive the Closing for a period of three years. The representations
and warranties contained in this Agreement shall in no way be affected by
any investigation of the subject matter thereof made by or on behalf of the
Investor or the Company.
15
7.2 SUCCESSORS AND ASSIGNS.
Except as otherwise provided herein, the terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties hereto. Nothing in this
Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement.
7.3 GOVERNING LAW.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois, without giving effect t
the conflict of law provisions thereof; PROVIDED, HOWEVER, that matters
relating to the issuance of the Series A Preferred Shares and other
internal corporate matters related to the Company shall be governed by the
laws of the State of Maryland.
7.4 COUNTERPARTS.
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
7.5 TITLES AND SUBTITLES.
The title and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting
this Agreement.
7.6 NOTICES.
Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed
effectively given (a) upon personal delivery to the party to be notified,
(b) on the fifth business day after deposit with the United States Post
Office, by registered or certified mail, postage prepaid, (c) on the next
business day after dispatch via nationally recognized overnight courier or
(d) upon confirmation of transmission by facsimile, all addressed to the
party to be notified at the address indicated for such party on the
signature page hereof, or at such other address as such party may designate
by ten (10) days' advance written notice to the other parties. Notices
should be provided in accordance with this Section at the following
addresses:
16
If to the Investor, to:
United Group Reinsurance, Inc.
c/o Emerald Capital Group, Ltd.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx XxXxxxxxxx
If to the Company, to:
Amli Residential Properties Trust
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attn: President
with a copy to:
Xxxxxx X. Xxxxxxxxxx
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
7.7 NO FINDER'S FEES.
Except as set forth on Schedule 7.7 hereto, each party
represents that it neither is nor will be obligated for any finders' fee or
commission in connection with this transaction. The Investor agrees to
indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finders' fee (and the costs
and expenses of defending against such liability or asserted-liability) for
which the Investor or any of its officers, partners, employees, or
representatives is responsible. The Company agrees to indemnify and hold
harmless the Investor from any liability for any commission or compensation
in the nature of a finders' fee (and the costs and expenses of defending
against such liability or asserted liability) for which the Company or any
of its officers, employees or representatives is responsible.
7.8 EXPENSES.
Each party shall pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of
this Agreement. If any action at law or in equity is necessary to enforce
or interpret the terms of this Agreement or the Series A Preferred Articles
Supplementary, the prevailing party
17
shall be entitled to reasonable attorneys' fees, costs and necessary
disbursements in addition to any other relief to which such party may be
entitled.
7.9 AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended, and the observance
of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with
the written consent of the Company and the Investor. Any amendment or
waiver effected in accordance with this paragraph shall be binding upon
each holder of any securities purchased under this Agreement at the time
outstanding (including securities into which such securities are
convertible), each future holder of all such securities, and the Company.
7.10 SEVERABILITY.
If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with
its terms.
7.11 ENTIRE AGREEMENT.
This Agreement constitutes the entire agreement among the
parties and no party shall be liable or bound to any other party in any
manner by any warranties, representations or covenants except as
specifically set forth herein.
7.12 LIMITATION OF LIABILITY OF SHAREHOLDERS OF THE COMPANY.
ANY OBLIGATION OR LIABILITY WHATSOEVER OF THE COMPANY WHICH MAY ARISE
AT ANY TIME UNDER THIS AGREEMENT OR ANY OBLIGATION OR LIABILITY WHICH MAY
BE INCURRED BY IT PURSUANT TO ANY OTHER INSTRUMENT, TRANSACTION OR
UNDERTAKING CONTEMPLATED HEREBY SHALL BE SATISFIED, IF AT ALL, OUT OF THE
COMPANY'S ASSETS ONLY. NO SUCH OBLIGATION OR LIABILITY SHALL BE PERSONALLY
BINDING UPON, NOR SHALL RESORT FOR THE ENFORCEMENT THEREOF BE HAD TO, THE
PROPERTY OF ANY SHAREHOLDER, REGARDLESS OF WHETHER SUCH OBLIGATION OR
LIABILITY IS IN THE NATURE OF CONTRACT, TORT OR OTHERWISE.
18
IN WITNESS WHEREOF, the parties have executed this Agreement in
Chicago, Illinois as of the date first above written.
UNITED GROUP LIFE INSURANCE, INC. AMLI RESIDENTIAL
PROPERTIES TRUST
By: /S/ XXXX XXXXXXXX By: /S/ XXXXX X. XXXXX
--------------------------- ----------------------
19
