EXHIBIT 10.3
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REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into
as of the 9th day of March, 1998 by and between AMLI Residential Properties
Trust, a Maryland real estate investment trust (the "Company"), and
Security Capital Preferred Growth Incorporated, a Maryland corporation (the
"Investor").
WHEREAS, pursuant to that certain Preferred Share Purchase Agreement
dated as of February 20, 1998 (the "Purchase Agreement"), among the
Company, AMLI Residential Properties Trust, L.P., a Delaware limited
partnership, and the Investor, the Investor has agreed to purchase
3,125,000 shares of Series B Cumulative Convertible Redeemable Preferred
Shares of Beneficial Interest, par value $.01 per share, of the Company
(the "Preferred Shares"), all of which Preferred Shares may be converted
into the Company's common shares of beneficial interest, par value $.01 per
share (the "Common Shares"), pursuant to the terms of such Preferred
Shares; and
WHEREAS, in connection with the Purchase Agreement, the Company has
agreed to register for sale by the Investor and certain transferees, the
Common Shares issued or issuable upon conversion of shares of Preferred
Shares (collectively, "Conversion Shares" or the "Registrable Shares"); and
WHEREAS, the parties hereto desire to enter into this Agreement to
evidence the foregoing agreement of the Company and the mutual covenants of
the parties relating thereto.
NOW, THEREFORE, in consideration of the foregoing and the covenants,
agreements and warranties herein contained and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. In this Agreement, the following
terms shall have the following respective meanings:
"Accredited Investor" shall have the meaning set forth in Rule
501 under the Securities Act.
"Affiliate" shall mean, when used with respect to any Person,
another Person which directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control
with the Person specified.
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder, all
as the same are in effect at the relevant time.
"Holders" shall mean (a) the Investor and (b) each Person
holding Registrable Shares as a result of a transfer or assignment to that
Person of Registrable Shares other than pursuant to an effective
registration statement or Rule 144.
"Indemnified Party" shall have the meaning ascribed to it in
Section 4(c) of this Agreement.
"Indemnifying Party" shall mean the meaning ascribed to it in
Section 4(c) of this Agreement.
"Person" shall mean an individual, corporation, partnership,
limited liability company, estate, trust, association, private foundation,
joint stock company or other entity.
"Preferred Shares" shall have the meaning ascribed to it in the
recitals to this Agreement.
"Register," "Registered" and "Registration" refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act providing for the sale by the Holders of
Registrable Shares in accordance with the method or methods of distribution
designated by the Holders, and the declaration or ordering of the
effectiveness of such registration statement by the Commission.
"Registrable Shares" shall have the meaning ascribed to it in
the recitals to this Agreement.
"Registration Expenses" shall mean all out-of-pocket expenses
(excluding Selling Expenses) incurred by the Company in complying with
Section 2, including, without limitation, the following: (a) all
registration, filing and listing fees; (b) fees and expenses of compliance
with federal and state securities or real estate syndication laws
(including, without limitation, reasonable fees and disbursements of
counsel in connection with state securities and real estate syndication
qualifications of the Registrable Shares under the laws of such
jurisdictions as the Holders may reasonably designate); (c) printing
(including, without limitation, expenses of printing or engraving
certificates for the Registrable Shares in a form eligible for deposit with
The Depository Trust Company and otherwise meeting the requirements of any
securities exchange on which they are listed and of printing registration
statements and prospectuses), messenger, telephone, shipping and delivery
expenses; (d) fees and disbursements of counsel for the Company; (e) fees
and disbursements of all independent public accountants of the Company
(including, without limitation, the expenses of any annual or special audit
and "cold comfort" letters required by the managing underwriter); (f) fees
and expenses incurred in connection with the listing of the Registrable
Shares on each securities exchange on which securities of the same class
are then listed; and (g) fees and expenses associated with any filing with
the National Association of Securities Dealers, Inc. required to be made in
connection with the registration statement.
"Registration Request" shall have the meaning ascribed to it in
Section 2(a) of this Agreement.
"Rule 144" shall mean Rule 144 under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder, all as
the same are in effect at the relevant time.
"Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to any sale of
Registrable Shares and, if neither the Company nor any Person not a Holder
shall include securities within the subject Registration, shall include all
travel and other expenses of members of the management of the Company and
its affiliates in connection with the matters described in SECTION 6 (and
if the Company or any such Person shall so include securities, Selling
Expenses shall include a pro rata portion of such travel and other
expenses).
SECTION 2. REGISTRATION.
(a) Upon receipt of a written request (a "Registration Request")
delivered not earlier than nine months from the date of this Agreement from
Holders holding at least 50% of the Preferred Shares and Registrable Shares
then outstanding, the Company shall, as soon as practicable but not later
than 30 days after its receipt of such Registration Request, prepare and
file with the Commission a registration statement for the purpose of
effecting a Registration of the sale of Registrable Shares by the Holders
thereof; shall use its best efforts to effect such Registration as soon as
practicable but not later than 90 days after its receipt of such
Registration Request (including, without limitation, the execution of an
undertaking to file post-effective amendments and appropriate qualification
under applicable state securities and real estate syndication laws); and
shall keep such Registration continuously effective until the earlier of
(i) the third anniversary of the date hereof, (ii) the date on which all
Registrable Shares have been sold pursuant to such registration statement
or Rule 144 and (iii) the date on which all of the Registrable Shares may
be sold in accordance with Rule 144(k); PROVIDED, HOWEVER, that the Company
shall not be obligated to take any action to effect any such Registration,
qualification or compliance pursuant to this Section 2 in any particular
jurisdiction in which the Company would be required to execute a general
consent to service of process in effecting such Registration, qualification
or compliance unless the Company is already subject to service in such
jurisdiction.
Notwithstanding the foregoing, the Company shall have the right
(the "Suspension Right") to defer such filing (or suspend sales under any
filed registration statement or defer the updating of any filed
registration statement and suspend sales thereunder) for a single period of
not more than 90 days each during each calendar year, if the Company
furnishes to the Holders a certificate signed by the President or any other
executive officer or any trustee of the Company stating that, in the good
faith judgment of the Company, it would be detrimental to the Company and
its shareholders to file such registration statement or amendment thereto
at such time (or to continue sales under a filed registration statement)
and therefore the Company has elected to defer the filing of such
registration statement (or to suspend sales under a filed registration
statement).
(b) The Company shall promptly notify the Holders of the occurrence
of the following events:
(i) when any registration statement relating to the
Registrable Shares or post-effective amendment thereto filed with the
Commission has become effective;
(ii) the issuance by the Commission of any stop order
suspending the effectiveness of any registration statement relating to the
Registrable Shares;
(iii) the suspension of an effective registration statement by
the Company in accordance with the last paragraph of Section 2(a);
(iv) the Company's receipt of any notification of the
suspension of the qualification of any Registrable Shares covered by a
registration statement for sale in any jurisdiction; and
(v) the existence of any event, fact or circumstance which
results in a registration statement or prospectus relating to Registrable
Shares or any document incorporated therein by reference containing an
untrue statement of a material fact or omitting to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading during the distribution of securities.
The Company agrees to use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any such
registration statement or any state qualification as promptly as possible.
(c) The Company shall provide to the Holders, at no cost to the
Holders, a copy of the registration statement and any amendment thereto
used to effect the Registration of the Registrable Shares, each prospectus
contained in such registration statement or post-effective amendment and
any amendment or supplement thereto and such other documents as the
requesting Holders may reasonably request in order to facilitate the
disposition of the Registrable Shares covered by such registration
statement. The Company consents to the use of each such prospectus and any
supplement thereto by the Holders in connection with the offering and sale
of the Registrable Shares covered by such registration statement or any
amendment thereto. The Company shall also file a sufficient number of
copies of the prospectus and any post-effective amendment or supplement
thereto with the New York Stock Exchange (or, if the Common Shares is no
longer listed thereon, with such other securities exchange or market on
which the Common Shares is then listed) so as to enable the Holders to have
the benefits of the prospectus delivery provisions of Rule 153 under the
Securities Act.
(d) The Company agrees to use its best efforts to cause the
Registrable Shares covered by a registration statement to be registered
with or approved by such state securities authorities as may be necessary
to enable the Holders to consummate the disposition of such shares pursuant
to the plan of distribution set forth in the registration statement.
(e) Subject to the Company's Suspension Right, if any event, fact
or circumstance exists requiring an amendment to a registration statement
relating to the Registrable Shares or supplement to a prospectus relating
to the Registrable Shares, immediately upon becoming aware thereof the
Company agrees to notify the Holders and prepare and furnish to the Holders
a post-effective amendment to the registration statement or supplement to
the prospectus or any document incorporated therein by reference or file
any other required document so that, as thereafter delivered to the
purchasers of the Registrable Shares, the prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading.
(f) The Company agrees to use its reasonable best efforts
(including the payment of any listing fees) to obtain the listing of all
Registrable Shares covered by the registration statement on each securities
exchange on which securities of the same class are then listed.
(g) The Company agrees to use its best efforts to comply with the
Securities Act and the Exchange Act and, as soon as reasonably practicable
following the end of any fiscal year during which a registration statement
effecting a Registration of the Registrable Shares was effective, to make
available to its security holders an earning statement satisfying the
provisions of Section 11(a) of the Securities Act.
(h) The Company agrees to cooperate with the selling Holders to
facilitate the timely preparation and delivery of certificates representing
Registrable Shares to be sold pursuant to a Registration and not bearing
any Securities Act legend; and enable certificates for such Registrable
Shares to be issued for such numbers of shares and registered in such names
as the Holders may reasonably request at least two business days prior to
any sale of Registrable Shares.
SECTION 3. EXPENSES OF REGISTRATION. The Company shall pay all
Registration Expenses incurred in connection with the Registration,
qualification or compliance pursuant to Section 2. All Selling Expenses
incurred in connection with the sale of Registrable Shares by any of the
Holders shall be borne by the Holder selling such Registrable Shares. Each
Holder shall pay the expenses of its own counsel.
SECTION 4. INDEMNIFICATION.
(a) The Company shall indemnify each Holder, each Holder's officers
and directors, and each person controlling such Holder within the meaning
of Section 15 of the Securities Act, against all expenses, claims, losses,
damages and liabilities (including reasonable legal expenses), arising out
of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement or prospectus
relating to the Registrable Shares, or any amendment or supplement thereto,
or based on any omission (or alleged omission) to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading; PROVIDED, HOWEVER, that the Company shall not be
liable in any such case to the extent that any such claim, loss, damage or
liability arises out of or is based on any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in
conformity with information furnished in writing to the Company by such
Holder for inclusion therein.
(b) Each Holder shall indemnify the Company, each of its trustees
and each of its officers who sign the registration statement, each
underwriter, if any, of the Company's securities covered by such
registration statement, and each person who controls the Company or such
underwriter within the meaning of Section 15 of the Securities Act, each
other Holder with Registrable Shares covered by such registration
statement, and each officer, director and controlling person of each such
other Holder, against all expenses, claims, losses, damages and liabilities
(including reasonable legal fees and expenses) arising out of or based on
any untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement or prospectus, or any
amendment or supplement thereto, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to
the extent, but only to the extent, that such untrue statement (or alleged
untrue statement) or omission (or alleged omission) is made in such
registration statement or prospectus in reliance upon and in conformity
with information furnished in writing to the Company or such underwriter by
such Holder for inclusion therein.
(c) Each party entitled to indemnification under this Section 4
(the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity
may be sought, but the omission to so notify the Indemnifying Party shall
not relieve it from any liability which it may have to the Indemnified
Party pursuant to the provisions of this Section 4 except to the extent of
the actual damages suffered by such delay in notification. The Indemnifying
Party shall assume the defense of such action, including the employment of
counsel to be chosen by the Indemnifying Party to be reasonably
satisfactory to the Indemnified Party, and payment of expenses. The
Indemnified Party shall have the right to employ its own counsel in any
such case, but the legal fees and expenses of such counsel shall be at the
expense of the Indemnified Party, unless the employment of such counsel was
authorized in writing by the Indemnifying Party in connection with the
defense of such action, or the Indemnifying Party did not employ counsel to
take charge of the defense of such action or the Indemnified Party
reasonably concluded that there may be defenses available to it or them
which are different from or additional to those available to the
Indemnifying Party (in which case the Indemnifying Party shall not have the
right to direct the defense of such action on behalf of the Indemnified
Party), in any of which events such fees and expenses shall be borne by the
Indemnifying Party. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party,
consent to the entry of any judgment or enter into any settlement which
does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all
liability in respect of such claim or litigation.
(d) If the indemnification provided for in this Section 4 is
unavailable to a party which would have been an Indemnified Party under
this Section 4 in respect of any expenses, claims, losses, damages and
liabilities referred to herein, then each party which would have been an
Indemnifying Party hereunder shall, in lieu of indemnifying such
Indemnified Party, contribute to the amount paid or payable by such
Indemnified Party as a result of such expenses, claims, losses, damages and
liabilities in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and such Indemnified Party
on the other in connection with the statement or omission which resulted in
such expenses, claims, losses, damages and liabilities, as well as any
other relevant equitable considerations. The relative fault shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Indemnifying Party or such Indemnified Party and the parties' relative
intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Company and each holder of
Registrable Shares agrees that it would not be just and equitable if
contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 4(d).
(e) No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
(f) In no event shall any Holder be liable for any expenses,
claims, losses, damages or liabilities pursuant to this Section 4 in excess
of the net proceeds to such Holder of any Registrable Shares sold by such
Holder.
SECTION 5. INFORMATION TO BE FURNISHED BY HOLDERS. Each Holder shall
furnish to the Company such information as the Company may reasonably
request and as is required in connection with the Registration and related
proceedings referred to in Section 2. If any Holder fails to provide the
Company with such information within three weeks of the Company's request,
the Company's obligations under Section 2 with respect to such Holder or
the Registrable Shares owned by such Holder shall be suspended until such
Holder provides such information.
SECTION 6. UNDERTAKING TO PARTICIPATE IN UNDERWRITING. If the
Holders of at least $40 million of the Registrable Securities propose to
sell Registrable Securities in an underwritten public offering, the Company
shall make available members of the management of the Company and its
affiliates for reasonable assistance in selling efforts relating to such
offering, to the extent customary for a public offering (including, without
limitation, to the extent customary, senior management attendance at due
diligence meetings with underwriters and their counsel and road shows) and
shall enter into underwriting agreements containing usual and customary
terms and conditions reasonably acceptable to the Company for such types of
offerings.
SECTION 7. Rule 144 Sales.
(a) The Company covenants that it shall file the reports required
to be filed by the Company under the Exchange Act, so as to enable any
Holder to sell Registrable Shares pursuant to Rule 144.
(b) In connection with any sale, transfer or other disposition by
any Holder of any Registrable Shares pursuant to Rule 144, the Company
shall cooperate with such Holder to facilitate the timely preparation and
delivery of certificates representing Registrable Shares to be sold and not
bearing any Securities Act legend, and enable certificates for such
Registrable Shares to be for such number of shares and registered in such
names as the selling Holder may reasonably request at least two business
days prior to any sale of Registrable Shares.
SECTION 8. MISCELLANEOUS.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Maryland, without
giving effect to the conflict of law provisions thereof.
(b) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof.
(c) Amendment. No amendment, supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing
by the party sought to be bound thereby.
(d) Notices, etc. Unless otherwise provided herein, 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. Notices shall be addressed as
follows: (i) if to the Investor, at the Investor's address or fax number
set forth below its signature hereto, or at such other address or fax
number as such Investor furnished to the Company in writing, or (ii) if to
any assignee or transferee of an Investor, at such address or fax number as
such assignee or transferee furnished to the Company in writing, or (iii)
if to the Company, at the address of its principal executive offices and
addressed to the attention of the President, or at such other address or
fax number as the Company furnished to the Investor or any assignee or
transferee. Any notice or other communication required to be given
hereunder to a Holder in connection with a registration may instead be
given to the designated representative of such Holder.
(e) 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.
(f) 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 this Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.
(g) 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.
(h) Successors and Assigns. Except as otherwise provided herein,
the terms and conditions of this Agreement shall inure to the benefit of
and be binding on the respective successors and assigns of the parties
hereto.
(i) Remedies. The Company and the Investor acknowledge that there
would be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that the Company and each
Holder, in addition to any other remedy to which it may be entitled at law
or in equity, shall be entitled to compel specific performance of the
obligations of another party under this Agreement in accordance with the
terms and conditions of this Agreement in any court of the United States or
any State thereof having jurisdiction.
(j) Attorneys' Fees. If the Company or any Holder brings an action
to enforce its rights under this Agreement, the prevailing party in the
action shall be entitled to recover its costs and expenses, including,
without limitation, reasonable attorneys' fees, incurred in connection with
such action, including any appeal of such action.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
AMLI RESIDENTIAL PROPERTIES TRUST
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: President
SECURITY CAPITAL PREFERRED
GROWTH INCORPORATED
By: /s/ Xxxxx Xxxxxxxxx
Name: Xxxxx Xxxxxxxxx
Title: Vice President
