REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of December 27, 1996 (this
"AGREEMENT"), by and among Apartment Investment and Management Company, a
Maryland corporation (the "COMPANY"), and the persons listed on Schedule A
hereto (each, an "INVESTOR").
WHEREAS, pursuant to the Agreement for Purchase and Sale of Property
and Joint Escrow Instructions, dated as of December 27, 1996 (the "PURCHASE
AGREEMENT"), by and among AIMCO Properties, L.P., a Delaware limited
partnership, Pacific Multi-Family Group, L.P., a Texas limited partnership, and
Ticor Title Company, the Investors will acquire in the aggregate the number of
shares (the "REGISTRABLE SHARES") of the Company's Class A Common Stock, par
value $.01 per share (the "COMMON STOCK") equal to $4,900,000.00 divided by the
average (i.e., mean) closing price of the Common Stock on the New York Stock
Exchange for the ten trading days immediately preceding the date which is three
trading days prior to closing under the Purchase Agreement (the "STOCK PRICE"),
in the amounts set forth opposite the name of each Investor under the heading
"Registrable Shares" on Schedule A hereto; and
WHEREAS, it is a condition to the closing under the Purchase Agreement
that the Company enter into this Agreement with the Investors to provide for the
registration of the Registrable Shares.
NOW, THEREFORE, in consideration of the foregoing and the covenants of
the parties set forth herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, subject to the terms
and conditions set forth herein, 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 of
the General Rules and Regulations promulgated under the Securities Act.
"AFFILIATE" shall mean, when used with respect to a specified Person,
another Person that 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 shall be in effect at the relevant time.
"HOLDERS" shall mean (i) each of the Investors, and (ii) each Person
holding Registrable Shares as a result of a transfer or assignment to that
Person of Registrable Shares made by an Investor in accordance with this
Agreement 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 have the meaning ascribed to it in Section
4(c) of this Agreement.
"PERSON" shall mean an individual, corporation, partnership, estate,
trust, association, private foundation, joint stock company or other entity.
The terms "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
hereof, 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
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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) securities act liability insurance if the Company so desires;
(g) fees and expenses of other Persons reasonably necessary in connection with
the registration, including any experts, retained by the Company; (h) 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 (i) fees and expenses associated with any NASD filing required to be made in
connection with the registration statement.
"RULE 144" shall mean Rule 144 promulgated by the Commission 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
shall be 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.
Section 2. REGISTRATION.
(a) The Company shall 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; shall use commercially reasonable efforts
to effect such Registration on or before March 4, 1997 (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, (iii) the date on which all of the Registrable Shares may
be sold in accordance with Rule 144 under the Securities Act, and (iv) the date
on which all of the Registrable Shares have been repurchased by the Company in
accordance with Section 2(i) below; 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,
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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 period of not more than 120 days during any
one year period ending on December 31, if the Company shall furnish to the
Holders a certificate signed by the President or any other executive officer or
any director 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 continue sales
under a filed registration statement) and therefore the Company has elected to
defer the filing of such registration statement (or 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) above;
(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 that
results in a registration statement or prospectus relating to Registrable Shares
or any document incorporated therein by reference containing an untrue statement
of 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.
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The Company agrees to use its best effort to obtain the withdrawal of any order
suspending the effectiveness of any such registration statement or state
qualification at the earliest possible moment.
(c) The Company shall promptly provide the Holders, at no cost to
the Holders, with copies of any registration statement or prospectus relating to
the Registrable Shares, and any post-effective 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
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 Stock is no longer listed thereon,
with such other securities exchange or market on which the Common Stock is then
listed) so as to enable the Holders to 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 requiring an amendment to a registration statement relating to
the Registrable Shares or supplement to a prospectus relating to the Registrable
Shares shall exist, 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 any material fact required to be stated therein or necessary to make
the statements therein not misleading.
(f) The Company agrees to use commercially reasonable 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.
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(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 shall have been effective, to
make available to its security holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act.
(h) The Company agrees to cooperate with the 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.
(i) If the Company has not effected a Registration of all of the
Registrable Shares (excluding shares for which, pursuant to Section 5, the
Company no longer has any obligations under Section 2) on or before March 4,
1997, whether or not the Company has exercised the Company's Suspension Right,
the Holder of any such shares that have not been registered may give written
notice (the "Put Notice") to the Company of such Holder's desire to sell such
shares (the "Put Shares") to the Company or to an affiliate designated by the
Company. Within 14 days after receipt of any Put Notice, the Company shall give
such Holder notice of the date (the "Put Date") on which the Company proposes to
purchase or to cause its designated affiliate to purchase such Put Shares and
such other information as the Holder may need in order to sell such Put Shares
to the Company or its designated affiliate on the Put Date. The Put Date shall
not be later than 28 days after the Company's receipt of the relevant Put
Notice. Unless the Company has effected a Registration of the Put Shares prior
thereto (in which case this Section 2(i) shall no longer apply), on the Put
Date, such Holder shall sell, assign, transfer and deliver to the Company or its
designated affiliate the Put Shares, free and clear of any and all liens, claims
and encumbrances, and the Company shall purchase or cause its designated
affiliate to purchase the Put Shares from such Holder for an aggregate purchase
price (the "Put Purchase Price") equal to (i) the Stock Price, multiplied by
(ii) the number of Put Shares so purchased. The closing of the purchase and
sale of the Put Shares hereunder (the "Put Closing") shall take place at the
offices of Skadden, Arps, Slate, Meagher & Flom in Los Angeles, California, on
the Put Date. At the Put Closing, such Holder shall deliver to the Company or
its designated affiliate (i) a counterpart copy of a stock purchase agreement,
in the form provided by the Company or its designated affiliate and reasonably
acceptable to the Holder (the "Stock Purchase Agreement"), duly executed by the
Holder, (ii) certificates representing the Put Shares, in negotiable form, duly
endorsed by the Holder in blank, or with separate stock
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transfer powers attached thereto and duly signed in blank by the Holder, and
(iii) a receipt executed by the Holder, evidencing the Holder's receipt of the
Put Purchase Price and reasonably satisfactory to the Company or its designated
affiliate. At the Put Closing, the Company shall deliver or shall cause its
designated affiliate to deliver to the Holder (i) a counterpart copy of the
Stock Purchase Agreement, duly executed by the Company or its designated
affiliate, and (ii) immediately available funds payable to the Holder in an
aggregate amount equal to the Put Purchase Price.
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 hereof. 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 will 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 will not be liable in any such case to the
extent that any such claim, loss, damage, liability or expense 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 or underwriter for inclusion therein.
(b) Each Holder will indemnify the Company, each of its directors
and each of its officers who signs 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, against all 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
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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 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 otherwise than pursuant to
the provisions of this Section 4 and then, only 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 shall have been authorized in writing by
the Indemnifying Party in connection with the defense of such action, or the
Indemnifying Party shall not have employed counsel to take charge of the defense
of such action or the Indemnified Party shall have 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 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 to such claim or litigation.
(d) If the indemnification provided for in this Section 4 is
unavailable to a party that would have been an Indemnified Party under this
Section in respect of any expenses, claims, losses, damages and liabilities
referred to herein, then each party that 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
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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.
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 shall be required in connection with the Registration and related
proceedings referred to in Section 2 hereof. If any Holder fails to provide the
Company with such information within three weeks of the Company's request, the
Company shall no longer have any obligations under Section 2 hereof with respect
to such Holder or Registrable Shares owned by such Holder.
Section 6. PLEDGE OF REGISTRABLE SHARES. The Registrable Shares may
be pledged by each Investor to any financial institution holding a loan that
encumbers the property that is the subject of the Purchase and Sale Agreement,
provided that (i) in each case, the pledgee is an Accredited Investor, (ii) such
pledge is otherwise effected in accordance with applicable securities laws and
the Company shall have been provided by the pledgor and the pledgee with such
evidence thereof as the Company may request, including representations by the
pledgee in form and content reasonably acceptable to the Company, (iii) the
Company is given written notice of such pledge prior to such pledge, and (iv)
the pledgee by written agreement delivered to the Company acknowledges that such
pledgee is bound by the terms of this Agreement and provides the Company with an
address and fax number for receipt of notices hereunder.
Section 7. INTENTIONALLY OMITTED.
Section 8. RULE 144 SALES.
(a) The Company covenants that it will file the reports required
to be filed by the Company under the Exchange Act, so as to enable the Holders
to sell Registrable Shares pursuant to Rule 144 under the Securities Act.
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(b) In connection with any sale, transfer or other disposition by
any Holder of any Registrable Shares pursuant to Rule 144 under the Securities
Act, 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 9. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of Maryland.
(b) ENTIRE AGREEMENT. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof.
(c) AMENDMENT. No supplement, modification, waiver or
termination of this Agreement shall be binding unless executed in writing by the
party to be bound thereby.
(d) NOTICES, ETC. Each notice, demand, request, request for
approval, consent, approval, disapproval, designation or other communication
(each of the foregoing being referred to herein as a notice) required or desired
to be given or made under this Agreement shall be in writing (except as
otherwise provided in this Agreement), and shall be effective and deemed to have
been received (i) when delivered in person, (ii) when sent by fax with receipt
acknowledged, (iii) five (5) days after having been mailed by certified or
registered United States mail, postage prepaid, return receipt requested, or
(iv) the next business day after having been sent by a nationally recognized
overnight mail or courier service, receipt requested. Notices shall be
addressed as follows (or at such other address or fax number as the Person shall
specify by like notice):
if to the Company:
Mr. Terry Considine
Apartment Investment and Management Company
1873 South Bellaire Street
Denver, Colorado 80222
Fax: (303) 753-9538
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with a copy (which copy shall not constitute notice) to:
Rod Guerra, Esq.
Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue, 34th Floor
Los Angeles, California 90071
Fax: (213) 687-5900
if to any Investor, to it at the address or fax number set forth below
its signature hereon; and if to any assignee or transferee of an Investor, at
such address or fax number as such assignee or transferee shall have furnished
the Company in writing.
(e) COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which may be executed by fewer than all of the parties
hereto (PROVIDED that each party executes one or more counterparts), each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one instrument.
(f) SEVERABILITY. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision.
(g) SECTION TITLES. Section titles are for descriptive purposes
only and shall not control or alter the meaning of the Agreement as set forth in
the text.
(h) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
the parties hereto and their respective successors and assigns.
(i) REMEDIES. The Company and the Investors 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
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attorneys' fees and costs, incurred in connection with such action, including
any appeal of such action.
(k) LIMITATION ON SALE OF REGISTERED COMMON STOCK.
Notwithstanding anything to the contrary contained herein, the Investors agree
to, and agree to cause each of the Holders to, limit on any trading day the
aggregate trades and sales of Registered Common Stock held by the Holders to no
more than 10,000 shares of Common Stock.
(THE NEXT PAGE IS THE SIGNATURE PAGE)
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By: /s/ Harry Alcock
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Name: Harry Alcock
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Title: Vice President
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PACIFIC MULTI-FAMILY GROUP, L.P.,
a Texas limited partnership
By: Pacific American Advisors Company,
a Nevada corporation, its general partner
By:
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Name:
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Title:
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Address:
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Phone Number:
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Fax Number:
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
APARTMENT INVESTMENT AND
MANAGEMENT COMPANY
By:
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Name:
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Title:
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PACIFIC MULTI-FAMILY GROUP, L.P.,
a Texas limited partnership
By: Pacific American Advisors Company,
a Nevada corporation, its general partner
By: /s/ David B. Hendricks
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Name: David B. Hendricks
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Title: Chief Executive Officer
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Address: 13810 CHAMPIONS FOREST DR., #150
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HOUSTON, TEXAS 77069
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Phone Number: (713) 580-1247
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Fax Number: (713) 893-6588
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