EXHIBIT 10.13
INVESTOR AND REGISTRATION RIGHTS AGREEMENT
THIS INVESTOR AND REGISTRATION RIGHTS AGREEMENT (this "Agreement"), is
entered into as of October 17, 1996, between Homestead Village Incorporated, a
Maryland corporation ("Homestead"), and Security Capital Pacific Trust, a
Maryland real estate investment trust ("PTR").
WHEREAS, on the date hereof, the parties are entering into a series of
transactions as described in that certain Merger and Distribution Agreement,
dated as of May 21, 1996, among Security Capital Atlantic Incorporated
("Atlantic"), PTR, Security Capital Group Incorporated ("SCG") and Homestead
(the "Merger Agreement"), pursuant to which, among other things, Homestead will
acquire all of PTR's assets relating to its operation of extended-stay lodging
facilities;
WHEREAS, pursuant to the Merger Agreement, PTR and Homestead are
entering to a Funding Commitment Agreement (the "Funding Commitment Agreement"),
pursuant to which PTR will agree to make certain loans to Homestead, which loans
will be secured by mortgages, and the notes evidencing such loans will be
convertible into shares of Common Stock, $0.01 par value per share ("Common
Stock"), of Homestead on the terms and conditions described therein;
WHEREAS, pursuant to a Warrant Purchase Agreement (the "Warrant
Purchase Agreement"), dated as of May 21, 1996, among Homestead, SCG, Atlantic
and PTR, Homestead has agreed to issue to PTR warrants to acquire Common Stock;
and
WHEREAS, the execution of this Agreement is a condition to the
consummation of the transactions contemplated by the Merger Agreement, the
Funding Commitment Agreement and the Warrant Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:
Section 1. Board Representation. Until March 31, 1998 and for so
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long thereafter as PTR shall continue to have the right to convert in excess of
$20 million in principal amount of loans made pursuant to the Funding Commitment
Agreement, Homestead shall not increase the number of members of its Board of
Directors to more than seven (7) members and PTR shall be entitled to designate
one person for nomination to the Homestead Board of Directors (such person, a
"Nominee") and Homestead will use its best efforts to cause the election of such
Nominee. The Nominee of PTR may, but need not, include the same person or
persons nominated by SCG pursuant to the Investor Agreement of even date
herewith between SCG and Homestead or the person nominated by Atlantic pursuant
to the Investor and Registration Rights Agreement of even date herewith between
Atlantic and Homestead.
Section 2. Inspection. Until March 31, 1998 and for so long
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thereafter as PTR shall continue to have the right to convert any principal
amount of loans made, pursuant to the Funding Commitment Agreement, at any time
during regular business hours and as often as reasonably requested of
Homestead's officers, Homestead shall permit PTR or any authorized employee,
agent or representative of PTR to examine and make copies and abstracts from the
records and books of account of, and to visit the properties of, Homestead and
to discuss the affairs, finances, and accounts of Homestead with any of its
officers or directors; provided, that all costs and expenses of such inspection
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shall be borne by PTR.
Section 3. Registration Rights.
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(a) Demand. At any time prior to the first anniversary of
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the date on which the Common Stock is registered under Section 12(b)
or 12(g) of the Exchange Act of 1934, as amended (the "Exchange Act"),
PTR may request one registration of all or any part of its Registrable
Securities (as defined in sub-section (h) below) under the Securities
Act of 1933, as amended (the "Securities Act"), by delivering written
notice (which notice shall state that PTR intends to dispose of such
securities through a public distribution thereof) to Homestead
specifying the number of Registrable Securities that PTR desires to
distribute and Homestead shall use its reasonable efforts to effect
the registration of such Registrable Securities under the Securities
Act in accordance with the further provisions of this Section 3.
(b) Shelf Registration. At any time after the first
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anniversary of the date on which the Common Stock is registered under
Section 12(b) or 12(g) of the Exchange Act, PTR may request, on up to
three separate occasions, registration of all or any part of its
Registrable Securities pursuant to Rule 415 under the Securities Act
by delivering written notice (which notice shall state that PTR
intends to dispose of such securities through a public distribution
thereof) to Homestead and Homestead shall use its reasonable efforts
to effect the registration of such Registrable Securities under the
Securities Act in accordance with the further provisions of this
Section 3.
(c) Registration Procedures. If and whenever Homestead is
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required by any of tmeans (i)he provisions of this Section 3 to use its
reasonable efforts to effect the registration of any of the Registrable
Securities under the Securities Act, Homestead shall:
(i) prepare and file with the Securities and Exchange
Commission (the "Commission") a registration statement with
respect to such securities and use its reasonable efforts to
cause such registration statement to become effective and
remain effective for as long as shall be necessary to complete
the distribution of the Registrable Securities so registered;
(ii) prepare and file with the Commission such
amendments and supplements to such registration statement and
the prospectus used in connection
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therewith as may be necessary to keep such registration
statement effective for so long as shall be necessary to
complete the distribution of the Registrable Securities so
registered and to comply with the provisions of the Securities
Act with respect to the sale or other disposition of all
securities covered by such registration statement whenever PTR
shall desire to sell or otherwise dispose of the same within
such period;
(iii) furnish to PTR such numbers of copies of such
registration statement, each amendment and supplement thereto,
the prospectus included in such registration statement,
including any preliminary prospectus, and any amendment or
supplement thereto, and such other documents, as PTR may
reasonably request in order to facilitate the sale or other
disposition of the Registrable Securities;
(iv) use its reasonable efforts to register and qualify
the securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions
as PTR shall reasonably request, and do any and all other acts
and things reasonably requested by PTR to assist it to
consummate the public sale or other disposition in such
jurisdictions of the securities owned by PTR, except that
Homestead shall not for any such purpose be required to
qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified or to file therein
any general consent to service of process;
(v) otherwise use its reasonable efforts to comply with
all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at
least twelve months, beginning with the first fiscal quarter
beginning after the effective date of the registration
statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act;
(vi) use its reasonable efforts to list such securities
on any securities exchange or quotation system on which any
securities of Homestead are then listed, if the listing of
such securities is then permitted under the rules of such
exchange or quotation system; and
(vii) notify PTR, at any time when a prospectus relating
to the Registrable Securities is required to be delivered
under the Securities Act, of the happening of any event of
which it has knowledge as a result of which the prospectus
included in such registration statement, as then in effect,
contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing.
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(d) Homestead's Ability to Postpone. Homestead shall have the
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right to postpone the filing of a registration statement under this
Section 3 for a reasonable period of time (not exceeding 60 days) if
Homestead furnishes PTR with a certificate signed by the Chairman of
the Board or the President of Homestead stating that, in its good
faith judgment, Homestead's Board of Directors has determined that
effecting the registration at such time would adversely affect a
material financing, acquisition, disposition of assets or stock,
merger or other comparable transaction or would require Homestead to
make public disclosure of information the public disclosure of that
would have a material adverse effect upon Homestead.
(e) Expenses. All expenses incurred in the registration of
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Registrable Securities under this Agreement shall be paid by
Homestead. The expenses shall include, without limitation, the
expenses of preparing the registration statement and the prospectus
used in connection therewith and any amendment or supplement thereto,
printing and photocopying expenses, all registration and filing fees
under Federal and state securities laws, and expenses of complying
with the securities or blue sky laws of any jurisdictions, provided,
however, that PTR shall be responsible for the fees and disbursements
of its own counsel.
(f) Indemnification. In the event any Registrable Securities
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are included in a registration statement under this Section 3:
(i) Indemnity by Homestead. Without limitation of any
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other indemnity provided to PTR, to the extent permitted by
law, Homestead will indemnify and hold harmless PTR and its
officers, trustees and any individual, partnership,
corporation, trust, unincorporated organization or other
entity (a "Person") if any, who controls PTR (within the
meaning of the Securities Act or the Exchange Act), against
any losses, claims, damages, liabilities and expenses (joint
or several) to which they may become subject under the
Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages, liabilities and
expenses (or actions in respect thereof) arise out of or are
based upon any of the following statements, omissions or
violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact
contained in any registration statement (including any
preliminary prospectus or final prospectus contained therein
or any amendments or supplements thereto), (ii) the omission
or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, or (iii) any violation or alleged
violation by Homestead of the Securities Act, the Exchange
Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any
state securities law, and Homestead will reimburse PTR and its
officers, trustees and any controlling person thereof for any
reasonable legal or other expenses incurred by them in
connection with
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investigating or defending any such loss, claim, damage,
liability, expense or action; provided, however, that
Homestead shall not be liable in any such case for any such
loss, claim, damage, liability, expense or action to the
extent that it arises out of or is based upon a Violation that
occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with
such registration by PTR or any officer, trustee or
controlling person thereof.
(ii) Indemnity by PTR. In connection with any
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registration statement in which PTR is participating, PTR will
furnish to Homestead in writing such information and
affidavits as Homestead reasonably requests for use in
connection with any such registration statement or prospectus
and, to the extent permitted by law, will indemnify Homestead,
its directors and officers and each Person who controls
Homestead (within the meaning of the Securities Act or
Exchange Act) against any losses, claims, damages, liabilities
and expenses resulting from any Violation, but only to the
extent that such Violation is contained in any information or
affidavit so furnished in writing by PTR; provided, that the
obligation to indemnify will be several and not joint and
several with any other Person and will be limited to the net
amount received by PTR from the sale of Registrable Securities
pursuant to such registration statement.
(iii) Notice; Right to Defend. Promptly after receipt
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by an indemnified party under this Section 3(f) of notice of
the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect
thereof is to be made against any indemnifying party under
this Section 3(f), deliver to the indemnifying party a written
notice of the commencement thereof and the indemnifying party
shall have the right to participate in, and, if the
indemnifying party agrees in writing that it will be
responsible for any costs, expenses, judgments, damages and
losses incurred by the indemnified party with respect to such
claim, jointly with any other indemnifying party similarly
noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an
indemnified party shall have the right to retain its own
counsel, with the fees and expenses to be paid by the
indemnifying party, if the indemnified party reasonably
believes that representation of such indemnified party by the
counsel retained by the indemnifying party would be
inappropriate due to actual or potential differing interests
between such indemnified party and any other party represented
by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall relieve such
indemnifying party of any liability to the indemnified party
under this Section 3(f) only if and to the extent that such
failure is prejudicial to its ability to defend such action,
and the omission so to deliver written notice to the
indemnifying party will not relieve it
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of any liability that it may have to any indemnified party
other than under this Section 3(f).
(iv) Contribution. If the indemnification provided for
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in this Section 3(f) is held by a court of competent
jurisdiction to be unavailable to an indemnified party with
respect to any loss, liability, claim, damage or expense
referred to therein, then the indemnifying party, in lieu of
indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified
party as a result of such loss, liability, claim, damage or
expense in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and
of the indemnified party on the other hand in connection with
the statements or omissions which resulted in such loss,
liability, claim, damage or expense as well as any other
relevant equitable considerations. The relevant fault of the
indemnifying party and the indemnified party shall be
determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information
supplied by the indemnifying party or by the indemnified party
and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, the
amount PTR shall be obligated to contribute pursuant to this
Section 3(f)(iv) shall be limited to an amount equal to the
aggregate value of the Registrable Securities distributed by
PTR pursuant to the registration statement which gives rise to
such obligation to contribute (less the aggregate amount of
any damages which PTR has otherwise been required to pay in
respect of such loss, claim, damage, liability or action or
any substantially similar loss, claim, damage, liability or
action arising from the distribution of such Registrable
Securities).
(v) Survival of Indemnity. The indemnification
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provided by this Section 3(f) shall be a continuing right to
indemnification and shall survive the registration and sale of
any securities by any Person entitled to indemnification
hereunder and the expiration or termination of this Agreement.
(g) Limitations on Registration Rights.
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(i) Homestead shall not, without the prior written
consent of PTR, include in any registration in which PTR has a
right to participate pursuant to this Agreement any securities
of any Person other than Atlantic and PTR.
(ii) PTR shall not, without the prior written consent of
Homestead, effect any public sale or distribution (including
sales pursuant to Rule 144 under the Securities Act) of
securities of Homestead during any period commencing 30 days
prior to and ending 60 days after the effective date any
registration statement filed
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by Homestead on behalf of any Person (including Homestead),
other than a registration statement on Form S-8 or any
successor form.
(h) Registrable Security. The term Registrable Security
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means (i) any shares of Common Stock issuable to PTR pursuant to the
conversion of notes issuable pursuant to the terms of the Funding
Commitment Agreement or otherwise held by PTR, (ii) any other shares
of Common Stock owned by PTR and (iii) any shares of Common Stock or
other securities that may subsequently be issued with respect to such
shares of Common Stock as a result of a stock split or dividend or any
sale, transfer, assignment or other transaction by Homestead involving
the shares of Common Stock and any securities into which the shares of
Common Stock may thereafter be changed as a result of merger,
consolidation, recapitalization or otherwise. As to any particular
Registrable Securities, such securities will cease to be Registrable
Securities when they have been distributed to the public pursuant to
an offering registered under the Securities Act. All Registrable
Securities shall cease to be Registrable Securities when all such
securities may be sold in any three-month period pursuant to Rule 144,
or any successor to such rule, under the Securities Act.
Section 4. File Reports. For so long as PTR owns any Registrable
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Securities, Homestead shall file on a timely basis all annual, quarterly and
other reports required to be filed by it under Section 13 and 15(d) of the
Exchange Act, and the rules and regulations of the Commission thereunder, as
amended from time to time.
Section 5. Miscellaneous.
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(a) Survival of Covenants. All covenants contained herein shall
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survive the execution of this Agreement and shall remain in full force and
effect until terminated in accordance with this Agreement.
(b) Successors and Assigns. This Agreement shall be binding upon,
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and inure to the benefit of, the parties hereto and their respective heirs,
personal representatives, successors, assigns and affiliates.
(c) Notices. All notices and other communications hereunder shall
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be in writing and shall be deemed given if delivered personally, sent via a
recognized overnight courier with delivery confirmed in writing or sent via
facsimile to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
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If to Homestead:
Homestead Village Incorporated
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to PTR:
Security Capital Pacific Trust
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(d) Waiver. No party may waive any of the terms or conditions of this
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Agreement, except by a duly executed writing referring to the specific provision
to be waived.
(e) Amendment. This Agreement may be amended only by a writing duly
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executed by both Homestead and PTR.
(f) Severability. Insofar as is possible, each provision of this
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Agreement shall be interpreted so as to render it valid and enforceable under
applicable law and severable from the remainder of this Agreement. A finding
that any such provision is invalid or unenforceable in any jurisdiction shall
not affect the validity or enforceability of any other provision or the validity
or enforceability of such provision under the laws of any other jurisdiction.
(g) Entire Agreement. This Agreement constitutes the entire agreement,
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and supersedes all other prior agreements and understandings, both written and
oral, between the parties hereto and their affiliates, with respect to the
subject matter hereof.
(h) Expenses. Except as otherwise expressly contemplated herein to the
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contrary, regardless of whether the transactions contemplated hereby are
consummated, each party hereto shall pay its own expenses incident to preparing
for, entering into and carrying out this Agreement and the consummation of the
transactions contemplated hereby.
(i) Captions. The Section and Paragraph captions herein are for
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convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
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(j) Counterparts. This Agreement may be executed in one or more
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counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
(k) Governing Law. This Agreement shall be governed by, and construed and
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enforced in accordance with, the laws of the State of Maryland.
(l) Limitation of Liability. Any obligation or liability whatsoever of
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PTR 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 PTR'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 of its shareholders, trustees, officers, employees or agents,
regardless of whether such obligation or liability is in the nature of contract,
tort or otherwise.
* * * * *
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IN WITNESS WHEREOF, each of the undersigned has executed this Agreement, or
caused this Agreement to be duly executed on its behalf, as of the date first
set forth above.
HOMESTEAD VILLAGE INCORPORATED
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Chairman
SECURITY CAPITAL PACIFIC TRUST
By: /s/ C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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C. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Chairman
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