UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended September 30, 1998
Commission File Number 1-12784
AMLI RESIDENTIAL PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
Maryland 36-3925916
(State of Organization) (I.R.S. Employer Identification No.)
125 South Wacker Drive, Suite 3100,
Chicago, Illinois 60606
(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (312) 443-1477
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months and (2) has been subject to such
filing requirements for the past 90 days. Yes ( X ) No ( )
The number of the Registrant's Common Shares of Beneficial Interest
outstanding was 16,645,459 as of September 30, 1998.
<PAGE>
INDEX
PART I: FINANCIAL INFORMATION
Item 1: Financial Statements (Unaudited)
Consolidated Balance Sheets as of
September 30, 1998 and December 31, 1997. . . . . 3
Consolidated Statements of Operations
for the three and nine months ended
September 30, 1998 and 1997 . . . . . . . . . . . 5
Consolidated Statements of
Shareholders' Equity
for the nine months ended
September 30, 1998 . . . . . . . . . . . . . . . . 7
Consolidated Statements of Cash Flows
for the nine months ended
September 30, 1998 and 1997 . . . . . . . . . . . 8
Notes to Consolidated Financial Statements. . . . . 10
Item 2: Management's Discussion and
Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . 25
Item 3: Quantitative and Qualitative Disclosures
About Market Risk . . . . . . . . . . . . . . . . 31
PART II: OTHER INFORMATION
Item 5. Other Events. . . . . . . . . . . . . . . . . . . . 35
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . 37
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . 38
<PAGE>
<TABLE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
(UNAUDITED)
(Dollars in thousands, except share data)
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1998 1997
-------------- ------------
<S> <C> <C>
ASSETS:
Rental apartments:
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,471 78,476
Depreciable property. . . . . . . . . . . . . . . . . . . . . . . . . . . 534,538 496,747
---------- ----------
618,009 575,223
Less accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . (75,592) (62,641)
---------- ----------
542,417 512,582
Property under development. . . . . . . . . . . . . . . . . . . . . . . . . 81,770 78,724
Investments in partnerships . . . . . . . . . . . . . . . . . . . . . . . . 65,090 50,729
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . 8,754 5,676
Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,637 1,821
Deferred expenses, net. . . . . . . . . . . . . . . . . . . . . . . . . . . 3,144 3,140
Notes receivable from and advances to Service Companies . . . . . . . . . . 29,463 18,356
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,214 8,950
---------- ----------
Total Assets $ 747,489 679,978
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY:
LIABILITIES:
Debt (note 5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 336,190 333,250
Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . . . . . 1,523 1,389
Accrued real estate taxes payable . . . . . . . . . . . . . . . . . . . . . 10,609 9,334
Construction costs payable. . . . . . . . . . . . . . . . . . . . . . . . . 3,114 8,403
Security deposits and prepaid rents . . . . . . . . . . . . . . . . . . . . 3,044 2,722
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,411 2,978
---------- ----------
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . 356,891 358,076
---------- ----------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED BALANCE SHEETS - CONTINUED
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
Commitments and contingencies (note 6)
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,111 51,463
---------- ----------
SHAREHOLDERS' EQUITY:
Series A Cumulative Convertible Preferred shares of beneficial interest,
$.01 par value,
1,500,000 authorized, 1,200,000 issued and
1,100,000 outstanding (aggregate liquidation price of $22,191
and $22,213 respectively). . . . . . . . . . . . . . . . . . . . . . . . 11 11
Series B Cumulative Convertible Preferred shares of beneficial interest,
$0.01 par value, 3,125,000 authorized, issued and outstanding
(aggregate liquidation price of $75,943 at September 30, 1998) . . . . . . 31 --
Shares of beneficial interest, $.01 par value, 145,375,000
authorized, 16,645,459 and 16,577,580 common shares issued
and outstanding, respectively . . . . . . . . . . . . . . . . . . . . . . 166 166
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . . . . . . 417,570 341,148
Employees and trustees notes. . . . . . . . . . . . . . . . . . . . . . . . (7,432) (6,924)
Dividends paid in excess of net income. . . . . . . . . . . . . . . . . . . (68,859) (63,962)
---------- ----------
Total shareholders' equity. . . . . . . . . . . . . . . . . . . . 341,487 270,439
---------- ----------
Total Liabilities and Shareholders' Equity. . . . . . . . . . . . $ 747,489 679,978
========== ==========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
(Dollars in thousands, except share data)
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------ ------------------------
1998 1997 1998 1997
--------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues:
Property:
Rental. . . . . . . . . . . . . . . . . . . . . $ 25,673 20,035 75,015 57,996
Other . . . . . . . . . . . . . . . . . . . . . 1,606 1,167 4,354 3,161
Interest and share of income
from Service Companies . . . . . . . . . . . . . 764 472 1,823 989
Other interest. . . . . . . . . . . . . . . . . . 430 172 844 399
Income from partnerships. . . . . . . . . . . . . 685 224 1,508 557
Other . . . . . . . . . . . . . . . . . . . . . . 997 912 2,582 2,043
-------- -------- -------- --------
Total revenues. . . . . . . . . . . . . . 30,155 22,982 86,126 65,145
-------- -------- -------- --------
Expenses:
Personnel . . . . . . . . . . . . . . . . . . . . 2,565 1,953 7,411 5,498
Advertising and promotion . . . . . . . . . . . . 674 559 2,178 1,548
Utilities . . . . . . . . . . . . . . . . . . . . 1,259 1,097 3,403 3,031
Building repairs and maintenance and services . . 1,748 1,706 4,493 4,269
Landscaping and grounds maintenance . . . . . . . 609 474 1,699 1,353
Real estate taxes . . . . . . . . . . . . . . . . 3,040 2,167 9,494 6,801
Insurance . . . . . . . . . . . . . . . . . . . . 232 243 704 641
Property management fees. . . . . . . . . . . . . 682 539 1,987 1,547
Other operating expenses. . . . . . . . . . . . . 370 283 1,101 794
Interest. . . . . . . . . . . . . . . . . . . . . 5,255 2,619 14,993 8,151
Amortization of deferred costs. . . . . . . . . . 116 105 364 435
Depreciation . . . . . . . . . . . . . . . . . . 4,466 3,328 13,245 9,581
General and administrative. . . . . . . . . . . . 837 680 2,803 2,153
-------- -------- -------- --------
Total expenses. . . . . . . . . . . . . . 21,853 15,753 63,875 45,802
-------- -------- -------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF OPERATIONS - CONTINUED
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30 SEPTEMBER 30
------------------------ ------------------------
1998 1997 1998 1997
--------- -------- --------- --------
Income before minority interest and
extraordinary item. . . . . . . . . . . . . . . . 8,302 7,229 22,251 19,343
Minority interest . . . . . . . . . . . . . . . . . 1,129 1,062 3,171 2,973
-------- -------- -------- --------
Income before extraordinary item. . . . . . . . . . 7,173 6,167 19,080 16,370
Extraordinary item -
loss on early extinguishment of debt
(net of minority interest). . . . . . . . . . . . -- 19 -- 196
-------- -------- -------- --------
Net income. . . . . . . . . . . . . . . . 7,173 6,148 19,080 16,174
Less income attributable to
preferred shares. . . . . . . . . . . . . . . . . 1,423 473 2,985 1,419
-------- -------- -------- --------
Net income attributable to
common shares . . . . . . . . . . . . . $ 5,750 5,675 16,095 14,755
======== ======== ======== ========
Net income per common share - basic:
Before extraordinary item . . . . . . . . . . . . $ .35 .35 .97 .97
Extraordinary item. . . . . . . . . . . . . . . . $ -- -- -- (.01)
Net income per common share . . . . . . . . . . . $ .35 .35 .97 .96
======== ======== ======== ========
Net income per common share - diluted:
Before extraordinary item . . . . . . . . . . . . $ .34 .35 .96 .97
Extraordinary item. . . . . . . . . . . . . . . . $ -- -- -- (.01)
Net income per common share . . . . . . . . . . . $ .34 .35 .96 .96
======== ======== ======== ========
Dividends declared and paid
per common share. . . . . . . . . . . . . . . . . $ .44 .43 1.32 1.29
======== ======== ======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1998
(Dollars in thousands)
<CAPTION>
SHARES OF EMPLOYEES
BENEFICIAL INTEREST ADDITIONAL AND RETAINED
-------------------- PAID-IN TRUSTEES EARNINGS DIVIDENDS
SHARES AMOUNT CAPITAL NOTES (DEFICIT) PAID TOTAL
------- ------ ---------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1997. . . . . 17,677,580 $177 341,148 (6,924) 18,897 (82,859) 270,439
Shares issued in
connection with:
Preferred shares
offering. . . . . . . 3,125,000 31 74,169 -- -- -- 74,200
Executive Share
Purchase Plan. . . . 41,653 -- 939 -- -- -- 939
Options exercised. . . 1,666 -- 34 -- -- -- 34
Employees and
Trustees notes, net . . -- -- -- (508) -- -- (508)
Units converted
to shares . . . . . . . 24,560 -- 503 -- -- -- 503
Reallocation of
minority interest . . . -- -- 777 -- -- -- 777
Net income. . . . . . . . -- -- -- -- 19,080 -- 19,080
Dividends paid. . . . . . -- -- -- -- -- (23,977) (23,977)
---------- ---- ------- ------- ------- ------- -------
Balance at
September 30, 1998. . . . 20,870,459 $208 417,570 (7,432) 37,977 (106,836) 341,487
========== ==== ======= ======= ======= ======= =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(UNAUDITED)
(Dollars in thousands)
<CAPTION>
1998 1997
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 19,080 16,174
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . 13,609 10,016
Income from partnerships. . . . . . . . . . . . . . . . . . . . . . . . . (1,508) (555)
(Income) loss from Service Companies. . . . . . . . . . . . . . . . . . . 179 (260)
Loss on early extinguishment of debt. . . . . . . . . . . . . . . . . . . -- 211
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,171 2,936
Changes in assets and liabilities:
Increase in deferred costs. . . . . . . . . . . . . . . . . . . . . . . . (407) (309)
Decrease (increase) in security deposits. . . . . . . . . . . . . . . . . 184 (183)
(Increase) decrease in other assets . . . . . . . . . . . . . . . . . . . (2,311) 168
Increase (decrease) in accrued interest payable . . . . . . . . . . . . . 134 (127)
Increase in accrued real estate taxes . . . . . . . . . . . . . . . . . . 1,283 190
Increase (decrease) in tenant security deposits and prepaid rents . . . . 322 (380)
(Decrease) increase in other liabilities. . . . . . . . . . . . . . . . . (567) 147
-------- -------
Net cash provided by operating activities . . . . . . . . . . . . . . 33,169 28,028
-------- -------
Cash flows from investing activities:
Investments in partnerships . . . . . . . . . . . . . . . . . . . . . . . . . (3,044) (10,723)
Cash distributions from partnerships. . . . . . . . . . . . . . . . . . . . . 3,390 2,015
Advances to affiliates. . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,435) (1,351)
Earnest money deposits. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,261 (875)
Capital expenditures - existing properties. . . . . . . . . . . . . . . . . . (3,029) (2,705)
Acquisition properties. . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,552) (35,281)
Properties under development, net of
reimbursable costs from co-investors . . . . . . . . . . . . . . . . . . . . (44,690) (36,416)
(Decrease) increase in construction costs payable . . . . . . . . . . . . . . (5,210) 6,273
-------- -------
Net cash used in investing activities . . . . . . . . . . . . . . . . (79,309) (79,063)
-------- -------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
1998 1997
-------- --------
Cash flows from financing activities:
Debt proceeds, net of financing costs . . . . . . . . . . . . . . . . . . . . 286,455 125,788
Debt repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (283,604) (93,623)
Proceeds from shares offering, net of issuance costs. . . . . . . . . . . . . 74,200 37,447
Net proceeds from issuance of Executive Share Purchase Plan
shares and employee notes for stock purchase . . . . . . . . . . . . . . . 465 (2,195)
Distributions to partners . . . . . . . . . . . . . . . . . . . . . . . . . . (4,321) (3,853)
Dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,977) (21,304)
-------- -------
Net cash provided by financing activities . . . . . . . . . . . . . . 49,218 42,260
-------- -------
Net increase (decrease) in cash and cash equivalents. . . . . . . . . . . . . . 3,078 (8,775)
Cash and cash equivalents at beginning of period. . . . . . . . . . . . . . . . 5,676 10,291
-------- -------
Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . . . . $ 8,754 1,516
======== =======
Supplemental disclosure of cash flow information:
Cash paid for mortgage and other interest, net of amounts capitalized . . . . $ 14,859 8,278
======== ========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998 AND 1997
(Unaudited)
(Dollars in thousands, except share data)
1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
AMLI Residential Properties Trust (the "Company") commenced
operations upon the completion of its initial public offering on February
15, 1994. In the opinion of management, all adjustments, which include
only normal recurring adjustments necessary to present fairly the financial
position at September 30, 1998 and December 31, 1997 and the results of
operations and cash flows for the periods presented, have been made.
Certain information and note disclosures normally included in the
Company's annual financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. These
consolidated financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's December
31, 1997 Annual Report on Form 10-K filed with the Securities and Exchange
Commission. The results for the nine months ended September 30, 1998 are
not necessarily indicative of expected results for the entire year.
The consolidated financial statements include the accounts of the
Company and AMLI Residential Properties, L. P. (the "Operating Partnership"
which holds the operating assets of the Company). The Company is the sole
general partner and owned an 86% majority interest in the Operating
Partnership at September 30, 1998. The limited partners hold Operating
Partnership units ("OP Units") which are convertible into shares of the
Company on a one-for-one basis, subject to certain limitations.
The Company's management has made a number of estimates and
assumptions relating to the reporting of assets and liabilities, disclosure
of contingent assets and liabilities and the reported amounts of revenues
and expenses during the report periods to prepare these financial
statements in conformity with generally accepted accounting principles.
Actual amounts realized or paid could differ from these estimates.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Properties Under Development
Land being planned for development and all apartment homes in a new
community or new phase are reported as "property under development" until
the entire community or new phase is substantially complete and stabilized
(generally 95% occupancy). Upon stabilization, all apartment homes in the
community or new phase are reported as "rental apartments".
Regardless of whether or not 95% occupancy is achieved, a community
or new phase will be reported as "rental apartments" no later than six
months following substantial completion of construction.
At September 30, 1998, the Company's properties under development
include parcels of land in the development planning stage on which physical
construction will commence later this year or in 1999. Properties under
development are as follows:
<PAGE>
<TABLE> AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
NUMBER NUMBER TOTAL
OF OF EXPENDED
COMMUNITY LOCATION ACRES UNITS THRU 9/30/98
- - --------- -------- ------ ------ -------------
<S> <C> <C> <C> <C>
Wholly-Owned:
Development Communities:
AMLI at Deerfield (1) Plano, TX 18 240 $ 5,907
AMLI at AutumnChase III Carrollton, TX 24 240 13,830
AMLI at Park Creek Gainesville, GA 20 200 11,235
AMLI at Killian Creek Gwinnett County, GA 22 216 6,580
AMLI at Wynnewood (1) Overland Park, KS 20 232 2,625
AMLI at Regents Crest II (1) Overland Park, KS 6 108 1,219
AMLI at Creekside (1) Overland Park, KS 12 224 2,839
AMLI at St. Charles (1) St. Charles, IL 25 400 6,095
AMLI at Clearwater (1) Indianapolis, IN 11 216 3,279
AMLI at Castle Creek (1) Indianapolis, IN 15 276 2,778
--- ----- --------
Total Development Communities 173 2,352 56,387(5)
--- ----- --------
Land Held for Future Development:
AMLI at Bent Tree II Dallas, TX 10 200 1,937
AMLI at Mesa Ridge Ft. Worth, TX 27 520 3,630
AMLI at Lake Houston (1) Houston, TX 15 300 2,024
AMLI at Park Bridge (1) City of Alpharetta, GA 35 352 3,882
AMLI at Fossil Lake (1) Ft. Worth, TX 19 324 2,785
AMLI at Prairie Lakes I Indianapolis, IN 17 228 814
AMLI at Prairie Lakes II-VI Indianapolis, IN (4) (4) 3,928
AMLI at Lee Summit (1) Overland Park, KS 24 410 1,584
AMLI at Monterey Oaks (1) Austin, TX 38 452 4,799
--- ----- --------
Total Land Held for Future Development 185 2,786 25,383
--- ----- --------
Total Wholly-Owned 358 5,138 81,770
--- ----- --------
Co-Investments (Company Ownership Percentage):
AMLI at Fossil Creek (25%) Ft. Worth, TX 19 384 21,047
AMLI at Northwinds (35%) Atlanta, GA 80 800 41,665
AMLI at Wells Branch (25%) (2) Austin, TX 29 576 31,018
AMLI at Oakhurst (25%) (2) Aurora, IL 29 464 33,029
AMLI on the Parkway (25%) (3) Dallas, TX 10 240 15,136
--- ----- --------
Total Co-Investments 167 2,464 141,895(6)
--- ----- --------
Total 525 7,602 $223,665
=== ===== ========
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<FN>
(1) It is the Company's intention to develop these land parcels in partnership with one or more institutional
investors.
(2) AMLI at Wells Branch and AMLI at Oakhurst were conveyed at cost to a 25%-owned co-investment venture in
June 1998.
(3) AMLI on the Parkway was conveyed at cost to a 25%-owned co-investment venture on July 2, 1998.
(4) The Company intends to develop approximately 1,100 apartment homes on 104 acres after 1999 in Phases II-
VI of AMLI at Prairie Lakes.
(5) Total development costs for the Development Communities is estimated at approximately $178,765.
(6) The total development costs for the Co-investment Development properties is estimated at approximately
$172,200.
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Acquisition
The Company's policy is and has been to expense internal property
acquisition costs (i.e., salaries and overhead of acquisition personnel).
This policy is consistent with the recently-issued EITF 97-11 on this
subject, and thus the issuance of EITF 97-11 had no impact on its results
of operations.
Interest Rate Limitation Contracts
The Company has used interest rate caps and swaps to limit its
exposure to increases in interest rates on its floating rate debt. The
Company does not use them for trading purposes.
At September 30, 1998, the Company was a party to various interest
rate swap agreements which require the Company to pay to or receive from
counterparties on a monthly basis the amounts, if any, by which the
Company's interest costs on the fixed rate basis differs from the interest
payments required on certain floating rate debt.
The following table summarizes certain information pursuant to
interest rate limitation and swap contracts at September 30, 1998.
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
<CAPTION>
Type Remaining Cumulative Approximate
Notional Fixed of Contract Cash Value of
Amount Rate(1) Contract Maturity Paid Liability(2)
- - -------- ------- -------- --------- ---------- -------------
<S> <C> <C> <C> <C> <C>
$10,000 6.216% Swap 11/01/02 $ 44 529
10,000 6.029% Swap 11/01/02 28 460
20,000 6.145% Swap 02/15/03 57 1,053
10,000 6.070% Swap 02/18/03 24 497
---- -----
$153 2,539
==== =====
<FN>
(1) The fixed rate for the swaps includes the swap spread (the risk component added to the Treasury yield to
determine a fixed rate) and excludes lender's spread.
(2) "Value of Liability" represents the approximate amount which would have to be paid as of September 30, 1998
to terminate these contracts. This amount is not recorded as a liability in the accompanying balance sheet as of
September 30, 1998.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
PER SHARE DATA
Earnings per share, basic and diluted, are calculated based on weighted average common shares outstanding for the
three and nine months ended September 30, 1998 and 1997.
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------- -------------------------
1998 1997 1998 1997
---------- ----------- ---------- ----------
<S> <S> <S> <S> <S>
Net income. . . . . . . . . . . . . . . . . $ 7,173 6,148 19,080 16,174
Less income attributable to
preferred shares. . . . . . . . . . . . . (1,423) (473) (2,985) (1,419)
---------- ---------- ---------- ----------
Net income attributable to common shares. . $ 5,750 5,675 16,095 14,755
========== ========== ========== ==========
Weighted average common shares - Basic. . . 16,636,875 16,356,320 16,616,352 15,352,484
Dilutive Options and Other Plan shares. . . 43,414 82,717 70,481 86,532
Weighted average common shares - Dilutive . 16,680,289 16,439,037 16,686,833 15,439,016
========== ========== ========== ==========
Earnings per share - Basic. . . . . . . . . $ .35 .35 .97 .96
Earnings per share - Diluted. . . . . . . . $ .34 .35 .96 .96
========== ========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
3. INVESTMENTS IN PARTNERSHIPS AND SERVICE COMPANIES
INVESTMENTS IN PARTNERSHIPS
At September 30, 1998, the Operating Partnership is a general partner in various co-investment partnerships and
in the GP Properties (AMLI at Prairie Court in Oak Park, Illinois and AMLI at Towne Creek in Gainesville, Georgia)
which are accounted for using the equity method. The Operating Partnership and the Service Companies receive
various fees for services provided to these co-investment partnerships, including development fees, construction
fees, acquisition fees, property management fees, asset management fees, financing fees, administrative fees and
disposition fees. The Operating Partnership is entitled to shares of cash flow or liquidation proceeds in excess
of its stated ownership percentages based on returns to its partners in excess of specified rates. Through
September 30, 1998, the Operating Partnership has received $152 of cash flow in excess of its ownership
percentages ($55 for the three months ended September 30, 1998). Investments in partnerships at September 30, 1998
and the Company's 1998 share of income or loss from each are summarized as follows:
<CAPTION>
Equity Total Company's
Company's ------------------- Net Share of
Percentage Total Company's Company's Income Net Income
Community Ownership Assets Total Share Investment (Loss) (Loss)
- - --------- ---------- ------- ----- --------- ---------- ----- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
AMLI at:
Park Place 25% $19,162 6,052 1,513 1,478 233 58
Greenwood Forest 15% 16,782 4,721 708 690 74 11
Champions Park 15% 12,373 3,166 475 475 146 22
Champions Centre 15% 9,523 2,604 390 390 63 9
Windbrooke 15% 16,621 4,726 709 709 49 7
Willeo Creek 30% 14,677 4,483 1,345 1,345 32 10
Pleasant Hill 40% 26,064 10,441 4,423 4,012 617 247
Barrett Lakes 35% 26,864 9,628 3,370 3,482 432 139
Chevy Chase 33% 43,246 13,178 4,339 4,339 623 210
Willowbrook 40% 36,261 11,221 4,489 4,398 387 155
River Park 40% 14,504 5,583 2,233 2,187 276 111
Fox Valley 25% 24,057 23,452 5,863 6,061 328 82
Fossil Creek 25% 20,957 20,175 5,044 5,141 318 80
Danada Farms 10% 47,738 22,263 2,226 2,217 915 92
Verandah 35% 25,290 7,619 4,938 2,744 167 113
Northwinds 35% 41,670 21,173 7,423 7,323 178 62
Regents Crest 25% 25,460 9,036 2,260 2,260 103 90
<PAGE>
Equity Total Company's
Company's ------------------- Net Share of
Percentage Total Company's Company's Income Net Income
Community Ownership Assets Total Share Investment (Loss) (Loss)
- - --------- ---------- ------- ------ --------- ---------- ----- ----------
Oakhurst North 25% 33,002 22,322 5,581 7,757 (106) (26)
Wells Branch 25% 31,124 24,109 6,027 6,981 142 35
AMLI on the
Parkway 25% 15,140 5,568 1,392 1,101 (16) (4)
-------- ------- ------ ------ ----- -----
$500,515 231,520 64,748 65,090 4,961 1,503
======== ======= ====== ====== =====
GP Properties and other 5
-----
1,508
=====
The Company's original investment in the co-investment partnerships totals $70,847 at September 30, 1998.
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
All but one debt financing has been obtained at fixed rate from
various insurance companies on behalf of these co-investment partnerships.
AMLI at Parkway's debt financing is a variable rate note payable to AMLI.
AMLI at Parkway has received a ten year 6.75% fixed rate permanent loan
commitment from an insurance company and anticipates funding this $10,800
loan prior to March 31, 1999. The following table summarizes co-investment
debt at September 30, 1998:
Total Outstanding Interest
Community Commitment at 9/30/98 Rate Maturity
- - --------- ---------- ----------- -------- --------
AMLI on the
Parkway $10,800 8,600 L+1.5% December 1998
AMLI at:
Park Place 13,000 12,271 8.21% October 1999
Champions Centre 6,700 6,603 8.93% January 2002
Champions Park 9,500 9,872 7.26% January 2002
Windbrooke 11,500 11,442 9.24% February 2002
Greenwood Forest 11,625 11,590 8.95% May 2002
Chevy Chase 29,767 29,079 6.67% April 2003
Willeo Creek 10,000 9,786 6.77% May 2003
Willowbrook 24,500 24,052 7.785% May 2003
Regents Crest 16,500 16,074 7.50% December 2003
Verandah 16,940 16,940 7.55% April 2004
Danada Farms 24,500 24,500 7.33% March 2007
Pleasant Hill 15,500 15,227 9.15% March 2007
River Park 9,100 8,025 7.75% June 2008
Barrett Lakes 16,680 16,680 8.50% December 2009
Northwinds 33,800 17,070 8.25% October 2010
In general, these loans provide for monthly payments of principal and
interest based on a 25 or 27 year amortization schedule and a balloon
payment at maturity. Loans against newly-completed properties provide for
payments of interest only for an initial period, with principal
amortization commencing generally within two years of completion of
construction and initial lease-up.
Investments in Service Companies
Summarized combined financial information of the Service Companies at and
for the nine months ended September 30, 1998 and 1997 follows:
1998 1997
------- -------
Income (1) $10,970 6,519
General and adminis-
trative expenses (7,383) (4,780)
------- -------
EBITDA 3,587 1,739
Interest (2,001) (729)
Depreciation (2) (967) (218)
Income taxes (286) (300)
------- -------
Net income (loss) $ 333 492
======= =======
Total assets $32,490 19,144
======= =======
(1) Net of construction and landscaping costs.
(2) In 1998, includes $501 in amortization of goodwill.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Substantially all interest expense of the Service Companies results
from notes payable to the Company at interest rates ranging from 9.5% to
13.0%. The Company's share of income (loss) from the Service Companies for
the nine months ended September 30, 1998 and 1997 was $122 and $260,
respectively, after elimination of intercompany profit on construction
activities. The Company's interest income from the Service Companies is
combined with the Company's share of income (loss) from the Service
Companies in the accompanying consolidated statements of operations.
4. RELATED PARTY TRANSACTIONS
During the nine months ended September 30, 1998 and 1997, the Company
accrued or paid to its affiliates fees and other costs and expenses as
follows:
1998 1997
------ -----
Management fees $1,987 1,547
General contractor fees 943 1,204
Interest expense 496 23
Landscaping and grounds maintenance 513 472
====== =====
In addition, at September 30, 1998 and December 31, 1997, the Company
owed Amrescon $3,114 and $8,403, respectively, for construction costs of
communities under development.
During the nine months ended September 30, 1998 and 1997, the Company
earned or received from its affiliates other income as follows:
1998 1997
------ ------
Development fees $2,019 1,175
Acquisition fees -- 49
Asset management fees 452 455
Debt placement fee -- 88
Accounting and administrative fees 108 10
Interest on advances to other
affiliates 262 339
Interest on notes and advances
to Service Companies 2,001 390
====== =====
In addition, total revenues of $1,552 and $687, respectively, were
generated from leases to AMLI Corporate Homes ("ACH"), a division of one of
the Service Companies. At September 30, 1998 and December 31, 1997, $50
and $624 were due from ACH, respectively.
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
5. DEBT
The table below sets forth certain information relating to the indebtedness of the Company.
<CAPTION>
Balance Balance
Original at Interest Maturity at
Encumbered Communities Amount 9/30/98 Rate Date 12/31/97
- - ---------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
BOND FINANCING:
Tax-Exempt
Unsecured (1) $ 40,750 40,750 Rate+1.48% 10/1/24 40,750
Tax-Exempt
AMLI at Poplar Creek 9,500 9,500 Rate+1.15% 2/1/24 9,500
-------- ------- -------
Total Bonds 50,250 50,250 50,250
-------- ------- -------
MORTGAGE NOTES PAYABLE TO FINANCIAL INSTITUTIONS:
AMLI at Reflections (2) 4,800 -- 7.05% 6/30/98 4,436
AMLI on Rosemeade (2) 7,050 6,441 7.02% 10/5/98 6,548
AMLI at Sherwood 7,320 6,671 7.75% 7/1/03 6,813
AMLI at Riverbend 31,000 29,976 7.30% 7/1/03 30,349
AMLI in Great Hills 11,000 10,639 7.34% 7/1/03 10,770
AMLI at Valley Ranch 11,500 10,527 7.625% 7/10/03 10,693
AMLI at Conner Farms 13,275 12,797 7.00% 6/15/03 12,965
AMLI at Nantucket 7,735 7,709 7.70% 6/1/04 7,735
AMLI on Timberglen 6,770 6,747 7.70% 6/1/04 6,770
AMLI at Regents Center 20,100 19,693 (3) 9/1/05 19,819
AMLI at Bishop's Gate 15,380 15,137 (4) 8/1/05 15,329
AMLI on the Green (5)
AMLI of North Dallas (5) 43,234 41,935 7.789% 5/1/06 42,383
AMLI at Clairmont 12,880 12,880 6.95% 2/15/08 --
-------- ------- --------
Total Mortgage Notes Payable 192,044 181,152(6) 174,610
-------- ------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
Balance Balance
Original at Interest Maturity at
Encumbered Properties Amount 9/30/98 Rate Date 12/31/97
- - --------------------- -------- -------- -------- -------- --------
OTHER NOTES PAYABLE:
AMLI at Park Creek 10,322 9,038 7.875% 12/1/38 2,640
Unsecured line of credit (7)(8) 200,000 90,000 L+.90% 6/27/01 100,000
Note payable to Service Company 5,000 5,000 10.00% 1/1/03 5,000
Unsecured note payable to Service Company 750 750 4.00% Demand 750
-------- ------- --------- ------- -------
Total Other Notes Payable 216,072 104,788 108,390
-------- ------- -------
Total $458,366 336,190 333,250
======== ======= =======
<FN>
(1) The terms of these tax-exempt bonds require that a portion of the apartment units be leased to individuals
who qualify based on income levels specified by the U.S. Government. The bonds bear interest at a variable rate
that is adjusted weekly based upon the remarketing rate for these bonds (3.20% for Spring Creek and 3.13% for
Poplar Creek at October 29, 1998). The credit enhancement for the Spring Creek bonds was provided by a $41,297
letter of credit from Wachovia Bank which expires on October 15, 2002 and the credit enhancement for the Poplar
Creek bonds was provided by a $9,617 letter of credit from LaSalle National Bank that expires December 18, 2002.
(2) These loans were repaid on their maturity dates.
(3) $13,800 at 8.73% and $6,300 at 9.23%.
(4) This original $14,000 mortgage bears interest at 9.1%. For financial reporting purposes, it was valued at
$15,380 to reflect a 7.25% market rate of interest when assumed in connection with the acquisition of AMLI at
Bishop's Gate on October 17, 1997.
(5) These two properties secure the FNMA loan that was sold at a discount of $673. At September 30, 1998, the
unamortized discount amount is $511.
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(6) All but $21,193 of the total is non-recourse to the partners of the Operating Partnership.
(7) The Company has used interest rate swaps on $50,000 of the outstanding amount to fix its base interest rate
(before current lender's spread) at an average of 6.12%.
(8) The Company's $200,000 unsecured line of credit has been provided by a group of six banks led by Wachovia
Bank, N.A. and the First National Bank of Chicago. The credit agreement provides for annual one-year extensions
and reductions in the interest rate based on the future credit rating the Company is able to obtain. In June
1998, the Company extended the maturity of the line of credit by one year to June 2001. In July 1998, Moody's
rated the borrowing under this facility Baa3; this reduced the interest rate from LIBOR plus 130 basis points to
LIBOR plus 90 basis points. Concurrently, the annual 15 basis points non-use fee was replaced by an annual 20
basis points facility fee based on the entire commitment. The commitment under the line of credit was increased
to $200,000 in July, 1998, and a sixth bank was added to the bank lending group. This unsecured line of credit
requires that the Company meet various covenants typical of such an arrangement, including minimum net worth,
minimum debt service coverage and maximum debt to equity percentage. The unsecured line of credit is used for
acquisition and development activities and working capital needs.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
As of September 30, 1998, the scheduled maturities of the Company's debt are as follows:
<CAPTION>
FIXED RATE
MORTGAGE NOTES
NOTES PAYABLE UNSECURED PAYABLE TO
BOND TO FINANCIAL LINES SERVICE
FINANCINGS INSTITUTIONS OF CREDIT COMPANIES TOTAL
---------- ------------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
1998. . . . . . . . . . . . . . . . . . $ -- 7,104 -- 750 7,854
1999. . . . . . . . . . . . . . . . . . -- 2,780 -- -- 2,780
2000. . . . . . . . . . . . . . . . . . -- 3,138 -- -- 3,138
2001. . . . . . . . . . . . . . . . . . -- 3,394 90,000 -- 93,394
2002. . . . . . . . . . . . . . . . . . 50,250 3,655 -- -- 53,905
Thereafter. . . . . . . . . . . . . . . -- 170,119 -- 5,000 175,119
------- ------- ------ ------- -------
$50,250 190,190 90,000 5,750 336,190
======= ======= ====== ======= =======
</TABLE>
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONCLUDED
6. COMMITMENTS AND CONTINGENCIES
The limited partnership agreement of AMLI at Verandah L.P. provides for
the redemption (at an amount determined by formula) by the partnership of
the limited partner's entire interest, in the limited partner's sole
discretion, at any time after March 25, 2002, or at any time that there is
a designated event of default on related indebtedness of the partnership,
which event of default remains uncured and unwaived to the time of notice
of redemption election. The redemption amount may be paid in cash or
Company shares of beneficial interest, or any combination thereof, in the
sole discretion of the Company. The original capital contribution made by
the limited partner was $5,525.
7. SUBSEQUENT EVENTS
On October 26, 1998, the Company closed on the acquisition of two TCR-
Midwest communities, AMLI at Eagle Creek in Indiana and AMLI at
Lexington Farms in Kansas. The two communities have a total of 644
apartment homes, and the acquisition price of $48,150 was paid in cash of
$41,108 and OP Units valued at $7,042. In addition, the acquisition of the
last TCR-Midwest community, AMLI at Centennial, a 170-unit apartment
community, closed on November 2, 1998. The acquisition price of $16,250
was paid in cash of $15,337 and the balance in OP Units.
On November 2, 1998, the Company's Board of Trustees adopted a
shareholder rights plan. In connection with the adoption of the rights
plan, the Board declared a dividend distribution of one right for each
common share outstanding on November 13, 1998, and created a series of
preferred shares, consisting of 150,000 shares, designated the Series C
Junior Participating Preferred Shares (the "Series C Preferred Shares").
The rights will not become exercisable unless someone acquires 15% or more
of the Company's common shares or commences a tender offer for 15% or more
of the common shares. Once exercisable, each right would entitle the
holder, other than holders who caused the rights to become exercisable, to
purchase one one-thousandth of a Series C Preferred Share. Each Series C
Preferred Share, when and if issued, would entitle the holder to receive
quarterly dividends on a cumulative basis, to exercise 1,000 votes per
share on all matters submitted to shareholders and to receive a preference
in the event of a liquidation. Under certain circumstances, each right
would also entitle the holder, other than holders who caused the rights to
become exercisable, to purchase common shares of the Company or of an
acquiring person at a 50% discount to the market price.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (DOLLARS IN THOUSANDS,
EXCEPT SHARE DATA)
The following discussion is based primarily on the consolidated financial
statements of Amli Residential Properties Trust (the "Company") as of
September 30, 1998 and December 31, 1997 and for the nine months ended
September 30, 1998 and 1997.
This information should be read in conjunction with the accompanying
unaudited consolidated financial statements and notes thereto. These
financial statements include all adjustments which are, in the opinion of
management, necessary to reflect a fair statement of the results for the
interim periods presented, and all such adjustments are of a normal
recurring nature.
On January 30, 1996, the Company issued 1,200,000 convertible preferred
shares for $20 per share, or $24,000, directly to four institutional
investors and Amli Realty Co. ("ARC") in a registered offering. In
November 1996, the Company completed a public offering of 2,976,900 common
shares. In July 1997, the Company closed on an offering of 1,694,700
common shares. In February 1998, the Company placed 3,125,000 convertible
preferred shares for $24 per share with Security Capital Preferred Growth
Incorporated. The net proceeds of the issuance of the preferred shares and
the public offerings were used to reduce the Company's debt and fund
development costs.
As of September 30, 1998, the Company owned an 86% general partnership
interest in the Operating Partnership, which holds the operating assets of
the Company. The limited partners hold Operating Partnership units ("OP
Units") that are convertible into common shares of the Company on a one-
for-one basis, subject to certain limitations. At September 30, 1998, the
Company owned 20,870,459 OP Units and the limited partners owned 3,259,669
OP Units. The Company has qualified, and anticipates continuing to
qualify, as a real estate investment trust ("REIT") for Federal income tax
purposes.
RESULTS OF OPERATIONS
During the period from January 1, 1997 through September 30, 1998, growth
in property revenues and property operating expenses resulted from
increases at communities owned as of January 1, 1997, from communities
acquired and from the newly-constructed communities since January 1, 1997.
During the same period, the Company has invested in three co-investment
partnerships, which acquired the 600-unit AMLI at Danada in Wheaton,
Illinois, the 538-unit AMLI at Verandah in Arlington, Texas, and the 368-
unit AMLI at Regents Crest in Overland Park, Kansas.
The Company in joint venture with institutional investors, has developed or
has under development five residential communities. Since January 1997,
the Company began rental operations of the 222-unit AMLI at River Park in
Atlanta, Georgia, the 446-unit AMLI at Barrett Lakes in Cobb County,
Georgia, the 272-unit AMLI at Fox Valley in Aurora, Illinois, the 384-unit
AMLI at Fossil Creek in Fort Worth, Texas and the 800-unit AMLI at
Northwinds in Fulton County, Georgia.
In addition, the Company has acquired three communities in Texas with a
total of 920 apartment homes, two communities in Georgia with 440 apartment
homes and one community each in Indiana and Illinois with a total of 496
apartment homes. During the same period, the Company has developed and
begun rental operations of three new communities and three additional
phases to existing communities that contain a total of 1,096 apartment
homes.
<PAGE>
For the nine months ended September 30, 1998, net income attributable to
common shares was $16,095 or $.97 per share ($.96 per share-diluted) on
total revenues of $86,126. For the nine months ended September 30, 1997,
net income was $14,755 or $.96 per share (basic and diluted) on total
revenues of $65,145.
On a "same community" basis, weighted average occupancy of the apartment
homes owned wholly by the Company increased slightly to 94.3% for the nine
months ended September 30, 1998 from 93.7% in the prior year. Weighted
average collected rental rates increased by 2.1% to $680 from $666 per unit
per month for the nine months ended September 30, 1998 and 1997,
respectively. Including Co-Investment Communities, weighted average
occupancy of the Company's apartment homes increased to 94.5% for the nine
months ended September 30, 1998 from 93.8% in the prior year, and weighted
average collected rental rates increased by 2.4% to $716 from $699 per unit
per month for the nine months ended September 30, 1998 and 1997,
respectively.
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1998 TO NINE MONTHS ENDED
SEPTEMBER 30, 1997.
Income before minority interest increased to $22,251 for the nine months
ended September 30, 1998 from $19,343 for the nine months ended
September 30, 1997. This increase was primarily attributable to a $20,981
increase in total revenues, reduced by a $6,988 increase in property
operating expenses, a $6,842 increase in interest expense and a $3,664
increase in depreciation. Net income for the nine months ended
September 30, 1998 and 1997 was $19,080 and $16,174, respectively.
Total property revenues increased by $18,212, or 29.8%. This increase in
property revenues was primarily from the 1,856 apartment homes acquired
during the fourth quarter of 1997 and January 1988. In addition, leasing
commenced on 1,096 apartment homes developed by the Company during the
period from January 1997 through September 30, 1998. Furthermore, moderate
increases in rental rates were achieved while managing and maintaining just
below 95% average occupancy at the communities. Other property revenues
include increases in revenues from garages and carport ($233), telephone
and cable systems ($82) and other fees ($1,465) charged to residents. On
the same community basis total property revenues increased by $1,761, or
3.1%.
Interest and share of income from Service Companies increased 84.3% to
$1,823 from $989 as a result of additional advances to the Service
Companies to fund the acquisition cost of non-residential land and the cost
of computer hardware and software.
Income from partnerships increased to $1,508 from $557, or 170.7%. This
increase was a result of the acquisition of 1,506 apartment homes in 1997
through three new co-investment partnerships. In addition, five new co-
investment partnerships have invested in five development communities,
which has a total of 2,124 apartment homes that began rental operations in
1997 and of which, 940 units were stabilized in 1998.
Other income increased to $2,582 from $2,043, or 26.4% as a result of fees
charged to newly formed co-investment partnerships that own properties
under development. This increase includes a $845 increase in development
fees, reduced by a $303 decrease in financing, acquisition and other fees.
Other interest income increased by $445. This increase was from additional
employee notes for purchase of the Company's shares, from increased short-
term advances to co-investment partnerships, and from a gap loan to one co-
investment partnership that is anticipated to be repaid by year end.
Property operating expenses increased by $6,988, or 27.4%. This increase
is principally due to the increase in the number of apartment homes through
acquisition or development. On the same community basis, property
operating expenses increased by $649 or 2.7%.
<PAGE>
Interest expense, net of the amounts capitalized, increased to $14,993 from
$8,151 or 83.9%, primarily due to increased indebtedness incurred in
conjunction with property acquisition, development and investments in joint
ventures.
General and administrative expenses increased to $2,803 for the nine months
ended September 30, 1998 from $2,153 for the nine months ended
September 30, 1997. The increase is primarily attributable to increased
compensation and compensation-related costs attributable to both additional
employees and increased rates of compensation.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1998, the Company had $8,754 in cash and cash equivalents
and $110,000 in availability under its $200,000 unsecured line of credit.
On February 20, 1998, the Company privately placed $75,000 of Series B
cumulative convertible preferred shares with an institutional investor at
$24 per share. Funding of $25,000 each occurred on March 9, June 30 and
September 30, 1998. Proceeds from this private placement, net of an
estimated 1.05% in offering costs, were approximately $74,200.
At September 30, 1998, eighteen of the Company's wholly-owned stabilized
Communities were unencumbered. The Company expects to repay one fixed rate
loan aggregating $6,441 at its scheduled 1998 maturity from additional
borrowings under its unsecured line of credit, whereupon one more Community
will be unencumbered. There are no other fixed rate loans on wholly-owned
Communities with maturity dates prior to July 2003.
Net cash flows provided by operating activities for the nine months ended
September 30, 1998 increased to $33,169 from $28,028 for the nine months
ended September 30, 1997. The increase is primarily due to an increase in
property net operating income (before depreciation) and an increase in
other revenue, reduced by increases in interest expense and general and
administrative expense.
Cash flows used in investing activities for the nine months ended
September 30, 1998 slightly increased to $79,309 from $79,063 for the nine
months ended September 30, 1997. The investing activities consisted
primarily of expenditures for acquisition and development costs,
contributions to co-investment partnerships and working capital advances to
the Service Companies. For the nine months ended September 30, 1998, the
Company has acquired 288 apartment homes compared to 506 apartment homes
acquired during the same period last year. There were 2,352 apartment
homes under development and 2,786 apartment homes that were anticipated to
be developed on land parcels owned by the Company at September 30, 1998.
During the same period in 1997, there were 2,032 apartment homes under
development and 1,292 apartment homes that either commenced development in
the fourth quarter of 1997 or in 1998. Contributions to co-investment
partnerships decreased as costs of acquiring land and costs prior to
construction, before the partnerships were formed in 1998, were advanced by
the Company in 1997.
Net cash flows provided by financing activities for the nine months ended
September 30, 1998 were $49,218, which reflect net proceeds from the
preferred shares issued and net proceeds of additional borrowings. In
1997, cash flows include net proceeds of borrowings and dividend payments.
<PAGE>
Funds from operations is defined as income (loss) before minority interest
of the holders of OP Units and extraordinary items (computed in accordance
with generally accepted accounting principles), excluding gains (losses)
from debt restructuring and sales of property, plus certain non-cash items,
primarily depreciation. Adjustments for unconsolidated partnerships and
joint ventures are calculated to reflect funds from operations on the same
basis. Funds from operations is widely accepted in measuring the
performance of equity REITs. An understanding of the Company's funds from
operations will enhance the reader's comprehension of the Company's results
of operations and cash flows as presented in the financial statements and
data included elsewhere herein. Funds from operations should not be
considered an alternative to net income or any other GAAP measurement as a
measure of the results of the Company's operations, the Company's cash
flows or liquidity.
Funds from operations for the nine months ended September 30, 1998 and 1997
are summarized as follows:
SEPTEMBER 30,
------------------------
1998 1997
------- -------
Income before minority
interest $22,251 19,343
Depreciation 13,245 9,581
Other, net (1) 2,940 1,834
------- ------
Funds from operations $38,436 30,758
======= ======
Weighted average shares
and units (including
dilutive shares and units) 22,206 19,525
======= ======
(1) Share of co-investment partnerships' depreciation and, in 1998,
share of Service Company amortization of goodwill (net of related income
taxes).
In the typical situation, start-up losses will be recorded between the time
the first apartment homes are delivered from construction until occupancy
levels are adequate to recover all costs and expenses (including interest
but excluding depreciation). The amounts shown above for the nine months
ended September 30, 1998 and 1997 are shown net of $996 and $822,
respectively, of start-up losses which, for the nine months ended
September 30, 1998 are attributable to the initial lease-up of Phase III of
AMLI at Autumn Chase, AMLI at Wells Branch, AMLI at Park Creek, AMLI at Fox
Valley, AMLI at Fossil Creek, AMLI at Northwinds, AMLI at Oakhurst North
and AMLI on the Parkway. Additional amounts will be recorded in future
quarters of 1998 as initial lease-up is completed or continued at these and
other communities currently under development.
The Company expects to pay quarterly dividends from cash available for
distribution. Until distributed, funds available for distribution will be
invested in short-term investment-grade securities or used to temporarily
reduce outstanding balances on the Company's revolving lines of credit.
The Company intends to finance the majority of its future development
activities by co-investing these developments with institutional partners.
The Company expects to meet its short-term liquidity requirements by using
its working capital and any portion of net cash flow from operations not
distributed currently. The Company is of the opinion that its future net
cash flows will be adequate to meet operating requirements in both the
short and the long term and provide for payment of dividends by the Company
in accordance with REIT requirements. In order to qualify as a REIT, the
Company is required to make distributions to its shareholders equal to 95%
of its REIT taxable income. The Company's 1998 estimated dividend payment
level equals an annual rate of $1.76 per share. The Company estimates that
no more than 18% of the total dividends to be paid in 1998 will be treated
as a return of capital.
<PAGE>
The Company expects to meet certain long-term liquidity requirements such
as scheduled debt maturities, repayment of loans for construction,
development, and acquisition activities through the issuance of long-term
secured and unsecured debt and additional equity securities of the Company
(or OP Units). On July 20, 1995, the Company's shelf registration became
effective. The registration statement provided for up to an aggregate of
$200,000 of preferred shares, common shares and security warrants which the
Company may issue from time to time. Through September 30, 1998, the
Company has issued preferred and common shares for an aggregate issuance
price of $128,467, leaving a balance of $71,533 in shares that the Company
may issue in the future under the shelf registration statement.
COMPANY INDEBTEDNESS
The Company's debt as of September 30, 1998 includes $195,940 (58% of
the total) which is secured by first mortgages on 14 of the Wholly-Owned
Communities and is summarized as follows:
SUMMARY DEBT TABLE
------------------
Type of Weighted Average Outstanding Percent
Indebtedness Interest Rate Balance of Total
- - ------------ ---------------- ----------- --------
Fixed Rate
Mortgages 7.61% $190,190 56%
Tax-Exempt Tax-Exempt Rate + 1.48% 50,250 15%
Bonds (1) Tax-Exempt Rate + 1.15%
Lines of
Credit (2) LIBOR + 0.90% 90,000 27%
Notes payable
to Service
Companies 9.22% 5,750 2%
-------- ----
Total $336,190 100%
======== ====
- - --------------------
(1) The tax-exempt bonds bear interest at a variable tax-exempt rate that
is adjusted weekly based on the re-marketing of these bonds (3.20% for AMLI
at Spring Creek and 3.13% for AMLI at Poplar Creek at October 29, 1998).
The Spring Creek bonds mature on October 1, 2024 and the related credit
enhancement expires on October 15, 2002. The Poplar Creek bonds mature on
February 1, 2024 and the related credit enhancement expires on December 18,
2002.
(2) "Weighted average interest rate" reflects July 1998 change from LIBOR
plus 1.30%. The July amendment to the Company's principal credit agreement
also provides for an annual facility fee of 0.20% of the total commitment.
The terms of the lines of credit extend to June 2001.
DEVELOPMENT ACTIVITIES
At September 30, 1998, there are fifteen communities or additional phases
to existing communities (including co-investment properties) that are under
development. When completed, a total of 4,816 apartment homes will be
added to the Company's portfolio of rental apartments. The estimated
development costs of the nine wholly-owned communities under development
total approximately $178,765 of which $56,387 has been incurred at
September 30, 1998. The Company's share of the development costs for the
five co-investment partnerships is approximately $48,530 of which, at
September 30, 1998, $8,694 remains to be funded.
<PAGE>
In addition, the Company owns land for the development of an additional
2,786 apartment homes in Ft. Worth, Austin and Houston Texas, Alpharetta,
Georgia, Indianapolis, Indiana and Overland Park, Kansas. The total costs
incurred to date of $25,383 are primarily land acquisition costs and
professional fees.
CAPITAL EXPENDITURES
Capital expenditures are those made for assets having a useful life in
excess of one year and include replacements (including carpeting and
appliances) and betterments, such as unit upgrades, enclosed parking
facilities and similar items.
In conjunction with acquisitions of existing properties, it is the
Company's policy to provide in its acquisition budgets adequate funds to
complete any deferred maintenance items and to otherwise make the
properties acquired competitive with comparable newly-constructed
properties. In some cases, the Company will provide in its acquisition
budget additional funds to upgrade or otherwise improve new acquisitions.
INFLATION
Virtually all apartment leases at the communities and co-investment
communities are for six or twelve months' duration. This enables the
Company to pass along inflationary increases in its operating expenses on a
timely basis. Because the Company's property operating expenses (exclusive
of depreciation and amortization) are approximately 41% of rental and other
revenue, increased inflation typically results in comparable increases in
income before interest and general and administrative expenses, so long as
rental market conditions allow increases in rental rates while maintaining
stable occupancy.
An increase in general price levels may immediately precede, or accompany,
an increase in interest rates. The Company's exposure (including the
Company's proportionate share of its co-investment partnerships' exposure)
to rising interest rates is mitigated by the existing debt level of
approximately 44% of the Company's total market capitalization at
September 30, 1998, the high percentage (58%) of intermediate term fixed
rate debt, and the use of interest rate swaps to effectively fix the
interest rate on $20 million of floating rate debt through November 2002
and $30 million through February 2003. As a result, for the foreseeable
future, increases in interest expense resulting from increasing inflation
are anticipated to be less than future increases in income before interest
and general and administrative expenses.
YEAR 2000 READINESS
The Chairman of the Securities and Exchange Commission has asked all public
companies to provide thorough, meaningful disclosure regarding their Year
2000 readiness. This topic is getting increasing attention as January 1,
2000 gets closer. As is now widely understood, there is real potential for
malfunction by computers and other equipment whose performance is dependent
in part on microprocessors.
The Company and the Service Companies have replaced all primary data
processing systems within the last thirty months and believe the new
systems are Year 2000 compliant. The Company is commencing testing of its
data processing systems in October 1998 and anticipates that this testing
will be complete by March 31, 1999. Little remedial action is anticipated.
Some external consultants are being engaged by the Service Companies to
assist these testing efforts and remedial action, if any is required.
Total costs for using outside consultants in this effort is estimated at
less than $100,000, none of which has yet been incurred.
<PAGE>
The Company has undertaken a review of other aspects of its operations that
may be affected by the Year 2000 problem. For instance, three of its
communities have elevators whose performance could be affected. The
Company has contacted all its significant vendors, including banks and
companies providing outsourcing services for payroll and benefits
administration, to ensure that these vendors are satisfactorily addressing
the problem. The Company continues to be of the opinion that there will be
no direct material effect on its operating performance or results of
operations from the Year 2000 problem. Although the Company intends to
diligently continue preparations for Year 2000, it is not possible to
quantify potential indirect effects resulting from the lack of readiness on
the part of others with whom the Company conducts its business.
OTHER MATTERS
Statement of Financial Accounting Standards No. 131 "Disclosures about
Segments of an Enterprise and Related Information" becomes effective for
fiscal years beginning after December 15, 1997 and will not have a material
impact on the Company's financial statements.
Statement of Financial Accounting Standards No. 133 "Accounting for
Derivative Instruments and Hedging Activities" becomes effective for all
fiscal quarters for fiscal years beginning after June 15, 1999 and is not
currently expected to have a material impact on the Company's financial
statements.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995
Certain statements set forth herein or incorporated by reference herein
from the Company's filings under the Securities Exchange Act of 1934, as
amended, contain forward-looking statements, including, without limitation,
statements relating to the timing and anticipated capital expenditures of
the Company's development programs. Although the Company believes that the
expectations reflected in such forward-looking statements are based on
reasonable assumptions, the actual results may differ materially from that
set forth in the forward-looking statements. Certain factors that might
cause such differences include general economic conditions, local real
estate conditions, construction delays due to the unavailability of
construction materials, weather conditions or other delays beyond the
control of the Company. Consequently, such forward-looking statements
should be regarded solely as reflections of the Company's current operating
and development plans and estimates. These plans and estimates are subject
to revision from time to time as additional information becomes available,
and actual results may differ from those indicated in the referenced
statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
<PAGE>
<TABLE>
OCCUPANCY
The following is a listing of approximate physical occupancy levels by quarter for the Company's Wholly-Owned
Communities and Co-Investment Communities:
<CAPTION>
1998 1997
LOCATION/COMMUNITY COMPANY'S NUMBER -------------------------- --------------------------
- - ------------------ PERCENTAGE OF AT AT AT AT AT AT AT AT
WHOLLY-OWNED COMMUNITIES OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31
- - ------------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DALLAS/FT. WORTH, TEXAS
AMLI at AutumnChase. . . . . 450 93% 90% 97% 96% 97% 95% 97%
AMLI at Bent Tree. . . . . . 300 91% 93% 93% 93% N/A N/A N/A
AMLI at Bishop's Gate. . . . 266 92% 97% 100% 90% N/A N/A N/A
AMLI at Chase Oaks . . . . . 250 93% 93% 98% 94% 96% 97% 96%
AMLI at Gleneagles . . . . . 590 93% 98% 97% 97% 99% 98% 96%
AMLI on the Green. . . . . . 424 93% 92% 96% 93% 95% 93% 91%
AMLI at Nantucket. . . . . . 312 93% 97% 98% 98% 98% 98% 99%
AMLI of North Dallas . . . . 1,032 93% 93% 96% 95% 96% 97% 94%
AMLI at Reflections. . . . . 212 95% 96% 98% 98% 98% 98% 96%
AMLI on Rosemeade. . . . . . 236 94% 95% 96% 92% 95% 97% 97%
AMLI on Timberglen . . . . . 260 95% 94% 95% 98% 95% 97% 97%
AMLI at Valley Ranch . . . . 460 92% 97% 98% 99% 97% 97% 95%
------ ----- ----- ----- ----- ----- ----- ----- -----
4,792 93% 94% 97% 96% 97% 96% 95%
------ ----- ----- ----- ----- ----- ----- ----- -----
AUSTIN, TEXAS
AMLI at the Arboretum. . . . 231 97% 96% 97% 96% 100% 97% 97%
AMLI in Great Hills. . . . . 344 99% 97% 98% 97% 98% 97% 95%
AMLI at Lantana Ridge. . . . 354 92% 92% 94% 81% 83% N/A N/A
AMLI at Martha's Vineyard. . 360 96% 97% 96% 97% 98% 99% 97%
------ ----- ----- ----- ----- ----- ----- ----- -----
1,289 95% 96% 96% 92% 94% 98% 96%
------ ----- ----- ----- ----- ----- ----- ----- -----
ATLANTA, GEORGIA
AMLI at Sope Creek . . . . . 695 97% 95% 94% 93% 94% 93% 96%
AMLI at Spring Creek . . . . 1,180 94% 93% 94% 94% 95% 95% 97%
AMLI at Vinings. . . . . . . 360 94% 96% 95% 96% 96% 95% 93%
AMLI at West Paces . . . . . 337 97% 99% 98% 94% 92% 93% 98%
AMLI at Clairmont. . . . . . 288 95% 96% 96% N/A N/A N/A N/A
AMLI at Peachtree City . . . 312 96% 99% N/A N/A N/A N/A N/A
------ ----- ----- ----- ----- ----- ----- ----- -----
3,172 95% 95% 95% 94% 94% 94% 96%
------ ----- ----- ----- ----- ----- ----- ----- -----
<PAGE>
1998 1997
COMPANY'S NUMBER -------------------------- --------------------------
PERCENTAGE OF AT AT AT AT AT AT AT AT
LOCATION/COMMUNITY OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31
- - ------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------
EASTERN KANSAS
AMLI at Alvamar. . . . . . . 152 94% 94% 95% 93% 90% 93% 98%
AMLI at Crown Colony . . . . 220 91% 89% 96% 95% 98% 93% 97%
AMLI at Regents Center . . . 424 93% 95% 90% 87% 93% 99% 91%
AMLI at Town Center. . . . . 156 96% 94% 93% 92% N/A N/A N/A
AMLI at Sherwood . . . . . . 300 89% 93% 92% 97% 98% 95% 98%
------ ----- ----- ----- ----- ----- ----- ----- -----
1,252 92% 93% 93% 92% 95% 96% 96%
------ ----- ----- ----- ----- ----- ----- ----- -----
INDIANAPOLIS, INDIANA
AMLI at Conner Farms . . . . 300 93% 86% 90% 93% N/A N/A N/A
AMLI at Riverbend. . . . . . 996 92% 93% 96% 88% 89% 94% 92%
------ ----- ----- ----- ----- ----- ----- ----- -----
1,296 92% 92% 95% 89% 89% 94% 92%
------ ----- ----- ----- ----- ----- ----- ----- -----
CHICAGO, ILLINOIS
AMLI at Park Sheridan. . . . 253 98% 97% 100% 98% 99% 92% 93%
AMLI at Poplar Creek . . . . 196 94% 95% 98% 91% N/A N/A N/A
------ ----- ----- ----- ----- ----- ----- ----- -----
449 96% 96% 99% 95% 99% 92% 93%
------ ----- ----- ----- ----- ----- ----- ----- -----
12,250 93.8% 94.3% 95.6% 93.6% 95.0% 95.4% 95.1%
====== ===== ===== ===== ===== ===== ===== ===== =====
CO-INVESTMENT COMMUNITIES:
- - --------------------------
ATLANTA, GA
AMLI at: lease lease lease
Barrett Lakes . . . . . . . 35% 446 93% 93% 96% 95% up up up
Pleasant Hill . . . . . . . 40% 502 94% 95% 93% 89% 91% 96% 97%
lease lease
River Park. . . . . . . . . 40% 222 96% 95% 98% 95% 97% up up
Towne Creek . . . . . . . . 1% 150 89% 92% 95% 88% 97% 90% 93%
Willeo Creek. . . . . . . . 30% 242 96% 94% 98% 91% 91% 95% 98%
------ ----- ----- ----- ----- ----- ----- ----- -----
1,562 94% 94% 96% 92% 93% 95% 96%
------ ----- ----- ----- ----- ----- ----- ----- -----
<PAGE>
1998 1997
COMPANY'S NUMBER -------------------------- --------------------------
PERCENTAGE OF AT AT AT AT AT AT AT AT
LOCATION/COMMUNITY OWNERSHIP UNITS 12/31 9/30 6/30 3/31 12/31 9/30 6/30 3/31
- - ------------------ ---------- ------- ----- ----- ----- ------ ----- ----- ------ ------
CHICAGO, IL
AMLI at:
Chevy Chase . . . . . . . . 33% 592 97% 98% 97% 94% 96% 99% 97%
Prairie Court . . . . . . . 1% 125 96% 93% 96% 98% 98% 100% 97%
Willowbrook . . . . . . . . 40% 488 95% 98% 98% 94% 98% 94% 96%
Windbrooke. . . . . . . . . 15% 236 99% 95% 100% 98% 99% 100% 96%
Danada Farms. . . . . . . . 10% 600 94% 96% 98% 93% 94% 93% 92%
Fox Valley. . . . . . . . . 25% 272 89% 87% N/A N/A N/A N/A N/A
------- ----- ----- ----- ----- ----- ----- ----- -----
2,313 95% 95% 98% 94% 96% 96% 95%
------- ----- ----- ----- ----- ----- ----- ----- -----
EASTERN KANSAS
AMLI at Regents Crest. . . . 25% 368 96% 94% 92% 93% N/A N/A N/A
------- ----- ----- ----- ----- ----- ----- ----- -----
DALLAS, TX
AMLI at Verandah . . . . . . 35% 538 93% 96% 97% 94% 95% 96% 94%
------- ----- ----- ----- ----- ----- ----- ----- -----
AUSTIN, TX
AMLI at Park Place . . . . . 25% 588 95% 95% 95% 98% 97% 94% 96%
------- ----- ----- ----- ----- ----- ----- ----- -----
HOUSTON, TX
AMLI at:
Champions Centre. . . . . . 15% 192 95% 97% 98% 97% 94% 98% 95%
Champions Park. . . . . . . 15% 246 98% 95% 95% 98% 99% 99% 97%
Greenwood Forest. . . . . . 15% 316 98% 96% 97% 95% 96% 96% 96%
------- ----- ----- ----- ----- ----- ----- ----- -----
754 97% 96% 97% 96% 96% 98% 96%
------- ----- ----- ----- ----- ----- ----- ----- -----
Total Co-Investment
Communities . . . . . . . . . 6,123 94.8% 94.8% 96.4% 94.2% 95.5% 95.8% 95.5%
------- ----- ----- ----- ----- ----- ----- ----- -----
TOTAL . . . . . . . . . . . . . 18,373 94.1% 94.4% 95.9% 93.8% 95.2% 95.7% 95.3%
======= ===== ===== ===== ===== ===== ===== ===== =====
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 5. OTHER EVENTS
On November 2, 1998, the Board of Trustees of the Company declared a
dividend distribution of one preferred share purchase right (a "Right") for
each common share of beneficial interest, par value $0.01 per share (the
"Common Shares"), of the Company outstanding at the close of business on
November 13, 1998 (the "Record Date"). The dividend will be paid on the
Record Date to holders of Common Shares on such date. The holders of any
additional Common Shares issued after the Record Date and before the
redemption or expiration of the Rights (or the Distribution Date, as
defined below) will also be entitled to one Right for each such additional
Common Share. Each Right entitles the registered holder under certain
circumstances to purchase from the Company one one-thousandth of a Series C
Junior Participating Preferred Share, par value $0.01 per share (the
"Participating Preferred Shares"), of the Company at a price of $70.00 per
one one-thousandth of a Participating Preferred Share (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights
are set forth in the Rights Agreement dated as of November 2, 1998 between
the Company and Harris Trust and Savings Bank, as rights agent (the "Rights
Agreement").
Initially, the Rights will be attached to and evidenced by certificates
evidencing Common Shares, and no separate certificates for the Rights will
be distributed. The Rights will become exercisable and will be evidenced
by separate certificates only after the earlier to occur of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons has acquired beneficial ownership of 15% or more of the
outstanding Common Shares (thereby becoming an "Acquiring Person"), (ii) 15
business days (or such later date as may be determined by the Board of
Trustees prior to such time as any person or group of affiliated or
associated persons becomes an Acquiring Person) following the commencement
of, or the announcement of an intention to commence, a tender or exchange
offer the consummation of which would result in the beneficial ownership by
a person or group of persons of 15% or more of the outstanding Common
Shares, or (iii) 10 business days (or such later date as may be determined
by action of the Board of Trustees prior to such time as any person or
group of affiliated or associated persons becomes an Acquiring Person)
after the filing of any application, request or other document with a
governmental agency seeking approval of, attempting to rebut any
presumption of control upon, or indicating an intention to enter into, any
transaction or series of transactions that would result in any person
becoming the beneficial owner of 15% or more of the outstanding Common
Shares (the first of such dates to occur being referred to herein as the
"Distribution Date"). Common Share certificates issued upon transfer or
issuance of Common Shares after the Record Date and prior to the
Distribution Date (or earlier redemption or expiration of the Rights) will
contain a notation incorporating the Rights Agreement by reference.
Notwithstanding the foregoing, certain existing investors specified in the
Rights Agreement (the "Grandfathered Persons") will not be deemed to be
Acquiring Persons except under certain circumstances. In addition, if the
Board of Trustees in good faith determines that a person who would
otherwise be an Acquiring Person has become such inadvertently, and such
person divests as soon as practicable a sufficient number of Common Shares
so that such person would no longer be an Acquiring Person, then such
person shall not be deemed to be an Acquiring Person for purposes of the
Rights Agreement.
The Rights will expire on November 2, 2008 (the "Final Expiration Date"),
unless the Final Expiration Date is extended or unless the Rights are
earlier redeemed or exchanged by the Company, in each case as described
below.
<PAGE>
The Purchase Price payable, and the number of Participating Preferred
Shares or other securities or property issuable, upon exercise of the
Rights are subject to adjustment under certain circumstances from time to
time to prevent dilution. With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price.
Participating Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Participating Preferred Share will be entitled to
a minimum preferential quarterly distribution payment, when, as and if
authorized by the Board of Trustees out of funds legally available for such
purpose, of $1.00 per share but will be entitled to an aggregate
distribution of 1,000 times any distribution declared per Common Share. In
the event of liquidation, the holders of the Participating Preferred Shares
will be entitled to a minimum preferential liquidation payment of $1.00 per
share but will be entitled to an aggregate payment of 1,000 times the
payment made per Common Share. Each Participating Preferred Share will
have 1,000 votes, voting together with the Common Shares. In the event of
any merger, consolidation or other transaction in which Common Shares are
exchanged, each Participating Preferred Share will be entitled to receive
1,000 times the amount received per Common Share. In the event of issuance
of Participating Preferred Shares upon exercise of the Rights, in order to
facilitate trading, a depositary receipt may be issued for each one one-
thousandth of a Participating Preferred Share. The Rights will be
protected by customary antidilution provisions.
In the event that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision will be made so that each
holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will thereafter be void), will thereafter have the right to
receive, upon exercise thereof, a number of Common Shares having a market
value (determined in accordance with the Rights Agreement) equal to two
times the Purchase Price. In lieu of the issuance of Common Shares upon
exercise of Rights, the Board of Trustees may under certain circumstances,
and if there is an insufficient number of Common Shares authorized but
unissued to permit the exercise in full of the Rights, the Board is
required to, take such action as may be necessary to cause the Company to
issue or pay upon the exercise of Rights, cash (including by way of a
reduction of the Purchase Price), property, other securities or any
combination of the foregoing having an aggregate value equal to that of the
Common Shares which otherwise would have been issuable upon exercise of the
Rights. The Company may permit the Rights to be exercised for 50% of the
Common Shares (or cash, property or other securities that may be
substituted for Common Shares) that would otherwise be purchasable upon
exercise thereof in consideration of the surrender of the Rights so
exercised and without other payment of the Purchase Price.
In the event that, after any person or group becomes an Acquiring Person,
the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power are
sold, proper provision will be made so that each holder of a Right will
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price, a number of shares of common stock of the acquiring
company having a market value (determined in accordance with the Rights
Agreement) equal to two times the Purchase Price.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by that person or group of 50% or more of the
outstanding Common Shares, the Board of Trustees may exchange the Rights
(other than Rights owned by that person or group which will have become
void), in whole or in part, at an exchange ratio of one Common Share (or
one one-thousandth of a Participating Preferred Share) per Right (subject
to adjustment).
<PAGE>
As soon as practicable after the Distribution Date, the Company is
obligated to use its best efforts to file a registration statement under
the Securities Act of 1933, as amended, relating to the securities issuable
upon exercise of Rights and to cause such registration statement to become
effective as soon as practicable.
At any time prior to the time a person or group of persons becomes an
Acquiring Person, the Board of Trustees may redeem the Rights, in whole but
not in part, at a redemption price of $0.01 per Right (the "Redemption
Price"), payable in cash, Common Shares or any other form of consideration
deemed appropriate by the Board of Trustees. The redemption of the Rights
may be made effective at such time, on such basis and with such conditions
as the Board of Trustees in its sole discretion may establish. Immediately
upon the effectiveness of any redemption of the Rights, the right to
exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of Trustees without the
consent of the holders of the Rights, except that from and after the time
any person or group of affiliated or associated persons becomes an
Acquiring Person, no such amendment may adversely affect the interests of
the holders of the Rights.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the
right to vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Trustees. The Rights should
not interfere with any merger or other business combination approved by the
Board of Trustees since the Rights may be redeemed by the Company at the
Redemption Price prior to the time that a person or group has acquired
beneficial ownership of 15% or more of the Common Shares.
The Rights Agreement, which specifies the terms of the Rights and the
Participating Preferred Shares, has been filed as an exhibit to this report
and is incorporated herein by reference. The foregoing description of the
Rights does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the Rights Agreement, including the
definitions therein of certain terms.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
No reports on Form 8-K have been filed during the quarter ended
September 30, 1998. The Exhibits filed as part of this report are listed
below.
EXHIBIT NO. DOCUMENT DESCRIPTION
4. Rights Agreement, dated as of November 2, 1998, between
AMLI Residential Properties Trust and Harris Trust and Savings Bank, as
Rights Agent, including Exhibit A thereto (Form of Articles Supplementary
relating to the Series C Junior Participating Preferred Shares) and Exhibit
B thereto (Form of Right Certificate).
27. Financial Data Schedule
99. Financial and Operating Data furnished to Shareholders
and Analysts
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AMLI RESIDENTIAL PROPERTIES TRUST
Date: November 12, 1998 By:/s/ CHARLES C. KRAFT
-----------------------------------
Charles C. Kraft
Principal Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
Date: November 12, 1998 By:/s/ GREGORY T. MUTZ
-----------------------------------
Gregory T. Mutz
Chairman of the Board of Trustees
Date: November 12, 1998 By:/s/ ALLAN J. SWEET
-----------------------------------
Allan J. Sweet
President and Trustee
Date: November 12, 1998 By:/s/ ROBERT J. CHAPMAN
-----------------------------------
Robert J. Chapman
Principal Financial Officer
Date: November 12, 1998 By:/s/ CHARLES C. KRAFT
-----------------------------------
Charles C. Kraft
Principal Accounting Officer
EXHIBIT 4
- - ---------
--------------------------------------------------
RIGHTS AGREEMENT
between
AMLI RESIDENTIAL PROPERTIES TRUST
and
HARRIS TRUST AND SAVINGS BANK
Rights Agent
Dated as of November 2, 1998
--------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Section 1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
Section 2. APPOINTMENT OF RIGHTS AGENT . . . . . . . . . . . . . . . . 4
Section 3. ISSUANCE OF RIGHT CERTIFICATES. . . . . . . . . . . . . . . 4
Section 4. FORM OF RIGHT CERTIFICATES. . . . . . . . . . . . . . . . . 6
Section 5. COUNTERSIGNATURE AND REGISTRATION . . . . . . . . . . . . . 7
Section 6. TRANSFER, DIVISION, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS. . . . . . . . . . . . . . . . . . . . . . . 8
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. . . . . 9
Section 9. AVAILABILITY OF PREFERRED SHARES. . . . . . . . . . . . . . 9
Section 10. PREFERRED SHARES RECORD DATE. . . . . . . . . . . . . . . . 10
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES
OR NUMBER OF RIGHTS . . . . . . . . . . . . . . . . . . . . 10
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES.. . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER . . . . . . . . . . . . . . . . . . 16
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.. . . . . . . . . . 17
Section 15. RIGHTS OF ACTION. . . . . . . . . . . . . . . . . . . . . . 18
Section 16. AGREEMENT OF RIGHT HOLDERS. . . . . . . . . . . . . . . . . 19
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER . . . . . 19
Section 18. CONCERNING THE RIGHTS AGENT . . . . . . . . . . . . . . . . 19
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME
OF RIGHTS AGENT . . . . . . . . . . . . . . . . . . . . . . 20
Section 20. DUTIES OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . . 20
Section 21. CHANGE OF RIGHTS AGENT. . . . . . . . . . . . . . . . . . . 22
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. . . . . . . . . . . . . 23
Section 23. REDEMPTION. . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 24. EXCHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 25. NOTICE OF CERTAIN EVENTS. . . . . . . . . . . . . . . . . . 25
Section 26. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 27. SUPPLEMENTS AND AMENDMENTS. . . . . . . . . . . . . . . . . 26
Section 28. SUCCESSORS. . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 29. BENEFITS OF THIS AGREEMENT. . . . . . . . . . . . . . . . . 26
<PAGE>
Section 30. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 31. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . 26
Section 32. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . 26
Section 33. DESCRIPTIVE HEADINGS. . . . . . . . . . . . . . . . . . . . 27
Section 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF TRUSTEES . . . . 27
Section 35. LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . 27
Exhibit A - Form of Articles Supplementary of Amli Residential
Properties Trust
Exhibit B - Form of Right Certificate
<PAGE>
RIGHTS AGREEMENT
----------------
Agreement, dated as of November 2, 1998 between Amli Residential
Properties Trust, a Maryland real estate investment trust (the "Company"),
and Harris Trust and Savings Bank, an Illinois banking corporation (the
"Rights Agent").
The Board of Trustees of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common
Share (as hereinafter defined) of the Company outstanding as of the close
of business on November 13, 1998 (the "Record Date"), each Right
representing the right to purchase one one-thousandth of a Preferred Share
(as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and has further agreed to authorize and direct the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the first to occur of the
Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person (as hereinafter
defined) who or which, together with all Affiliates and Associates (as such
terms are hereinafter defined) of such Person, shall be the Beneficial
Owner (as hereinafter defined) of 15% or more of the Common Shares of the
Company then outstanding, but shall not include the Company, any Affiliate
or Subsidiary (as hereinafter defined) of the Company, any employee benefit
plan of the Company or of any Affiliate or Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such plan,
or any Grandfathered Person (as defined below). Notwithstanding the
foregoing, no Person shall become an "Acquiring Person" as the result of
(i) an acquisition of Common Shares by the Company which, by reducing the
number of Common Shares outstanding, increases the proportionate number of
Common Shares beneficially owned by such Person to 15% or more of the
Common Shares of the Company then outstanding, or (ii) the acquisition by
such Person of newly issued Common Shares directly from the Company (it
being understood that a purchase from an underwriter or other intermediary
is not directly from the Company); PROVIDED, HOWEVER, that if a Person
shall become the Beneficial Owner of 15% or more of the Common Shares of
the Company then outstanding by reason of Common Share purchases by the
Company or the receipt of newly issued Common Shares directly from the
Company and shall, after such Common Share purchases or direct issuance by
the Company, become the Beneficial Owner of any additional Common Shares of
the Company, then such Person shall be deemed to be an "Acquiring Person";
PROVIDED FURTHER, HOWEVER, that any transferee from such Person who becomes
the Beneficial Owner of 15% or more of the Common Shares of the Company
then outstanding shall nevertheless be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an "Acquiring
Person" became such inadvertently (including, without limitation, because
(A) such Person was unaware that it beneficially owned a percentage of
Common Shares that would otherwise cause such Person to be an "Acquiring
Person" or (B) such Person was aware of the extent of its Beneficial
Ownership of Common Shares but had no actual knowledge of the consequences
of such Beneficial Ownership under this Agreement) and without any
intention of changing or influencing control of the Company, then such
Person shall not be deemed to be or to have become an "Acquiring Person"
for any purpose of this Agreement unless and until such Person shall have
failed to divest itself, as soon as practicable (as determined, in good
faith, by the Board of Directors of the Company), of Beneficial Ownership
of a sufficient number of Common Shares so that such Person would no longer
otherwise qualify as an "Acquiring Person."
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has (A) the right to
acquire (whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or understanding,
whether written or oral (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities tendered pursuant
to a tender or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered securities are
accepted for purchase or exchange; (B) the sole or shared right to vote or
dispose (including any such right pursuant to any agreement, arrangement or
understanding, whether written or oral); PROVIDED, HOWEVER, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or (C) "beneficial ownership" of (as determined pursuant to Rule
13d-3 of the General Rules and Regulations under the Exchange Act); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the purpose of
acquiring, holding, voting (except to the extent contemplated by the
proviso to clause (B) of subparagraph (ii) of this definition) or disposing
of any securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when used with
reference to the Beneficial Ownership of securities of the Company by any
Person, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to own
beneficially hereunder.
"Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in New York or Illinois are
authorized or obligated by law or executive order to close.
"Close of business" on any given date shall mean 5:00 P.M.,
Eastern time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., Eastern time, on the next succeeding
Business Day.
"Common Shares" when used with reference to the Company shall
mean the common shares of beneficial interest, par value $0.01 per share,
of the Company. "Common Shares" when used with reference to any Person
other than the Company shall mean the capital stock (or equity interest)
with the greatest voting power of such other Person or the equity
securities or other equity interest having power to control or direct the
management of such other Person.
"Distribution Date" shall have the meaning set forth in
Section 3 hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Ratio" shall have the meaning set forth in Section 24
hereof.
"Expiration Date" shall have the meaning set forth in Section 7
hereof.
"Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
"Grandfathered Person" shall mean (i) UICI, a Delaware
corporation, and its Affiliates, (ii) Gregory T. Mutz and his Affiliates,
(iii) Security Capital Preferred Growth Incorporated, a Maryland
corporation ("SCPG"), and its Affiliates, and (iv) any Person who acquires
all of the outstanding Series B Cumulative Convertible Redeemable Preferred
Shares, par value $0.01 per share (the "Series B Preferred Shares"), of the
Company (or all of the Common Shares issued upon conversion of the Series B
Preferred Shares) directly from SCPG (the "Subsequent Series B Holder");
PROVIDED, HOWEVER, that (v) UICI and its Affiliates shall cease to be
Grandfathered Persons if they shall be the Beneficial Owners of more than
29.9% of the Common Shares of the Company then outstanding, (w) Gregory T.
Mutz and his Affiliates shall cease to be Grandfathered Persons if they
shall be the Beneficial Owners of more than 24.9% of the Common Shares of
the Company then outstanding, (x) UICI, Gregory T. Mutz and each of their
respective Affiliates shall cease to be Grandfathered Persons if such
Persons, in the aggregate, shall be the Beneficial Owners of more than
34.9% of the Common Shares of the Company then outstanding, (y) SCPG and
its Affiliates shall cease to be Grandfathered Persons if, in addition to
the Common Shares issued or issuable upon conversion of the Series B
Preferred Shares, they shall be the Beneficial Owners of more than 4.9% of
the Common Shares of the Company then outstanding, and (z) the Subsequent
Series B Holder shall cease to be a Grandfathered Person if such Person
shall be the Beneficial Owner of any Common Shares of the Company other
than the Common Shares issued or issuable upon conversion of the Series B
Preferred Shares; except, in each such case, pursuant to dividends or
rights (including the Rights) paid or offered to shareholders of the
Company generally (other than an Acquiring Person or Persons) or as the
result of an acquisition of Common Shares by the Company which, by reducing
the number of Common Shares outstanding, increases the proportionate number
of Common Shares beneficially owned by such Grandfathered Person.
"Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such
entity.
"Preferred Shares" shall mean the Series C Junior Participating
Preferred Shares, par value $0.01 per share, of the Company having the
rights and preferences set forth in the form of Articles Supplementary
attached to this Agreement as Exhibit A.
"Principal Party" shall have the meaning set forth in
Section 13 hereof.
"Purchase Price" shall have the meaning set forth in Section 4
hereof.
"Redemption Date" shall have the meaning set forth in Section 7
hereof.
"Right Certificate" shall have the meaning set forth in
Section 3 hereof.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) promulgated
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
"Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such
Person.
"Trading Day" shall have the meaning set forth in
Section 11(d)(i) hereof.
"Triggering Event" shall mean any event described in
Section 11(a)(ii) or Section 13(a).
Any determination or interpretation required in connection with any
of the definitions contained in this Section 1 shall be made by the Board
of Trustees of the Company in their good faith judgment, which
determination shall be final and binding on the Rights Agent and on all
shareholders of the Company.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable upon ten days' prior written
notice to the Rights Agent. The Rights Agent shall have no duty to
supervise and shall in no event be liable for acts or omissions of any such
co-Rights Agents.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on the tenth day
after the Shares Acquisition Date, (ii) the close of business on the
fifteenth Business Day (or such later date as may be determined by action
of the Board of Trustees prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other
than the Company, any Affiliate or Subsidiary of the Company, any employee
benefit plan of the Company or of any Affiliate or Subsidiary of the
Company or any entity holding Common Shares for or pursuant to the terms of
any such plan) of, or of the first public announcement of, the intention of
any Person (other than the Company, any Affiliate or Subsidiary of the
Company, any employee benefit plan of the Company or of any Affiliate or
Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) to commence, a tender or exchange
offer the consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating 15% or more of the then
outstanding Common Shares, or (iii) the close of business on the tenth
Business Day (or such later date as may be determined by action of the
Board of Trustees prior to such time as any Person becomes an Acquiring
Person) after the date of filing by any Person of, or the first public
announcement of the intention of any Person to file, any application,
request, submission or other document with any federal or state regulatory
authority seeking approval of, attempting to rebut any presumption of
control upon, or otherwise indicating an intention to enter into, any
transaction or series of transactions the consummation of which would
result in any Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares, other than a
transaction in which newly issued Common Shares are issued directly by the
Company to such Person (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights
will be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders
thereof (which certificates shall also be deemed to be certificates for
Rights) and not by separate certificates, and (y) the Rights will be
transferable only in connection with the transfer of the underlying Common
Shares (including a transfer to the Company). As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent (and
the Rights Agent, at the expense of the Company, will, if requested, send)
by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right
Certificate, in substantially the form of Exhibit B hereto (a "Right
Certificate"), evidencing one Right for each Common Share so held. As of
the Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) With respect to certificates for Common Shares outstanding as
of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders
thereof, and registered holders of Common Shares shall also be the
registered holders of the associated Rights (regardless of whether such
ownership is indicated on the Common Share certificates). Until the
earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date, the transfer of any certificate for Common Shares shall
also constitute the transfer of the Rights associated with the Common
Shares represented thereby.
(c) Rights shall be issued in respect of all Common Shares which
are issued (whether or not previously issued) after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date. Certificates evidencing such Common Shares shall
also be deemed to be certificates for Rights. Certificates evidencing both
Common Shares and Rights in accordance with this Section 3 which are
executed and delivered (whether or not the Common Shares evidenced thereby
were previously issued or are presented for transfer) by the Company
(including, without limitation, certificates representing reacquired Common
Shares referred to in the last sentence of this paragraph (c)) after the
Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date shall have impressed on,
printed on, written on or otherwise affixed to them a legend that by itself
or together with prior legends is substantially to the following effect:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in the Rights Agreement between Amli
Residential Properties Trust (the "Company") and Harris Trust and Savings
Bank, dated as of November 2, 1998, as amended (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, the Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this certificate a
copy of the Rights Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held
by, any Person who is, was or becomes an Acquiring Person or an Affiliate
or Associate thereof (as such terms are defined in the Rights Agreement),
whether currently held by or on behalf of such Person or by any subsequent
holder, shall become null and void.
Until the Distribution Date, the Rights associated with the Common Shares
shall be evidenced by the certificates evidencing the associated Common
Shares alone (regardless of whether any such certificate contains the above
legend), and the transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented
thereby. In the event that the Company purchases or acquires any Common
Shares after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Shares shall be deemed canceled and retired so
that the Company shall not be entitled to exercise any Rights associated
with the Common Shares which are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof)
shall be substantially the same as Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange
on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the
Right Certificates shall entitle the holders thereof to purchase such
number of one one-thousandths of a Preferred Share as shall be set forth
therein at the price per one one-thousandth of a Preferred Share set forth
therein (the "Purchase Price"), but the amount and type of securities
purchasable upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or
Section 22 hereof that evidences Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii)
a transferee of an Acquiring Person (or any Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes an Acquiring
Person, or (iii) a transferee of an Acquiring Person (or any Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement or
understanding, whether written or oral, regarding the transferred Rights or
(B) a transfer which is part of a plan, arrangement or understanding,
whether written or oral, which has as a primary purpose or effect the
avoidance of Section 7(e) hereof, and any Right Certificate issued pursuant
to Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Right Certificate referred to in this sentence,
shall contain (to the extent feasible and otherwise reasonably identifiable
as such) the following legend:
The Rights evidenced by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Right Certificate and the Rights
evidenced hereby may become void in the circumstances specified in Section
7(e) of such Agreement.
The provisions of Section 7(e) shall apply whether or not any Right
Certificate actually contains the foregoing legend.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right
Certificates shall be executed on behalf of the Company by the Chairman of
its Board of Trustees, its President or any of its Vice Presidents, or its
Secretary, either manually or by facsimile signature, shall have affixed
thereto the Company's seal or a facsimile thereof, and shall be attested by
the Secretary or an Assistant Secretary of the Company, either manually or
by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose
unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at
the date of the execution of this Rights Agreement any such person was not
such an officer.
Following the Distribution Date, the Rights Agent will keep or cause
to be kept, at its office designated for such purpose, books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of
the Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, DIVISION, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
Subject to the provisions of Sections 4(b), 7(e), 14 and 24 hereof, at any
time after the close of business on the Distribution Date, and at or prior
to the close of business on the earlier of the Redemption Date or the Final
Expiration Date, any Right Certificate or Right Certificates may be
transferred, divided, combined or exchanged for another Right Certificate
or Right Certificates, entitling the registered holder to purchase a like
number of Preferred Shares (or, following a Triggering Event, Common Shares
or other securities or property, as the case may be) as the Right
Certificate or Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, divide, combine or
exchange any Right Certificate or Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, divided,
combined or exchanged at the office of the Rights Agent designated for such
purpose. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of any such
surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on
the reverse side of such Right Certificate and the Company shall have been
provided with such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request. Thereupon the Rights Agent shall,
subject to Sections 4 and 7 hereof, countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as the case may
be, as so requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection
with any transfer, division, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Right Certificate if mutilated, the
Company will make and deliver a new Right Certificate of like tenor to the
Rights Agent for countersignature and delivery to the registered holder in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the
Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the Purchase Price with respect to each
surrendered Right for the total number of Preferred Shares (or Common
Shares or other securities or property, as the case may be) as to which the
Rights are exercised, at or prior to the earliest of (i) the close of
business on November 2, 2008 (the "Final Expiration Date"), (ii) the time
at which the Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date") or (iii) the time at which such Rights are exchanged as
provided in Section 24 hereof (the earliest to occur of the events
described in (i), (ii) and (iii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right shall initially be $70.00, shall
be subject to adjustment from time to time as provided in Sections 11 and
13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate evidencing exercisable
Rights, with the form of election to purchase and the certificate on the
reverse side of the Right Certificate duly executed, accompanied by payment
of the Purchase Price for the Preferred Shares (or Common Shares or other
securities or property, as the case may be) to be purchased and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of the Company,
the Rights Agent shall thereupon promptly (i) (A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent of the Preferred Shares) certificates for the
number of Preferred Shares to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests,
or (B) if the Company shall have elected to deposit the Preferred Shares
issuable upon exercise of the Rights with a depositary agent, requisition
from the depositary agent depositary receipts representing such number of
one one-thousandths of a Preferred Share as are to be purchased (in which
case certificates for the Preferred Shares evidenced by such receipts shall
be deposited by the transfer agent with the depositary agent) and the
Company will direct the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 14
hereof, (iii) after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may
be designated by such holder and (iv) when appropriate, after receipt,
deliver such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to issue
other securities (including Common Shares) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company
will make all arrangements necessary so that such other securities, cash
and/or property are available for distribution by the Rights Agent, if and
when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Right Certificate or to his duly authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate
of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring
Person becomes an Acquiring Person or (iii) a transferee of an Acquiring
Person (or any Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming an Acquiring Person and
receives such Rights pursuant to either (x) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding, whether written or
oral, regarding the transferred Rights or (y) a transfer which the Board of
Trustees otherwise concludes in good faith is part of a plan, arrangement
or understanding, whether written or oral, which has as a primary purpose
or effect the avoidance of this Section 7(e), shall become null and void
without any further action, and any holder of such Rights shall thereupon
have no rights whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise, from and after the occurrence of
a Triggering Event. The Company shall use all reasonable efforts to insure
that the provisions of this Section 7(e) hereof are complied with, but
shall have no liability to any holder of Rights for the inability to make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise shall have been
completed and signed by the registered holder thereof and the Company shall
have been provided with such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
(g) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred
Shares (and, following the occurrence of a Triggering Event, Common Shares
and/or other securities), the number of Preferred Shares (and, following
the occurrence of a Triggering Event, Common Shares and/or other
securities) that will be sufficient to permit the exercise in full of all
outstanding Rights.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer,
division, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation or
in canceled form, or, if surrendered to the Rights Agent, shall be canceled
by it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Right
Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. AVAILABILITY OF PREFERRED SHARES. The Company covenants
and agrees that it will take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such
Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities), subject to payment of the Purchase
Price, be duly and validly authorized and issued and fully paid and
nonassessable.
The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right
Certificates or of any Preferred Shares (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company
shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a
person other than, or the issuance or delivery of certificates or
depositary receipts for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing Rights surrendered
for exercise or to issue or to deliver any certificates or depositary
receipts for Preferred Shares (or Common Shares and/or other securities, as
the case may be) upon the exercise of any Rights until any such tax shall
have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to
the Company's reasonable satisfaction that no such tax is due.
Section 10. PREFERRED SHARES RECORD DATE. Each person in whose name
any certificate for Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
shares or securities represented thereby on, and such certificate shall be
dated, the date upon which the Right Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; PROVIDED, HOWEVER, that if the date of such
surrender and payment is a date upon which the Preferred Shares (or Common
Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record
holder of such shares or securities on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books
of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any
rights of a holder of Preferred Shares (or Common Shares and/or other
securities, as the case may be) for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or
other distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Company, except as
provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER
OF RIGHTS. The Purchase Price, the number of Preferred Shares covered by
each Right and the number of Rights outstanding are subject to adjustment
from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of Preferred
Shares or (D) issue any of its shares in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
entity), except as otherwise provided in this Section 11(a) and Section
7(e) hereof, the Purchase Price in effect at the time of the record date
for such dividend or of the effective date of such subdivision, combination
or reclassification, and the number and kind of shares issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive the aggregate number
and kind of shares which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Shares transfer books
of the Company were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of the Company issuable upon exercise of
one Right. If an event occurs which would require an adjustment under both
Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person, each holder of a Right, except as
provided below and in Section 7(e) hereof, shall thereafter have a right to
receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable, in accordance with
the terms of this Agreement and in lieu of Preferred Shares, such number of
Common Shares of the Company as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of one one-
thousandths of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price
of the Company's Common Shares (determined pursuant to Section 11(d)
hereof) on the date of the occurrence of such event. In the event that any
Person shall become an Acquiring Person and the Rights shall then be
outstanding, the Company shall not take any action which would eliminate or
diminish the benefits intended to be afforded by the Rights.
(iii) In lieu of issuing Common Shares of the Company in
accordance with Section 11(a)(ii) hereof, the Company may, in the sole
discretion of the Board of Trustees, elect to (and, in the event that the
Board of Trustees has not exercised the exchange right contained in Section
24 hereof and there are not sufficient issued but not outstanding and
authorized but unissued Common Shares to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii), the Company
shall) take all such action as may be necessary to authorize, issue or pay,
upon the exercise of the Rights, cash (including by way of a reduction of
the Purchase Price), property, other securities or any combination thereof
having an aggregate value equal to the value of the Common Shares of the
Company which otherwise would have been issuable pursuant to
Section 11(a)(ii), which aggregate value shall be determined by a majority
of the Board of Trustees. For purposes of the preceding sentence, the
value of the Common Shares shall be determined pursuant to Section 11(d)
hereof and the value of any equity securities which a majority of the Board
of Trustees determines to be equivalent to a Common Share (including the
Preferred Shares, in such ratio as the Board of Trustees shall determine)
shall be deemed to have the same value as the Common Shares. Any such
election by the Board of Trustees must be made and publicly announced
within 60 days following the date on which the event described in Section
11(a)(ii) shall have occurred. Following the occurrence of the event
described in Section 11(a)(ii), a majority of the Board of Trustees then in
office may suspend the exercisability of the Rights for a period of up to
60 days following the date on which the event described in Section
11(a)(ii) shall have occurred to the extent that the Board of Trustees has
not determined whether to exercise the Company's right of election under
this Section 11(a)(iii). In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling
them (for a period expiring within 45 calendar days after such record date)
to subscribe for or purchase Preferred Shares (or shares having the same
rights, privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred Shares or
equivalent preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred shares) less than
the then current per share market price of the Preferred Shares (as defined
in Section 11(d)) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding on
such record date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at
such current market price and the denominator of which shall be the number
of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); PROVIDED, HOWEVER,
that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of the Company
issuable upon exercise of one Right. In case such subscription price is
paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith
by the Board of Trustees of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding
on the Rights Agent and on the holders of the Rights. Preferred Shares
owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall
be made successively whenever such a record date is fixed; and in the event
that such rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving entity) of evidences of indebtedness
or assets (other than a regular periodic cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair market
value (as determined in good faith by the Board of Trustees of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants attributable to one
Preferred Share and the denominator of which shall be such current per
share market price of the Preferred Shares; PROVIDED, HOWEVER, that in no
event shall the consideration to be paid upon the exercise of one Right be
less than the aggregate par value of the shares of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had
not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
under Section 11(a)(iii) hereof, the "current per share market price" of
any security (a "Security" for the purpose of this Section 11(d)(i)) on any
date shall be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days (as such term is
hereinafter defined) immediately prior to such date, and for the purpose of
any computation under Section 11(a)(iii) hereof, the "current per share
market price" of a Security on any date shall be deemed to be the average
of the daily closing prices per share of such Security for thirty (30)
consecutive Trading Days immediately following such date; PROVIDED,
HOWEVER, that in the event that the current per share market price of the
Security is determined during a period following the announcement by the
issuer of such Security of (A) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such
shares (other than the Rights), or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading
Days after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then,
and in each such case, the "current per share market price" shall be
appropriately adjusted to reflect the current market price per share
equivalent (ex-dividend) of such Security. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the Security is not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Security is listed or admitted to trading or, if the Security is not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use, or, if on any such date the
Security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Trustees of the Company.
If on any such date no market maker is making a market in the Security, the
fair value of such Security on such date (as determined in good faith by
the Board of Trustees of the Company) shall be used. The term "Trading
Day" shall mean a day on which the principal national securities exchange
on which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i). If
the Preferred Shares are not publicly traded, the "current per share market
price" of the Preferred Shares shall be conclusively deemed to be the
current per share market price of the Common Shares of the Company as
determined pursuant to Section 11(d)(i) (appropriately adjusted to reflect
any share split, share dividend or similar transaction occurring after the
date hereof), multiplied by one thousand. If neither the Common Shares of
the Company nor the Preferred Shares are publicly held or so listed or
traded, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Trustees of the Company,
whose determination shall be described in a statement filed with the Rights
Agent.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one
one-millionth of a Preferred Share or one ten-thousandth of any other share
or security, as the case may be. Notwithstanding the first sentence of
this Section 11(e), any adjustment required by this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the
expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of the Company other than Preferred
Shares, thereafter the number of such other shares so receivable upon
exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions
with respect to the Preferred Shares contained in this Section 11, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall entitle the holder
thereof to purchase, at the adjusted Purchase Price, the number of one one-
thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter entitle
the holder thereof to purchase, at the adjusted Purchase Price, that number
of one one-thousandths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (A) the
number of one one-thousandths of a Preferred Share covered by a Right
immediately prior to such adjustment by (B) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-thousandths of a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the
number of one one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become that
number of Rights (calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of
the Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of
the adjustment to be made. This record date may be the date on which the
Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this
Section 11(i), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such record date
Right Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one
one-thousandths of a Preferred Share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-thousandth of the then par value, if any,
of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully
paid and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for
a specified event, the Company may elect to defer until the occurrence of
such event the issuance to the holder of any Right exercised after such
record date of the Preferred Shares and other securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and
other securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; PROVIDED,
HOWEVER, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and
to the extent that it in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in Preferred Shares
or issuance of rights, options or warrants referred to hereinabove in
Section 11(b), hereafter made by the Company to holders of its Preferred
Shares shall not be taxable to such shareholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay
any dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any such
case (x) the number of one one-thousandths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be determined by
multiplying the number of one one-thousandths of a Preferred Share so
purchasable immediately prior to such event by a fraction, the numerator of
which is the number of Common Shares outstanding immediately before such
event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (y) each Common Share
outstanding immediately after such event shall have issued with respect to
it that number of Rights which each Common Share outstanding immediately
prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(n) shall be made successively whenever such
a dividend is declared or paid or such a subdivision, combination or
consolidation is effected.
(o) So long as the shares issuable upon the exercise of the Rights
may be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(p) The Company shall use its best efforts to (i) file, as soon as
practicable following the first occurrence of a Triggering Event, a
registration statement under the Securities Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement
to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the date of the expiration of the
Rights. The Company will also take such action as may be appropriate under
the blue sky laws of the various states. The Company may temporarily
suspend, for a period of time not to exceed 90 days, the exercisability of
the Rights in order to prepare and file such registration statement or in
order to comply with such blue sky laws. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended.
(q) In the event that the Rights become exercisable following the
occurrence of a Triggering Event, the Company may permit the Rights,
subject to Section 7(e) hereof, to be exercised for 50% of the Common
Shares (or cash, property or other securities to be substituted for Common
Shares pursuant to Section 11(a)(iii)) that would otherwise be purchasable
under subsection (a) in consideration of the surrender to the Company of
the Rights so exercised and without other payment of the Purchase Price.
Rights exercised under this subsection (q) shall be deemed to have been
exercised in full and shall be canceled.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment, and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Common Shares or the Preferred Shares a copy of such certificate and
(c) mail a brief summary thereof to each holder of a Right Certificate in
accordance with Section 25 hereof. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
contained and shall not be obligated or responsible for calculating any
adjustment and may assume that no adjustment has been made unless and until
it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) If after the Shares Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other
Person, (y) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
entity of such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons other than the Company or one or more of its wholly-
owned Subsidiaries, then, and in each such case, proper provision shall be
made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by
the number of one one-thousandths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of validly authorized and issued,
fully paid, non-assessable and freely tradeable common shares of the
Principal Party (as hereinafter defined), free and clear of all liens,
rights of call or first refusal, encumbrances or other adverse claims, as
shall equal the result obtained by (A) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share
for which a Right is then exercisable (or, if such Right is not then
exercisable for a number of one one-thousandths of a Preferred Share, the
number of such fractional shares for which it was exercisable immediately
prior to an event described under Section 11(a)(ii) hereof) and dividing
that product by (B) 50% of the then current per share market price of the
common shares of such Principal Party (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and
shall assume, by virtue of such consolidation, merger, sale or transfer, or
otherwise, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to
such Principal Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the authorization and reservation of a
sufficient number of its common shares in accordance with Section 9 hereof)
in connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its common shares thereafter deliverable upon the
exercise of the Rights.
(b) "Principal Party" shall mean:
(i) In the case of any transaction described in (x) or (y) of
the first sentence of Section 13(a), the Person that is the issuer of any
securities into which Common Shares of the Company are converted in such
merger or consolidation, and if no securities are so issued, the Person
that is the surviving entity of such merger or consolidation (including the
Company if applicable); and
(ii) in the case of any transaction described in (z) of the
first sentence in Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions;
PROVIDED, HOWEVER, that in any such case described in clauses (b)(i) and
(b)(ii): (1) if the common shares of such Person are not at such time and
have not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the common shares of which are and
have been so registered, "Principal Party" shall refer to such other
Person; (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the common shares of two or more of which are and
have been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the common shares having the greatest aggregate
market value; and (3) in case such Person is owned, directly or indirectly,
by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in (1) and
(2) above shall apply to each of the chains of ownership having an interest
in such joint venture as if such party were a "Subsidiary" of both or all
of such joint venturers and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as
their direct or indirect interests in such Person bear to the total of such
interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have sufficient common
shares authorized to permit the full exercise of the Rights and prior
thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the
terms set forth in paragraphs (a) and (b) of this Section 13 and further
providing that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this Section 13, the
Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use its best
efforts to cause such registration statement to (A) become effective as
soon as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date;
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10 under the
Exchange Act; and
(iii) take such actions as may be necessary or appropriate
under the blue sky laws of the various states.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event that
one of the transactions described in this Section 13(a) shall occur at any
time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there may be paid to the registered holders
of the Right Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading
or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of
Trustees of the Company. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board of Trustees of the Company shall be
used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions which are integral multiples of one one-thousandth of a
Preferred Share). Fractions of Preferred Shares in integral multiples of
one one-thousandth of a Preferred Share may, at the election of the
Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; PROVIDED,
that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which
they are entitled as beneficial owners of the Preferred Shares represented
by such depositary receipts. In lieu of fractional Preferred Shares that
are not integral multiples of one one-thousandth of a Preferred Share, the
Company may, to the extent necessary to reduce such fraction to an integral
multiple of one one-thousandth, pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one one-thousandth of a Preferred Share. For the purposes of this
Section 14(b), the current market value of one one-thousandth of a
Preferred Share shall be one one-thousandth of the closing price of a
Preferred Share (as determined pursuant to the second sentence of
Section 11(d)(i) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of Common Shares upon exercise of
the Rights or to distribute certificates which evidence fractional Common
Shares. In lieu of fractional Common Shares, the Company may pay to the
registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one Common Share. For purposes of this
Section 14(c), the current market value of one Common Share shall be the
closing price of one Common Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior
to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
under Section 18 hereof, are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his own benefit, enforce, and may institute
and maintain any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, his right to exercise the Rights evidenced
by such Right Certificate in the manner provided in such Right Certificate
and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered
at the principal office of the Rights Agent, duly endorsed or accompanied
by a proper instrument of transfer;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the Distribution
Date, the associated Common Shares certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than the Company
or the Rights Agent) for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or any other Person as a result of its inability
to perform any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority
prohibiting or otherwise restraining performance of such obligation.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights
of a shareholder of the Company or any right to vote for the election of
trustees or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any trust action, or to receive
notice of meetings or other actions affecting shareholders (except as
provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. CONCERNING THE RIGHTS AGENT. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent, for anything done or omitted by
the Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against any
claim of liability in the premises. The costs and expenses of enforcing
this right of indemnification shall also be paid by the Company. The
indemnification provided for hereunder shall survive the expiration of the
Rights and the termination of this Agreement.
The Rights Agent may conclusively rely upon and shall be protected
and shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with, its administration of this
Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or
other paper or document believed by it to be genuine and to be signed,
executed and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set forth in
Section 20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT. Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
stock transfer or corporate trust business of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; PROVIDED, that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the
Right Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall
not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent
or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under
its prior name and deliver Right Certificates so countersigned; and in case
at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates
either in its prior name or in its changed name; and in all such cases such
Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms
and conditions (and no implied duties and obligations shall be read against
the Rights Agent), by all of which the Company and the holders of Right
Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts, the Rights Agent may consult with
legal counsel (who may be legal counsel for the Company), and the opinion
of such counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good faith and
in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, the President, any Vice President, or the Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for any and all losses, liabilities, costs, damages
and expenses (including attorneys' fees) arising out of or in connection
with the Rights Agent's gross negligence, bad faith or willful misconduct.
Anything in this Agreement to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage and regardless of the form of the action.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Agreement or in
any Right Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant
to Section 7(e) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Section 3,
11, 13, 23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise
of Rights evidenced by Right Certificates after receipt of a certificate
furnished pursuant to Section 12 describing a change or adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Preferred Shares or
Common Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares or Common Shares will,
when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the Secretary
or the Treasurer of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while waiting
for those instructions. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on and/or after which such action
shall be taken or such omission shall be effective. The Rights Agent shall
not be liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five
Business Days after the date any officer of the Company actually receives
such application, unless any such officer shall have consented in writing
to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying
the action to be taken or omitted.
(h) The Rights Agent and any stockholder, Trustee, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or its Subsidiaries or become pecuniarily
interested in any transaction in which the Company or its Subsidiaries may
be interested, or contract with or lend money to the Company or its
Subsidiaries or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or its
Subsidiaries or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form
of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise of transfer without first consulting
with the Company.
(k) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of
such funds or adequate indemnification against such risk or liability is
not reasonably assured.
(l) The Rights Agent shall not be required to take notice or be
deemed to have notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or Associate)
under this Agreement unless and until the Rights Agent shall be
specifically notified in writing by the Company of such fact, event or
determination.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares or Preferred Shares by registered
or certified mail, and, at the expense of the Company, to the holders of
the Right Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon 30 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be,
and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates
by first-class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation or bank
organized and doing business under the laws of the United States or of any
other state of the United States, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at
the time of its appointment as Rights Agent a combined capital and surplus
of at least $100 million. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for
in this Section 21, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or
the appointment of the successor Rights Agent, as the case may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights
in such form as may be approved by its Board of Trustees to reflect any
adjustment or change in the Purchase Price and the number or kind or class
of shares or other securities or property purchasable under the Right
Certificates made in accordance with the provisions of this Agreement.
Section 23. REDEMPTION.
(a) The Company may, at its option, at any time prior to such time
as any Person becomes an Acquiring Person, redeem all but not less than all
the then outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any share split, share dividend or
similar transaction occurring after the date hereof (such redemption price
being hereinafter referred to as the "Redemption Price"). The redemption
of the Rights by the Company may be made effective at such time on such
basis and with such conditions as the Board of Trustees in its sole
discretion may establish. The Company may, at its option, pay the
Redemption Price in cash, Common Shares (based on the current per share
market price of the Common Shares at the time of redemption) or any other
form of consideration deemed appropriate by the Board of Trustees.
(b) Immediately upon the action of the Board of Trustees of the
Company ordering the redemption of the Rights (or at the effective time of
such redemption established by the Board of Trustees of the Company
pursuant to the last sentence of paragraph (a) of this Section 23), and
without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption; PROVIDED, HOWEVER, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. Within 10 days after such action of the Board
of Trustees ordering the redemption of the Rights or, if later, the
effectiveness of the redemption of the Rights pursuant to the last sentence
of paragraph (a), the Company shall mail a notice of redemption to all the
holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the
Common Shares. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each
such notice of redemption will state the method by which the payment of the
Redemption Price will be made. The Company may, at its option, discharge
all of its obligations with respect to the Rights by (i) issuing a press
release announcing the manner of redemption of the Rights, (ii) depositing
with a bank or trust company having a capital and surplus of at least $100
million, funds necessary for such redemption, in trust, to be applied to
the redemption of the Rights so called for redemption and (iii) arranging
for the mailing of the Redemption Price to the registered holders of the
Rights; then, and upon such action, all outstanding Rights Certificates
shall be null and void without further action by the Company. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23, in Section 24 hereof, or in
connection with the purchase of Common Shares prior to the Distribution
Date.
Section 24. EXCHANGE.
(a) The Company may, at its option, at any time after a Triggering
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio
of one Common Share per Right, appropriately adjusted to reflect any share
split, share dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Company shall not be empowered
to effect such exchange at any time after any Person (other than the
Company, any Affiliate or Subsidiary of the Company, any employee benefit
plan of the Company or of any Affiliate or Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any such
plan), together with all Affiliates and Associates of such Person, becomes
the Beneficial Owner of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Trustees of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right thereafter
of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice of any such
exchange; PROVIDED, HOWEVER, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the holders of
such Rights at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Common Shares for Rights will be effected and, in the event
of any partial exchange, the number of Rights which will be exchanged. Any
partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares (or equivalent preferred shares, as
such term is defined in Section 11(b) hereof) for Common Shares
exchangeable for Rights, at the initial rate of one one-thousandth of a
Preferred Share (or equivalent preferred share) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares or
Preferred Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this
Section 24, the Company shall take all such action as may be necessary to
authorize additional Common Shares or Preferred Shares for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to
the registered holders of the Right Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this paragraph (e), the current market value of
a whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for
the Trading Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose at any time after the
Distribution Date (i) to pay any dividend payable in shares of any class to
the holders of its Preferred Shares or to make any other distribution to
the holders of its Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Preferred Shares rights or
warrants to subscribe for or to purchase any additional Preferred Shares or
shares of any class or any other securities, rights or options, (iii) to
effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to, any other Person, (v) to effect
the liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares
or to effect a subdivision, combination or consolidation of the Common
Shares (by reclassification or otherwise than by payment of dividends in
Common Shares), then, in each such case, the Company shall give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such share dividend, or distribution of rights or warrants, or
the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the Common Shares and/or
Preferred Shares, if any such date is to be fixed, and such notice shall be
so given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of the occurrence of such event, which notice shall
describe such event and the consequences of such event to holders of Rights
under Section 11(a)(ii) hereof.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Amli Residential Properties Trust
125 South Wacker Drive, Suite 3100
Chicago, Illinois 60606
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by registered or certified mail and
shall be deemed given upon receipt, addressed (until another address is
filed in writing with the Company) as follows:
Harris Trust and Savings Bank
311 West Monroe Street
Chicago, Illinois 60690
Attention: Shareholder Services Department
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time
to time supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, or to make any other
provisions with respect to the Rights (including, without limitation,
changes to the Purchase Price) which the Company may deem necessary or
desirable, any such supplement or amendment to be evidenced by a writing
signed by the Company and, if the Company so directs, the Rights Agent;
PROVIDED, HOWEVER, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights.
Notwithstanding anything in this Agreement to the contrary, no supplement
or amendment that changes the rights and duties of the Rights Agent under
this Agreement will be effective against the Rights Agent without the
execution of such supplement or amendment by the Rights Agent.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares).
Section 30. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction
or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired
or invalidated.
Section 31. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Maryland and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to
contracts to be made and performed entirely within such State, except that
those provisions of this Agreement affecting the rights, duties and
responsibilities of the Rights Agent shall be governed by and construed in
accordance with the law of the State of Illinois.
Section 32. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
Section 34. DETERMINATIONS AND ACTIONS BY THE BOARD OF TRUSTEES.
The Board of Trustees of the Company shall have the exclusive power and
authority to administer this Agreement and to exercise all rights and
powers specifically granted to the Trustees or the Company or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (a) interpret the provisions of
this Agreement, and (b) make all determinations deemed necessary or
advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, interpretations and determinations
(including, for purpose of clause (b) above, all omissions with respect to
the foregoing) which are done or made by the Trustees in good faith, shall
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties, and (y) not
subject the Trustees to any liability to the holders of the Right
Certificates.
Section 35. LIMITATION OF LIABILITY. 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. To the maximum
extent permissible under Maryland law, 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.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above
written.
AMLI RESIDENTIAL PROPERTIES TRUST
By: /s/ Allan J. Sweet
--------------------
Name: Allan J. Sweet
Title: President
Attest:
By: /s/ Fred Shapiro
Name: Fred Shapiro
Title: Assistant Secretary
HARRIS TRUST AND SAVINGS BANK
By: /s/ Susan M. Shadel
--------------------
Name: Susan M. Shadel
Title: Assistant Vice President
Attest:
By: /s/ K.W. Penn
--------------------
Name: K.W. Penn
Title: Assistant Vice President
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
FORM OF
ARTICLES SUPPLEMENTARY
SERIES C JUNIOR
PARTICIPATING PREFERRED SHARES
Amli Residential Properties Trust, a Maryland real estate investment
trust (the "Company"), hereby certifies to the State Department of
Assessments and Taxation of Maryland pursuant to Section 8-203(b) of the
Annotated Code of Maryland (the "Code") that:
FIRST: Under a power contained in Article 2, Section 1 of the
Declaration of Trust of the Company, the Board of Trustees, as required by
Section 8-203(b) of the Code, at a meeting duly called and held on November
2, 1998, has classified 150,000 unissued shares of the Company as Series C
Junior Participating Preferred Shares, with the following preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions
of redemption, which upon any restatement of the Declaration of Trust shall
be made part of Article 2 of the Declaration, with any necessary or
appropriate changes to the enumeration and lettering hereof:
SERIES C JUNIOR PARTICIPATING PREFERRED SHARES
Section 1. DESIGNATION AND AMOUNT. There shall be a series of
preferred shares of the Company, $0.01 par value per share, which shall be
designated "Series C Junior Participating Preferred Shares" (the "Series C
Preferred Shares"), and the number of shares constituting that Series C
shall be 150,000. Such number of shares may be increased or decreased by
resolution of the Board of Trustees and by the filing of articles
supplementary in accordance with the provisions of Title 8 of the
Corporations and Associations Code of the State of Maryland stating that
such increase or reduction has been so authorized; PROVIDED, HOWEVER, that
no decrease shall reduce the number of Series C Preferred Shares to a
number less than the number of Series C Preferred Shares then outstanding
plus the number of Series C Preferred Shares issuable upon exercise of
outstanding rights, options or warrants or upon conversion of outstanding
securities issued by the Company.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the prior and superior rights of the holders of any
shares of any class or series of preferred shares of the Company ranking
prior and superior to the Series C Preferred Shares with respect to
dividends, the holders of Series C Preferred Shares shall be entitled to
receive, when, as and if authorized by the Board of Trustees out of funds
legally available for the purpose, quarterly dividends payable in cash to
holders of record on the last Business Day of January, April, July and
October in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date") (commencing on the first Quarterly
Dividend Payment Date after the first issuance of a Series C Preferred
Share or fraction thereof) in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times the aggregate per share
amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in Common Shares (hereinafter defined) or a
subdivision of the outstanding Common Shares (by a reclassification or
otherwise), authorized on the common shares of beneficial interest, par
value $0.01 per share, of the Company (the "Common Shares") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any
Series C Preferred Share or fraction thereof. In the event the Company
shall at any time following November 2, 1998 (i) declare any dividend on
Common Shares payable in Common Shares, (ii) subdivide the outstanding
Common Shares or (iii) combine the outstanding Common Shares into a smaller
number of shares, then in each such case the amount to which holders of
Series C Preferred Shares were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying
each such amount by a fraction the numerator of which is the number of
Common Shares outstanding immediately after such event and the denominator
of which is the number of Common Shares that were outstanding immediately
prior to such event.
(B) The Company shall declare a dividend or distribution on the
Series C Preferred Shares as provided in paragraph (A) above at the time it
declares a dividend or distribution on the Common Shares (other than a
dividend payable in Common Shares).
(C) No dividend or distribution (other than a dividend or
distribution payable in Common Shares) shall be paid or payable to the
holders of Common Shares unless, prior thereto, all accrued but unpaid
dividends to the date of that dividend or distribution shall have been paid
to the holders of Series C Preferred Shares.
(D) Dividends shall begin to accrue and be cumulative on outstanding
Series C Preferred Shares from the Quarterly Dividend Payment Date next
preceding the date of issuance of such Series C Preferred Shares, unless
the date of issuance of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends on such
shares shall begin to accrue and be cumulative from the date of issuance of
such shares, or unless the date of issuance is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
Series C Preferred Shares entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the Series C Preferred Shares in an amount
less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of Trustees
may fix a record date for the determination of holders of Series C
Preferred Shares entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to
the date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of Series C Preferred Shares
shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each one one-thousandth of a Series C Preferred Share shall entitle the
holder thereof to one vote on all matters submitted to a vote of the
shareholders of the Company. In the event the Company shall at any time
following November 2, 1998 (i) declare any dividend on Common Shares
payable in Common Shares, (ii) subdivide the outstanding Common Shares or
(iii) combine the outstanding Common Shares into a smaller number of
shares, then in each such case the number of votes per share to which
holders of Series C Preferred Shares were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of Common Shares outstanding immediately
after such event and the denominator of which is the number of Common
Shares that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, the holders of Series C
Preferred Shares and the holders of Common Shares and any other shares of
beneficial interest of the Company having general voting rights shall vote
together as one class on all matters submitted to a vote of shareholders of
the Company.
(C) (i) Whenever, at any time or times, dividends payable on any
Series C Preferred Shares shall be in arrears in an amount equal to at
least six full quarterly dividends (whether or not declared and whether or
not consecutive), the holders of record of the outstanding Series C
Preferred Shares shall have the exclusive right, voting separately as a
single class, to elect two Trustees of the Company at a special meeting of
shareholders of the Company or at the Company's next annual meeting of
shareholders, and at each subsequent annual meeting of shareholders, as
provided below. At elections for such Trustees, the holders of Series C
Preferred Shares shall be entitled to cast one vote for each one one-
thousandth of a Series C Preferred Share held, subject to adjustment.
(ii) Upon the vesting of such right of the holders of the
Series C Preferred Shares, the maximum authorized number of members of the
Board of Trustees shall automatically be increased by two and the two
vacancies so created shall be filled by vote of the holders of the
outstanding Series C Preferred Shares as hereinafter set forth. A special
meeting of the shareholders of the Company then entitled to vote shall be
called by the Chairman, the President, any Senior Vice President or the
Secretary of the Company, if requested in writing by the holders of record
of not less than 10% of the Series C Preferred Shares then outstanding. At
such special meeting, or, if no such special meeting shall have been
called, then at the next annual meeting of shareholders of the Company, the
holders of the Series C Preferred Shares shall elect, voting as above
provided, two Trustees of the Company to fill the aforesaid vacancies
created by the automatic increase in the number of members of the Board of
Trustees. At any and all such meetings for such election, the holders of a
majority of the outstanding Series C Preferred Shares shall be necessary to
constitute a quorum for such election, whether present in person or by
proxy, and such two Trustees shall be elected by the vote of at least a
plurality of shares held by such shareholders present or represented at the
meeting. Any Trustee elected by holders of Series C Preferred Shares
pursuant to this Section may be removed at any annual or special meeting,
by vote of a majority of the shareholders voting as a class who elected
such Trustee, with or without cause. In case any vacancy shall occur among
the Trustees elected by the holders of the Series C Preferred Shares
pursuant to this Section, such vacancy may be filled by the remaining
Trustee so elected, or his successor then in office, and the Trustee so
elected to fill such vacancy shall serve until the next meeting of
shareholders for the election of Trustees. After the holders of the Series
C Preferred Shares shall have exercised their right to elect Trustees in
any default period and during the continuance of such period, the number of
Trustees shall not be further increased or decreased except by vote of the
holders of Series C Preferred Shares as herein provided or pursuant to the
rights of any equity securities ranking senior to or PARI PASSU with the
Series C Preferred Shares.
(iii) The right of the holders of the Series C Preferred
Shares, voting separately as a class, to elect two members of the Board of
Trustees of the Company as aforesaid shall continue until, and only until,
such time as all arrears in dividends (whether or not declared) on the
Series C Preferred Shares shall have been paid or declared and set apart
for payment, at which time such right shall terminate, except as herein or
by law expressly provided, subject to revesting in the event of each and
every subsequent default of the character above-mentioned. Upon any
termination of the right of the holders of the Series C Preferred Shares as
a class to vote for Trustees as herein provided, the term of office of all
Trustees then in office elected by the holders of Series C Preferred Shares
pursuant to this Section shall terminate immediately. Whenever the term of
office of the Trustees elected by the holders of the Series C Preferred
Shares pursuant to this Section shall terminate and the special voting
powers vested in the holders of the Series C Preferred Shares pursuant to
this Section shall have expired, the maximum number of members of the Board
of Trustees of the Company shall be such number as may be provided for in
the Bylaws of the Company irrespective of any increase made pursuant to the
provisions of this Section.
(D) Except as otherwise provided herein or required by law, holders
of Series C Preferred Shares shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to
vote with holders of Common Shares as provided herein) for taking any
corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever any quarterly dividends or other dividends or
distributions payable on the Series C Preferred Shares as provided in
Section 2 are in arrears, then, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on Series C Preferred
Shares outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any shares
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series C Preferred Shares, other than dividends paid or
payable in such junior shares;
(ii) declare or pay dividends on or make any other
distributions on any shares ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series C Preferred
Shares, except dividends paid ratably on the Series C Preferred Shares and
all such parity shares on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series C Preferred Shares, provided
that the Company may at any time redeem, purchase or otherwise acquire any
such parity shares in exchange for shares of the Company ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to
the Series C Preferred Shares; or
(iv) purchase or otherwise acquire for consideration any
Series C Preferred Shares, except in accordance with a purchase offer made
in writing or by publication (as determined by the Board of Trustees) to
all holders of such shares upon such terms as the Board of Trustees, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of the Company
unless the Company could, under paragraph (A) of this Section, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any Series C Preferred Shares
purchased or otherwise acquired by the Company in any manner whatsoever
shall become authorized but unissued shares of beneficial interest and may
be reissued as Common Shares or as part of a new series of preferred shares
to be created by resolution or resolutions of the Board of Trustees,
subject to the conditions and restrictions on issuance set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. (A) Upon any
voluntary liquidation, dissolution or winding up of the Company, no
distribution shall be made to the holders of shares ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series C Preferred Shares unless, prior thereto, the holders of Series C
Preferred Shares shall have received $1.00 per share, plus an amount equal
to accrued and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series C Liquidation
Preference"). Following the payment of the full amount of the Series C
Liquidation Preference, no additional distributions shall be made to the
holders of Series C Preferred Shares unless, prior thereto, the holders of
Common Shares shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series C
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set
forth in subparagraph C below to reflect such events as share splits, share
dividends and recapitalizations with respect to the Common Shares) (such
number in clause (ii), the "Adjustment Number"). Following the payment of
the full amount of the Series C Liquidation Preference and the Common
Adjustment in respect of all outstanding Series C Preferred Shares and
Common Shares, respectively, holders of Series C Preferred Shares and
holders of Common Shares shall receive their ratable and proportionate
share of the remaining assets to be distributed in the ratio, on a per
share basis, of the Adjustment Number to 1 with respect to such Series C
Preferred Shares and Common Shares, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series C Liquidation Preference
and the liquidation preferences of all other series of preferred shares, if
any, which rank on a parity with the Series C Preferred Shares, then such
remaining assets shall be distributed ratably to the holders of the Series
C Preferred Shares and such parity shares in proportion to their respective
liquidation preferences.
(C) In the event the Company shall at any time following November 2,
1998 (i) declare any dividend on Common Shares payable in Common Shares,
(ii) subdivide the outstanding Common Shares or (iii) combine the
outstanding Common Shares into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of Common Shares outstanding immediately
after such event and the denominator of which is the number of Common
Shares that were outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Company shall
enter into any consolidation, merger, combination or other transaction in
which the Common Shares are exchanged for or changed into other shares or
securities, cash and/or any other property, then in any such case, the
Series C Preferred Shares shall at the same time be similarly exchanged or
changed in an amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate amount of shares,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each Common Share is exchanged or changed.
In the event the Company shall at any time (i) declare any dividend on
Common Shares payable in Common Shares, (ii) subdivide the outstanding
Common Shares or (iii) combine the outstanding Common Shares into a smaller
number of shares, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of Series C
Preferred Shares shall be adjusted by multiplying such amount by a fraction
the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
Section 8. REDEMPTION. The Series C Preferred Shares shall not be
redeemable by the Company. The preceding sentence shall not limit the
ability of the Company to purchase or otherwise deal in such shares to the
extent permitted by law.
Section 9. RANKING. The Series C Preferred Shares shall rank junior
to all other series of the Company's preferred shares (whether with or
without par value), including, but not limited to, the Series A Cumulative
Convertible Preferred Shares of Beneficial Interest, par value $0.01 per
share, the Series B Cumulative Convertible Redeemable Preferred Shares of
Beneficial Interest, par value $0.01 per share, and all other series of the
Company's preferred shares ranking senior to or on a parity with such
Series A or Series B preferred shares, as to the payment of dividends and
the distribution of assets, unless the terms of any such series shall
provide otherwise.
Section 10. AMENDMENT. Neither the Company's Declaration of Trust
nor any Articles Supplementary relating to the Series C Preferred Shares
shall be amended in any manner which would materially and adversely alter
or change the preferences, rights or other terms of the Series C Preferred
Shares without the affirmative vote of the holders of a majority or more of
the outstanding Series C Preferred Shares, voting separately as a class.
Section 11. FRACTIONAL SHARES. Series C Preferred Shares may be
issued in fractions of a share that are integral multiples of one-one
thousandth of a share, which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive
dividends and participate in distributions and to have the benefit of all
other rights of holders of Series C Preferred Shares.
SECOND: These Articles Supplementary have been approved by the Board
of Trustees in the manner and by the vote required by law.
THIRD: The undersigned President of the Company acknowledges these
Articles Supplementary to be the act of the Company and, as to all matters
or facts required to be verified under oath, such officer acknowledges that
to the best of his knowledge, information and belief, these matters and
facts are true in all material respects and that this statement is made
under the penalties for perjury.
<PAGE>
IN WITNESS WHEREOF, these Articles Supplementary have been duly
executed by the undersigned officer this 2nd day of November, 1998.
AMLI RESIDENTIAL PROPERTIES TRUST
By: /s/ ALLAN J. SWEET
Name: Allan J. Sweet
Title: President
Attest:
By:_______________________
Name:
Title:
<PAGE>
[Form of Right Certificate]
Certificate No. R- ____________________ Rights
NOT EXERCISABLE AFTER NOVEMBER 2, 2008 OR EARLIER IF THE RIGHTS
EXPIRE UNDER CERTAIN CIRCUMSTANCES OR ARE EXCHANGED OR REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING
PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY
THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY,
THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN
THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]
Right Certificate
AMLI RESIDENTIAL PROPERTIES TRUST
This certifies that , or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of November 2, 1998 (the
"Rights Agreement"), between Amli Residential Properties Trust, a Maryland
real estate investment trust (the "Company"), and Harris Trust and Savings
Bank (the "Rights Agent") to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights Agreement) and
prior to 5:00 p.m. (Eastern time) on November 2, 2008 or notice of
redemption or exchange at the office of the Rights Agent (or its successors
as Rights Agent) designated for such purpose, one one-thousandth of a fully
paid, non-assessable Series C Junior Participating Preferred Share (a
"Preferred Share") of the Company, at a purchase price of $70.00 per one
one-thousandth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the appropriate
Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Right Certificate (and the number of
Preferred Shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per Preferred Share set forth above, are the
number and Purchase Price as of November 2, 1998, based on the Preferred
Shares as constituted at such date. Capitalized terms not defined in this
Right Certificate that are defined in the Rights Agreement shall have the
meanings ascribed to them in the Rights Agreement.
Upon the occurrence of a Triggering Event, if the Rights evidenced by
this Right Certificate are beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of any such Acquiring Person, (ii) under certain
circumstances specified in the Rights Agreement, a transferee of any such
Acquiring Person, Associate or Affiliate, or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of a person
who, after such transfer, became an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, such Rights shall become null and void
and no holder hereof shall have any right with respect to such Rights from
and after the occurrence of any such Triggering Event.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of Preferred Shares or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right
Certificate are subject to modification and adjustment upon the happening
of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to
which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary suspension
of the exercisability of such Rights under certain circumstances specified
in such Rights Agreement. Copies of the Rights Agreement are on file at
the above-mentioned office of the Rights Agent and are also available upon
written request to the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal corporate trust office of the Rights Agent,
may be exchanged for another Right Certificate or Right Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of Preferred Shares as the Rights evidenced by the
Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof another
Right Certificate or Right Certificates for the number of whole Rights not
exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option
at a redemption price of $0.01 per Right at any time prior to the earlier
of (i) such time as any Person becomes an Acquiring Person or (ii) the
close of business on the Final Expiration Date.
No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share, which may,
at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of
Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise hereof, nor shall anything contained in
the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Company or any
right to vote for the election of trustees or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
trust action, or, to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised as provided
in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
<PAGE>
WITNESS the facsimile signature of the proper officers of the Company
and its seal.
Dated as of _________________ ___, 19_____
AMLI RESIDENTIAL PROPERTIES TRUST
By:
Name:
Title:
Attest: (SEAL)
Name:
Title:
Countersigned:
HARRIS TRUST AND SAVINGS BANK
By:
Authorized Signature
<PAGE>
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder desires to
transfer the Right Certificate.)
FOR VALUE RECEIVED __________________________________________________
____________________ hereby sells, assigns and transfers unto
______________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint _____________
________________________________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full power of
substitution.
Date: _____________ ____, 19_____ _________________________________
Signature
Signature Guaranteed:
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Date: ____________ _____, 19_____ ------------------------------
Signature
NOTICE
------
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
<PAGE>
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to
exercise Rights evidenced by the
Right Certificate.)
To: AMLI RESIDENTIAL PROPERTIES TRUST
The undersigned hereby irrevocably elects to exercise ________ Rights
evidenced by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of
the Rights) and requests that certificates for such shares be issued in the
name of:
Please insert social security
or other identifying number: ________________________________________
- - --------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: ________________________________________
- - --------------------------------------------------
(Please print name and address)
Date: __________ _____, 19____ ______________________________
Signature
Signature Guaranteed:
<PAGE>
Certificate
-----------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ____________________, 19____ ______________________________
Signature
NOTICE
------
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S FORM 10-Q FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
INCLUDED IN SUCH REPORT.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 8,754
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 699,779
<DEPRECIATION> 75,592
<TOTAL-ASSETS> 747,489
<CURRENT-LIABILITIES> 0
<BONDS> 336,190
0
42
<COMMON> 166
<OTHER-SE> 341,279
<TOTAL-LIABILITY-AND-EQUITY> 747,489
<SALES> 0
<TOTAL-REVENUES> 86,126
<CGS> 0
<TOTAL-COSTS> 63,875
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 14,993
<INCOME-PRETAX> 19,080
<INCOME-TAX> 0
<INCOME-CONTINUING> 19,080
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,080
<EPS-PRIMARY> .97
<EPS-DILUTED> .97
</TABLE>
EXHIBIT 99
- - ----------
AMLI RESIDENTIAL PROPERTIES TRUST
FINANCIAL AND OPERATING DATA
September 30, 1998
1. Funds from Operations
2. Statements of Operations
3. Balance Sheets
4. Selected Financial Information
5. Debt
6. Debt Maturities
7. Same Community Comparison - Wholly-Owned
- three months ended September 30, 1998 and 1997
8. Same Community Comparison - Wholly-Owned
- nine months ended September 30, 1998 and 1997
9. Same Community Comparison - Wholly-Owned
and Co-Investments
- three months ended September 30, 1998 and 1997
10. Same Community Comparison - Wholly-Owned
and Co-Investments
- nine months ended September 30, 1998 and 1997
11. Property Information
12. Property EBITDA
13. Development Activities
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
FUNDS FROM OPERATIONS
Unaudited - Dollars in thousands except per share data
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
- - --------
Property revenues:
Rental. . . . . . . . . . . . . . . . . . . $ 25,673 20,035 75,015 57,996
Other . . . . . . . . . . . . . . . . . . . 1,606 1,167 4,354 3,161
-------- -------- -------- --------
Total Property Revenues . . . . . . . 27,279 21,202 79,369 61,157
-------- -------- -------- --------
Property operating expenses . . . . . . . . . (10,497) (8,482) (30,483) (23,935)
Property management fees. . . . . . . . . . . (682) (539) (1,987) (1,547)
-------- -------- -------- --------
Property expenses . . . . . . . . . . (11,179) (9,021) (32,470) (25,482)
Operating expense ratio . . . . . . . . . . . 41.0% 42.5% 40.9% 41.7%
-------- -------- -------- --------
Net operating income. . . . . . . . . 16,100 12,181 46,899 35,675
-------- -------- -------- --------
OTHER INCOME
- - ------------
Share of Service Cos. FFO (1). . . . . . . . 14 183 122 260
Interest from Service Companies (2). . . . . 850 289 2,001 729
Other interest . . . . . . . . . . . . . . . 430 172 844 399
Share of partnerships FFO (3). . . . . . . . 1,659 904 4,148 2,391
Fee income - acquisitions and
dispositions . . . . . . . . . . . . . . . -- -- -- 137
Fee income - developments. . . . . . . . . . 813 573 2,019 1,174
Fee income - asset management. . . . . . . . 150 151 452 455
Other. . . . . . . . . . . . . . . . . . . . 34 188 111 277
-------- -------- -------- --------
Total other income. . . . . . . . . . 3,950 2,460 9,697 5,822
General and administrative (4). . . . . . . . (837) (680) (2,803) (2,153)
-------- -------- -------- --------
EBITDA. . . . . . . . . . . . . . . . . . . . 19,213 13,961 53,793 39,344
-------- -------- -------- --------
Interest expense. . . . . . . . . . . . . . . (5,255) (2,619) (14,993) (8,151)
Amortization of deferred costs. . . . . . . . (116) (105) (364) (435)
-------- -------- -------- --------
FUNDS FROM OPERATIONS (FFO) . . . . . . . . . $ 13,842 11,237 38,436 30,758
======== ======== ======== ========
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
FUNDS FROM OPERATIONS - CONTINUED
Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1998 1997 1998 1997
-------- -------- -------- --------
Capital expenditures paid from FFO. . . . . . (1,175) (825) (3,029) (2,705)
Other - share of Co-investments
Cap exp.. . . . . . . . . . . . . . . . . . (121) (54) (268) (154)
-------- -------- -------- --------
Funds available for distribution
(FAD) . . . . . . . . . . . . . . . . . . . $ 12,546 10,358 35,139 27,899
======== ======== ======== ========
FFO per share . . . . . . . . . . . . . . . . $ 0.60 0.55 1.73 1.58
FAD per share . . . . . . . . . . . . . . . . $ 0.54 0.50 1.58 1.43
Dividend per share. . . . . . . . . . . . . . $ 0.44 0.44 1.32 1.30
======== ======== ======== ========
Dividend as a % of FFO. . . . . . . . . . . . 73.6% 80.4% 76.4% 82.3%
Dividend as a % of FAD. . . . . . . . . . . . 81.2% 87.3% 83.4% 90.9%
======== ======== ======== ========
<FN>
NOTES:
(1) Includes share of income (before amortization of goodwill of $300) for the nine months ended September 30,
1998.
(2) Interest on 13% notes receivable and working capital advances.
(3) Includes share of income and share of depreciation of $2,640 and $1,834 for the nine months ended
September 30, 1998 and 1997, respectively.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
STATEMENT OF OPERATIONS
Unaudited - Dollars in thousands except per share data
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1998 1997 1998 1997
-------- -------- -------- --------
<S> <C> <C> <C> <C>
REVENUES
- - --------
Property revenues:
Rental. . . . . . . . . . . . . . . . . . . $ 25,673 20,035 75,015 57,996
Other . . . . . . . . . . . . . . . . . . . 1,606 1,167 4,354 3,161
Interest and share of income (loss)
from Service Cos.. . . . . . . . . . . . . . 764 472 1,823 989
Other interest. . . . . . . . . . . . . . . . 430 172 844 399
Share of income from co-investment
partnerships . . . . . . . . . . . . . . . . 685 224 1,508 557
Fees from co-investment partnerships. . . . . 997 912 2,582 2,043
-------- -------- -------- --------
Total revenues. . . . . . . . . . . . 30,155 22,982 86,126 65,145
-------- -------- -------- --------
EXPENSES
- - --------
Personnel . . . . . . . . . . . . . . . . . . 2,565 1,953 7,411 5,498
Advertising and promotion . . . . . . . . . . 674 559 2,178 1,548
Utilities . . . . . . . . . . . . . . . . . . 1,259 1,097 3,403 3,031
Building repairs and maintenance. . . . . . . 1,748 1,706 4,493 4,269
Landscaping and grounds maintenance . . . . . 609 474 1,699 1,353
Real estate taxes . . . . . . . . . . . . . . 3,040 2,167 9,494 6,801
Insurance . . . . . . . . . . . . . . . . . . 232 243 704 641
Other operating expenses. . . . . . . . . . . 370 283 1,101 794
Property management fees. . . . . . . . . . . 682 539 1,987 1,547
Interest, net of capitalized. . . . . . . . . 5,255 2,619 14,993 8,151
Amortization of deferred costs. . . . . . . . 116 105 364 435
Depreciation of real property . . . . . . . . 3,214 2,456 9,661 7,148
Depreciation of personal property . . . . . . 1,252 872 3,584 2,433
General and administrative. . . . . . . . . . 837 680 2,803 2,153
-------- -------- -------- --------
Total expenses. . . . . . . . . . . . 21,853 15,753 63,875 45,802
-------- -------- -------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
STATEMENT OF OPERATIONS - CONTINUED
Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1998 1997 1998 1997
-------- -------- -------- --------
Non-recurring item - gain on sale
of properties and rate caps . . . . . . . . -- -- -- --
-------- -------- -------- --------
Income before taxes, minority interest
and extraordinary item. . . . . . . . . . . 8,302 7,229 22,251 19,343
-------- -------- -------- --------
Income taxes. . . . . . . . . . . . . . . . . -- -- -- --
-------- -------- -------- --------
Income before minority interest/extra-
ordinary items. . . . . . . . . . . . . . . 8,302 7,229 22,251 19,343
Minority interest . . . . . . . . . . . . . . 1,129 1,062 3,171 2,973
-------- -------- -------- --------
Income before and extraordinary items . . . . 7,173 6,167 19,080 16,370
Extraordinary items net of minority interest. -- (19) -- (196)
-------- -------- -------- --------
Net income. . . . . . . . . . . . . . . . . . $ 7,173 6,148 19,080 16,174
======== ======== ======== ========
Net income allocable to preferred shares. . . 1,423 473 2,985 1,419
-------- -------- -------- --------
Net income allocable to common shares . . . . $ 5,750 5,675 16,095 14,755
======== ======== ======== ========
INCOME PER COMMON SHARE:
- - -----------------------
Before extraordinary items. . . . . . . . . . $ 0.35 0.35 0.97 0.97
Extraordinary item. . . . . . . . . . . . . . $ 0.00 0.00 0.00 (0.01)
Income per common share . . . . . . . . . . . $ 0.35 0.35 0.97 0.96
======== ======== ======== ========
FUNDS FROM OPERATIONS
- - ---------------------
Income before taxes, minority interest and
extraordinary item. . . . . . . . . . . . . $ 8,302 7,229 22,251 19,343
-------- -------- -------- --------
Depreciation of real property . . . . . . . . 3,214 2,456 9,661 7,148
Depreciation of personal property . . . . . . 1,252 872 3,584 2,433
Non-recurring items . . . . . . . . . . . . . -- -- -- --
Share of Co-investments depreciation. . . . . 974 680 2,640 1,834
Share of Service Company amortization
of goodwill . . . . . . . . . . . . . . . . 100 -- 300 --
-------- -------- -------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
STATEMENT OF OPERATIONS - CONTINUED
Unaudited - Dollars in thousands except per share data
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------ ------------------------
1998 1997 1998 1997
-------- -------- -------- --------
Funds from operations (FFO) . . . . . . . . . $ 13,842 11,237 38,436 30,758
FFO per share . . . . . . . . . . . . . . . . $ 0.60 0.55 1.73 1.58
======== ======== ======== ========
Capital expenditures paid from FFO. . . . . . (1,175) (825) (3,029) (2,705)
Other - Share Co-investments Cap exp. . . . . (121) (54) (268) (154)
-------- -------- -------- --------
Funds available for distribution (FAD). . . . $ 12,546 10,358 35,139 27,899
FAD per share . . . . . . . . . . . . . . . . $ 0.54 0.50 1.58 1.43
======== ======== ======== ========
Dividends per share . . . . . . . . . . . . . $ 0.44 0.44 1.32 1.30
======== ======== ======== ========
Dividends as a % of FFO . . . . . . . . . . . 73.6% 80.4% 76.4% 82.3%
Dividends as a % of FAD . . . . . . . . . . . 81.2% 87.3% 83.4% 90.9%
======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONDENSED BALANCE SHEETS
Unaudited - Dollars in thousands except per share data
<CAPTION>
SEPT. 30, DEC. 31,
1998 1997
--------- --------
<S> <C> <C>
ASSETS
- - ------
Rental apartments
Land. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,471 $ 78,476
Depreciable property. . . . . . . . . . . . . . . . . . . . . . . 534,538 496,747
-------- --------
618,009 575,223
Less accumulated depreciation . . . . . . . . . . . . . . . . . . (75,592) (62,641)
-------- --------
542,417 512,582
Properties under development. . . . . . . . . . . . . . . . . . . . 81,770 78,724
Investments in partnerships . . . . . . . . . . . . . . . . . . . . 65,090 50,729
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . 8,754 5,676
Security deposits . . . . . . . . . . . . . . . . . . . . . . . . . 1,637 1,821
Deferred costs, net . . . . . . . . . . . . . . . . . . . . . . . . 3,144 3,140
Notes receivable and advances to Service Companies. . . . . . . . . 29,463 18,356
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,214 8,950
-------- --------
Total assets. . . . . . . . . . . . . . . . . . . . . . . . $747,489 $679,978
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- - ------------------------------------
Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $336,190 333,250
Accrued interest payable. . . . . . . . . . . . . . . . . . . . . . 1,523 1,389
Accrued real estate taxes . . . . . . . . . . . . . . . . . . . . . 10,609 9,334
Construction costs payable. . . . . . . . . . . . . . . . . . . . . 3,114 8,403
Security deposits and prepaid rents . . . . . . . . . . . . . . . . 3,044 2,722
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 2,411 2,978
-------- --------
Total liabilities . . . . . . . . . . . . . . . . . . . . . $356,891 $358,076
-------- --------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
CONDENSED BALANCE SHEETS - CONTINUED
Unaudited - Dollars in thousands except per share data
SEPT. 30, DEC. 31,
1998 1997
--------- --------
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . $ 49,111 $ 51,463
-------- --------
Shareholders' equity
Preferred shares, $.01 par value. . . . . . . . . . . . . . . . . 42 11
Shares of beneficial interest, $.01 par value . . . . . . . . . . 166 166
Additional paid-in capital. . . . . . . . . . . . . . . . . . . . 417,570 341,148
Employees and trustees notes. . . . . . . . . . . . . . . . . . . (7,432) (6,924)
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . 37,977 18,897
Dividends paid. . . . . . . . . . . . . . . . . . . . . . . . . . (106,836) (82,859)
-------- --------
Total shareholders' equity. . . . . . . . . . . . . . . . . 341,487 270,439
-------- --------
Total liabilities and shareholders' equity. . . . . . . . . $747,489 $679,978
======== ========
</TABLE>
<PAGE>
<TABLE> Amli Residential Properties Trust
Selected Quarterly Financial Information
September 30, 1998
(dollars in thousands except for share data)
<CAPTION>
Quarter Ending
-----------------------------------------------------------------------------------------
Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
1998 1998 1998 1997 1997 1997 1997
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Total Debt. . . . . $336,190 337,108 361,305 333,250 235,692 238,061 220,964
Total Debt (1). . . 402,972 400,485 422,393 392,295 289,097 290,699 271,738
Total Shares
and Units
Outstanding (2). . 24,130,128 23,085,101 22,028,680 20,958,523 20,675,333 18,976,280 18,968,168
Value per
Common Share -
end of quarter . . $21.3125 21.4375 22.938 22.250 23.250 23.625 23.000
Total Equity
(Market Value) -
end of quarter . . $ 514,273 494,887 505,283 466,327 480,701 448,315 436,268
Total Market
Capitalization . . 850,463 831,995 866,588 799,577 716,393 686,376 657,232
Total Market
Capitalization
(1). . . . . . . . 917,245 895,372 927,676 858,622 769,798 739,014 708,006
======== ======== ======== ======== ======== ======== ========
Total Revenues(3) . $ 30,155 29,309 26,662 24,928 22,982 21,313 20,850
EBITDA(4) . . . . . 19,213 18,048 16,532 15,420 13,961 12,861 12,522
FFO . . . . . . . . 13,842 13,130 11,464 11,414 11,237 9,888 9,633
FAD . . . . . . . . 12,546 11,965 10,628 10,752 10,358 9,073 8,468
Dividends Paid. . . 9,719 9,356 9,224 9,037 8,889 8,158 8,111
Debt service
(net of capitalized
interest). . . . . 5,932 5,441 5,571 4,340 3,154 3,420 3,195
Interest Expense. . 5,255 4,800 4,938 3,844 2,619 2,886 2,646
G & A Expense . . . 837 1,112 854 697 680 706 767
Total Shares
and Units
Outstanding
- Wtd. Avg.. . . . 23,097,922 22,050,967 21,238,186 20,714,889 20,461,533 18,973,232 18,882,000
========== ========== ========== ========== ========== ========== ==========
<PAGE>
Amli Residential Properties Trust
Selected Quarterly Financial Information - CONTINUED
September 30, 1998
(dollars in thousands except for share data)
Quarter Ending
-----------------------------------------------------------------------------------------
Sept. 30, Jun. 30, Mar. 31, Dec. 31, Sept. 30, Jun. 30, Mar. 31,
1998 1998 1998 1997 1997 1997 1997
-------- -------- -------- -------- -------- -------- --------
Interest
Coverage Ratio . . 3.66 3.76 3.35 4.01 5.33 4.46 4.73
Debt as % of
Total Market
Capitalization . . 39.53% 40.52% 41.69% 41.68% 32.90% 34.68% 33.62%
Debt as % of
Total Market
Capitalization(1). 43.93% 44.73% 45.53% 45.69% 37.55% 39.34% 38.38%
EBITDA as % of
Total Market
Capitalization . . 9.04% 8.68% 7.63% 7.71% 7.80% 7.50% 7.62%
FFO as % of
Total Market
Equity . . . . . . 10.77% 10.61% 9.08% 9.79% 9.35% 8.82% 8.83%
G&A as % of
Total Market
Capitalization . . 0.39% 0.53% 0.39% 0.35% 0.38% 0.41% 0.47%
G&A as % of
Total Revenues . . 2.78% 3.79% 3.20% 2.80% 2.96% 3.31% 3.68%
Dividends as %
of FFO (5) . . . . 73.6% 74.1% 81.9% 80.1% 80.4% 82.5% 84.3%
Dividends as %
of FAD (5) . . . . 81.2% 81.3% 88.3% 85.1% 87.3% 89.9% 95.9%
Apartment Units -
Wholly Owned
In Operation. . . 12,250 12,250 11,938 11,650 10,782 10,364 9,824
Under Develop-
ment. . . . . . 2,352 2,100 2,488 2,488 2,032 2,296 2,444
Apartment Units -
Co-Investments
In Operation. . . 6,123 6,123 5,851 5,851 5,421 4,815 4,815
Under Develop-
ment. . . . . . 2,464 2,224 1,456 1,456 1,370 1,324 1,324
-------- -------- -------- -------- -------- -------- --------
Total Units . . 23,189 22,697 21,733 21,445 19,605 18,799 18,407
======== ======== ======== ======== ======== ======== ========
<PAGE>
Amli Residential Properties Trust
Selected Quarterly Financial Information - CONTINUED
September 30, 1998
(dollars in thousands except for share data)
<FN>
(1) Including proportionate share of debt of Co-investment partnerships accounted for using the equity
method.
(2) End of the quarter - At September 30, 1998, includes 4,225,000 preferred shares convertible to common
shares.
(3) Excluding non-recurring gain of $2,457 in 1997.
(4) Includes other income, net of G & A expenses.
(5) Based on per share amounts.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
PORTFOLIO INDEBTEDNESS SUMMARY
September 30, 1998
(Dollars in thousands)
<CAPTION>
Percent Weighted Avg. Years to
Type of Indebtedness Balance of Total Interest Interest Rate Maturity
- - -------------------- -------- -------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
Conventional Fixed Rate $190,190 56.6% Fixed 7.61% 7.7
Tax-exempt Variable
Rate (1) 50,250 14.9% Variable 5.15% 4.1
Credit Facilities (2) 90,000 26.8% Variable 6.74% 2.7
Service Companies 5,750 1.7% Fixed 9.22% 3.7
-------- -------- -------- --------
Total $336,190 100.0% 7.04% 5.8
======== ======== ======== ========
Balance
including
share of
Co-investment Percent Weighted Avg. Years to
Type of Indebtedness debt (3) of Total Interest Interest Rate Maturity
- - -------------------- ------------- -------- -------- ------------- --------
Conventional Fixed Rate $256,972 63.8% Fixed 7.67% 7.3
Tax-exempt Variable Rate(1) 50,250 12.5% Variable 5.15% 4.1
Credit Facilities(2) 90,000 22.3% Variable 6.74% 2.7
Service Companies 5,750 1.4% Fixed 9.22% 3.7
-------- -------- -------- --------
Total $402,972 100.0% 7.17% 5.8
======== ======== ======== ========
<FN>
(1) Maturity Date shown is expiration date of Credit Enhancement. Bonds mature in 2024.
(2) $50,000 has been swapped to a fixed rate ($20,000 maturing in November 2002 and $30,000 maturing in February
2003).
(3) Co-Investment debt represents Amli Residential's pro rate share of debt. Interest rate and maturity reflect
average numbers based on Amli's pro rate share.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
DEBT MATURITIES
SEPTEMBER 30, 1998
Unaudited - dollars in thousands
<CAPTION>
There- % to
1998 1999 2000 2001 2002 after Total Total
-------- -------- -------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed Rate Mortgages $ 7,104 2,780 3,138 3,394 3,655 170,119 190,190 56.6%
Tax Exempt Bonds* 50,250 50,250 14.9%
Wachovia/First Chicago
Line of Credit 90,000 90,000 26.8%
Other 750 5,000 5,750 1.7%
-------- -------- -------- -------- -------- -------- -------- -------
Total Loans $ 7,854 2,780 3,138 93,394 53,905 175,119 336,190 100.0%
======== ======== ======== ======== ======== ======== ======== =======
Percent to Total 2.3% 0.8% 0.9% 27.8% 16.0% 52.2% 100.0% 83.4%
======== ======== ======== ======== ======== ======== ======== =======
SHARE OF CO-INVESTMENT DEBT
Prudential Ins. -
Park Place (25%) 14 3,054 -- -- -- -- 3,068 4.6%
Nationwide Life Ins. -
Greenwood Forest (15%) 4 17 19 20 1,679 -- 1,739 2.6%
Lincoln National Ins. -
Champions Park (15%) 5 21 22 24 1,259 -- 1,331 2.0%
Prudential Ins. -
Champions Centre (15%) 2 10 11 12 955 -- 990 1.5%
Allstate Life Ins. -
Windbrooke (15%) 5 16 18 20 22 1,635 1,716 2.6%
CIGNA -
Chevy Chase (33%) 42 177 189 202 216 8,770 9,596 14.4%
Northwestern Mutual Life Ins. -
Willowbrook (40%) 36 150 162 175 189 8,909 9,621 14.4%
Phoenix Mutual -
Willeo Creek (30%) 13 53 56 60 64 2,690 2,936 4.4%
Northwestern Mutual Life Ins. -
Pleasant Hill (40%) 19 80 88 96 106 5,702 6,091 9.1%
Northwestern Mutual Life Ins. -
Barrett Lakes (35%) -- 71 77 84 91 5,515 5,838 8.7%
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
DEBT MATURITIES - CONTINUED
There- % to
1998 1999 2000 2001 2002 after Total Total
-------- -------- -------- -------- -------- -------- -------- -------
Erie Insurance -
River Park (40%) -- 20 51 55 60 3,024 3,210 4.8%
Prudential Ins. -
Amli at Danada (10%) -- 17 25 27 29 2,352 2,450 3.7%
Phoenix Home Life -
Amli at Verandah (35%) -- 55 88 94 102 5,590 5,929 8.9%
Northwestern Mutual Life
Ins. - Northwinds (35%) -- -- 15 95 103 5,762 5,975 8.9%
Northwestern Mutual Life
Ins. - Regents Crest (25%) 16 65 70 76 82 3,710 4,019 6.0%
Amli Residential - Parkway
(25%) 2,150 -- -- -- -- -- 2,150 3.2%
Central Bank, Trustee -
Prairie Court (1%) -- 73 -- -- -- -- 73 0.1%
Erie Insurance -
Towne Creek (1%) -- 50 -- -- -- -- 50 0.1%
-------- -------- -------- -------- -------- -------- -------- -------
Total Share of
Co-Investments Loans $ 2,306 3,929 891 1,040 4,957 53,659 66,782 100.0%
======== ======== ======== ======== ======== ======== ======== =======
Percent to Total 3.5% 5.9% 1.3% 1.6% 7.4% 80.3% 100.0% 16.6%
======== ======== ======== ======== ======== ======== ======== =======
Total Including Share
of Co-Investments Debt $ 10,160 6,709 4,029 94,434 58,862 228,778 402,972 100.0%
======== ======== ======== ======== ======== ======== ======== =======
Percent to Total 2.5% 1.7% 1.0% 23.4% 14.6% 56.8% 100.0% 100.0%
======== ======== ======== ======== ======== ======== ======== =======
<FN>
* The Spring Creek Bonds mature in October 2024, but the credit enhancement expires on October 15, 2002.
* The Poplar Creek Bonds mature in February 2024, but credit enhancement expires December 18, 2002.
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES)
THREE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS THREE MONTHS ENDED SEPTEMBER 30, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
<CAPTION>
7/1/98-9/30/98 Budget 7/1/97-9/30/97
No. of --------------------------------- % --------------------------------
Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED AVG.
OCCUPANCY
- - --------------
Dallas 4,226 94.5% -1.0% 95.4%
Atlanta 2,420 94.4% 1.4% 93.1%
Austin 935 96.2% 1.2% 95.0%
Indianapolis 996 94.2% 3.7% 90.8%
Kansas 908 92.3% 1.4% 91.1%
Chicago 253 97.1% 1.7% 95.5%
----- ----- ----- -----
Weighted Average 94.5% 0.6% 93.9%
===== ===== =====
Total 9,738
=====
WEIGHTED AVG. RENTAL RATE
- - -------------------------
Dallas $670 2.3% $656
Atlanta 747 2.8% 726
Austin 666 3.7% 642
Indianapolis 598 5.0% 570
Kansas 653 0.5% 650
Chicago 945 4.4% 905
---- ---- ----
Weighted Average $687 2.7% 669
==== ==== ====
TOTAL PROPERTY REVENUES Per Month Per Month
- - ----------------------- ---------- ----------
Dallas $ 8,456,612 $ 667 $0.80 0.9% $ 8,379,544 $661 $0.79
Atlanta 5,426,249 $ 747 $0.80 4.9% $ 5,170,520 $712 $0.76
Austin 1,902,901 $ 678 $0.92 4.9% $ 1,814,760 $647 $0.88
Indianapolis 1,786,386 $ 598 $0.73 7.6% $ 1,660,676 $556 $0.67
Kansas 1,745,591 $ 641 $0.74 0.3% $ 1,740,710 $639 $0.74
Chicago 804,477 $1,060 $1.24 8.1% $ 744,026 $980 $1.15
----------- ------ ----- ----- ----------- ---- -----
Total $20,122,217 $ 689 $0.81 3.1% $19,510,236 $668 $0.78
=========== ===== ===== ===== =========== ==== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97)
7/1/98-9/30/98 Budget 7/1/97-9/30/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED)
- - --------------------------- ------------ ------------
Dallas $ 3,943,390 $3,733 $4.46 6.5% $3,703,286 $3,505 $4.19
Atlanta 1,945,134 3,215 3.45 6.6% 1,824,488 3,016 3.23
Austin 795,304 3,402 4.62 -4.4% 832,086 3,560 4.84
Indianapolis 662,922 2,662 3.23 -5.5% 701,508 2,817 3.42
Kansas 696,090 3,066 3.56 -1.5% 706,682 3,113 3.62
Chicago 385,086 6,088 7.12 -1.7% 391,935 6,197 7.25
------------ ------ ----- ----- ---------- ------ -----
Total $ 8,427,926 $3,462 $4.06 3.3% $8,159,983 $3,352 $3.93
============ ====== ===== ===== ========== ====== =====
Operating Efficiency 41.9% 41.8%
============ ==========
</TABLE>
<TABLE>
<CAPTION>
PER MONTH PER MONTH
--------- ----------
NOI 1998% 1997%
- - --- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dallas 53.4% 55.8% $ 4,513,222 $356 $0.43 -3.5% $ 4,676,259 $369 $0.44
Atlanta 64.2% 64.7% 3,481,115 479 0.51 4.0% 3,346,032 461 $0.49
Austin 58.2% 54.1% 1,107,597 395 0.54 12.7% 982,675 350 $0.48
Indianapolis 62.9% 57.8% 1,123,465 376 0.46 17.1% 959,169 321 $0.39
Kansas 60.1% 59.4% 1,049,501 385 0.45 1.5% 1,034,028 380 $0.44
Chicago 52.1% 47.3% 419,391 553 0.65 19.1% 352,091 464 $0.54
----- ----- ------------ ---- ----- ----- ----------- ---- -----
Total 58.1% 58.2% $ 11,694,291 $400 $0.47 3.0% $11,350,253 $389 $0.46
===== ===== ============ ==== ===== ===== =========== ==== =====
Operating Margin 58.1% 58.2%
============ ===========
CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED)
- - -------------------- ------------ ------------
Dallas $ 419,591 $397 $0.47 73.9% $ 241,286 $228 $0.27
Atlanta 216,051 357 0.38 -7.2% 232,773 385 0.41
Austin 74,076 317 0.43 -45.9% 136,988 586 0.80
Indianapolis 196,955 791 0.96 210.2% 63,496 255 0.31
Kansas 128,198 565 0.66 52.7% 83,956 370 0.43
Chicago 9,672 153 0.18 -12.4% 11,044 175 0.20
------------ ---- ----- ------ ---------- ---- -----
Total $ 1,044,544 $429 $0.50 35.7% $ 769,544 $316 $0.37
============ ==== ===== ====== ========== ==== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES) - CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97
7/1/98-9/30/98 Budget 7/1/97-9/30/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED)
- - ----------------------- ------------ ------------
Dallas $ 702,951 $ 665 $0.80 0.5% $ 699,799 $ 662 $0.79
Atlanta 318,444 526 0.56 -13.7% 369,022 610 0.65
Austin 116,989 500 0.68 -14.6% 137,053 586 0.80
Indianapolis 152,754 613 0.74 -13.0% 175,678 706 0.86
Kansas 102,235 450 0.52 7.8% 94,855 418 0.49
Chicago 96,390 1,524 1.78 9.0% 88,435 1,398 1.64
------------ ------ ----- ------ ---------- ------ -----
Total $ 1,489,764 $ 612 $0.72 -4.8% $1,564,841 $ 643 $0.75
============ ====== ===== ====== ========== ====== =====
REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED)
- - ----------------- ------------ ------------
Dallas $ 1,226,910 $1,161 $1.39 18.9% $1,031,642 $ 976 $1.17
Atlanta 356,695 590 0.63 36.4% 261,523 432 0.46
Austin 239,898 1,026 1.39 11.4% 215,406 922 1.25
Indianapolis 120,182 483 0.59 -32.4% 177,732 714 0.87
Kansas 178,280 785 0.91 -16.2% 212,667 937 1.09
Chicago 93,251 1,474 1.72 -21.5% 118,818 1,879 2.20
------------ ------ ----- ----- ---------- ------ -----
Total $ 2,215,216 $ 910 $1.07 9.8% $2,017,788 $ 829 $0.97
============ ====== ===== ===== ========== ====== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES)
NINE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
<CAPTION>
1/1/98-9/30/98 1/1/97-9/30/97
No. of --------------------------------- % --------------------------------
Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
------ -------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED AVG. OCCUPANCY
- - -----------------------
Dallas 4,226 94.7% 0.3% 94.3%
Atlanta 2,420 93.9% 0.3% 93.7%
Austin 935 96.0% 2.1% 94.1%
Indianapolis 996 93.0% 1.1% 92.0%
Kansas 908 92.5% 0.3% 92.2%
Chicago 253 97.1% 4.4% 93.1%
------ ----- ----- -----
Weighted Average 94.3% 0.7% 93.7%
Total 9,738 ===== ===== =====
======
WEIGHTED AVG. RENTAL RATE
- - -------------------------
Dallas $667 2.8% $648
Atlanta 739 1.7% 726
Austin 654 1.6% 644
Indianapolis 581 1.7% 572
Kansas 652 0.9% 646
Chicago 937 2.3% 916
---- ---- ----
Weighted Average $680 2.1% $666
==== ==== ====
TOTAL PROPERTY REVENUES PER MONTH PER MONTH
- - ----------------------- --------- ---------
Dallas $25,244,864 $ 664 $0.79 3.3% $24,439,294 $643 $0.77
Atlanta 15,889,544 730 0.78 2.4% 15,515,631 712 $0.76
Austin 5,565,416 661 0.90 3.6% 5,370,924 638 $0.87
Indianapolis 5,136,528 573 0.70 2.2% 5,025,998 561 $0.68
Kansas 5,211,022 638 0.74 1.0% 5,159,897 631 $0.73
Chicago 2,377,230 1,044 1.22 10.5% 2,151,433 945 $1.11
----------- ------ ----- ----- ---------- ---- -----
Total $59,424,604 $ 678 $0.80 3.1% $57,663,178 $658 $0.77
=========== ====== ===== ===== =========== ==== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES)
NINE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-9/30/98 1/1/97-9/30/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED)
- - --------------------------- ------------ -----------
Dallas $ 11,103,762 $3,503 $4.19 6.6% $10,418,667 $3,287 $3.93
Atlanta 5,672,829 3,126 3.35 2.4% 5,542,188 3,054 3.27
Austin 2,346,395 3,346 4.55 -5.8% 2,491,407 3,553 4.83
Indianapolis 1,896,602 2,539 3.08 -1.2% 1,919,686 2,570 3.12
Kansas 2,015,865 2,960 3.44 0.8% 1,999,504 2,936 3.41
Chicago 1,254,380 6,611 7.73 -1.2% 1,269,821 6,692 7.83
------------ ------ ----- ----- ----------- ------ -----
Total $ 24,289,832 $3,326 $3.90 2.7% $23,641,272 $3,237 $3.80
============ ====== ===== ===== =========== ====== =====
Operating Efficiency 40.9% 41.0%
===== =====
</TABLE>
<TABLE>
<CAPTION>
PER MONTH PER MONTH
1998 1997 --------- ----------
NOI % %
- - --- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dallas 56.0% 57.4% $ 14,141,102 $372 $0.44 0.9% $14,020,628 $369 $0.44
Atlanta 64.3% 64.3% 10,216,715 469 0.50 2.4% 9,973,444 458 0.49
Austin 57.8% 53.6% 3,219,022 383 0.52 11.8% 2,879,517 342 0.46
Indianapolis 63.1% 61.8% 3,239,927 361 0.44 4.3% 3,106,312 347 0.42
Kansas 61.3% 61.2% 3,195,157 391 0.45 1.1% 3,160,394 387 0.45
Chicago 47.2% 41.0% 1,122,850 493 0.58 27.4% 881,612 387 0.45
----- ----- ------------ ---- ----- ----- ----------- ---- -----
Total 59.1% 59.0% $ 35,134,772 $401 $0.47 3.3% $34,021,906 $388 $0.46
===== ===== ============ ==== ===== ===== =========== ==== =====
Operating Margin 59.1% 59.0%
===== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED PROPERTIES)
NINE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-9/30/98 1/1/97-9/30/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED)
- - -------------------- ------------- ------------
Dallas $ 1,200,671 $379 $0.45 -4.5% $1,257,511 $397 $0.47
Atlanta 602,101 332 0.36 6.6% 564,847 311 0.33
Austin 273,599 390 0.53 -9.1% 300,879 429 0.58
Indianapolis 296,657 397 0.48 91.4% 155,009 208 0.25
Kansas 299,620 440 0.51 79.2% 167,230 246 0.29
Chicago 62,778 331 0.39 -37.6% 100,564 530 0.62
------------ ---- ----- ------ ---------- ---- -----
Total $ 2,735,426 $375 $0.44 7.4% $2,546,040 $349 $0.41
============ ==== ===== ====== ========== ==== =====
REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED)
- - ----------------------- ------------ ------------
Dallas $ 1,698,340 $ 536 $0.64 0.7% $1,685,993 $ 532 $0.64
Atlanta 834,470 460 0.49 -5.9% 886,377 488 0.52
Austin 334,438 477 0.65 -24.3% 442,024 630 0.86
Indianapolis 367,484 492 0.60 -11.7% 416,109 557 0.68
Kansas 282,872 415 0.48 2.1% 277,117 407 0.47
Chicago 262,059 1,381 1.62 -0.2% 262,645 1,384 1.62
------------ ------ ----- ----- ---------- ------ -----
Total $ 3,779,662 $ 518 $0.61 -4.8% $3,970,265 $ 544 $0.64
============ ====== ===== ===== ========== ====== =====
REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED)
- - ----------------- ------------ ------------
Dallas $ 3,677,666 $1,160 $1.39 17.2% $3,139,246 $ 990 $1.18
Atlanta 1,183,207 652 0.70 8.7% 1,088,044 599 0.64
Austin 719,694 1,026 1.39 11.4% 646,218 922 1.25
Indianapolis 387,933 519 0.63 -25.5% 520,626 697 0.85
Kansas 553,586 813 0.94 -13.2% 638,001 937 1.09
Chicago 399,353 2,105 2.46 -4.4% 417,570 2,201 2.57
------------ ------ ----- ----- ---------- ------ -----
Total $ 6,921,439 $ 948 $1.11 7.3% $6,449,706 $ 883 $1.04
============ ====== ===== ==== ========== ====== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES)
THREE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS THREE MONTHS ENDED SEPTEMBER 30, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
<CAPTION>
7/1/98-9/30/98 7/1/97-9/30/97
No. of --------------------------------- % --------------------------------
Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED AVG.
OCCUPANCY
- - --------------
Dallas 4,226 94.5% -1.0% 95.4%
Atlanta 3,314 94.3% 1.7% 92.8%
Austin 1,523 95.5% 0.9% 94.7%
Houston 754 95.8% -0.2% 96.0%
Indianapolis 996 94.2% 3.7% 90.8%
Kansas 908 92.3% 1.4% 91.1%
Chicago 1,694 95.9% 0.9% 95.1%
----- ----- ----- -----
Weighted Average 94.6% 0.7% 94.0%
===== ===== =====
Total 13,415
======
WEIGHTED AVG. RENTAL RATE
- - -------------------------
Dallas $670 2.3% $656
Atlanta 755 1.9% 740
Austin 639 3.4% 618
Houston 765 6.1% 721
Indianapolis 598 5.0% 570
Kansas 653 0.5% 650
Chicago 968 4.6% 925
---- ---- ----
Weighted Average $724 3.0% $703
==== ==== ====
TOTAL PROPERTY REVENUES Per Month Per Month
- - ----------------------- ---------- ----------
Dallas $ 8,456,612 $ 667 $0.79 0.9% $ 8,379,544 $661 $0.79
Atlanta 7,543,196 759 0.79 4.3% 7,233,409 728 0.76
Austin 2,959,932 648 0.91 4.7% 2,827,696 619 0.87
Houston 1,784,701 789 0.85 8.8% 1,641,005 725 0.78
Indianapolis 1,786,386 598 0.73 7.6% 1,660,676 556 0.67
Kansas 1,745,591 641 0.74 0.3% 1,740,710 639 0.74
Chicago 5,078,827 999 1.18 5.8% 4,800,739 945 1.12
----------- ------ ----- ----- ----------- ---- -----
Total $29,355,247 $ 729 $0.85 3.8% $28,283,780 $703 $0.82
=========== ====== ===== ===== =========== ==== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) -
CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97)
7/1/98-9/30/98 7/1/97-9/30/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED)
- - --------------------------- ------------ ------------
Dallas $ 3,943,390 $3,733 $4.45 6.5% $3,703,286 $3,505 $4.18
Atlanta 2,740,251 3,307 3.45 3.8% 2,639,718 3,186 3.32
Austin 1,325,239 3,481 4.88 -2.0% 1,352,073 3,551 4.98
Houston 698,801 3,707 4.01 3.8% 673,265 3,572 3.86
Indianapolis 662,922 2,662 3.23 -5.5% 701,508 2,817 3.42
Kansas 696,090 3,066 3.56 -1.5% 706,682 3,113 3.62
Chicago 1,958,504 4,625 5.46 -0.1% 1,960,981 4,630 5.47
------------ ------ ----- ----- ----------- ------ -----
Total $ 12,025,197 $3,586 $4.17 2.5% $11,737,512 $3,500 $4.07
============ ====== ===== ===== =========== ====== =====
Operating Efficiency 41.0% 41.5%
============ ===========
</TABLE>
<TABLE>
<CAPTION>
PER MONTH PER MONTH
--------- ----------
NOI 1998% 1997%
- - --- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dallas 53.4% 55.8% $ 4,513,222 $356 $0.42 -3.5% $ 4,676,259 $369 $0.44
Atlanta 63.7% 63.5% 4,802,946 483 0.50 4.6% 4,593,691 462 0.48
Austin 55.2% 52.2% 1,634,693 358 0.50 10.8% 1,475,623 323 0.45
Houston 60.8% 59.0% 1,085,900 480 0.52 12.2% 967,740 428 0.46
Indianapolis 62.9% 57.8% 1,123,465 376 0.46 17.1% 959,169 321 0.39
Kansas 60.1% 59.4% 1,049,501 385 0.45 1.5% 1,034,028 380 0.44
Chicago 61.4% 59.2% 3,120,323 614 0.73 9.9% 2,839,758 559 0.66
----- ----- ------------ ---- ----- ----- ----------- ---- -----
Total 59.0% 58.5% $ 17,330,050 $431 $0.50 4.7% $16,546,268 $411 $0.48
===== ===== ============ ==== ===== ===== =========== ==== =====
Operating
Margin 59.0% 58.5%
============ ===========
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES) -
CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97
<CAPTION>
7/1/98-9/30/98 7/1/97-9/30/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED)
- - -------------------- ------------ ------------
Dallas $ 419,591 $397 $0.47 73.9% $ 241,286 $228 $0.27
Atlanta 255,710 309 0.32 -4.7% 268,333 324 0.34
Austin 166,370 437 0.61 -0.7% 167,537 440 0.62
Houston 24,966 132 0.14 18.3% 21,096 112 0.12
Indianapolis 196,955 791 0.96 210.2% 63,496 255 0.31
Kansas 128,198 565 0.66 52.7% 83,956 370 0.43
Chicago 193,827 458 0.54 92.6% 100,649 238 0.28
------------ ---- ----- ------ ---------- ---- -----
Total $ 1,385,617 $413 $0.48 46.4% $ 946,353 $282 $0.33
============ ==== ===== ====== ========== ==== =====
REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED)
- - ----------------------- ------------ ------------
Dallas $ 702,951 $ 665 $0.79 0.5% $ 699,799 $ 662 $0.79
Atlanta 415,004 501 0.52 -14.8% 486,826 588 0.61
Austin 213,530 561 0.79 -8.0% 231,984 609 0.85
Houston 48,245 256 0.28 3.9% 46,427 246 0.27
Indianapolis 152,754 613 0.74 -13.0% 175,678 706 0.86
Kansas 102,235 450 0.52 7.8% 94,855 418 0.49
Chicago 329,527 778 0.92 5.4% 312,700 738 0.87
------------ ------ ----- ------ ---------- ------ -----
Total $ 1,964,246 $ 586 $0.68 -4.1% $2,048,269 $ 611 $0.71
============ ====== ===== ====== ========== ====== =====
REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED)
- - ----------------- ------------ ------------
Dallas $ 1,226,910 $1,161 $1.38 18.9% $1,031,642 $ 976 $1.16
Atlanta 428,488 517 0.54 0.1% 428,041 517 0.54
Austin 387,459 1,018 1.43 11.1% 348,696 916 1.28
Houston 272,777 1,447 1.56 5.0% 259,739 1,378 1.49
Indianapolis 120,182 483 0.59 -32.4% 177,732 714 0.87
Kansas 178,280 785 0.91 -16.2% 212,667 937 1.09
Chicago 260,976 616 0.73 -54.9% 578,702 1,366 1.61
------------ ------ ----- ----- ---------- ------ -----
Total $ 2,875,072 $ 857 $1.00 -5.3% $3,037,218 $ 906 $1.05
============ ====== ===== ===== ========== ====== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P. - "SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES)
NINE MONTHS ENDED SEPTEMBER 30, 1998 VERSUS NINE MONTHS ENDED SEPTEMBER 30, 1997
(Excludes all properties acquired or stabilized after 1/1/97)
<CAPTION>
1/1/98-9/30/98 1/1/97-9/30/97
No. of --------------------------------- % --------------------------------
Apts. Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WEIGHTED AVG.
OCCUPANCY
- - --------------
Dallas 4,226 94.7% 0.3% 94.3%
Atlanta 3,314 93.6% -0.1% 93.7%
Austin 1,523 95.7% 1.5% 94.3%
Houston 754 95.6% 1.1% 94.6%
Indianapolis 996 93.0% 1.1% 92.0%
Kansas 908 92.5% 0.3% 92.2%
Chicago 1,694 96.2% 2.2% 94.1%
----- ----- ----- -----
Weighted Average 94.5% 0.7% 93.8%
===== ===== =====
Total 13,415
======
WEIGHTED AVG. RENTAL RATE
- - -------------------------
Dallas $667 2.8% $648
Atlanta 748 1.2% 739
Austin 627 1.3% 620
Houston 750 5.9% 709
Indianapolis 581 1.7% 572
Kansas 652 0.9% 646
Chicago 952 3.9% 916
---- ---- ----
Weighted Average $716 2.4% $699
==== ==== ====
TOTAL PROPERTY REVENUES Per Month Per Month
- - ----------------------- ---------- ----------
Dallas $25,244,864 $ 664 $0.79 3.3% $24,439,294 $643 $0.77
Atlanta 22,010,550 738 0.77 1.3% 21,726,761 728 0.76
Austin 8,670,286 633 0.89 3.1% 8,408,921 613 0.86
Houston 5,162,794 761 0.82 7.8% 4,787,483 705 0.76
Indianapolis 5,136,528 573 0.70 2.2% 5,025,998 561 0.68
Kansas 5,211,022 638 0.74 1.0% 5,159,897 631 0.73
Chicago 14,909,440 978 1.16 6.2% 14,043,708 921 1.09
----------- ------ ----- ----- ----------- ---- -----
Total $86,345,483 $ 715 $0.83 3.3% $83,592,062 $692 $0.80
=========== ====== ===== ===== =========== ==== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES L.P.-"SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES)-CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97)
1/1/98-9/30/98 1/1/97-9/30/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
PROPERTY OPERATING EXPENSES (ANNUALIZED) (ANNUALIZED)
- - --------------------------- ------------ ------------
Dallas $ 11,103,762 $3,503 $4.17 6.6% $10,418,667 $3,287 $3.92
Atlanta 8,088,043 3,254 3.39 2.5% 7,890,347 3,175 3.31
Austin 3,851,306 3,372 4.73 -2.2% 3,938,998 3,448 4.83
Houston 2,082,778 3,683 3.98 5.1% 1,982,319 3,505 3.79
Indianapolis 1,896,602 2,539 3.08 -1.2% 1,919,686 2,570 3.12
Kansas 2,015,865 2,960 3.44 0.8% 1,999,504 2,936 3.41
Chicago 5,938,365 4,674 5.52 2.6% 5,789,793 4,557 5.38
------------ ------ ----- ----- ----------- ------ -----
Total $ 34,976,722 $3,476 $4.04 3.1% $33,939,313 $3,373 $3.92
============ ====== ===== ===== =========== ====== =====
Operating Efficiency 40.5% 40.6%
============ ===========
</TABLE>
<TABLE>
<CAPTION>
PER MONTH PER MONTH
--------- ----------
NOI 1998% 1997%
- - --- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dallas 56.0% 57.4% $14,141,102 $372 $0.44 0.9% $14,020,628 $369 $0.44
Atlanta 63.3% 63.7% 13,922,506 467 0.49 0.6% 13,836,414 $464 $0.48
Austin 55.6% 53.2% 4,818,979 352 0.49 7.8% 4,469,923 $326 $0.46
Houston 59.7% 58.6% 3,080,015 454 0.49 9.8% 2,805,164 $413 $0.45
Indianapolis 63.1% 61.8% 3,239,927 361 0.44 4.3% 3,106,312 $347 $0.42
Kansas 61.3% 61.2% 3,195,157 391 0.45 1.1% 3,160,394 $387 $0.45
Chicago 60.2% 58.8% 8,971,075 588 0.70 8.7% 8,253,914 $541 $0.64
----- ----- ------------ ---- ----- ----- ----------- ---- -----
Total 59.5% 59.4% $ 51,368,762 $425 $0.49 3.5% $49,652,750 $411 $0.48
===== ===== ============ ==== ===== ===== =========== ==== =====
Operating
Margin 59.5% 59.4
============ ==========
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES L.P.-"SAME COMMUNITY COMPARISON" (WHOLLY-OWNED AND CO-INVESTMENT PROPERTIES)-CONTINUED
(Excludes all properties acquired or stabilized after 1/1/97
<CAPTION>
1/1/98-9/30/98 1/1/97-9/30/97
--------------------------------- % --------------------------------
Amount/% Per Unit Per Sq Ft Change Amount/% Per Unit Per Sq Ft
-------- -------- ---------- ------ ---------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
CAPITAL EXPENDITURES (ANNUALIZED) (ANNUALIZED)
- - -------------------- ------------ ------------
Dallas $ 1,200,671 $379 $0.45 -4.5% $1,257,511 $397 0.47
Atlanta 691,871 278 0.29 -2.6% 710,635 286 0.30
Austin 464,139 406 0.57 13.8% 407,850 357 0.50
Houston 91,166 161 0.17 52.1% 59,951 106 0.11
Indianapolis 296,657 397 0.48 91.4% 155,009 208 0.25
Kansas 299,620 440 0.51 79.2% 167,230 246 0.29
Chicago 444,574 350 0.41 64.7% 269,850 212 0.25
------------ ---- ----- ------ ---------- ---- -----
Total $ 3,488,698 $347 $0.40 15.2% $3,028,036 $301 $0.35
============ ==== ===== ====== ========== ==== =====
REPAIRS AND MAINTENANCE (ANNUALIZED) (ANNUALIZED)
- - ----------------------- ------------ ------------
Dallas $ 1,698,340 $536 0.64 0.7% $1,685,993 $ 532 $0.63
Atlanta 1,151,711 463 0.48 -2.2% 1,178,006 474 0.49
Austin 587,575 514 0.72 -14.0% 682,949 598 0.84
Houston 134,120 237 0.26 3.5% 129,546 229 0.25
Indianapolis 367,484 492 0.60 -11.7% 416,109 557 0.68
Kansas 282,872 415 0.48 2.1% 277,117 407 0.47
Chicago 909,539 716 0.85 8.6% 837,326 659 0.78
------------ ------ ----- ------ ---------- ------ -----
Total $ 5,131,640 $ 510 $0.59 -1.4% $5,207,045 $ 518 $0.60
============ ====== ===== ====== ========== ====== =====
REAL ESTATE TAXES (ANNUALIZED) (ANNUALIZED)
- - ----------------- ------------ ------------
Dallas $ 3,677,666 $1,160 $1.38 17.2% $3,139,246 $ 990 $1.18
Atlanta 1,697,558 683 0.71 6.2% 1,597,795 643 0.67
Austin 1,162,377 1,018 1.43 11.1% 1,046,088 916 1.28
Houston 817,938 1,446 1.56 17.1% 698,402 1,235 1.34
Indianapolis 387,933 519 0.63 -25.5% 520,626 697 0.85
Kansas 553,586 813 0.94 -13.2% 638,001 937 1.09
Chicago 1,968,839 1,550 1.83 4.9% 1,877,360 1,478 1.75
------------ ------ ----- ----- ---------- ------ -----
Total $ 10,265,897 $1,020 $1.19 7.9% $9,517,518 $ 946 $1.10
============ ====== ===== ===== ========== ====== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
PROPERTY INFORMATION
As of September 30, 1998
<CAPTION>
Qtr ended
Sept. 30, 1998
Approx- Average Qtr ended
imate Rental Rates Sept. 30,
Number Rentable Average ------------- 1998
Year Year of Area Unit Size Per Per Average
PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy
- - ---------- -------- -------- --------- ------ --------- --------- ---- ----- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
DALLAS/
FT. WORTH, TX
- - -------------
Amli:
at Autumn Chase Carrollton, TX 1991 1987/96 450 374,288 832 $685 $0.82 92.8%
at Bent Tree Dallas, TX 1997 1996 300 282,774 943 825 0.88 94.3%
at Bishop's Gate West Plano, TX 1997 1997 266 292,092 1,098 1,042 0.95 94.5%
at Chase Oaks Plano, TX 1994 1986 250 193,736 775 680 0.88 95.3%
at Gleneagles Dallas, TX 1988 1987/97 590 521,302 884 723 0.82 95.7%
on the Green Ft. Worth, TX 1994 1990/93 424 358,560 846 680 0.80 93.1%
at Nantucket Dallas, TX 1988 1986 312 222,208 712 564 0.79 96.9%
of North Dallas Dallas, TX 1989/90 1985/86 1,032 905,590 878 656 0.75 93.3%
at Reflections Irving, TX 1993 1986 212 174,332 822 687 0.84 95.1%
on Rosemeade Dallas, TX 1990 1987 236 205,382 870 663 0.76 96.9%
on Timberglen Dallas, TX 1990 1985 260 201,198 774 612 0.79 94.0%
at Valley Ranch Irving TX 1990 1985 460 389,940 848 707 0.83 94.9%
----- --------- --- ---- ----- ------
Subtotal-Dallas/
Ft. Worth, TX 4,792 4,121,402 860 $701 $0.81 94.4%
----- --------- --- ---- ----- ------
ATLANTA, GA
- - -----------
Amli:
at Sope Creek Marietta, GA 1982/83/
95 695 632,393 910 $692 $0.76 95.3%
at Spring Creek Dunwoody, GA 1985/86/
87/89 1,180 1,080,560 916 727 0.79 93.3%
at Vinings Atlanta, GA 1992 1985 208 229,708 1,104 810 0.73 95.0%
at Vinings-
Phase II Atlanta, GA 1997 1985 152 144,532 951 749 0.79 96.5%
at West Paces Atlanta, GA 1993 1992 337 314,707 934 892 0.96 96.1%
at Peachtree City Atlanta, GA 1998 312 305,756 980 844 0.86 98.7%
at Clairmont Atlanta, GA 1998 1988 288 229,335 796 772 0.97 95.5%
------ --------- ----- ---- ----- ------
Subtotal-
Atlanta, GA 3,172 2,936,991 926 $759 $0.82 95.1%
------ --------- ----- ---- ----- ------
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
PROPERTY INFORMATION - CONTINUED
As of September 30, 1998
Qtr ended
Sept. 30, 1998
Approx- Average Qtr ended
imate Rental Rates Jun. 30,
Number Rentable Average ------------- 1998
Year Year of Area Unit Size Per Per Average
PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy
- - ---------- -------- -------- --------- ------ --------- --------- ---- ----- -----------
AUSTIN, TEXAS
- - -------------
Amli:
at the Arboretum Austin, TX 1986 1983 231 178,116 771 $700 $0.91 94.4%
in Great Hills Austin, TX 1991 1985 344 256,892 747 697 0.93 96.6%
at Lantana Ridge Austin, TX 1997 1997 354 311,808 881 810 0.92 93.9%
at Martha's
Vineyard Austin, TX 1992 1986 360 253,328 704 615 0.87 96.9%
----- --------- --- ---- ----- -----
Subtotal-
Austin, TX 1,289 1,000,144 776 $706 $0.91 95.6%
----- --------- --- ---- ----- -----
EASTERN KANSAS
- - --------------
Amli:
at Alvamar Lawrence, KS 1994 1989 152 125,800 828 $667 $0.81 90.6%
at Crown Colony Topeka, KS 1994 1986 156 120,984 776 586 0.76 89.3%
at Crown Colony II Topeka, KS 1997 64 51,292 801 643 0.80 93.2%
at Regents Center Overland Park, KS 1994 1991/95 300 274,170 914 707 0.77 95.5%
at Regents
Center II Overland Park, KS 1997 124 123,728 998 760 0.76 95.7%
at Sherwood Topeka, KS 1994 1993 300 260,340 868 626 0.72 91.6%
at Town Center Overland Park, KS 1997 1997 156 176,994 1,135 935 0.82 92.5%
----- --------- ----- ---- ----- -----
Subtotal
-Eastern KS 1,252 1,133,308 905 $698 $0.77 92.7%
----- --------- ----- ---- ----- -----
INDIANAPOLIS, IN
- - ----------------
Amli:
at Riverbend Indianapolis, IN 1992/93 1983/85 996 820,712 824 $598 $0.73 94.2%
at Conner Farms Indianapolis, IN 1997 1993 300 324,636 1,082 793 0.73 88.9%
----- --------- ----- ---- ----- -----
Subtotal
-Indianapolis,
IN 1,296 1,145,348 884 $644 $0.73 93.0%
----- --------- ----- ---- ----- -----
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
PROPERTY INFORMATION - CONTINUED
As of September 30, 1998
Qtr ended
Sept. 30, 1998
Approx- Average Qtr ended
imate Rental Rates Sept. 30,
Number Rentable Average ------------- 1998
Year Year of Area Unit Size Per Per Average
PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy
- - ---------- -------- -------- --------- ------ --------- --------- ---- ----- -----------
CHICAGO, IL
- - ------------
Amli:
at Park Sheridan Chicago, IL 1989 1986 253 216,315 855 $945 $1.10 97.1%
at Poplar Creek Chicago, IL 1997 1985 196 178,490 911 945 1.04 96.3%
----- ---------- ----- ---- ----- -----
Subtotal
-Chicago, IL 449 394,805 879 $945 $1.07 96.7%
------ ---------- ----- ---- ----- -----
TOTAL
PROPERTIES 12,250 10,731,998 876 $719 $0.82 94.5%
====== ========== ==== ==== ===== =====
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST PROPERTY INFORMATION - CONTINUED
As of September 30, 1998
Qtr ended
Sept. 30, 1998
Approx- Average Qtr ended
imate Rental Rates Sept. 30,
Number Rentable Average ------------- 1998
Year Year of Area Unit Size Per Per Average
PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy
- - ---------- -------- -------- --------- ------ --------- --------- ---- ----- -----------
CO-INVESTMENT
PROPERTIES
- - --------------
ATLANTA, GA
- - -----------
Amli:
at Pleasant Hill Atlanta, GA 1996 502 501,816 1,000 $796 $0.80 95.4%
at Barrett Lakes Atlanta, GA 1997 446 460,150 1,032 844 0.82 93.4%
at River Park Atlanta, GA 1997 222 225,892 1,018 865 0.85 94.7%
at Towne Creek Gainesville, GA 1989 150 121,722 811 617 0.76 90.4%
at Willeo Creek Rosewell, GA 1995 1989 242 297,302 1,229 832 0.68 93.4%
----- --------- ----- ---- ----- ------
Subtotal-
Atlanta, GA 1,562 1,606,882 1,029 $808 $0.79 93.9%
----- --------- ----- ---- ----- ------
CHICAGO, IL
- - -----------
Amli:
at Prairie
Court Oak Park, IL 1987 125 105,578 845 1,096 1.30 96.3%
at Windbrooke Buffalo Grove, IL 1995 1987 236 213,160 903 989 1.10 97.7%
at Chevy Chase Buffalo Grove, IL 1996 1988 592 480,676 812 962 1.19 96.6%
at Danada Wheaton, IL 1997 1989/91 600 521,500 869 923 1.06 95.6%
at Fox Valley 1998 272 269,093 989 929 0.94 91.8%
at Willowbrook Willowbrook, IL 1996 1987 488 418,404 857 944 1.10 93.3%
----- --------- --- ---- ----- -----
Subtotal-
Chicago, IL 2,313 2,008,411 868 $954 $1.10 95.2%
----- --------- --- ---- ----- -----
EASTERN KANSAS
- - --------------
AMLI at:
Regents Crest Overland Park, KS 1997 1997 368 346,488 942 $729 $0.77 95.1%
----- --------- --- ---- ----- -----
DALLAS/FT. WORTH
- - ----------------
Amli:
at Verandah Arlington, TX 1997 1986/91 538 394,504 733 $678 $0.92 95.0%
----- --------- --- ---- ----- -----
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST PROPERTY INFORMATION - CONTINUED
As of September 30, 1998
Qtr ended
Sept. 30, 1998
Approx- Average Qtr ended
imate Rental Rates Sept. 30,
Number Rentable Average ------------- 1998
Year Year of Area Unit Size Per Per Average
PROPERTIES Location Acquired Completed Units (Sq Ft) (Sq Ft) Unit Sq Ft Occupancy
- - ---------- -------- -------- --------- ------ --------- --------- ---- ----- -----------
AUSTIN, TX
- - ----------
Amli:
at Park Place Austin, TX 1994 1985 588 397,968 677 $596 $0.88 94.5%
------ --------- --- ---- ----- -----
HOUSTON, TX
Amli:
at Champions
Centre Houston, TX 1994 1994 192 164,480 857 $754 $0.88 95.7%
at Champions Park Houston, TX 1994 1991 246 221,646 901 735 0.82 96.3%
at Greenwood
Forest Houston, TX 1995 1995 316 310,844 984 795 0.81 95.4%
---- ------- --- ---- ----- -----
Subtotal-
Houston, TX 754 696,970 924 $765 $0.83 95.8%
---- ---------- --- ---- ----- -----
TOTAL CO-INVESTMENT
PROPERTIES 6,123 5,451,223 890 821 0.92 94.9%
====== ========== === ==== ===== =====
TOTAL 18,373 16,183,221 881 $753 $0.85 94.6%
====== ========== === ==== ===== =====
</TABLE>
<PAGE>
<TABLE>
AMLI RESIDENTIAL PROPERTIES TRUST
COMPONENTS OF PROPERTY EBITDA
<CAPTION> WHOLLY-OWNED
----------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------- ---------------------------------
% %
1998 1997 Change 1998 1997 Change
------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
PROPERTY REVENUES
- - -----------------
Rental Income
- - -------------
Same Store Communities (1) . . . . . $18,952 18,444 2.8% 56,189 54,693 2.7%
Stabilized Development
Communities (2) . . . . . . . . . . 800 -- 2,398 --
Development and/or Lease-up
Communities (3) . . . . . . . . . . 1,470 612 140.3% 3,217 1,063 202.6%
Acquisition Communities (4). . . . . 4,440 405 12,964 572
Communities Sold/Contributed
to Ventures (5) . . . . . . . . . . 11 575 248 1,668
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $25,673 20,035 28.1% 75,015 57,996 29.3%
======= ======= ======= ======= ======= =======
Other Revenues
- - --------------
Same Store Communities . . . . . . . $ 1,170 1,067 9.7% 3,236 2,970 9.0%
Stabilized Development Communities . 38 -- 127 --
Development and/or Lease-up
Communities . . . . . . . . . . . . 111 57 93.9% 259 92 179.8%
Acquisition Communities. . . . . . . 286 11 686 12
Communities Sold/Contributed
to Ventures . . . . . . . . . . . . -- 32 46 86
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $ 1,606 1,167 37.6% 4,354 3,161 37.7%
======= ======= ======= ======= ======= =======
Total Property Revenues
- - -----------------------
Same Store Communities . . . . . . . $20,122 19,510 3.1% 59,425 57,663 3.1%
Stabilized Development Communities . 838 -- 2,525 --
Development and/or Lease-up
Communities . . . . . . . . . . . . 1,582 669 136.3% 3,475 1,155 200.8%
Acquisition Communities. . . . . . . 4,726 417 13,650 584
Communities Sold/Contributed
to Ventures . . . . . . . . . . . . 10 607 294 1,755
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $27,279 21,203 28.7% 79,369 61,157 29.8%
======= ======= ======= ======= ======= =======
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
COMPONENTS OF PROPERTY EBITDA - Continued
WHOLLY-OWNED
----------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------- ---------------------------------
% %
1998 1997 Change 1998 1997 Change
------- ------- ------ ------- ------- ------
Total Operating Expenses
- - ------------------------
Same Store Communities. . . . . . . $ 8,428 8,160 3.3% 24,290 23,641 2.7%
Stabilized Development
Communities . . . . . . . . . . . . 315 -- 912 --
Development and/or Lease-up
Communities . . . . . . . . . . . . 636 389 63.3% 1,490 742 100.9%
Acquisition Communities. . . . . . . 1,770 139 5,346 193
Communities Sold/Contributed
to Ventures . . . . . . . . . . . . 30 333 432 907
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $11,179 9,022 23.9% 32,470 25,483 27.4%
======= ======= ======= ======= ======= =======
Property EBITDA
- - ---------------
Same Store Communities . . . . . . . $11,694 11,350 3.0% 35,135 34,022 3.3%
Stabilized Development
Communities . . . . . . . . . . . . 523 -- 1,613 --
Development and/or Lease-up
Communities . . . . . . . . . . . . 946 280 1,986 414
Acquisition Communities. . . . . . . 2,956 277 8,304 391
Communities Sold/Contributed
to Ventures . . . . . . . . . . . . (20) 274 (138) 848
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $16,099 12,181 32.2% 46,899 35,675 31.5%
======= ======= ======= ======= ======= =======
Company's share of
Co-investment EBITDA. . . . . . . .
Percent of
Co-investment
EBITDA . . . . . . . . . . . . . . .
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
COMPONENTS OF PROPERTY EBITDA - Continued
WHOLLY-OWNED & CO-INVESTMENTS AT 100%
----------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------- ---------------------------------
% %
1998 1997 Change 1998 1997 Change
------- ------- ------ ------- ------- ------
PROPERTY REVENUES
- - -----------------
Rental Income
- - -------------
Same Store Communities (1) . . . . . $27,682 26,771 3.4% 81,771 79,326 3.1%
Stabilized Development
Communities (2) . . . . . . . . . . 2,391 -- 7,164 --
Development and/or Lease-up
Communities (3) . . . . . . . . . . 4,648 2,095 9,100 3,517
Acquisition Communities (4). . . . . 7,830 2,975 163.2% 22,972 6,178 271.8%
Communities Sold/Contributed
to Ventures (5) . . . . . . . . . . 11 575 248 1,668
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $42,561 32,416 31.3% 121,256 90,690 33.7%
======= ======= ======= ======= ======= =======
Other Revenues
- - --------------
Same Store Communities . . . . . . . $1,674 1,513 10.6% 4,574 4,266 7.2%
Stabilized Development
Communities . . . . . . . . . . . . 133 -- 382 --
Development and/or Lease-up
Communities . . . . . . . . . . . . 363 167 803 292
Acquisition Communities. . . . . . . 540 200 170.4% 1,371 370 270.6%
Communities Sold/Contributed
to Ventures . . . . . . . . . . . . -- 32 46 86
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $2,710 1,912 41.8% 7,177 5,015 43.1%
======= ======= ======= ======= ======= =======
Total Property Revenues
- - -----------------------
Same Store Communities . . . . . . . $29,355 28,284 3.8% 86,345 83,592 3.3%
Stabilized Development
Communities . . . . . . . . . . . . 2,524 -- 7,546 --
Development and/or Lease-up
Communities . . . . . . . . . . . . 5,011 2,262 9,904 3,810
Acquisition Communities. . . . . . . 8,370 3,175 163.6% 24,344 6,548 271.8%
Communities Sold/Contributed
to Ventures . . . . . . . . . . . . 10 607 294 1,755
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $45,270 34,327 31.9% 128,433 95,705 34.2%
======= ======= ======= ======= ======= =======
<PAGE>
AMLI RESIDENTIAL PROPERTIES TRUST
COMPONENTS OF PROPERTY EBITDA - Continued
WHOLLY-OWNED & CO-INVESTMENTS AT 100%
----------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------- ---------------------------------
% %
1998 1997 Change 1998 1997 Change
------- ------- ------ ------- ------- ------
Total Operating Expenses
- - ------------------------
Same Store Communities. . . . . . . $12,025 11,738 2.5% 34,977 33,939 3.1%
Stabilized Development
Communities . . . . . . . . . . . . 896 -- 2,688 --
Development and/or Lease-up
Communities . . . . . . . . . . . . 2,094 1,174 78.4% 4,636 2,425 91.2%
Acquisition Communities. . . . . . . 3,233 1,291 150.4% 9,599 2,516 281.6%
Communities Sold/Contributed
to Ventures . . . . . . . . . . . . 30 333 432 907
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $18,279 14,535 25.8% 52,333 39,787 31.5%
======= ======= ======= ======= ======= =======
Property EBITDA
- - ---------------
Same Store Communities . . . . . . . $17,330 16,546 4.7% 51,369 49,653 3.5%
Stabilized Development
Communities . . . . . . . . . . . . 1,628 -- 4,858 --
Development and/or Lease-up
Communities . . . . . . . . . . . . 2,917 1,088 5,268 1,385
Acquisition Communities. . . . . . . 5,136 1,883 172.8% 14,744 4,033 265.5%
Communities Sold/Contributed
to Ventures . . . . . . . . . . . . (20) 274 (138) 848
------- ------- ------- ------- ------- -------
Total . . . . . . . . . . . . . . $26,992 19,791 36.4% 76,100 55,919 36.1%
======= ======= ======= ======= ======= =======
Company's share of
Co-investment EBITDA. . . . . . . . 2,605 1,828 42.5% 7,930 5,297 49.7%
======= ======= ======= ======= ======= =======
Percent of Co-investment
EBITDA . . . . . . . . . . . . . . . 10% 9% 10% 9%
======= ======= ======= =======
<FN>
(1) Stabilized Communities at 1/1/97.
(2) Development Communities stabilized after 1/1/97 but before 1/1/98.
(3) Development Communities not yet stabilized.
(4) Stabilized Communities acquired after 1/1/97.
(5) Communities sold or contributed to co-investment ventures.
</TABLE>
