<PAGE> 1
As filed with the Securities and Exchange Commission on April 7, 1997
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
SUMMIT PROPERTIES INC.
(Exact name of Registrant as specified in its charter)
MARYLAND 56-1857807
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
212 SOUTH TRYON STREET, SUITE 500
CHARLOTTE, NORTH CAROLINA 28281
(704) 334-9905
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
-------------------------------
WILLIAM F. PAULSEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
SUMMIT PROPERTIES INC.
212 SOUTH TRYON STREET, SUITE 500
CHARLOTTE, NORTH CAROLINA 28281
(704) 334-9905
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
copy to:
DAVID W. WATSON, ESQ.
GOODWIN, PROCTER & HOAR LLP
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
(617) 570-1888
-----------------------------
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
Title of Securities Being Proposed Maximum Offering Proposed Maximum Aggregate Amount of
Registered Amount to be Registered Price Per Share(1) Offering Price(1) Registration Fee
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.01 589,792 $20.0625 $11,832,702 $3,586
per share
=================================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) of the Securities Act of 1933 based upon the
average of the high and low sales prices on the New York Stock Exchange
on April 1, 1997.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
================================================================================
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PROSPECTUS
589,792 SHARES
SUMMIT PROPERTIES INC.
COMMON STOCK
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This Prospectus relates to the possible offer and sale from time to time
of (i) up to 243,608 shares of common stock, par value $.01 per share ("Common
Stock"), of Summit Properties Inc. (the "Company") by a holder thereof, and (ii)
up to 346,184 shares of Common Stock by certain holders thereof, if and to the
extent that the Company elects to issue such shares to certain holders of units
of limited partnership interests ("Units") in Summit Properties Partnership,
L.P. (the "Operating Partnership"). Under the terms of the Agreement of Limited
Partnership of the Operating Partnership, holders of Units in the Operating
Partnership have the right to require the Operating Partnership to redeem their
Units for cash, subject to certain restrictions. However, at the Company's
election it may deliver an equivalent number of shares of Common Stock to the
holders of Units in satisfaction of the Operating Partnership's obligation to
redeem the Units for cash. The registration of the shares of Common Stock
offered hereby (the "Shares") does not necessarily mean that Shares will be
issued by the Company in satisfaction of the Unit holders' redemption rights or
that, if issued by the Company, any of the Shares will be offered or sold by the
holders thereof (the "Selling Stockholders").
The Common Stock is listed on the New York Stock Exchange (the "NYSE")
under the symbol "SMT." To ensure that the Company maintains its qualification
as a real estate investment trust (a "REIT") for federal income tax purposes,
ownership of Common Stock by any person is limited to 9.8% of the Company's
capital stock, with certain exceptions. See "Restrictions on Transfers of
Capital Stock." The Company will not receive any proceeds from the sale of
Shares by the Selling Stockholders. The Company has agreed to bear certain
expenses of registration of the Shares under federal and state securities laws.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
From time to time, the Selling Stockholders may offer and sell Shares
held by them directly or through agents or broker-dealers on terms to be
determined at the time of sale. To the extent required, the names of any agent
or broker-dealer and applicable commissions or discounts and any other required
information with respect to any particular offer will be set forth in an
accompanying Prospectus Supplement. See "Plan of Distribution." Each of the
Selling Stockholders reserves the right to accept or reject, in whole or in
part, any proposed purchase of Shares to be made directly or through agents.
The Selling Stockholders and any agents or broker-dealers that
participate with the Selling Stockholders in the distribution of Shares may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), and any commission received by them and any
profit on the resale of the Shares may be deemed to be underwriting commissions
or discounts under the Securities Act. See "Registration Rights" for a
description of certain indemnification arrangements between the Company and the
Selling Stockholders.
The date of this Prospectus is April 7, 1997
<PAGE> 3
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"SEC" or "Commission") a registration statement on Form S-3 (the "Registration
Statement") under the Securities Act with respect to the Shares. This
Prospectus, which constitutes part of the Registration Statement, omits certain
of the information contained in the Registration Statement and the exhibits
thereto on file with the Commission pursuant to the Securities Act and the rules
and regulations of the Commission thereunder. The Registration Statement,
including exhibits thereto, may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the Commission's Regional Offices at 7 World
Trade Center, 13th Floor, New York, New York 10048, and Citicorp Center, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661-2511, and copies may be
obtained at the prescribed rates from the Public Reference Section of the
Commission at its principal office in Washington, D.C. The Commission also
maintains a Web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the Commission. Statements contained
in this Prospectus as to the contents of any contract or other document referred
to are not necessarily complete, and in each instance reference is made to the
copy of such contract or other document filed as an exhibit to the Registration
Statement, each such statement being qualified in all respects by such
reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and proxy statements and other information
with the Commission. Such reports, proxy statements and other information can be
inspected and copied at the locations described above. Copies of such materials
can be obtained by mail from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
In addition, the Common Stock is listed on the NYSE, and such materials can be
inspected and copied at the NYSE, 20 Broad Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
(a) Annual Report on Form 10-K for the year ended December 31, 1996,
filed with the Commission pursuant to the Exchange Act;
(b) Current Report on Form 8-K dated March 6, 1997, filed with the
Commission pursuant to the Exchange Act;
(c) The description of the Company's Common Stock contained in its
Registration Statement on Form 8-A filed with the Commission
pursuant to the Exchange Act, including all amendments and
reports updating such description; and
(d) Annual Report of the Company's 1996 Non-Qualified Employee Stock
Purchase Plan on Form 11-K for the year ended December 31, 1996,
filed with the Commission pursuant to the Exchange Act.
In addition, all documents subsequently filed with the Commission by the
Company pursuant to Sections 13(a) and 13(c), Section 14 and Section 15(d) of
the Exchange Act prior to the filing of a post-effective amendment hereto that
indicates that all securities offered hereunder have been sold or that
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein,
in any applicable Prospectus Supplement or in any other document subsequently
filed with the Commission which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
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Copies of all documents which are incorporated by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in such document) will be provided without charge to
each person, including any owner of Common Stock, to whom this Prospectus is
delivered, upon written or oral request. Requests should be directed to Summit
Properties Inc., 212 South Tryon Street, Suite 500, Charlotte, North Carolina
28281, Attention: General Counsel (telephone number (704) 334-9905).
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
financial and other information appearing elsewhere in this Prospectus or
incorporated herein by reference. Unless the context otherwise requires, all
references in this Prospectus to the "Company" or "Summit" shall mean Summit
Properties Inc., Summit Properties Partnership, L.P., a Delaware limited
partnership (the "Operating Partnership"), Summit Management Company, a Maryland
corporation (the "Management Company"), and Summit Apartment Builders, Inc., a
Florida corporation (the "Building Company").
THE COMPANY
Summit is one of the largest developers and operators of luxury garden
apartment communities in the southeastern United States. The Company is a
self-administered and self-managed REIT. The Company's Common Stock is listed on
the NYSE under the symbol "SMT."
The Company's business is conducted principally through the Operating
Partnership, of which the Company is the sole general partner and, as of March
31, 1997, the holder of approximately 84.5% of the outstanding partnership
interests of the Operating Partnership. The Company's third party management and
certain construction and other businesses are conducted through its
subsidiaries, the Management Company and the Building Company.
TAX STATUS OF THE COMPANY
The Company has elected to be taxed as a REIT under Sections 856 through
860 of the Internal Revenue Code of 1986, as amended (the "Code") commencing
with its taxable year ending December 31, 1994. As long as the Company qualifies
for taxation as a REIT, the Company generally will not be subject to federal
income tax on that portion of its ordinary income and capital gains that is
currently distributed to its stockholders. REITs are subject to a number of
highly technical and complex organizational and operational requirements.
Although the Company believes it has operated, and intends to continue to
operate, in such a manner as to qualify as a REIT under the Code, no assurance
can be given that the Company will at all times so qualify. If the Company fails
to qualify as a REIT in any taxable year, the Company will be subject to federal
income tax (including any applicable alternative minimum tax) on its taxable
income at regular corporate rates. Even if the Company qualifies for taxation as
a REIT, the Company may be subject to certain state and local taxes on its
income and property and to federal income and excise taxes on its undistributed
income. See "Federal Income Tax Considerations."
SECURITIES TO BE OFFERED
This Prospectus relates to the offer and sale from time to time of up to
589,792 Shares by the holders thereof. The Company is registering the Shares
pursuant to its obligations under certain registration rights agreements.
The Company will not receive any proceeds from the sale of any Shares.
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THE COMPANY
GENERAL
Summit is one of the largest developers and operators of luxury garden
multifamily apartment communities in the southeastern United States. The Company
is a self-administered and self-managed REIT. The Company's Common Stock is
listed on the NYSE under the symbol "SMT."
The Company's business is conducted principally through the Operating
Partnership, of which the Company is the sole general partner and, as of March
31, 1997, the holder of approximately 84.5% of the outstanding partnership
interests of the Operating Partnership. Each Unit, other than those held by the
Company, may be submitted for redemption by the holder thereof, subject to
certain holding periods and other conditions, and the Company may, at its
option, elect to satisfy such redemption request by redeeming each Unit for one
share (subject to certain adjustments) of Common Stock. With each such exchange,
the number of Units owned by the Company and, therefore, the Company's
percentage interest in the Operating Partnership, will increase.
The Company's third party management and certain construction and other
businesses are conducted through its subsidiaries, the Management Company and
the Building Company.
The Company was organized as a real estate investment trust under the
laws of the State of Maryland on December 1, 1993 and later changed to corporate
form on January 13, 1994. On February 15, 1994, the Company completed its
initial public offering of Common Stock. The principal executive office of the
Company is located at 212 South Tryon Street, Suite 500, Charlotte, North
Carolina 28281; telephone number (704) 334-9905.
THE OPERATING PARTNERSHIP
The Company's business is conducted principally through the Operating
Partnership. As the sole general partner of the Operating Partnership, the
Company has the exclusive power to manage and conduct the business of the
Operating Partnership, subject to the consent of holders of a specified
percentage of the Units in connection with a sale, transfer or other disposition
of all or substantially all of the assets of the Operating Partnership, or
certain other transactions which would result in the recognition of a
significant taxable gain to the holders of Units. The Company's general and
limited partnership interests in the Operating Partnership entitle it to share
in 84.5% of the profits and losses of, and the cash distributions from, the
Operating Partnership.
The Operating Partnership was organized as a limited partnership under
the laws of the State of Delaware on January 14, 1994. The Operating Partnership
will continue until December 31, 2093, or until sooner dissolved upon (i)
withdrawal of Summit Properties Inc. as general partner of the Operating
Partnership (the "General Partner") (unless the limited partners elect to
continue the Operating Partnership), (ii) an election to dissolve the Operating
Partnership made on or before December 31, 2053 by the General Partner with the
consent of the limited partners (including Summit Properties Inc.) holding 85%
of the outstanding Units, subject to certain restrictions in the event of a
change-in-control of the Company, (iii) an election to dissolve the Operating
Partnership made on or after January 1, 2054 by the General Partner in its sole
and absolute discretion, subject to certain restrictions in the event of a
change-in-control of the Company, (iv) entry of a decree of judicial
dissolution, (v) the sale of all or substantially all of the assets of the
Operating Partnership, or (vi) a final and non-appealable judgment ruling the
General Partner bankrupt or insolvent (unless the limited partners elect to
continue the Operating Partnership prior to the entry of such order or
judgment).
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DESCRIPTION OF SECURITIES TO BE REGISTERED
The description of the Company's Common Stock set forth below does not
purport to be complete and is qualified in its entirety by reference to the
Company's Articles of Incorporation and Bylaws, as in effect as of the date
hereof.
GENERAL
Under the Articles of Incorporation, the Company has authority to issue
100 million shares of Common Stock, par value $.01 per share. Under Maryland
law, stockholders generally are not responsible for the corporation's debts or
obligations. At April 7, 1997, the Company had outstanding 23,078,821 shares
of Common Stock.
TERMS
Subject to the preferential rights of any other class or series of stock
and to the provisions of the Company's Articles of Incorporation regarding
Excess Stock, holders of shares of Common Stock will be entitled to receive
dividends on shares of Common Stock if, as and when authorized and declared by
the Board of Directors of the Company out of assets legally available therefor
and to share ratably in the assets of the Company legally available for
distribution to its stockholders in the event of its liquidation, dissolution or
winding-up after payment of, or adequate provision for, all known debts and
liabilities of the Company.
Subject to the provisions of the Company's Articles of Incorporation
regarding Excess Stock, each outstanding share of Common Stock entitles the
holder to one vote on all matters submitted to a vote of stockholders, including
the election of directors and, except as otherwise required by law or except as
provided with respect to any other class or series of stock, the holders of
Common Stock will possess the exclusive voting power. The Company's Board of
Directors is divided into three classes. The members of each class serve for a
term of three years. The terms for the three classes are staggered such that the
term of only one class of directors expires each year. There is no cumulative
voting in the election of directors, which means that the holders of a majority
of the outstanding shares of Common Stock can elect all of the directors then
standing for election and the holders of the remaining shares of Common Stock
will not be able to elect any directors.
Holders of Common Stock have no conversion, sinking fund or redemption
rights, or preemptive rights to subscribe for any securities of the Company.
Subject to the provisions of the Company's Articles of Incorporation
regarding Excess Stock, all shares of Common Stock will have equal dividend,
distribution, liquidation and other rights, and will have no preference,
appraisal or exchange rights.
Pursuant to Maryland law, a corporation generally cannot dissolve, amend
its Articles of Incorporation, merge, sell all or substantially all of its
assets, engage in a share exchange or engage in similar transactions outside the
ordinary course of business unless approved by the affirmative vote of
stockholders holding at least two-thirds of the shares entitled to vote on the
matter unless a lesser percentage (but not less than a majority of all of the
votes to be cast on the matter) is set forth in the corporation's Articles of
Incorporation. The Company's Articles of Incorporation provide that such
transactions, with the exception of an amendment of the Articles of
Incorporation affecting restrictions on transfer, can be effected by a vote of a
majority of the shares entitled to vote on such matters.
Provisions of the Company's Articles of Incorporation and Bylaws
described below under "Restrictions on Transfers of Capital Stock," together
with other provisions of the Company's Articles of Incorporation and Maryland
law may discourage a change in control and limit the opportunity for
stockholders to receive a premium for their Common Stock.
RESTRICTIONS ON OWNERSHIP
For the Company to qualify as a REIT under the Code, not more than 50%
in value of its outstanding capital stock may be owned, directly or indirectly,
by five or fewer individuals (defined in the Code to include certain
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entities) during the last half of a taxable year. To assist the Company in
meeting this requirement, the Company may take certain actions to limit the
beneficial ownership, directly or indirectly, by a single person of the
Company's outstanding equity securities. See "Restrictions on Transfers of
Capital Stock."
TRANSFER AGENT
The transfer agent and registrar for the Common Stock is First Union
National Bank of North Carolina.
RESTRICTIONS ON TRANSFERS OF CAPITAL STOCK
For the Company to qualify as a REIT under the Code, among other things,
not more than 50% in value of its outstanding capital stock may be owned,
directly or indirectly, by five or fewer individuals (defined in the Code to
include certain entities) during the last half of a taxable year (other than the
first year) (the "Five or Fewer Test"), and such capital stock must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months (other than the first year) or during a proportionate part of
a shorter taxable year. In order to maintain the Company's qualification as a
REIT, the Articles of Incorporation, subject to certain exceptions, provide that
no holder who is an individual may own, or be deemed to own by virtue of the
attribution provisions of the Code, more than 9.8% (the "Ownership Limit") of
the Company's capital stock. Pursuant to the Code, certain types of entities,
such as pension trusts qualifying under Section 401(a) of the Code, United
States investment companies registered under the Investment Company Act of 1940
and corporations will be looked-through for purposes of the Five or Fewer Test.
The Company's Articles of Incorporation limit such entities to holding no more
than 15% of the aggregate value of the Company's shares of capital stock (the
"Look-Through Ownership Limit"). Any transfer of capital stock or any security
convertible into capital stock that would create a direct or indirect ownership
of capital stock in excess of the Ownership Limit or the Look-Through Ownership
Limit or that would result in the disqualification of the Company as a REIT,
including any transfer that results in the capital stock being owned by fewer
than 100 persons or results in the Company being "closely held" within the
meaning of Section 856(h) of the Code, shall be null and void, and the intended
transferee will acquire no rights to the capital stock. The Board of Directors
in its sole discretion may waive the Ownership Limit or the Look-Through
Ownership Limit if evidence satisfactory to the Board of Directors and the
Company's tax counsel is presented that the changes in ownership will not then
or in the future jeopardize the Company's status as a REIT. The foregoing
restrictions on transferability and ownership will not apply if the Board of
Directors determines that it is no longer in the best interests of the Company
to attempt to qualify, or to continue to qualify, as a REIT.
Capital stock owned, or deemed to be owned, or transferred to a
stockholder in excess of the Ownership Limit or the Look-Through Ownership Limit
will automatically be converted into shares of Excess Stock that will be
transferred, by operation of law, to the Company as trustee of a trust for the
exclusive benefit of the transferees to whom such capital stock may be
ultimately transferred without violating the Ownership Limit or the Look-Through
Ownership Limit. While held in trust, the Excess Stock will not be considered
for purposes of any stockholder vote or the determination of a quorum for such
vote and, except upon liquidation, will not be entitled to participate in
distributions. Any distribution paid on Excess Stock, prior to the discovery by
the Company that capital stock has been transferred in violation of the
Ownership Limit or the Look-Through Ownership Limit, shall be repaid to the
Company upon demand. Shares of Excess Stock are not treasury stock, but rather
constitute a separate class of issued and outstanding stock of the Company. The
original transferee-stockholder may, at any time the shares of Excess Stock are
held by the Company in trust, transfer the interest in the trust representing
the Excess Stock to any individual whose ownership of the capital stock
converted into such Excess Stock would be permitted under the Ownership Limit or
the Look-Through Ownership Limit, at a price per share not in excess of (i) the
price per share paid by the original transferee-stockholder for the capital
stock that was converted into Excess Stock; or (ii) if the original
transferee-stockholder did not give value for such shares (e.g., the capital
stock was received through a gift, devise or other transaction), the average
closing price per share for the class of shares from which such shares of Excess
Stock were converted for the 10 days immediately preceding such sale or gift.
Immediately upon the transfer to the permitted transferee, the Excess Stock will
automatically be converted into capital stock of the class from which it was
converted. If the foregoing transfer restrictions are determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation, then the
intended transferee of any Excess Stock may be deemed, at the option
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of the Company, to have acted as an agent on behalf of the Company in acquiring
the Excess Stock and to hold the Excess Stock on behalf of the Company.
In addition, the Company will have the right, for a period of 90 days
during the time any shares of Excess Stock are held by the Company in trust, to
purchase all or any portion of the Excess Stock from the original
transferee-stockholder for a price per share equal to the lesser of (i) the
price per share initially paid for the capital stock by the original
transferee-stockholder, or if the original transferee-stockholder did not give
value for such shares (e.g., the shares were received through a gift, devise or
other transaction), the average closing price per share for the class of shares
from which such shares of Excess Stock were converted for the 10 days
immediately preceding such sale or gift, and (ii) the average closing price per
share for the class of shares from which such shares of Excess Stock were
converted for the 10 days immediately preceding the date the Company elects to
purchase such shares. The 90-day period begins on the date of the violative
transfer if the original transferee-stockholder gives notice to the Company of
the transfer or, if no such notice is given, the date the Board of Directors
determines that a violative transfer has been made.
These restrictions will not preclude settlement of transactions through
the NYSE.
Each stockholder shall, upon demand, be required to disclose to the
Company in writing any information with respect to the direct, indirect and
constructive ownership of the Company's capital stock as the Board of Directors
deems necessary to comply with the provisions of the Code applicable to REITs,
to comply with the requirements of any taxing authority or governmental agency
or to determine any such compliance.
The Ownership Limit and the Look-Through Ownership Limit may have the
effect of precluding acquisition of control of the Company unless the Board of
Directors determines that maintenance of REIT status is no longer in the best
interests of the Company.
REGISTRATION RIGHTS
The statements made under this heading relating to the Registration
Rights Agreements (as defined below) are summaries of certain provisions
thereof, do not purport to be complete and are qualified in there entirety by
reference to the Registration Rights Agreements. The registration of the Shares
pursuant to the Registration Statement of which this Prospectus is a part will
discharge certain of the Company's obligations under the terms of (i) a
Registration Rights Agreement dated as of February 20, 1997 (the "Sand Lake
Registration Rights Agreement"); (ii) a Registration Rights Agreement dated as
of January 10, 1996 (the "Sedgebrook Registration Rights Agreement"); and (iii)
a Registration Rights Agreement dated as of December 11, 1995 (the "Bissell
Ballantyne Registration Rights Agreement," and together with the Sand Lake
Registration Rights Agreement and the Sedgebrook Registration Rights Agreement,
the "Registration Rights Agreements").
Pursuant to the Registration Rights Agreements, the Company has agreed
to pay all expenses of effecting the registration of the Shares (other than
brokerage and underwriting commissions and taxes of any kind and any legal,
accounting and other expenses incurred by the Selling Stockholders). The Company
also has agreed to indemnify each Selling Stockholder under the Registration
Rights Agreements and its officers, directors and other affiliated persons and
any person who controls any Selling Stockholder against certain losses, claims,
damages and expenses arising under the securities laws in connection with the
Registration Statement or this Prospectus, subject to certain limitations. In
addition, each Selling Stockholder under the Registration Rights Agreements
severally agreed to indemnify the Company, any person who controls the Company
and their respective officers, directors and certain other affiliates against
all losses, claims, damages and expenses, subject to certain limitations,
arising under the securities laws insofar as such loss, claim, damage or expense
relates to written information furnished to the Company by such Selling
Stockholder for use in the Registration Statement or Prospectus or an amendment
or supplement thereto or, in the case of the Sedgebrook and Bissell Ballantyne
Registration Rights Agreements, the failure by such Selling Stockholder to
deliver or cause to be delivered this Prospectus or any amendment or supplement
thereto to any purchaser of shares covered by the Registration Statement from
such Selling Stockholder through no fault of the Company.
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FEDERAL INCOME TAX CONSIDERATIONS
The Company believes it has operated, and the Company intends to
continue to operate, in such a manner as to qualify as a REIT under the Code,
but no assurance can be given that it will at all times so qualify.
The provisions of the Code pertaining to REITs are highly technical and
complex. The following is a brief and general summary of certain provisions that
currently govern the federal income tax treatment of the Company and its
stockholders. For the particular provisions that govern the federal income tax
treatment of the Company and its stockholders, reference is made to Sections 856
through 860 of the Code and the regulations thereunder. The following summary is
qualified in its entirety by such reference.
Under the Code, if certain requirements are met in a taxable year, a
REIT generally will not be subject to federal income tax with respect to income
that it distributes to its stockholders. If the Company fails to qualify during
any taxable year as a REIT, unless certain relief provisions are available, it
will be subject to tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates, which could have a material adverse
effect upon its stockholders.
In any year in which the Company qualifies to be taxed as a REIT,
distributions made to its stockholders out of current or accumulated earnings
and profits will be taxed to stockholders as ordinary income except that
distributions of net capital gains designated by the Company as capital gain
dividends will be taxed as long-term capital gain income to the stockholders. To
the extent that distributions exceed current or accumulated earnings and
profits, they will constitute a return of capital, rather than a dividend or
capital gain income, and will reduce the basis for the stockholder's capital
stock with respect to the distribution paid or, to the extent that they exceed
such basis, will be taxed in the same manner as gain from the sale of such
capital stock.
Investors are urged to consult their own tax advisors with respect to
the appropriateness of an investment in the Common Stock offered hereby and with
respect to the tax consequences arising under federal law and the laws of any
state, municipality or other taxing jurisdiction, including tax consequences
resulting from such investor's own tax characteristics. In particular, foreign
investors should consult their own tax advisors concerning the tax consequences
of an investment in the Company, including the possibility of United States
income tax withholding on Company distributions.
SELLING STOCKHOLDERS
As used herein, "Selling Stockholders" are the stockholder listed below
who currently holds certain of the Shares and those persons listed below who
may, at the Company's option, receive Shares upon the exercise of their rights
to require the redemption of their Units.
The following table provides the names of and the number of shares of
Common Stock and Units owned by each Selling Stockholder, to the best knowledge
of the Company as of March 25, 1997. The Shares offered by this Prospectus may
be offered from time to time by the Selling Stockholders. Since the Company is
not required to issue Shares upon the redemption of Units and the Selling
Stockholders may sell all, some or none of the Shares, no estimate can be made
of the aggregate number of Shares that will be offered hereby or the number or
percentage of shares of Common Stock that each Selling Stockholder will own upon
completion of the offering to which this Prospectus relates.
<TABLE>
<CAPTION>
Shares of Units Owned as of
Common Stock Shares March 25, 1997 that may Percent of Percent of
Owned as of Offered by be Redeemed for Shares at All Common All Shares/
Name March 25, 1997 This Prospectus the Company's Option (1) Stock (2) Units (3)
---- -------------- --------------- ------------------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Bissell Ballantyne, LLC 0 0 45,359 * *
Clifford A. Breining 0 0 4,012 * *
Joseph H. Call 0 0 53,165 * *
Gary S. Cangelosi 0 0 53,165 * *
</TABLE>
9
<PAGE> 11
<TABLE>
<CAPTION>
Shares of Units Owned as of
Common Stock Shares March 25, 1997 that may Percent of Percent of
Owned as of Offered by be Redeemed for Shares at All Common All Shares/
Name March 25, 1997 This Prospectus the Company's Option (1) Stock (2) Units (3)
---- -------------- --------------- ------------------------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Trammell S. Crow 0 0 27 * *
Crow Residential Realty
Investors, L. P 0 0 30,376 * *
Douglas A. Hoeksema 0 0 26,749 * *
The Northwestern Mutual
Life Insurance Company 610,608 243,608 0 2.65% 2.24%
Randy J. Pace 0 0 4,012 * *
TCF Residential Partnership,
Ltd 0 0 49,458 * *
J. Ronald Terwilliger 0 0 49,485 * *
J. Ronald Terwilliger
Grantor Trust 0 0 30,376 * *
</TABLE>
- ----------------------
* Less than 1%.
(1) All Units listed in this column can be redeemed on a one-for-one basis for
shares of the Company's Common Stock under certain conditions. Upon such
redemption, all such shares of Common Stock may be offered for sale
hereby.
(2) Assumes that all Units held by the Selling Stockholder are redeemed for
shares of Common Stock. The total number of shares of Common Stock
outstanding used in calculating this percentage assumes that none of the
Units held by other persons are redeemed for shares of Common Stock.
(3) Assumes that all Units held by the Selling Stockholder are redeemed for
shares of Common Stock. The total number of shares of Common Stock
outstanding used in calculating this percentage includes the total number
of shares of Common Stock outstanding and the total number of Units
outstanding held by persons other than the Company.
USE OF PROCEEDS
The Company will not receive any of the proceeds of the sale of the
Shares offered hereby.
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time to time of the
Shares by the holders thereof. The Company has registered the Shares for sale
pursuant to its obligations under the Registration Rights Agreements, but
registration of such shares does not necessarily mean that any of the Shares
will be offered or sold by the Selling Stockholders. The Company will not
receive any proceeds from the offering of Shares by the Selling Stockholders.
The distribution of Shares may be effected from time to time in one or
more underwritten transactions at a fixed price or prices, which may be changed,
or in other transactions at market prices prevailing at the time of sale, at
prices related to such prevailing market prices or at negotiated prices. Any
such underwritten offering may be on either a "best efforts" or a "firm
commitment" basis. In connection with any such underwritten offering,
underwriters or agents may receive compensation in the form of discounts,
concessions or commissions from the Selling Stockholders and/or from purchasers
of the Shares for whom they may act as agents. Underwriters may sell Shares to
or through dealers, and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters and/or commissions
from the purchasers for whom they may act as agents.
The Selling Stockholders and any underwriters, dealers or agents that
participate in the distribution of Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, and any profit on the sale of Shares
by them
10
<PAGE> 12
and any discounts, commissions or concessions received by any such underwriters,
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act.
At a time a particular offer of Shares is made by a Selling
Stockholder, a Prospectus Supplement, if required, will be distributed that will
set forth the names of any underwriters, dealers or agents and any discounts,
commissions and other terms constituting compensation from the Selling
Stockholders and any other required information.
The sale of Shares by the Selling Stockholders may also be effected
from time to time by selling Shares directly to purchasers or to or through
broker-dealers. In connection with any such sale, any such broker-dealer may act
as agent for the Selling Stockholders or may purchase from the Selling
Stockholders all or a portion of the Shares as principal, and sales may be made
pursuant to any of the methods described below. Such sales may be made on the
NYSE or other exchanges on which the shares of Common Stock are then traded, in
the over-the-counter market, in negotiated transactions or otherwise, in each
case at prices and at terms then prevailing or at prices related to the
then-current market prices or at prices otherwise negotiated.
The Shares may also be sold in one or more of the following
transactions: (i) block transactions (which may involve crosses) in which a
broker-dealer may sell all or a portion of such shares as agent but may position
and resell all or a portion of the block as principal to facilitate the
transaction; (ii) purchases by any such broker-dealer as principal and resale by
such broker-dealer for its own account pursuant to a Prospectus Supplement;
(iii) a special offering, an exchange distribution or a secondary distribution
in accordance with applicable NYSE or other stock exchange rules; (iv) ordinary
brokerage transactions and transactions in which any such broker-dealer solicits
purchasers; (v) sales "at the market" to or through a market maker or into an
existing trading market, on an exchange or otherwise, for such shares; and (vi)
sales in other ways not involving market makers or established trading markets,
including direct sales to purchasers. In effecting sales, broker-dealers engaged
by the Selling Stockholders may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or other compensation from the Selling
Stockholders in amounts to be negotiated immediately prior to the sale that will
not exceed those customary in the types of transactions involved. Broker-dealers
may also receive compensation from purchasers of the Shares which is not
expected to exceed that customary in the types of transactions involved.
In order to comply with the securities laws of certain states, if
applicable, the Shares may be sold only through registered or licensed brokers
or dealers.
Until the distribution of the Shares is completed, rules of the
Commission may limit the ability of any underwriters and selling group members
to bid for and purchase the Common Stock. As an exception to these rules,
underwriters are permitted to engage in certain transactions that stabilize the
price of the Common Stock. Such transactions consist of bids or purchases for
the purpose of pegging, fixing or maintaining the price of the Common Stock.
If any underwriters create a short position in the Shares in connection
with the offering, i.e., if they sell more Shares than are set forth on the
cover page of this Prospectus, the underwriters may reduce that short position
by purchasing shares of Common Stock in the open market.
The lead underwriters may also impose a penalty bid on certain other
underwriters participating in the offering and selling group members. This means
that if the lead underwriters purchase shares of Common Stock in the open market
to reduce the underwriters' short position or to stabilize the price of the
Common Stock, they may reclaim the amount of any selling concession from the
underwriters and selling group members who sold those Shares as part of the
offering.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resale of the security before the distribution is completed.
11
<PAGE> 13
The Company does not make any representation or prediction as to the
direction or magnitude of any effect that the transactions described above might
have on the price of the Common Stock. In addition, the Company does not make
any representation that underwriters will engage in such transactions or that
such transactions, once commenced, will not be discontinued without notice.
All expenses incident to the offering and sale of the Shares (other
than brokerage and underwriting commissions and taxes of any kind and any legal,
accounting and other expenses incurred by the Selling Stockholders) shall be
paid by the Company. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act. See "Registration Rights."
LEGAL MATTERS
Certain legal matters, including the legality of the Common Stock
offered hereby, will be passed upon for the Company by Goodwin, Procter & Hoar
LLP, Boston, Massachusetts.
EXPERTS
The financial statements and related financial statement schedules
incorporated in this registration statement by reference from the Company's
Annual Report on Form 10-K and the Annual Report on Form 11-K of the Company's
1996 Non-Qualified Employee Stock Purchase Plan have been audited by Deloitte &
Touche LLP, independent accountants, as stated in their reports which are
incorporated herein by reference and have been so incorporated in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
12
<PAGE> 14
================================================================================
No dealer, salesperson or other individual has been authorized to give any
information or make any representations not contained in this Prospectus. If
given or made, such information or representation must not be relied upon as
having been authorized by the Company or the Selling Stockholders. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy the Common Stock in any jurisdiction where, or to any person to whom, it is
unlawful to make such offer or solicitation. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create an
implication that there has not been any change in the facts set forth in this
Prospectus or in the affairs of the Company since the date hereof.
---------------------------
SUMMARY TABLE OF CONTENTS
PAGE
----
Available Information ................................................. 2
Incorporation of Certain Documents by
Reference ........................................................... 2
Prospectus Summary .................................................... 4
The Company ........................................................... 5
Description of Securities to be Registered ............................ 6
Restrictions on Transfers of Capital Stock ............................ 7
Registration Rights ................................................... 8
Federal Income Tax Considerations ..................................... 9
Selling Stockholders .................................................. 9
Use of Proceeds ....................................................... 10
Plan of Distribution .................................................. 10
Legal Matters ......................................................... 12
Experts ............................................................... 12
---------------------------
================================================================================
589,792 Shares of Common Stock
Summit Properties Inc.
Common Stock
---------------------------
PROSPECTUS
---------------------------
April 7, 1997
================================================================================
<PAGE> 15
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the issuance and distribution of the
securities being registered are set forth in the following table (all amounts
except the registration fee are estimated):
<TABLE>
<S> <C>
Registration fee -- Securities and Exchange Commission....... $ 3,586
-------
Accountants' fees and expenses............................... 5,000
Legal fees and expenses...................................... 25,000
Miscellaneous................................................ 2,414
-------
TOTAL........................................................ $36,000
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
LIMITATION OF LIABILITY AND INDEMNIFICATION
The Company's Articles of Incorporation and Bylaws limit the liability
of the Company's directors and officers to the Company and its stockholders to
the fullest extent permitted from time to time by Maryland law. Maryland law
presently permits the liability of directors and officers to a corporation or
its stockholders for money damages to be limited, except (i) to the extent that
it is proved that the director or officer actually received an improper benefit
or profit; or (ii) if a judgment or other final adjudication is entered in a
proceeding based on a finding that the director's or officer's action or failure
to act was the result of active and deliberate dishonesty and was material to
the cause of action adjudicated in the proceeding. This provision does not limit
the ability of the Company or its stockholders to obtain other relief, such as
an injunction or rescission.
The Company's Articles of Incorporation and Bylaws also require the
Company to indemnify its directors, officers and certain other parties to the
fullest extent permitted from time to time by Maryland law. Maryland law permits
a corporation to indemnify its directors, officers and certain other parties
against judgements, penalties, fines, settlements and reasonable expenses
actually incurred by them in connection with any proceeding to which they may be
made a party by reason of their service to or at the request of the corporation,
unless it is established that (i) the act or omission was committed in bad faith
or was the result of active and deliberate dishonesty; (ii) the indemnified
party actually received an improper personal benefit; or (iii) in the case of
any criminal proceeding, the indemnified party had reasonable cause to believe
that the act or omission was unlawful.
Pursuant to the authority granted in the Company's Articles of
Incorporation and Bylaws, the Company and its affiliate, the Operating
Partnership, have entered into indemnification agreements with each of the
Company's directors and executive officers. The indemnification agreements
require, among other matters, that the Company indemnify its executive officers
and directors to the fullest extent permitted by law and advance to such
officers and directors all related expenses, subject to reimbursement if it is
subsequently determined that indemnification is not permitted. The Company must
also indemnify and advance all expenses incurred by such officers and directors
seeking to enforce their rights under the indemnification agreements and may
cover such officers and directors under the Company's directors' and officers'
liability insurance. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by law, it provides assurance
to directors and officers that indemnification will be available, because, as a
contract, it cannot be modified unilaterally in the future by the Board of
Directors or the stockholders to eliminate the rights it provides.
The Registration Rights Agreements between the Company and certain
holders of shares of Common Stock and Units provide for indemnification of the
Company, its officers, directors and other persons for certain liabilities,
including liabilities under the Securities Act.
II-1
<PAGE> 16
<TABLE>
<CAPTION>
ITEM 16. EXHIBITS. Page**
- -------- --------- ------
<S> <C> <C>
4.1* Articles of Incorporation (Incorporated by reference to
Exhibit No. 3.1 to the Registration Statement on Amendment No.
1 to Form S-11 of Summit Properties Inc., registration number
33-72454).
4.2* Bylaws (Incorporated by reference to Exhibit No. 3.2 to the
Registration Statement on Amendment No. 2 to Form S-11 of
Summit Properties Inc., registration number 33-72454).
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the Securities being registered.
8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax
matters.
10.1 Registration Rights Agreement, dated December 11, 1995,
between the Company and Bissell Ballantyne, LLC
10.2 Registration Rights Agreement, dated January 10, 1996, among
the Company, Joseph H. Call and Gary S. Cangelosi
10.3 Registration Rights Agreement, dated February 20, 1997, among
the Company, The Northwestern Mutual Life Insurance Company,
J. Ronald Terwilliger, J. Ronald Terwilliger Grantor Trust,
Crow Residential Realty Investors, L.P., Douglas A. Hoeksema,
Randy J. Pace, Clifford A. Breining, TCF Residential
Partnership, Ltd. and Trammell S. Crow
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1 hereto).
24.1 Power of Attorney (included on the signature page hereof).
</TABLE>
----------------------------------
* Previously filed.
** Refers to sequentially numbered copy.
ITEM 17. UNDERTAKINGS.
(a) The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made pursuant to this Registration Statement, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this
Registration Statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth in
this Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed
in this Registration Statement or any material
change to such information in this Registration
Statement.
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with the
Commission by the Company pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in
this Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and
the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof; and
II-2
<PAGE> 17
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The Company hereby undertakes that, for purposes of determining
any liability under the Securities Act of 1933, each filing of
the Company's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 and each filing of
the annual report of the Company's 1996 Non-Qualified Employee
Stock Purchase Plan pursuant to Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in this
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein and the
offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the Company pursuant to the foregoing
provisions, or otherwise, the Company has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Company of expenses incurred or
paid by a director, officer or controlling person of the Company
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Company
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 18
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Charlotte, State of North Carolina on April 4, 1997.
SUMMIT PROPERTIES INC.
By: /s/ William F. Paulsen
-------------------------------------
William F. Paulsen
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that we, the undersigned officers and
directors of Summit Properties Inc. hereby severally constitute and appoint
William B. McGuire, Jr. and William F. Paulsen, and each of them singly, our
true and lawful attorneys with full power to them, and each of them singly, to
sign for us and in our names in the capacities indicated below, the registration
statement filed herewith and any and all amendments to said registration
statement, and generally to do all such things in our names and in our
capacities as officers and directors to enable Summit Properties Inc. to comply
with the provisions of the Securities Act of 1933 and all requirements of the
Securities and Exchange Commission, hereby ratifying and confirming our
signatures as they may be signed by our said attorneys, or any of them, to said
registration statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
--------- -------- ----
<S> <C> <C>
/s/ William B. McGuire, Jr. Chairman of the Board April 4, 1997
- ----------------------------------- of Directors
William B. McGuire, Jr.
/s/ William F. Paulsen President, Chief Executive April 4, 1997
- ----------------------------------- Officer and Director
William F. Paulsen (Principal Executive
Officer)
/s/ Michael L. Schwarz Executive Vice President April 4, 1997
- ----------------------------------- and Chief Financial Officer
Michael L. Schwarz (Principal Financial Officer
and Accounting Officer)
/s/ Henry H. Fishkind Director April 4, 1997
- -----------------------------------
Henry H. Fishkind
/s/ James H. Hance, Jr. Director April 4, 1997
- -----------------------------------
James H. Hance, Jr.
/s/ Nelson Schwab III Director April 4, 1997
- -----------------------------------
Nelson Schwab III
/s/ John Crosland, Jr. Director April 4, 1997
- ----------------------------------------
John Crosland, Jr.
</TABLE>
II-4
<PAGE> 19
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page**
- ----------- ----------- ------
<S> <C> <C>
4.1* Articles of Incorporation (Incorporated by reference to
Exhibit No. 3.1 to the Registration Statement on Amendment
No. 1 to Form S-11 of Summit Properties Inc., registration
number 33-72454).
4.2* Bylaws (Incorporated by reference to Exhibit No. 3.2 to the
Registration Statement on Amendment No. 2 to Form S-11 of
Summit Properties Inc., registration number 33-72454).
5.1 Opinion of Goodwin, Procter & Hoar LLP as to the legality of
the Securities being registered.
8.1 Opinion of Goodwin, Procter & Hoar LLP as to certain tax
matters.
10.1 Registration Rights Agreement, dated December 11, 1995,
between the Company and Bissell Ballantyne, LLC
10.2 Registration Rights Agreement, dated January 10, 1996, among
the Company, Joseph H. Call and Gary S. Cangelosi
10.3 Registration Rights Agreement, dated February 20, 1997, among
the Company, The Northwestern Mutual Life Insurance Company,
J. Ronald Terwilliger, J. Ronald Terwilliger Grantor Trust,
Crow Residential Realty Investors, L.P., Douglas A. Hoeksema,
Randy J. Pace, Clifford A. Breining, TCF Residential
Partnership, Ltd. and Trammell S. Crow
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Goodwin, Procter & Hoar LLP (included in Exhibit
5.1 hereto).
24.1 Power of Attorney (included on the signature page hereof).
</TABLE>
- ---------------
* Previously filed.
** Refers to sequentially numbered copy.
II-5
<PAGE> 1
EXHIBIT 5.1
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
April 4, 1997
Summit Properties Inc.
212 South Tryon Street, Suite 500
Charlotte, NC 28281
Re: Legality of Securities to be Registered Under the Registration
Statement on Form S-3
Ladies and Gentlemen:
This opinion is furnished in connection with the registration statement
on Form S-3 (the "Registration Statement") pursuant to the Securities Act of
1933, as amended (the "Securities Act"), of 589,792 shares of common stock, par
value $.01 per share ("Common Stock"), of Summit Properties Inc., a Maryland
corporation (the "Company"), consisting of (i) 346,184 shares of Common Stock
(the "Redemption Shares") that may be issued by the Company if, and to the
extent that, holders of units of limited partnership interest ("Units") in
Summit Properties Partnership, L.P. (the "Operating Partnership") tender such
Units to the Operating Partnership for redemption and the Company exercises its
contractual right to acquire such tendered Units for Redemption Shares; and (ii)
243,608 currently issued and outstanding shares of Common Stock (the "Original
Shares" and, together with the Redemption Shares, the "Registered Shares") to be
sold pursuant to the Registration Statement for the respective accounts of
certain stockholders of the Company.
In connection with rendering this opinion, we have examined the
Articles of Incorporation of the Company, as amended and restated to the date
hereof and on file with the Maryland State Department of Assessments and
Taxation; the Bylaws of the Company; the Agreement of Limited Partnership of the
Operating Partnership, as amended to the date hereof (the "Partnership
Agreement"); such records of the corporate proceedings of the Company as we
deemed material; the Registration Statement and the exhibits thereto; and such
other certificates, receipts, records and documents as we considered necessary
for the purposes of this opinion. In our examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as certified, photostatic or
facsimile copies, the authenticity of the originals of such copies and the
authenticity of telephonic confirmations of public officials and others. As to
facts material to our opinion, we have relied upon certificates or telephonic
confirmations of public officials
<PAGE> 2
Summit Properties Inc.
April 4, 1997
Page 2
and certificates, documents, statements and other information of the Company or
representatives or officers thereof.
We are attorneys admitted to practice in The Commonwealth of
Massachusetts. We express no opinion concerning the laws of any jurisdictions
other than the laws of the United States of America, the laws of The
Commonwealth of Massachusetts and the Maryland General Corporation Law, and also
express no opinion with respect to the blue sky or securities laws of any state,
including Massachusetts and Maryland.
Based upon the foregoing, we are of the opinion that under the Maryland
General Corporation Law, pursuant to which the Company was incorporated:
(1) When the Registration Statement relating to the Registered Shares
has become effective under the Securities Act and the Redemption Shares have
been duly issued and exchanged for Units tendered to the Operating Partnership
for redemption in accordance with the provisions of the Partnership Agreement as
described in the Registration Statement, such Redemption Shares will be validly
issued, fully paid and nonassessable.
(2) The Original Shares have been validly issued and are fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us with respect to this opinion
under the heading "Legal Matters" in the Prospectus which is a part of such
Registration Statement.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
-----------------------------------
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
Exhibit 8.1
GOODWIN, PROCTER & HOAR LLP
COUNSELLORS AT LAW
EXCHANGE PLACE
BOSTON, MASSACHUSETTS 02109-2881
TELEPHONE (617) 570-1000
TELECOPIER (617) 523-1231
April 4, 1997
Summit Properties Inc.
212 South Tryon Street
Suite 500
Charlotte, North Carolina 28281
Re: Certain Federal Income Tax Matters
----------------------------------
Ladies and Gentlemen:
This opinion is delivered to you in our capacity as counsel to Summit
Properties Inc. (the "Company") in connection with the Company's registration
statement on Form S-3 (the "Registration Statement") filed by the Company with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the possible offering and sale of up to 589,792 shares of
the Company's Common Stock (as such term is defined in the Registration
Statement) authorized for issuance under the Company's Articles of
Incorporation. This opinion relates to the Company's qualification for federal
income tax purposes as a real estate investment trust ("REIT") under the
Internal Revenue Code of 1986, as amended (the "Code") and the accuracy of the
discussion under the heading "Federal Income Tax Considerations" contained in
the Registration Statement.
In rendering the following opinion, we have examined the Articles of
Incorporation and Bylaws of the Company, each as amended, the Company's federal
income tax return for each of the taxable years ended December 1994 and December
1995 filed on Forms 1120-REIT, and such other records, certificates and
documents as we have deemed necessary or appropriate for purposes of rendering
the opinions set forth herein.
We have reviewed the Registration Statement and the descriptions set forth
therein of the Company and its investments and activities. We have relied upon
the representations of an officer of the Company regarding the manner in which
the Company has been and will continue to be owned and operated. We assume that
the Company has been and will be operated in accordance with applicable laws and
the terms and conditions of applicable documents, and that the descriptions of
the Company and its investments, and the proposed investments, activities,
operations and governance of the Company set forth in the Registration
<PAGE> 2
GOODWIN, PROCTER & HOAR LLP
Summit Properties Inc.
April 4, 1997
Page 2
Statement continue to be true. In addition, we have relied on certain additional
facts and assumptions described below.
In rendering the opinions set forth herein, we have assumed (i) the
genuineness of all signatures on documents we have examined, (ii) the
authenticity of all documents submitted to us as originals, (iii) the conformity
to the original documents of all documents submitted to us as copies, (iv) the
conformity of final documents to all documents submitted to us as drafts, (v)
the authority and capacity of the individual or individuals who executed any
such documents on behalf of any person, (vi) the accuracy and completeness of
all records made available to us, and (vii) the factual accuracy of all
representations, warranties and other statements made by all parties. We have
also assumed, without investigation, that all documents, certificates,
warranties and covenants on which we have relied in rendering the opinion set
forth below and that were given or dated earlier than the date of this letter
continue to remain accurate, insofar as relevant to the opinion set forth
herein, from such earlier date through and including the date of this letter.
The discussion and conclusions set forth below are based upon the Code,
the Income Tax Regulations and Procedure and Administration Regulations
promulgated thereunder and existing administrative and judicial interpretations
thereof, all of which are subject to change. No assurance can therefore be given
that the federal income tax consequences described below will not be altered in
the future.
Based upon and subject to the foregoing, and provided that the Company
continues to meet the applicable asset composition, source of income,
shareholder diversification, distribution, recordkeeping and other requirements
of the Code necessary for a corporation to qualify as a REIT, we are of the
opinion that
1. Commencing with the Company's first taxable year ended December 31,
1994, the Company has been organized in conformity with the
requirements for qualification as a "real estate investment trust"
under the Code, and its method of operation, as described in the
representations referred to above will enable it to continue to meet
the requirements for qualification and taxation as a "real estate
investment trust" under the Code.
2. The Statements in the Registration Statement set forth under the
caption "Federal Income Tax Considerations" to the extent such
information constitutes
<PAGE> 3
GOODWIN, PROCTER & HOAR LLP
Summit Properties Inc.
April 4, 1997
Page 3
matters of law, summaries of legal matters, or legal conclusions,
have been reviewed by us and are accurate in all material respects.
We express no opinion with respect to the transactions described in the
Registration Statement other than those expressly set forth herein. You should
recognize that our opinion is not binding on the IRS and that the IRS may
disagree with the opinion contained herein. Although we believe that our opinion
will be sustained if challenged, there can be no assurance that this will be the
case. Except as specifically discussed above, the opinion expressed herein is
based upon the law as it currently exists. Consequently, future changes in the
law may cause the federal income tax treatment of the transactions described
herein to be materially and adversely different from that described above.
We consent to being named as Counsel to the Company in the Registration
Statement, to the references in the Registration Statement to our firm and to
the inclusion of a copy of this opinion letter as an exhibit to the Registration
Statement.
Very truly yours,
/s/ GOODWIN, PROCTER & HOAR LLP
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
Exhibit 10.1
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
This Registration Rights and Lock-up Agreement (the "Agreement") is
entered into as of December 11, 1995 by and among Summit Properties Inc., a
Maryland corporation (the "Company"), Bissell Ballantyne, LLC, a North Carolina
limited liability company ("Bissell"), which contemporaneously herewith is to
become a partner of Summit Properties Partnership, L.P., a Delaware limited
partnership (the "Partnership"), and its successors and assigns (together with
Bissell, the "Holders," or individually, a "Holder").
WHEREAS, Bissell is to receive contemporaneously herewith units of limited
partnership interest in the Partnership, issued without registration under the
Securities Act of 1933, as amended (the "Securities Act"), in consideration for
its contribution to the Partnership of land pursuant to that certain Contract
for Purchase of Real Estate between the Company and Bissell and others dated as
of October __, 1995 and any amendment thereto (collectively, the "Acquisition
Agreement");
WHEREAS, such Units may be redeemed for shares of the Company's common
stock, par value $.01 per share ("Common Stock"), issued without registration
under the Securities Act; and
WHEREAS, it is a condition precedent to the closing of the Acquisition
Agreement that the Company provide Bissell with the registration rights set
forth in Section 3 hereof.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
agreements set forth herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Certain Definitions.
-------------------
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"PERSON" shall mean an individual, partnership, corporation, trust, or
unincorporated organization, or a government or agency or political subdivision
thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, as amended or supplemented by
any prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration Statement, and by
all other
<PAGE> 2
amendments and supplements to such prospectus, including post-effective
amendments, and in each case including all material incorporated by reference
therein.
"REGISTRABLE SHARES" shall mean the Shares, excluding (i) Shares for which
a Registration Statement relating to the sale thereof shall have become
effective under the Securities Act and which have been disposed of under such
Registration Statement, (ii) Shares sold pursuant to Rule 144 under the
Securities Act or (iii) Shares eligible for sale pursuant to Rule 144(k) under
the Securities Act.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or NASD registration and filing fees; (ii) all fees
and expenses incurred in connection with compliance with state securities or
"blue sky" laws (including reasonable fees and disbursements of counsel in
connection with "blue sky" qualification of any of the Registrable Shares and
the preparation of a Blue Sky Memorandum) and compliance with the rules of the
NASD; (iii) all expenses of any Persons in preparing or assisting in preparing,
word processing, printing and distributing any Registration Statement, any
Prospectus, certificates and other documents relating to the performance of and
compliance with this Agreement; (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Shares on any
securities exchange or exchanges pursuant to Section 5 hereof; and (v) the fees
and disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audit or "cold
comfort" letters required by or incident to such performance and compliance.
Registration Expenses shall specifically exclude underwriting discounts and
commissions relating to the sale or disposition of Registrable Shares by a
selling Holder, the fees and disbursements of counsel representing a selling
Holder, and transfer taxes, if any, relating to the sale or disposition of
Registrable Shares by a selling Holder, all of which shall be borne by such
Holder in all cases.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company and other entity required to be a registrant with respect to such
registration statement pursuant to the requirements of the Securities Act which
covers any of the Registrable Shares on an appropriate form, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all materials incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
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<PAGE> 3
"SHARES" shall mean the shares of Common Stock issued or to be issued to
the Holder(s) upon redemption or in exchange for its or their Units.
2. Lock-Up Agreement.
-----------------
(a) Each Holder hereby agrees that, except as set forth in Section
2(b) below, for one hundred eighty (180) days from the date hereof (the "Lock-Up
Period"), without the prior written consent of the Company, it will not offer,
sell, contract to sell, hypothecate, pledge, grant an option, right or warrant
to purchase or otherwise dispose of, directly or indirectly (collectively
"Sell"), any Shares or Units (the "Lock-Up").
(b) The following Sales of Shares and/or Units shall not be subject
to the Lock-Up set forth in Section 2(a):
(i) a Holder who is a natural person may Sell his or
her Shares or Units to his or her spouse, siblings, parents or
any natural or adopted children or other descendants or to any
personal trust in which any such family member or Holder
retains the entire beneficial interest;
(ii) a Holder that is a corporation, partnership,
joint venturer or other business entity may Sell its Shares or
Units to one or more Persons who have an ownership interest in
such Holder or to one or more other entities that are
wholly-owned and controlled, legally and beneficially, by such
Holder or by one or more of the Persons who have an ownership
interest in such Holder;
(iii) a Holder may Sell his or her Shares or Units to
his or her estate, executor, administrator or personal
representative or to his or her beneficiaries pursuant to a
devise or bequest or by laws of descent and distribution;
(iv) a Holder may Sell Shares or Units as a gift or
other transfer without consideration; and
(v) the Holder may Sell Shares or Units pursuant to a
pledge, grant of security interest or other encumbrance
effected in a bona fide transaction with an unrelated and
unaffiliated pledgee;
PROVIDED, HOWEVER, that as a condition to any transfer of Units or Shares the
transferee must be an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act of
3
<PAGE> 4
1933 and must provide the Company with such representations and other assurances
that the transferee is an accredited investor as the Company deems necessary or
appropriate, and PROVIDED, HOWEVER, in the case of any transfer of Shares or
Units pursuant to clauses (i), (ii), (iv) and (v), the transferring Holder
shall, at the request of the Company, provide evidence satisfactory to the
Company that the transfer is exempt from the registration requirements of the
Securities Act.
In the event any Holder Sells any Shares or Units pursuant to Section 2(b), such
Shares or Units shall remain subject to this Agreement and, as a condition of
the validity of such disposition, the transferee shall be required to execute
and deliver a counterpart of this Agreement (except that a pledgee shall not be
required to execute and deliver a counterpart of this Agreement until it
forecloses upon such Shares or Units). Thereafter, such transferee shall be
deemed to be a Holder for purposes of this Agreement.
3. Registration.
------------
(a) DEMAND REGISTRATION. Subject to the conditions set forth in this
Agreement, at any time after one hundred eighty (180) days from the date of the
closing of the Acquisition Agreement, the Company shall, at the written request
of a Holder who is unable to sell its Registrable Shares pursuant to Rule 144(k)
under the Securities Act, cause to be filed as soon as practicable after the
date of such request by such Holder a Registration Statement under Rule 415
under the Securities Act relating to the sale by the Holder of all or a portion
of the Registrable Shares held by such Holder in accordance with the terms
hereof, and shall use reasonable efforts to cause such Registration Statement to
be declared effective by the SEC as soon as practicable thereafter. If the
Holder chooses to register less than all of the Registrable Shares at one time,
then (i) it must seek to register a minimum of 10,000 Shares (or if such Holder
owns less than 10,000 Registrable Shares, the total number of Registrable Shares
then owned), (ii) no Holder (including the Holder making the request) has made a
request to register any Registrable Shares during the one (1) year period ending
on the date of such request; and (iii) the total number of requests which may be
made by Holders in the aggregate under this Section 3(a) shall not exceed three
(3). The Company may, in its sole discretion, elect to file a Registration
Statement with respect to any or all of the Shares before receipt of notice from
any Holder. The Company agrees to use reasonable efforts to keep the
Registration Statement continuously effective until the earlier of (i) six (6)
months thereafter, or (ii) the date on which such Holder no longer holds any
Registrable Shares. Notwithstanding the foregoing provisions of this Section
3(a), during any period of time which the Company has a Registration Statement
in effect under the provisions of Rule 415 of the Securities Act relating to the
original issuance by the Company of shares of Common Stock in
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<PAGE> 5
connection with the redemption of Holders' Units, or in the alternative, if the
registration of such original issuance is not practicable, the sale by Holders
of Registrable Shares in the form of the Common Stock to be received in
connection with the redemption of Holders' Units then, such Holders will not
have the right to request the registration of Registrable Shares under the
provisions of this Section 3(a).
(b) PIGGYBACK REGISTRATION. If at any time while any Registrable
Shares or Units are outstanding (without any obligation to do so) the Company
proposes to file a registration statement under the Securities Act in connection
with an offering of Common Stock solely for cash (other than a registration
statement (i) on Form S-8 or any successor form to such Form or in connection
with any employee or director welfare, benefit or compensation plan, (ii) on
Form S-4 or any successor form to such Form or in connection with an exchange
offer, (iii) in connection with a rights offering exclusively to existing
holders of Common Stock, (iv) in connection with an offering solely to employees
of the Company or its subsidiaries, or (v) relating to a transaction pursuant to
Rule 145 of the Securities Act), whether or not for its own account, the Company
shall give prompt written notice of such proposed filing to each Holder. The
notice referred to in the preceding sentence shall offer each Holder the
opportunity to register any amount of Registrable Shares as such Holder may
request (a "Piggyback Registration"). Subject to the provisions of Section 4
below, the Company shall include in such Piggyback Registration, in the
registration and qualification for sale under the blue sky or securities laws of
the various states and in any underwriting in connection therewith, all
Registrable Shares for which the Company has received written requests for
inclusion therein within fifteen (15) calendar days after the notice referred to
above has been given by the Company to each Holder. Each Holder of Registrable
Shares shall be permitted to withdraw all or part of its Registrable Shares from
a Piggyback Registration at any time prior to the effective date of such
Piggyback Registration. If a Piggyback Registration is an underwritten primary
registration on behalf of the Company and the managing underwriter advises the
Company that the total number of shares of Common Stock requested to be included
in such registration exceeds the number of shares of Common Stock which can be
sold in such offering, the Company will include in such registration in the
following priority: (i) first, all shares of Common Stock the Company proposes
to sell, (ii) second, if such Piggyback Registration Statement is being used to
register shares of the Company's Common Stock of holders of registration rights
granted under that certain Registration Rights Agreement dated as of May 16,
1995 among the Company and those other parties listed therein (the
"Crosland-related holders") up to the full number of such other shares of Common
Stock requested to be included in such registration by the Crosland-related
holders which, in the opinion of such managing underwriter, can be sold without
adversely affecting the price range or probability of
5
<PAGE> 6
success of such offering, allocated among the Crosland-related holders
requesting registration on a pro rata basis, (iii) third, up to the full number
of shares of Common Stock requested to be included in such registration by
certain stockholders of the Company pursuant to that certain Continuing Investor
Registration Rights Agreement among the Company and the stockholders named
therein dated February 8, 1994, which in the opinion of such managing
underwriter, can be sold without adversely affecting the price range or
probability of success of such offering, allocated among such holders requesting
registration on a pro rata basis; and (iv) fourth, up to the full number of
Registrable Shares and shares of Common Stock requested to be included in such
registration by any Holders and other holders of registration rights other than
those described in clauses (ii) and (iii), respectively, which in the opinion of
such managing underwriter, can be sold without adversely affecting the price
range or probability of success of such offering (with the shares of Common
Stock to be registered allocated pro rata among the Holders and the other
holders of registration rights on the basis of the total number of Registrable
Shares and the other shares of the Company's Common Stock requested to be
included in such registration by all such Holders and other holders of
registration rights).
(c) The Company shall notify each Holder of the effectiveness of any
Registration Statement and shall furnish to each Holder the number of copies of
such Registration Statement (including any amendments, supplements and
exhibits), the Prospectus contained therein (including each preliminary
prospectus and all related amendments and supplements) and any documents
incorporated by reference in such Registration Statement or such other documents
as such Holder may reasonably request in order to facilitate its sale of the
Registrable Shares in the manner described in such Registration Statement.
(d) The Company shall prepare and file with the SEC from time to
time such amendments and supplements to any Registration Statement and
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all the Registrable Shares
until the earlier of (i) such time as all of the Registrable Shares have been
disposed of in accordance with the intended methods of disposition by the
Holders as set forth in such Registration Statement or (ii) the date on which
such Registration Statement ceases to be effective in accordance with the terms
of this Section 3. Upon five (5) business days' notice, the Company shall file
any supplement or post-effective amendment to such Registration Statement with
respect to the plan of distribution or such Holder's ownership interests in
Registrable Shares that is reasonably necessary to permit the sale of the
Holder's Registrable Shares pursuant to the Registration Statement. The Company
shall file any necessary listing applications or amendments to the existing
applications to
6
<PAGE> 7
cause the Shares registered under the Registration Statement to be then listed
or quoted on the primary exchange or quotation system on which the Common Stock
is then listed or quoted.
(e) The Company shall promptly notify each Holder of, and confirm in
writing, (i) the receipt by the Company of any request by the SEC for amendments
or supplements to any Registration Statement or the Prospectus related thereto
or for additional information, and (ii) the filing of any Registration Statement
or any Prospectus, amendment or supplement related thereto or any post-effective
amendment to any Registration Statement and the effectiveness of any
post-effective amendment.
(f) At any time when a Prospectus relating to a Registration
Statement is required to be delivered under the Securities Act, the Company
shall immediately notify each Holder of the happening of any event as a result
of which the Prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. In such event, the Company shall promptly prepare and furnish to
each Holder a reasonable number of copies of a supplement to or an amendment of
such Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of Registrable Shares, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company will, if
necessary, amend the Registration Statement of which such Prospectus is a part
to reflect such amendment or supplement.
4. STATE SECURITIES LAWS. Subject to the conditions set forth in this
Agreement, the Company shall, in connection with the filing of any Registration
Statement hereunder, file such documents as may be necessary to register or
qualify the Registrable Shares under the securities or "Blue Sky" laws of such
states as any Holder may reasonably request, and the Company shall use its best
efforts to cause such filings to become effective; PROVIDED, HOWEVER, that the
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of ANY such state in which it is not then qualified or
to file any general consent to service of process in any such state. Once
effective, the Company shall use its best efforts to keep such filings effective
until the earlier of (a) such time as all of the Registrable Shares have been
disposed of in accordance with the intended methods of disposition by the Holder
as set forth in the Registration Statement, (b) in the case of a particular
state, a Holder has notified the Company that it no longer requires an effective
filing in such state in accordance with its original request for filing or (c)
the date on which the Registration Statement ceases to be effective in
7
<PAGE> 8
accordance with Section 3. The Company shall promptly notify each Holder of, and
confirm in writing, the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Shares for sale under
the securities or "Blue Sky" laws of any jurisdiction or the initiation of any
threat of any proceeding for such purpose.
5. EXPENSES. The Company shall bear all Registration Expenses incurred
in connection with the registration of the Registrable Shares pursuant to this
Agreement, except that each Holder shall be responsible for any brokerage or
underwriting commissions and taxes of any kind (including, without limitation,
transfer taxes) with respect to any disposition, sale or transfer of Registrable
Shares sold by it and for any legal, accounting and other expenses incurred by
it.
6. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify each
Holder and its respective officers, directors, employees, agents,
representatives and affiliates, and each person or entity, if any, that controls
such Holder within the meaning of the Securities Act, and each other person or
entity, if any, subject to liability because of his, her or its connection with
such Holder, and any underwriter and any person who controls the underwriter
within the meaning of the Securities Act (each an "Indemnitee") against any and
all losses, claims, damages, actions, liabilities, costs and expenses (including
without limitation reasonable fees, expenses and disbursements of attorneys and
other professionals), joint or several, arising out of or based upon any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to any action or inaction
required of the Company in connection with any Registration Statement or
Prospectus, or upon any untrue or alleged untrue statement of material fact
contained in the Registration Statement or any Prospectus, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, PROVIDED, THAT, the Company shall not be
liable to such Indemnitee or any person who participates as an underwriter in
the offering or sale of Registrable Shares or any other person, if any, who
controls such underwriter within the meaning of the Securities Act, in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof), cost or expenses arises out of or is based upon
(i) an untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with information regarding such Indemnitee or its plan of
distribution or ownership interests which was furnished to the Company for use
in connection with the Registration Statement or the Prospectus contained
therein by such Indemnitee or (ii) such Indemnitee's failure to send or
8
<PAGE> 9
give a copy of the final prospectus furnished to it by the Company through no
fault of the Company at or prior to the time such action is required by the
Securities Act to the person claiming an untrue statement or alleged untrue
statement or omission or alleged omission if such statement or omission was
corrected in such final prospectus.
7. COVENANTS AND REPRESENTATIONS OF HOLDER(S). Each Holder hereby
agrees (a) to cooperate with the Company and to furnish to the Company all such
information concerning its plan of distribution and ownership interests with
respect to its Registrable Shares in connection with the preparation of the
Registration Statement and any filings with any state securities commissions as
the Company may reasonably request, (b) to deliver or cause delivery of the
Prospectus contained in the Registration Statement to any purchaser of the
shares covered by the Registration Statement from the Holder and (c) to
indemnify the Company, its officers, directors, employees, agents,
representatives and affiliates, and each person, if any, who controls the
Company within the meaning of the Securities Act, and each other person, if any,
subject to liability because of his connection with the Company, against any and
all losses, claims, damages, actions, liabilities, costs and expenses arising
out of or based upon (i) any untrue statement or alleged untrue statement of
material fact contained in either a Registration Statement or the Prospectus
contained therein, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, if and to the extent that such statement or omission occurs from
reliance upon and in conformity with written information regarding the Holder,
its plan of distribution or its ownership interests, which was furnished to the
Company by the Holder expressly for use therein unless such statement or
omission was corrected in writing to the Company not less than five (5) business
days prior to the date of the final prospectus (as supplemented or amended, as
the case may be) or (ii) the failure by the Holder to deliver or cause to be
delivered the Prospectus contained in the Registration Statement (as amended or
supplemented, if applicable) furnished by the Company to the Holder to any
purchaser of the shares covered by the Registration Statement from the Holder
through no fault of the Company.
The Holders represent and warrant to the Company that (i) the transfer of
Bissell's interest in the land in exchange for Units in the Partnership was
approved by the holders of more than two-thirds (2/3rds) of the voting interests
in Bissell and (ii) that any distribution of such Units to members of Bissell
will be in accordance with the provisions of the operating agreement of Bissell.
9
<PAGE> 10
8. Suspension of Registration Requirement.
--------------------------------------
(a) The Company shall promptly notify each Holder of, and confirm
in writing, the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement at the earliest possible moment.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, the Company's obligation under this Agreement to use its best efforts
to cause the Registration Statement and any filings with any state securities
commission to become effective or to amend or supplement the Registration
Statement shall be suspended in the event and during such period as unforeseen
circumstances exist (including without limitation (i) an underwritten primary
offering by the Company if the Company is advised by the underwriters that sale
of Registrable Shares under the Registration Statement would have a material
adverse effect on the primary offering or (ii) pending negotiations relating to,
or consummation of, a transaction or the occurrence of an event that would
require additional disclosure of material information by the Company in the
Registration Statement or such filing, as to which the Company has a BONA FIDE
business purpose for preserving confidentiality or which renders the Company
unable to comply with SEC requirements) (such unforeseen circumstances being
hereinafter referred to as a "Suspension Event") that would make it impractical
or unadvisable to cause the Registration Statement or such filings to become
effective or to amend or supplement the Registration Statement, but such
suspension shall continue only for so long as such events or its effect is
continuing but in no event will that suspension exceed ninety (90) days. The
Company shall notify each Holder of the existence and, in the case of
circumstances referred to in clause (i) of this Section 8(b), nature of any
Suspension Event.
(c) Each Holder of Registrable Shares whose Registrable Shares are
covered by a Registration Statement filed pursuant to Section 3 agrees, if
requested by the Company in the case of a Company-initiated nonunderwritten
offering or if requested by the managing underwriter or underwriters in a
Company-initiated underwritten offering, not to effect any public sale or
distribution of any of the securities of the Company of any class included in
such Registration Statement, including a sale pursuant to Rule 144 or Rule 144A
under the Securities Act (except as part of such Company-initiated
registration), during the 15-day period prior to, and during the 60-day period
beginning on, the date of effectiveness of each Company-initiated offering made
pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or the managing underwriters; PROVIDED, HOWEVER, that
such 60-day period shall be extended by the number of
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<PAGE> 11
days from and including the date of the giving of any notice pursuant to Section
3(c) or (f) hereof to and including the date when each seller of Registrable
Shares covered by such Registration Statement shall have received the copies of
the supplemented or amended Prospectus contemplated by Section 3(f) hereof.
9. BLACK-OUT PERIOD. Following the effectiveness of the Registration
Statement and the filings with any state securities commissions, each Holder
agrees that it will not effect any sales of the Registrable Shares pursuant to
the Registration Statement or any such filings at any time after it has received
notice from the Company to suspend sales as a result of the occurrence or
existence of any Suspension Event or so that the Company may correct or update
the Registration Statement or such filing. Each Holder may recommence effecting
sales of the Shares pursuant to the Registration Statement or such filings
following further notice to such effect from the Company, which notice shall be
given by the Company not later than five (5) days after the conclusion of any
such Suspension Event.
10. ADDITIONAL SHARES. The Company, at its option, may register, under
any registration statement and any filings with any state securities commissions
filed pursuant to this Agreement, any number of unissued shares of Common Stock
of the Company or any shares of Common Stock of the Company owned by any other
stockholder(s) of the Company.
11. CONTRIBUTION. If the indemnification provided for in Sections 6 and
7 is unavailable to an indemnified party with respect to any losses, claims,
damages, actions, liabilities, costs or expenses referred to therein or is
insufficient to hold the indemnified party harmless as contemplated therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, actions, liabilities, costs or expenses
in such proportion as is appropriate to reflect the relative fault of the
Company, on the one hand, and the Indemnitee, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
actions, liabilities, costs or expenses as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Indemnitee, on the other hand, shall be determined by reference to, among other
factors, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
or by the Indemnitee and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
PROVIDED, HOWEVER, that in no event shall the obligation of any indemnifying
party to contribute under this Section 11 exceed the amount that such
indemnifying party would have been obligated to pay by way of
11
<PAGE> 12
indemnification if the indemnification provided for under Sections 6 or 7 hereof
had been available under the circumstances.
The Company and each of the Holders agree that it would not be just and
equitable if contribution to this Section 11 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 11, no Holder shall be
required to contribute any amount in excess of the amount by which the gross
proceeds from the sale of shares exceeds the amount of any damages that the
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission. No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any indemnifying party who was not guilty
of such fraudulent misrepresentation.
12. NO OTHER OBLIGATION TO REGISTER. Except as otherwise expressly
provided in this Agreement, the Company shall have no obligation to the Holders
to register the Registrable Shares under the Securities Act.
13. AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified, or supplemented or waived without the prior written consent
of the Company and the Holders of in excess of fifty percent (50%) of the
aggregate of all Registrable Shares.
14. NOTICES. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid or courier or overnight delivery service to the respective parties at
the following addresses (or at such other address for any party as shall be
specified by like notice, provided that notices of a change of address shall be
effective only upon receipt thereof), and further provided that in case of
directions to amend the Registration Statement pursuant to Section 3(d) or
Section 7, a Holder must confirm such notice in writing by overnight express
delivery with confirmation of receipt:
If to the Company: Summit Properties Inc.
212 South Tryon Street, Suite 500
Charlotte, North Carolina 28281
Attn: Michael G. Malone, Esq.,
Senior Vice President,
Secretary and General Counsel
Telecopy: (704) 333-6114
12
<PAGE> 13
with a copy to: Goodwin, Procter & Hoar
Exchange Place
Boston, Massachusetts 02109
Attn: Gilbert G. Menna, P.C.
Telecopy: (617) 523-1231
If to the Holders: As listed on the applicable Holder
Signature Page
In addition to the manner of notice permitted above, notices given pursuant to
Sections 3, 8 and 9 hereof may be effected telephonically and confirmed in
writing thereafter in the manner described above.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. This Agreement may not be assigned by any Holder and any attempted
assignment hereof by any Holder will be void and of no effect and shall
terminate all obligations of the Company hereunder; PROVIDED THAT any Holder may
assign its rights hereunder to any person to whom such Holder may Sell Shares
and/or Units pursuant to Section 2(b) hereof.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland applicable to contracts made
and to be performed wholly within said State.
18. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereof shall be enforceable to the fullest extent permitted by law.
19. ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect to the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement
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<PAGE> 14
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SUMMIT PROPERTIES INC.
By: /S/ Michael G. Malone
-------------------------------------
Name: Michael G. Malone
--------------------------------
Title: Sr. Vice President
-------------------------------
14
<PAGE> 15
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Holder:
Bissell Ballantyne, LLC
By: /s/ H.C. Bissell
-------------------------------------
Name: H.C. Bissell, President
--------------------------------
Title: Authorized Member
Address for Notice:
------------------
Bissell Ballantyne, LLC
Attn: H.C. Bissell
-----------------------------------
Phone Number:
------------
(704) 366-9841
----------------------------------------
15
<PAGE> 16
S U M M I T
- - - - - - -
PROPERTIES
December 12, 1995
Bissell Ballantyne, LLC
c/o B. D. Farmer, III, Esquire
Perry Patrick Farmer & Michaux
227 West Trade Street, Suite 2200
Charlotte, North Carolina 28202
Ladies and Gentlemen:
This letter is being written in connection with the Registration Rights
and Lock-Up Agreement being entered into of even date herewith (the "Agreement")
between Summit Properties Inc. ("Summit") and Bissell Ballantyne, LLC
("Bissell"). This letter will confirm our understanding that in the event Summit
undertakes to file a so-called "shelf" registration statement for any of its
securities, that it will, upon the request of Bissell, include in such
registration statement any "Registrable Shares" (as that term is defined in the
Agreement) which Bissell owns or which it may receive as a result of the
redemption by Summit of Bissell's partnership units in Summit Properties
Partnership, L.P. (the "Partnership") unless (y) such shelf registration
involves an offering described in clauses (i) through (v) of the first sentence
of Section 3(b) of the Agreement or (z) Summit is advised by its underwriters or
its legal counsel that the inclusion of such Registrable Shares would (A) result
in material marketing problems with respect to the other securities Summit
proposes to include therein, or (B) raise material legal concerns (including
concerns which would result in significant additional disclosure requirements, a
materially higher level of review by the Securities and Exchange Commission or
state securities regulators or significant additional legal or accounting
expenses in connection with the preparation of such registration statement)
which might have a material and adverse effect on the Summit's ability register
the other securities that it proposes to register under said shelf registration.
Very truly yours,
SUMMIT PROPERTIES INC.
By: /s/ Michael G. Malone
----------------------------------------
Michael G. Malone
Senior Vice President and
General Counsel
<PAGE> 1
Exhibit 10.2
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
This Registration Rights and Lock-up Agreement (the "Agreement") is
entered into as of January 10, 1996 by and among Summit Properties Inc., a
Maryland corporation (the "Company"), Joseph H. Call ("Call"), Gary S. Cangelosi
("Cangelosi"), each of which contemporaneously herewith is to become a partner
of Summit Properties Partnership, L.P., a Delaware limited partnership (the
"Partnership"), and their successors and assigns (together with, Call and
Cangelosi, the "Holders," or individually, a "Holder").
WHEREAS, Call and Cangelosi are to receive contemporaneously herewith
units of limited partnership interest in the Partnership, issued without
registration under the Securities Act of 1933, as amended (the "Securities
Act"), in consideration for their contribution to the Partnership of land
pursuant to that certain Contract for Purchase of Real Estate between the
Company and Village Development Corporation dated as of October 31, 1995 and any
amendment thereto (collectively, the "Acquisition Agreement");
WHEREAS, such Units may be redeemed for shares of the Company' s common
stock, par value $. 01 per share ("Common Stock" ), issued without registration
under the Securities Act; and
WHEREAS, it is a condition precedent to the closing of the Acquisition
Agreement that the Company provide Call and Cangelosi with the registration
rights set forth in Section 3 hereof.
NOW, THEREFORE, in consideration of the foregoing, the mutual promises and
agreements set forth herein, and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. Certain Definitions.
-------------------
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
"NASD" shall mean the National Association of Securities Dealers, Inc.
"PERSON" shall mean an individual, partnership, corporation, trust, or
unincorporated organization, or a government or agency or political subdivision
thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, as amended or supplemented by
any prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Shares covered by such Registration Statement, and by
all other amendments and supplements to such prospectus, including post-
<PAGE> 2
effective amendments, and in each case including all material incorporated by
reference therein.
"REGISTRABLE SHARES" shall mean the Shares, excluding (i) Shares for which
a Registration Statement relating to the sale thereof shall have become
effective under the Securities Act and which have been disposed of under such
Registration Statement, (ii) Shares sold pursuant to Rule 144 under the
Securities Act or (iii) Shares eligible for sale pursuant to Rule 144(k) under
the Securities Act.
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or NASD registration and filing fees; (ii) all fees
and expenses incurred in connection with compliance with state securities or
"blue sky" laws (including reasonable fees and disbursements of counsel in
connection with "blue sky" qualification of any of the Registrable Shares and
the preparation of a Blue Sky Memorandum) and compliance with the rules of the
NASD; (iii) all expenses of any Persons in preparing or assisting in preparing,
word processing, printing and distributing any Registration Statement, any
Prospectus, certificates and other documents relating to the performance of and
compliance with this Agreement; (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Shares on any
securities exchange or exchanges pursuant to Section 5 hereof; and (v) the fees
and disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audit or "cold
comfort" letters required by or incident to such performance and compliance.
Registration Expenses shall specifically exclude underwriting discounts and
commissions relating to the sale or disposition of Registrable Shares by a
selling Holder, the fees and disbursements of counsel representing a selling
Holder, and transfer taxes, if any, relating to the sale or disposition of
Registrable Shares by a selling Holder, all of which shall be borne by such
Holder in all cases.
"REGISTRATION STATEMENT" shall mean any registration statement of the
Company and other entity required to be a registrant with respect to such
registration statement pursuant to the requirements of the Securities Act which
covers any of the Registrable Shares on an appropriate form, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all materials incorporated by reference therein.
"SEC" shall mean the Securities and Exchange Commission.
"SHARES" shall mean the shares of Common Stock issued or to be issued to
the Holder(s) upon redemption or in exchange for its or their Units.
2
<PAGE> 3
2. Lock-Up Agreement.
-----------------
(a) Each Holder hereby agrees that, except as set forth in Section
2(b) below, for one (1) year from the date hereof (the "Lock-Up Period"),
without the prior written consent of the Company, it will not offer, sell,
contract to sell, hypothecate, pledge, grant an option, right or warrant to
purchase or otherwise dispose of, directly or indirectly (collectively "Sell"),
any Shares or Units (the "Lock-Up") .
(b) The following Sales of Shares and/or Units shall not be
subject to the Lock-Up set forth in Section 2(a):
(i) a Holder who is a natural person may Sell his or her
Shares or Units to his or her spouse, siblings, parents or any natural or
adopted children or other descendants or to any personal trust in which any such
family member or Holder retains the entire beneficial interest;
(ii) a Holder that is a corporation, partnership, joint
venturer or other business entity may Sell its Shares or Units to one or more
Persons who have an ownership interest in such Holder or to one or more other
entities that are wholly-owned and controlled, legally and beneficially, by such
Holder or by one or more of the Persons who have an ownership interest in such
Holder;
(iii) a Holder may Sell his or her Shares or Units to his or
her estate, executor, administrator or personal representative or to his or her
beneficiaries pursuant to a devise or bequest or by laws of descent and
distribution;
(iv) a Holder may Sell Shares or Units as a gift or other
transfer without consideration; and
(v) the Holder may Sell Shares or Units pursuant to a
pledge, grant of security interest or other encumbrance effected in a bona fide
transaction with an unrelated and unaffiliated pledgee;
PROVIDED, HOWEVER, that as a condition to any transfer of Units or Shares the
transferee must be an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act of 1933 and must provide the Company with
such representations and other assurances that the transferee is an accredited
investor as the Company deems necessary or appropriate, and PROVIDED, HOWEVER,
in the case of any transfer of Shares or Units pursuant to clauses
3
<PAGE> 4
(i), (ii), (iv) and (v), the transferring Holder shall, at the request of the
Company, provide evidence satisfactory to the Company that the transfer is
exempt from the registration requirements of the Securities Act.
In the event any Holder Sells any Shares or Units pursuant to Section 2(b),
such Shares or Units shall remain subject to this Agreement and, as a condition
of the validity of such disposition, the transferee shall be required to execute
and deliver a counterpart of this Agreement (except that a pledgee shall not be
required to execute and deliver a counterpart of this Agreement until it
forecloses upon such Shares or Units). Thereafter, such transferee shall be
deemed to be a Holder for purposes of this Agreement.
3. Registration.
------------
(a) DEMAND REGISTRATION. Subject to the conditions set forth in
this Agreement, at any time after one (1) year from the date of the closing of
the Acquisition Agreement, the Company shall, at the written request of a Holder
who is unable to sell its Registrable Shares pursuant to Rule 144(k) under the
Securities Act, cause to be filed as soon as practicable after the date of such
request by such Holder a Registration Statement under Rule 415 under the
Securities Act relating to the sale by the Holder of all of the Registrable
Shares held by such Holder in accordance with the terms hereof, and shall use
reasonable efforts to cause such Registration Statement to be declared effective
by the SEC as soon as practicable thereafter. The Company may, in its sole
discretion, elect to file a Registration Statement with respect to any or all of
the Shares before receipt of notice from any Holder. The Company agrees to use
reasonable efforts to keep the Registration Statement continuously effective
until the earlier of (i) six (6) months thereafter, or (ii) the date on which
such Holder no longer holds any Registrable Shares. Notwithstanding the
foregoing provisions of this Section 3(a), during any period of time which the
Company has a Registration Statement in effect under the provisions of Rule 415
of the Securities Act relating to the original issuance by the Company of shares
of Common Stock in connection with the redemption of Holders' Units, or in the
alternative, if the registration of such original issuance is not practicable,
the sale by Holders of Registrable Shares in the form of the Common Stock to be
received in connection with the redemption of Holders' Units then, such Holders
will not have the right to request the registration of Registrable Shares under
the provisions of this Section 3(a).
(b) PIGGYBACK REGISTRATION. If at any time while any Registrable
Shares or Units are outstanding (without any obligation to do so) the Company
proposes to file a registration statement under the Securities Act in connection
with an offering of Common Stock solely for cash (other than a registration
statement (i) on
4
<PAGE> 5
Form S-8 or any successor form to such Form or in connection with any employee
or director welfare, benefit or compensation plan, (ii) on Form S-4 or any
successor form to such Form or in connection with an exchange offer, (iii) in
connection with a rights offering exclusively to existing holders of Common
Stock, (iv) in connection with an offering solely to employees of the Company or
its subsidiaries, or (v) relating to a transaction pursuant to Rule 145 of the
Securities Act), whether or not for its own account, the Company shall give
prompt written notice of such proposed filing to each Holder. The notice
referred to in the preceding sentence shall offer each Holder the opportunity to
register any amount of Registrable Shares as such Holder may request (a
"Piggyback Registration"). Subject to the provisions of Section 4 below, the
Company shall include in such Piggyback Registration, in the registration and
qualification for sale under the blue sky or securities laws of the various
states and in any underwriting in connection therewith, all Registrable Shares
for which the Company has received written requests for inclusion therein within
fifteen (15) calendar days after the notice referred to above has been given by
the Company to each Holder. Each Holder of Registrable Shares shall be permitted
to withdraw all or part of its Registrable Shares from a Piggyback Registration
at any time prior to the effective date of such Piggyback Registration. If a
Piggyback Registration is an underwritten primary registration on behalf of the
Company and the managing underwriter advises the Company that the total number
of shares of Common Stock requested to be included in such registration exceeds
the number of shares of Common Stock which can be sold in such offering, the
Company will include in such registration in the following priority: (i) first,
all shares of Common Stock the Company proposes to sell, (ii) second, if such
Piggyback Registration Statement is being used to register shares of the
Company's Common Stock of holders of registration rights granted under that
certain Registration Rights Agreement dated as of May 16, 1995 among the Company
and those other parties listed therein (the "Crosland-related holders") up to
the full number of such other shares of Common Stock requested to be included in
such registration by the Crosland-related holders which, in the opinion of such
managing underwriter, can be sold without adversely affecting the price range or
probability of success of such offering, allocated among the Crosland-related
holders requesting registration on a pro rata basis, (iii) third, up to the full
number of shares of Common Stock requested to be included in such registration
by certain stockholders of the Company pursuant to that certain Continuing
Investor Registration Rights Agreement among the Company and the stockholders
named therein dated February 8, 1994, which in the opinion of such managing
underwriter, can be sold without adversely affecting the price range or
probability of success of such offering, allocated among such holders requesting
registration on a pro rata basis; and (iv) fourth, up to the full number of
Registrable Shares and shares of Common Stock requested to be included in such
registration by any Holders and other holders of registration rights other than
5
<PAGE> 6
those described in clauses (ii) and (iii), respectively, which in the opinion
of such managing underwriter, can be sold without adversely affecting the price
range or probability of success of such offering (with the shares of Common
Stock to be registered allocated pro rata among the Holders and the other
holders of registration rights on the basis of the total number of Registrable
Shares and the other shares of the Company's Common Stock requested to be
included in such registration by all such Holders and other holders of
registration rights).
(c) The Company shall notify each Holder of the effectiveness of
any Registration Statement and shall furnish to each Holder the number of copies
of such Registration Statement (including any amendments, supplements and
exhibits), the Prospectus contained therein (including each preliminary
prospectus and all related amendments and supplements) and any documents
incorporated by reference in such Registration Statement or such other documents
as such Holder may reasonably request in order to facilitate its sale of the
Registrable Shares in the manner described in such Registration Statement.
(d) The Company shall prepare and file with the SEC from time to
time such amendments and supplements to any Registration Statement and
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and to comply with the provisions of the
Securities Act with respect to the disposition of all the Registrable Shares
until the earlier of (i) such time as all of the Registrable Shares have been
disposed of in accordance with the intended methods of disposition by the
Holders as set forth in such Registration Statement or (ii) the date on which
such Registration Statement ceases to be effective in accordance with the terms
of this Section 3. Upon five (5) business days' notice, the Company shall file
any supplement or post-effective amendment to such Registration Statement with
respect to the plan of distribution or such Holder's ownership interests in
Registrable Shares that is reasonably necessary to permit the sale of the
Holder's Registrable Shares pursuant to the Registration Statement. The Company
shall file any necessary listing applications or amendments to the existing
applications to cause the Shares registered under the Registration Statement to
be then listed or quoted on the primary exchange or quotation system on which
the Common Stock is then listed or quoted.
(e) The Company shall promptly notify each Holder of, and confirm
in writing, (i) the receipt by the Company of any request by the SEC for
amendments or supplements to any Registration Statement or the Prospectus
related thereto or for additional information, and (ii) the filing of any
Registration Statement or any Prospectus, amendment or supplement related
thereto or any post-effective amendment to any Registration Statement and the
effectiveness of any post-effective amendment.
6
<PAGE> 7
(f) At any time when a Prospectus relating to a Registration
Statement is required to be delivered under the Securities Act, the Company
shall immediately notify each Holder of the happening of any event as a result
of which the Prospectus included in such Registration Statement, as then in
effect, includes an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. In such event, the Company shall promptly prepare and furnish to
each Holder a reasonable number of copies of a supplement to or an amendment of
such Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of Registrable Shares, such Prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company will, if
necessary, amend the Registration Statement of which such Prospectus is a part
to reflect such amendment or supplement.
4. STATE SECURITIES LAWS. Subject to the conditions set forth in this
Agreement, the Company shall, in connection with the filing of any Registration
Statement hereunder, file such documents as may be necessary to register or
qualify the Registrable Shares under the securities or "Blue Sky" laws of such
states as any Holder may reasonably request, and the Company shall use its best
efforts to cause such filings to become effective; PROVIDED, HOWEVER, that the
Company shall not be obligated to qualify as a foreign corporation to do
business under the laws of ANY such state in which it is not then qualified or
to file any general consent to service of process in any such state. Once
effective, the Company shall use its best efforts to keep such filings effective
until the earlier of (a) such time as all of the Registrable Shares have been
disposed of in accordance with the intended methods of disposition by the Holder
as set forth in the Registration Statement, (b) in the case of a particular
state, a Holder has notified the Company that it no longer requires an effective
filing in such state in accordance with its original request for filing or (c)
the date on which the Registration Statement ceases to be effective in
accordance with Section 3. The Company shall promptly notify each Holder of, and
confirm in writing, the receipt by the Company of any notification with respect
to the suspension of the qualification of the Registrable Shares for sale under
the securities or "Blue Sky" laws of any jurisdiction or the initiation of any
threat of any proceeding for such purpose.
5. EXPENSES. The Company shall bear all Registration Expenses incurred
in connection with the registration of the Registrable Shares pursuant to this
Agreement, except that each Holder shall be responsible for any brokerage or
underwriting commissions and taxes of any kind (including, without limitation,
transfer taxes) with respect to any disposition, sale or transfer
7
<PAGE> 8
of Registrable Shares sold by it and for any legal, accounting and other
expenses incurred by it.
6. INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify each
Holder and its respective officers, directors, employees, agents,
representatives and affiliates, and each person or entity, if any, that controls
such Holder within the meaning of the Securities Act, and each other person or
entity, if any, subject to liability because of his, her or its connection with
such Holder, and any underwriter and any person who controls the underwriter
within the meaning of the Securities Act (each an "Indemnitee") against any and
all losses, claims, damages, actions, liabilities, costs and expenses (including
without limitation reasonable fees, expenses and disbursements of attorneys and
other professionals), joint or several, arising out of or based upon any
violation by the Company of any rule or regulation promulgated under the
Securities Act applicable to the Company and relating to any action or inaction
required of the Company in connection with any Registration Statement or
Prospectus, or upon any untrue or alleged untrue statement of material fact
contained in the Registration Statement or any Prospectus, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, PROVIDED, THAT, the Company shall not be
liable to such Indemnitee or any person who participates as an underwriter in
the offering or sale of Registrable Shares or any other person, if any, who
controls such underwriter within the meaning of the Securities Act, in any such
case to the extent that any such loss, claim, damage, liability (or action or
proceeding in respect thereof), cost or expenses arises out of or is based upon
(i) an untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with information regarding such Indemnitee or its plan of
distribution or ownership interests which was furnished to the Company for use
in connection with the Registration Statement or the Prospectus contained
therein by such Indemnitee or (ii) such Indemnitee's failure to send or give a
copy of the final prospectus furnished to it by the Company through no fault of
the Company at or prior to the time such action is required by the Securities
Act to the person claiming an untrue statement or alleged untrue statement or
omission or alleged omission if such statement or omission was corrected in such
final prospectus.
7. COVENANTS OF HOLDER(S). Each Holder hereby agrees (a) to cooperate
with the Company and to furnish to the Company all such information concerning
its plan of distribution and ownership interests with respect to its Registrable
Shares in connection with the preparation of the Registration Statement and any
filings with any state securities commissions as the Company may reasonably
8
<PAGE> 9
request, (b) to deliver or cause delivery of the Prospectus contained in the
Registration Statement to any purchaser of the shares covered by the
Registration Statement from the Holder and (c) to indemnify the Company, its
officers, directors, employees, agents, representatives and affiliates, and each
person, if any, who controls the Company within the meaning of the Securities
Act, and each other person, if any, subject to liability because of his
connection with the Company, against any and all losses, claims, damages,
actions, liabilities, costs and expenses arising out of or based upon (i) any
untrue statement or alleged untrue statement of material fact contained in
either a Registration Statement or the Prospectus contained therein, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, if and to the extent
that such statement or omission occurs from reliance upon and in conformity with
written information regarding the Holder, its plan of distribution or its
ownership interests, which was furnished to the Company by the Holder expressly
for use therein unless such statement or omission was corrected in writing to
the Company not less than five (5) business days prior to the date of the final
prospectus (as supplemented or amended, as the case may be) or (ii) the failure
by the Holder to deliver or cause to be delivered the Prospectus contained in
the Registration Statement (as amended or supplemented, if applicable) furnished
by the Company to the Holder to any purchaser of the shares covered by the
Registration Statement from the Holder through no fault of the Company.
8. Suspension of Registration Requirement.
--------------------------------------
(a) The Company shall promptly notify each Holder of, and confirm
in writing, the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose. The Company shall use its best efforts to obtain the
withdrawal of any order suspending the effectiveness of the Registration
Statement at the earliest possible moment.
(b) Notwithstanding anything to the contrary set forth in this
Agreement, the Company's obligation under this Agreement to use its best efforts
to cause the Registration Statement and any filings with any state securities
commission to become effective or to amend or supplement the Registration
Statement shall be suspended in the event and during such period as unforeseen
circumstances exist (including without limitation (i) an underwritten primary
offering by the Company if the Company is advised by the underwriters that sale
of Registrable Shares under the Registration Statement would have a material
adverse effect on the primary offering or (ii) pending negotiations relating to,
or consummation of, a transaction or the occurrence of an event that would
require additional disclosure of material information by the
9
<PAGE> 10
Company in the Registration Statement or such filing, as to which the Company
has a BONA FIDE business purpose for preserving confidentiality or which renders
the Company unable to comply with SEC requirements) (such unforeseen
circumstances being hereinafter referred to as a "Suspension Event") that would
make it impractical or unadvisable to cause the Registration Statement or such
filings to become effective or to amend or supplement the Registration
Statement, but such suspension shall continue only for so long as such events or
its effect is continuing but in no event will that suspension exceed ninety (90)
days. The Company shall notify each Holder of the existence and, in the case of
circumstances referred to in clause (i) of this Section 8(b), nature of any
Suspension Event.
(c) Each Holder of Registrable Shares whose Registrable Shares are
covered by a Registration Statement filed pursuant to Section 3 agrees, if
requested by the Company in the case of a Company-initiated nonunderwritten
offering or if requested by the managing underwriter or underwriters in a
Company-initiated underwritten offering, not to effect any public sale or
distribution of any of the securities of the Company of any class included in
such Registration Statement, including a sale pursuant to Rule 144 or Rule 144A
under the Securities Act (except as part of such Company-initiated
registration), during the 15-day period prior to, and during the 60-day period
beginning on, the date of effectiveness of each Company-initiated offering made
pursuant to such Registration Statement, to the extent timely notified in
writing by the Company or the managing underwriters; PROVIDED, HOWEVER, that
such 60-day period shall be extended by the number of days from and including
the date of the giving of any notice pursuant to Section 3(c) or (f) hereof to
and including the date when each seller of Registrable Shares covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 3(f) hereof.
9. BLACK-OUT PERIOD. Following the effectiveness of the Registration
Statement and the filings with any state securities commissions, each Holder
agrees that it will not effect any sales of the Registrable Shares pursuant to
the Registration Statement or any such filings at any time after it has received
notice from the Company to suspend sales as a result of the occurrence or
existence of any Suspension Event or so that the Company may correct or update
the Registration Statement or such filing. Each Holder may recommence effecting
sales of the Shares pursuant to the Registration Statement or such filings
following further notice to such effect from the Company, which notice shall be
given by the Company not later than five (5) days after the conclusion of any
such Suspension Event.
10. ADDITIONAL SHARES. The Company, at its option, may register, under
any registration statement and any filings with any state securities commissions
filed pursuant to this Agreement, any
10
<PAGE> 11
number of unissued shares of Common Stock of the Company or any shares of Common
Stock of the Company owned by any other stockholder(s) of the Company.
11. CONTRIBUTION. If the indemnification provided for in Sections 6 and
7 is unavailable to an indemnified party with respect to any losses, claims,
damages, actions, liabilities, costs or expenses referred to therein or is
insufficient to hold the indemnified party harmless as contemplated therein,
then the indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, actions, liabilities, costs or expenses
in such proportion as is appropriate to reflect the relative fault of the
Company, on the one hand, and the Indemnitee, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
actions, liabilities, costs or expenses as well as any other relevant equitable
considerations. The relative fault of the Company, on the one hand, and of the
Indemnitee, on the other hand, shall be determined by reference to, among other
factors, whether the untrue or alleged untrue statement of a material fact or
omission to state a material fact relates to information supplied by the Company
or by the Indemnitee and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission;
PROVIDED, HOWEVER, that in no event shall the obligation of any indemnifying
party to contribute under this Section 11 exceed the amount that such
indemnifying party would have been obligated to pay by way of indemnification if
the indemnification provided for under Sections 6 or 7 hereof had been available
under the circumstances.
The Company and each of the Holders agree that it would not be just and
equitable if contribution to this Section 11 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 11, no Holder shall be
required to contribute any amount in excess of the amount by which the gross
proceeds from the sale of shares exceeds the amount of any damages that the
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission. No indemnified party guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any indemnifying party who was not guilty
of such fraudulent misrepresentation.
12. NO OTHER OBLIGATION TO REGISTER. Except as otherwise expressly
provided in this Agreement, the Company shall have no obligation to the Holders
to register the Registrable Shares under the Securities Act.
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<PAGE> 12
13. AMENDMENTS AND WAIVERS. The provisions of this Agreement may not be
amended, modified, or supplemented or waived without the prior written consent
of the Company and the Holders of in excess of fifty percent (50%) of the
aggregate of all Registrable Shares.
14. NOTICES. Except as set forth below, all notices and other
communications provided for or permitted hereunder shall be in writing and shall
be deemed to have been duly given if delivered personally or sent by telex or
telecopier, registered or certified mail (return receipt requested), postage
prepaid or courier or overnight delivery service to the respective parties at
the following addresses (or at such other address for any party as shall be
specified by like notice, provided that notices of a change of address shall be
effective only upon receipt thereof), and further provided that in case of
directions to amend the Registration Statement pursuant to Section 3(d) or
Section 7, a Holder must confirm such notice in writing by overnight express
delivery with confirmation of receipt:
If to the Company: Summit Properties Inc.
212 South Tryon Street, Suite 500
Charlotte, North Carolina 28281
Attn: Michael G. Malone, Esq.,
Senior Vice President,
Secretary and General Counsel
Telecopy: (704) 333-6114
with a copy to: Goodwin, Procter & Hoar
Exchange Place
Boston, Massachusetts 02109
Attn: Gilbert G. Menna, P.C.
Telecopy: (617) 523-1231
If to the Holders: As listed on the applicable Holder
Signature Page
In addition to the manner of notice permitted above, notices given pursuant to
Sections 3, 8 and 9 hereof may be effected telephonically and confirmed in
writing thereafter in the manner described above.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. This Agreement may not be assigned by any Holder and any attempted
assignment hereof by any Holder will be void and of no effect and shall
terminate all obligations of the Company hereunder; PROVIDED THAT any Holder may
assign its rights hereunder to any person to whom such Holder may Sell Shares
and/or Units pursuant to Section 2(b) hereof.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate
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<PAGE> 13
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland applicable to contracts made
and to be performed wholly within said State.
18. SEVERABILITY. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions contained herein shall not be in any way impaired
thereby, it being intended that all of the rights and privileges of the parties
hereof shall be enforceable to the fullest extent permitted by law.
19. ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and intended to be the complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect to the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to such subject matter. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
SUMMIT PROPERTIES INC.
By: /S/ Michael G. Malone
-------------------------------------
Name: Michael G. Malone
--------------------------------
Title: Sr. Vice President
-------------------------------
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<PAGE> 14
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
HOLDER SIGNATURE PAGE
Holders:
/s/ Joseph Call
---------------------------------------
Joseph H. Call
whose address is:
8929 Strickland Rd.
---------------------------------------
Raleigh, NC 27615
---------------------------------------
---------------------------------------
/s/ Gary S. Cangelosi
---------------------------------------
Gary S. Cangelosi
whose address is:
18549 Vineyard Pt. Ln.
---------------------------------------
Huntersville, NC 28078
---------------------------------------
---------------------------------------
14
<PAGE> 1
Exhibit 10.3
REGISTRATION RIGHTS AGREEMENT
DATED AS OF FEBRUARY 20, 1997
SUMMIT PROPERTIES INC.
COMMON STOCK, $.01 PAR VALUE
<PAGE> 2
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement is made and entered into as of
February 20, 1997, by and among Summit Properties Inc., a Maryland corporation
(the "Company"), The Northwestern Mutual Life Insurance Company, a Wisconsin
corporation ("NML"), J. Ronald Terwilliger, J. Ronald Terwilliger Grantor Trust,
Crow Residential Realty Investors, L.P., a Texas limited partnership, Douglas A.
Hoeksema, Randy J. Pace, Clifford A. Breining, TCF Residential Partnership,
Ltd., a Texas limited partnership, and Trammell S. Crow (NML and each such other
Person listed above (other than the Company), together with any other Accredited
Investor (as defined below) or, subject to Section 10(o) hereof, heir or
devisee, to whom NML or any such other Person may transfer the Common Stock (as
defined below), other than in a transfer made pursuant to the Shelf Registration
Statement (as defined below), and/or SPP Units (as defined below) held by it
without violation of applicable federal securities laws and, with respect to
transfers of SPP Units, in compliance with the SPP Partnership Agreement (as
defined below), shall be referred to herein individually as a "Holder," and
collectively as the "Holders").
This Agreement is made pursuant to the Joint Venture Interest
Purchase Agreement, dated February 20, 1997 (the "Purchase Agreement"), between
the Company, Summit Properties Partnership, L.P., a Delaware limited partnership
("SPP"), NML and TCR Sand Lake Limited Partnership, a Texas limited partnership
("Sand Lake"). The Purchase Agreement contemplates the acquisition by the
Company and SPP of the partnership interests in Sand Lake Joint Venture
currently held by NML and Sand Lake in exchange for a combination of cash,
Common Stock and SPP Units, and the assumption of certain indebtedness. The
Purchase Agreement also contemplates that Sand Lake will distribute to its
partners the Common Stock and/or SPP Units to be received by Sand Lake. In order
to induce NML and Sand Lake to enter into the Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this Agreement to the
Holders for their respective benefit. The execution and delivery of this
Agreement is a condition to the closing of the transactions contemplated by the
Purchase Agreement.
The parties hereto hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following
capitalized terms shall have the following meanings:
ACCREDITED INVESTOR: As defined in Rule 501(a) promulgated by the
SEC pursuant to the Securities Act, as such Rule may be amended from time to
time, or any successor rule or regulation.
ADVICE: As defined in Section 2(d) hereof.
<PAGE> 3
AFFILIATE: An affiliate of any specified Person (and its
correlative, "affiliated," when used with respect to any Person) shall mean any
other Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with, such specified
Person. For the purposes of this definition, "control" (and its correlatives,
"controlled" and "controlling"), when used with respect to any Person, means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.
AGREEMENT: This Registration Rights Agreement, as the same may
be amended, supplemented or modified from time to time in accordance with the
terms hereof.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday
that is not a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close.
CLOSING DATE: February 20, 1997, or such other date as mutually
agreed upon by NML, Sand Lake, SPP and the Company.
COMMON STOCK: The shares of Common Stock, $.01 par value per share,
of the Company, (i) to be delivered on the Closing Date to each Initial Holder
who so elects pursuant to Section 4.3(iii) of the Purchase Agreement, or (ii)
issuable upon conversion of the SPP Units, in either case, together with any
additional Common Stock received by the Holders from time to time as the result
of any stock split, stock dividend, recapitalization, combination or similar
event.
COMPANY: As defined in the first paragraph hereof.
CONTROLLING PERSON: As defined in Section 5(a) hereof.
EFFECTIVENESS PERIOD: As defined in Section 2(a) hereof.
EFFECTIVENESS TARGET DATE: The 90th day following the Closing Date.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated by the SEC thereunder.
EXCHANGE ACT REPORTS: All filings (including, but not limited to,
all forms, statements, reports and agreements, and all documents, exhibits,
amendments and supplements appertaining thereto) required to be made by the
Company to the SEC under the Exchange Act from January 1, 1996 through the
Closing Date.
FILING DATE: The 45th day after the Closing Date.
GOVERNMENTAL AUTHORITY: The government of the United States of
America or any state or other political subdivision of the United States or any
state, or any jurisdiction in which the Company, SPP or any of their
subsidiaries conducts all or any part of their respective
2
<PAGE> 4
businesses, or which asserts jurisdiction over any properties of any such
Persons; or any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
HOLDER(S): As defined in the first paragraph hereof.
INDEMNIFIED PERSON: As defined in Section 5(a) hereof.
INITIAL HOLDER(S): Each Holder that is a signatory to this
Agreement.
MATERIAL ADVERSE EFFECT: A material adverse effect on the business,
operations, affairs, financial condition, assets or properties of the Company,
SPP and their subsidiaries, taken as a whole.
NML: As defined in the first paragraph hereof.
NYSE: The New York Stock Exchange.
PERSON: An individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
PROSPECTUS: The prospectus included in the Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of the effective
Shelf Registration Statement in reliance upon Rule 430A), as amended or
supplemented by any prospectus supplement, with respect to the resale of any of
the Common Stock covered by such Shelf Registration Statement, and all other
amendments and supplements to any such prospectus, including post-effective
amendments.
PURCHASE AGREEMENT: As defined in the second paragraph hereof.
RULE 12b-25: Rule 12b-25 promulgated by the SEC pursuant to the
Exchange Act, as such Rule may be amended from time to time, or any successor
rule or regulation.
RULE 144: Rule 144 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
RULE 158: Rule 158 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
RULE 415: Rule 415 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
RULE 424: Rule 424 promulgated by the SEC pursuant to the Securities
Act, as such Rule may be amended from time to time, or any successor rule or
regulation.
3
<PAGE> 5
RULE 430A: Rule 430A promulgated by the SEC pursuant to the
Securities Act, as such Rule may be amended from time to time, or any successor
rule or regulation.
SAND LAKE: As defined in the second paragraph hereof.
SEC: The Securities and Exchange Commission.
SPP: As defined in the second paragraph hereof.
SPP PARTNERSHIP AGREEMENT: The Agreement of Limited Partnership of
Summit Properties Partnership, L.P., dated January 24, 1994, as amended.
SPP UNITS: The SPP limited partnership interests (each such interest
being denominated in units) to be delivered on the Closing Date to each Initial
Holder who so elects pursuant to Section 4.3(iii) of the Purchase Agreement,
together with any additional SPP Units received by the Holders from time to time
as the result of any unit split, unit dividend, recapitalization, combination or
similar event.
SECURITIES ACT: The Securities Act of 1933, as amended, and the
rules and regulations promulgated by the SEC thereunder.
SHELF REGISTRATION STATEMENT: The registration statement of the
Company filed on Form S-3 under the Securities Act with the SEC for the offer
and sale by the Holders, on a continuous or delayed basis pursuant to Rule 415,
of any or all of the Common Stock pursuant to the provisions of this Agreement,
including the Prospectus, together with amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, and all exhibits to such registration statement.
2. SHELF REGISTRATION.
(a) FILING AND EFFECTIVENESS. The Company agrees to file with the
SEC as soon as practicable after the Closing Date, but in no event later than
the Filing Date, the Shelf Registration Statement. The plan of distribution by
the Holders of the Common Stock contained in the Shelf Registration Statement
shall reflect the manner or manners of resale reasonably designated by one or
more Holders. The Company shall not permit any securities other than the Common
Stock to be included in the Shelf Registration Statement, except as provided in
Section 10(d) hereof. The Company shall use its best efforts to cause the Shelf
Registration Statement to be declared effective pursuant to the Securities Act
by the Effectiveness Target Date and, once it is effective, shall keep the Shelf
Registration Statement continuously effective under the Securities Act and
usable by the Holders for the resale of the Common Stock until the earlier of
(i) the third anniversary of the Closing Date, (ii) the date on which all of the
Common Stock has been disposed of by the Holders in accordance with the Shelf
Registration Statement, pursuant to Rule 144 or otherwise, or (iii) the date on
which all the Common Stock that has not previously been disposed of by the
Holders is saleable pursuant to Rule 144(k), the Company has delivered to the
4
<PAGE> 6
Holders a written opinion of its general counsel to such effect and the Company
has removed all legends from such Common Stock restricting the transfer thereof,
in any case, as extended pursuant to Sections 2(d) and 3(a) hereof (the
"Effectiveness Period").
(b) SUPPLEMENTS AND AMENDMENTS. Subject to Section 2(d) hereof,
the Company shall keep the Shelf Registration Statement continuously effective
by supplementing and amending the Shelf Registration Statement as required by
the rules, regulations or instructions applicable to the Shelf Registration
Statement and as required by the Securities Act.
(c) SELLING SECURITYHOLDER INFORMATION. The Company may require
each Holder to furnish to the Company such information regarding the Holder and
the distribution of the Common Stock by the Holder as the Company may from time
to time reasonably require for inclusion in the Shelf Registration Statement.
Each Holder severally agrees to furnish to the Company all information required
to be disclosed by it in the Shelf Registration Statement pursuant to the
Securities Act in order to make the information previously furnished to the
Company by such Holder not misleading.
(d) SUSPENSION OF SALES. The Company may, upon written notice to a
Holder, suspend such Holder's use of the Prospectus (which is a part of the
Shelf Registration Statement) for a reasonable period of time (not to exceed 90
days for all such suspensions in any consecutive 12-month period) if: (i) the
Company is in possession of material non-public information, (ii) the Board of
Directors of the Company determines (based on advice of counsel) that such
suspension is necessary in order to avoid a requirement to disclose such
material non-public information, and (iii) the Board of Directors of the Company
determines in good faith that disclosure of such material non-public information
is not in the best interests of the Company. Each Holder severally agrees that
upon receipt of any written notice from the Company of the happening of any
event of the kind described in Sections 3(c)(ii), 3(c)(iii), 3(c)(iv) or 3(c)(v)
hereof, such Holder will forthwith discontinue disposition of the Common Stock
covered by the Shelf Registration Statement or Prospectus (other than in lawful
transactions exempt from the registration requirements under the Securities Act)
until such Holder receives copies of the supplemented or amended Prospectus
contemplated by Section 3(j) hereof, if applicable, or until it is advised in
writing (the "Advice") by the Company that the use of the applicable Prospectus
may be resumed. In the event that the Company shall give any such written notice
contemplated by this Section 2(d), the Effectiveness Period shall be extended by
the number of days during the period from and including the date of the giving
of such written notice to and including the date when such Holder shall have
received copies of the supplemented or amended Prospectus contemplated by
Section 3(j) hereof or shall have received the Advice; provided, however, that
no such extension shall apply if the notice is given pursuant to this Section
2(d) as a result of a change in the Holders or any information provided by the
Holders for inclusion in the Shelf Registration Statement or Prospectus.
(e) COMPLIANCE. Except when a suspension of trading pursuant to
Section 2(d) is in effect, the Company shall take such action as may be
necessary so that (i) the Shelf Registration Statement and any amendment thereto
and any Prospectus forming part thereof and any amendment or supplement thereto
(and each report or other document incorporated therein
5
<PAGE> 7
by reference in each case) complies in all material respects with the applicable
requirements of the Securities Act and the Exchange Act, (ii) the Shelf
Registration Statement and any amendment thereto does not, when it becomes
effective and at all times thereafter, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iii) the
Prospectus forming part of the Shelf Registration Statement, and any amendment
or supplement to such Prospectus, does not include any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements, in the light of the circumstances
under which they were made, not misleading.
3. ADDITIONAL UNDERTAKINGS. In addition to the Company's
registration obligations hereunder, the Company shall:
(a) No fewer than five Business Days prior to the initial filing
of the Shelf Registration Statement or Prospectus with the SEC and no fewer than
two Business Days prior to the filing of any amendment or supplement thereto
with the SEC, furnish to each Holder copies of all such documents proposed to be
filed. The Company shall not file any such Shelf Registration Statement or any
Prospectus or any amendments or supplements thereto to which any Holder shall
reasonably object on a timely basis. Should such Holder's timely reasonable
objection to such Shelf Registration Statement, Prospectus or any amendments or
supplements thereto be based on the failure of the Company to reflect in such
document information with respect to the Holder that was previously provided to
the Company, the Effectiveness Period shall be extended by the number of days
the filing with the SEC is delayed.
(b) Subject to Section 2(d) hereof, prepare and file with the SEC
such amendments, including post-effective amendments, to the Shelf Registration
Statement as may be necessary to keep such Shelf Registration Statement
continuously effective during the Effectiveness Period; and cause the Prospectus
to be supplemented by any required Prospectus supplement, and as so
supplemented, to be filed pursuant to Rule 424 with respect to the disposition
of any Common Stock;
(c) Notify the Holders promptly (and in the case of an event
specified by clause (i)(A) of this paragraph, in no event fewer than two
Business Days prior to such filing), and (if requested by any such Person),
confirm such notice in writing: (i)(A) when a Prospectus or any Prospectus
supplement or any amendment to the Shelf Registration Statement is proposed to
be filed, and (B) with respect to the Shelf Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request of the SEC or any other federal or state governmental authority for
amendments or supplements to the Shelf Registration Statement or the Prospectus
or for additional information related thereto, (iii) of the issuance by the SEC,
any state securities commission, any other governmental agency or any court of
any stop order, order or injunction suspending or enjoining the use or the
effectiveness of the Shelf Registration Statement or the Prospectus or the
initiation of any proceedings for that purpose, (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Common Stock for sale in any
jurisdiction, or the initiation or threatening of any proceeding for such
purpose, (v) of the existence of any fact or the happening
6
<PAGE> 8
of any event (without any obligation to disclose to the Holders any material
non-public information about the fact or event itself at the time of the notice)
that makes any statement made in such Shelf Registration Statement or the
Prospectus untrue in any material respect, or that requires the making of any
changes in such Shelf Registration Statement or such Prospectus so that in the
case of the Shelf Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading and
that, in the case of the Prospectus, such Prospectus will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (vi) of any
suspension in trading or delisting of the Common Stock by the NYSE;
(d) If issued, use best efforts to, as promptly as practical,
obtain the withdrawal of any order enjoining or suspending the use or
effectiveness of the Shelf Registration Statement or the Prospectus, or any
suspension of the qualification (or exemption from qualification) of any of the
Common Stock for sale in any jurisdiction, or any suspension in trading of the
Common Stock by the NYSE;
(e) Subject to Section 2(c) hereof, if reasonably requested by any
Holder, (i) promptly incorporate in a Prospectus supplement or post-effective
amendment to the Shelf Registration Statement such information regarding the
Holder or the plan of distribution as such Holder requests be included therein,
and (ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; provided, however, that the Company shall not be
required to include in any such Prospectus supplement or post-effective
amendment to the Shelf Registration Statement information that it reasonably
believes is materially misleading or would result in a material omission in the
absence of additional information or take any other action pursuant to this
Section 3(e) that it reasonably believes is prohibited by applicable law;
(f) Furnish to each Holder, without charge, at least one conformed
copy of the effective Shelf Registration Statement and each effective amendment
thereto, including financial statements, schedules, exhibit indices and all
documents incorporated therein by reference (but excluding all exhibits), and
promptly following the filing of any Company Form 10-K, Form 10-Q or Form 8-K
that is incorporated by reference into the Shelf Registration Statement or the
Prospectus subsequent to the effective date of the Shelf Registration Statement,
provide copies of such documents (including exhibit indices but excluding
exhibits) to each Holder.
(g) Deliver to each Holder, without charge, up to ten copies of
the Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Holder reasonably requests; and, unless
the Company shall have given written notice to such Holder pursuant to Section
2(d) hereof, the Company hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the Holders in connection with the
offering and sale of the Common Stock covered by such Prospectus and any
amendment or supplement thereto;
7
<PAGE> 9
(h) At any time the Common Stock is not listed on the NYSE, use
best efforts to register or qualify, or cooperate with each Holder in connection
with the registration or qualification (or exemption from such registration or
qualification) of, the Common Stock for offer and sale under the securities or
blue sky laws of such jurisdictions as any Holder reasonably requests in
writing, keep each such registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and do any and all other acts or
things necessary to enable the disposition in such jurisdictions of the Common
Stock covered by the Shelf Registration Statement; provided, however, that the
Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified or take any action that would
subject it to general service of process (other than as to matters and
transactions relating to the Shelf Registration Statement, the Prospectus and
the offering and sale of the Common Stock) in any such jurisdiction where it is
not then so subject;
(i) In connection with any sale or transfer of the Common Stock,
cooperate with the Holders to (A) facilitate the timely preparation and delivery
of certificates representing Common Stock to be sold, which certificates shall
not bear any restrictive legends if sold pursuant to the Shelf Registration
Statement and the Prospectus or Rule 144, and (B) ensure that such Common Stock
is in such denominations and registered in such names as the Holders may request
at least three Business Days prior to any sale of the Common Stock;
(j) Subject to Section 2(d) hereof, upon the occurrence of any
event contemplated by Sections 3(c)(ii) or 3(c)(v) hereof, as promptly as
practicable, prepare an amendment to the Shelf Registration Statement or a
supplement or amendment to the related Prospectus or any document incorporated
or deemed to be incorporated therein by reference, and file any other required
document so that, in the case of the Shelf Registration Statement, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading and, as thereafter delivered, such Prospectus will not contain an
untrue statement of any material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
(k) Make generally available to its security holders earning
statements satisfying the provisions of Section 11(a) of the Securities Act and
Rule 158 no later than 45 days (60 days should the Company avail itself of Rule
12b-25) after the end of any 12-month period (or 90 days (105 days should the
Company avail itself of Rule 12b-25) after the end of any 12-month period if
such period is a fiscal year), commencing on the first day of the first fiscal
quarter after the effective date of the Shelf Registration Statement, which
statement shall cover said period, consistent with the requirements of and
definitions contained in Rule 158;
(l) On or prior to the Closing Date file a supplemental listing
application for the Common Stock with the NYSE and cause all the Common Stock to
be listed for trading (or reserved for listing in the case of the Common Stock
to be issued upon conversion of the SPP Units) on the NYSE as promptly as
practical thereafter (but no later than the Filing Date); maintain throughout
the Effectiveness Period the listing of its common stock (including the
8
<PAGE> 10
Common Stock upon approval by the NYSE of the supplemental listing application)
for trading on the NYSE; and deliver to the NYSE and any other exchange on which
the Common Stock is listed for trading, simultaneously with its filing with the
SEC, a copy of each Prospectus and each supplement or amendment thereto;
(m) At the request of any Holder who is not an affiliate of the
Company and who has not been such an affiliate for a period of at least three
months prior to such request, made at any time after the Common Stock held by
such Holder may be sold pursuant to Rule 144(k), issue to such Holder in
exchange for any certificate for Common Stock owned by such Holder that bears a
legend restricting transfer, a new certificate for such Common Stock with no
legend restricting transfer.
4. REGISTRATION EXPENSES. All fees and expenses incident to the
performance of or compliance with this Agreement by the Company shall be borne
by it whether or not the Common Stock is offered or sold pursuant to the Shelf
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filings
fees (including without limitation, fees and expenses incurred by the Company
(A) with respect to filings required to be made with the SEC, and (B) in
compliance with securities or blue sky laws) and (ii) the fees and expenses
incurred by the Company in connection with the listing of the Common Stock on
the NYSE.
5. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless (i) each
Holder, (ii) each Person who is deemed to be an underwriter under the Securities
Act as a result of selling Common Stock on behalf of a Holder, other than
pursuant to a best efforts or firmly underwritten offering, (iii) each Person,
if any, who controls (within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act) any Holder or any deemed underwriter (any of the
Persons referred to in this clause (iii) being hereinafter referred to as a
"Controlling Person"), and (iv) the respective officers, directors, trustees,
partners, employees, representatives and agents of each Holder, each deemed
underwriter or any Controlling Person (any Person referred to in clause (i),
(ii), (iii) or (iv) may hereinafter be referred to as an "Indemnified Person"),
from and against any and all losses, claims, damages, liabilities, reasonable
expenses and judgments caused by any untrue statement or alleged untrue
statement of a material fact contained in the Shelf Registration Statement, the
Prospectus or in any amendment or supplement thereto or in any preliminary
Prospectus or in any document incorporated by reference in any thereof or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein (in the case of
any Prospectus, preliminary Prospectus or amendment or supplement thereto, in
the light of the circumstances under which they were made) not misleading;
provided, however, that the Company shall have no liability hereunder insofar as
such losses, claims, damages, liabilities, reasonable expenses or judgments are
caused by any such untrue statement or omission or alleged untrue statement or
omission which has been made therein or omitted therefrom in reliance upon and
in conformity with information relating to the Holders and furnished in writing
to the Company by or on behalf of such Holders expressly for use therein;
provided, further, that the foregoing indemnity shall not inure to the benefit
of a
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<PAGE> 11
Holder (or related Indemnified Person) if (i) such untrue statement or omission
or alleged untrue statement or omission is remedied in a supplement or amendment
to the Prospectus, (ii) a copy of such Prospectus as supplemented or amended
shall have been furnished to the Holder by the Company in a timely manner, and
(iii) such Holder failed to send or give a copy of such Prospectus as
supplemented or amended at or prior to the time such action is required by the
Securities Act to the Person claiming an untrue statement or omission or alleged
untrue statement or omission.
(b) In case any action shall be brought against any Indemnified
Person, based upon the Shelf Registration Statement or the Prospectus or any
amendment or supplement thereto or any document incorporated by reference in any
thereof and with respect to which the Indemnified Person is entitled to seek
indemnity against the Company pursuant to Section 5(a) hereof, such Indemnified
Person shall promptly notify the Company in writing and the Company shall assume
the defense thereof, including the employment of counsel reasonably satisfactory
to such Indemnified Person. Any Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person; provided, however, that the Company shall pay the
reasonable fees and documented expenses of up to two counsel selected by the
Holders if, (i) the employment of such counsel shall have been specifically
authorized in writing by the Company, (ii) the Company shall have failed to
assume the defense and employ counsel or (iii) such Indemnified Person or
Persons shall have been advised by counsel that there is a conflict between the
positions of the Company and of the Indemnified Person or, as a condition to the
Company's obligation to pay for more than one counsel, there is a conflict among
Indemnified Persons in conducting the defense of such action or proceeding (in
which case the Company shall not have the obligation to assume the defense of
such action on behalf of such Indemnified Person). The Company shall not be
liable for any settlement of any such action effected without its written
consent (the granting of such consent to be at the reasonable discretion of the
Company), but if settled with the written consent of the Company, the Company
agrees to indemnify and hold harmless any Indemnified Person from and against
any loss or liability by reason of such settlement, but only to the extent
required by Section 5(a) hereof. The Company shall not, without the prior
written consent of the Indemnified Person (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
proceeding in respect of which such Indemnified Person is a party, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
(c) In connection with the Shelf Registration Statement, each
Holder agrees, severally and not jointly, to indemnify and hold harmless (i) the
Company, (ii) any Person controlling the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, and (iii) the
respective officers, directors, trustees, partners, employees, representatives
and agents of the Company or any Person controlling the Company, to the same
extent as the foregoing indemnity from the Company to each Indemnified Person
but only with reference to information furnished in writing by or on behalf of
such Holder expressly for use in such Shelf Registration Statement. In case any
action shall be brought against the Company, any Person controlling the Company
or any of their officers, directors, trustees, partners, employees,
10
<PAGE> 12
representatives or agents based on the Shelf Registration Statement and in
respect of which indemnity may be sought against any Holder, the Holder shall
have the rights and duties given to the Company (except that if the Company
shall have assumed the defense thereof, such Holder shall not be required to do
so, but may employ separate counsel therein and participate in defense thereof,
but the fees and expenses of such counsel shall be at the expense of such
Holder), and the Company, any Person controlling the Company and any of their
officers, directors, trustees, partners, employees, representatives or agents
shall have the rights and duties given to the Indemnified Person, by Section
5(b) hereof.
(d) If the indemnification provided for in this Section 5 is
unavailable to, unenforceable by or insufficient to hold harmless, an
indemnified party in respect of any losses, claims, damages, liabilities,
reasonable expenses or judgments referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities, expenses and judgments in such proportion as is
appropriate to reflect the relative fault of the Company and each such
Indemnified Person in connection with the statements or omissions which resulted
in such losses, claims, damages, liabilities, reasonable expenses or judgments,
as well as any other relevant equitable considerations. The relative fault of
the Company and each such Indemnified Person shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission to state a material fact relates to information
supplied by the Company or such Indemnified Person and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and each Holder agrees that it would not
be just and equitable if contribution pursuant to this Section 5(d) were
determined by pro rata allocation (even if the Indemnified Persons were treated
as one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to in the first
sentence of this Section 5(d). No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
(e) Any losses, claims, damages, liabilities, reasonable expenses
or judgments for which an indemnified party is entitled to indemnification or
contribution under this Section 5, shall be paid by the indemnifying party to
the indemnified party as incurred, subject to the right of the indemnifying
party, acting in good faith, to withhold such payments pending judicial
determination of any claim by it that the indemnified party is not entitled to
such indemnification or contribution under this Section 5.
(f) Notwithstanding the provisions of this Section 5, no
Indemnified Person shall be required to pay or contribute an aggregate amount
under this Section 5 in excess of the amount by which the net profits received
by it in connection with the sale of the Common Stock pursuant to this Agreement
exceeds the amount of any damages which such Indemnified Person has otherwise
been required to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission.
11
<PAGE> 13
(g) The agreements contained in this Section 5 shall survive the
sale of the Common Stock pursuant to the Shelf Registration Statement and shall
remain in full force and effect, regardless of any investigation made by or on
behalf of any Indemnified Person.
6. REPRESENTATIONS AND WARRANTIES OF THE INITIAL HOLDERS. Each
Initial Holder, severally and not jointly, represents and warrants to the
Company that:
(a) It is an Accredited Investor and has such knowledge and
experience in financial and business matters that it is capable of evaluating
the merits and risks of acquiring the SPP Units and/or Common Stock, as the case
may be; and
(b) It is acquiring the Common Stock or the SPP Units, as the case
may be, for its own account and not with a view to the distribution thereof,
provided that the disposition of such Holder's property shall at all times be
within such Holder's control. Each Initial Holder understands that the Common
Stock or the SPP Units to be acquired by it on the Closing Date, as the case may
be, have not been registered under the Securities Act or any applicable state
securities or blue sky law.
(c) The execution and delivery of this Agreement has been duly
authorized by all necessary corporate, partnership or trust action, as
applicable, on its part if it is not an individual; if it is not an individual,
this Agreement has been executed and delivered by a duly authorized Person on
its behalf; and this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and (iii) federal and state securities laws with respect to indemnification for
securities liabilities.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to each Holder that:
(a) Each of the Company and SPP (i) is duly organized, validly
existing and in good standing under the laws of their respective jurisdictions
of organization or incorporation; (ii) have all power and authority necessary to
own and operate their properties and carry on their business as now conducted
and as presently proposed to be conducted; and (iii) have all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to own and operate their properties and to carry on their business as
now conducted and as presently proposed to be conducted, except where the
failure to have such licenses, certificates, permits, franchises and other
governmental authorizations could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect.
(b) The Company and SPP each is duly licensed or qualified and is
in good standing as a foreign corporation or partnership, respectively, in each
jurisdiction wherein the nature of the business transacted by it or the nature
of the property owned or leased by it makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified
12
<PAGE> 14
and in good standing could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.
(c) Each of the issuance of the Common Stock and the SPP Units by
the Company and SPP, respectively, the execution and delivery by the Company of
the Agreement, and compliance by the Company with all of the provisions of this
Agreement (i) is within the corporate powers of the Company and SPP, as the case
may be, (ii) is legal and does not conflict with or result in any breach of any
of the provisions of, or constitute a default under (A) any agreement, charter
or other organizational instrument, bylaw or other instrument to which the
Company or SPP is a party or by which they or any of their property may be
bound, or (B) any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority applicable to the Company or SPP, except for any such
conflict, breach or default that could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.
(d) The execution and delivery of this Agreement has been duly
authorized by all necessary corporate action on the part of the Company (no
action on the part of the stockholders of the Company being required in respect
thereof); this Agreement has been executed and delivered by a duly authorized
officer of the Company; and this Agreement constitutes a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally, (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and (iii) federal and state securities laws
with respect to indemnification for securities liabilities.
(e) All of the Common Stock and SPP Units issued to the Holders
will be, upon issuance to each Holder entitled thereto, validly issued, fully
paid, nonassessable and free of preemptive rights.
(f) No consent, approval or authorization of, or registration,
filing or the declaration with, any Governmental Authority is required in
connection with the execution, delivery or performance by the Company of this
Agreement, the issuance by the Company of the Common Stock or the issuance by
SPP of the SPP Units.
(g) All of the Exchange Act Reports have been timely filed with
the SEC and complied, as of their respective dates, in all material respects
with all applicable requirements of the Exchange Act. As of their respective
dates, neither the statements made in this Agreement by the Company nor the
Exchange Act Reports contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein, or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. All of the financial statements of the Company included in
the Exchange Act Reports (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial
position of the Company and its subsidiaries as of the respective dates
specified in such Exchange Act Reports and the consolidated results of their
operations and cash flows for the respective periods so specified and have been
prepared in accordance with generally accepted accounting
13
<PAGE> 15
principles consistently applied throughout the periods involved and with prior
periods, except as set forth in the notes thereto (subject, in the case of any
interim financial statements, to normal year end adjustments).
(h) Based to the extent relevant on the accuracy of the Initial
Holders representations set forth in Sections 6(a) and 6(b) hereof, and assuming
that the Initial Holders have not taken any action with respect to the Common
Stock and SPP Units, as the case may be, so as to be deemed an underwriter under
the Securities Act, (i) in connection with the transactions contemplated by the
Purchase Agreement, neither the Company, SPP, nor anyone acting on their behalf
has offered the Common Stock, the SPP Units or any similar securities for
issuance or sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, any Person other
than the Holders and Sand Lake, each of which has been offered the Common Stock
and the SPP Units at a private sale for investment, and (ii) neither the
Company, SPP, nor anyone acting on their behalf has taken, or will take, any
action that would subject the issuance of the Common Stock or the SPP Units to
the Holders to the registration requirements of Section 5 of the Securities Act.
8. EXCHANGE ACT REPORTS. The Company shall file the reports
required to be filed by it under the Securities Act and the Exchange Act
(including, but not limited to, the reports under Section 13 and 15(d) of the
Exchange Act referred to in subparagraph (c)(1) of Rule 144) in a timely manner
and, if at any time it is not required to file such reports, it will, upon the
request of any Holder, make available other information as required by, and so
long as necessary to permit sales (with the minimum possible restrictions on
volume) of the Common Stock pursuant to, Rule 144 during the Effectiveness
Period.
9. LOCK-UP. Each Initial Holder agrees not to sell, contract to
sell, pledge or otherwise dispose of any of the Common Stock or SPP Units held
by it for a period of 90 days from and after the Closing Date; provided,
however, that this Section 9 shall not preclude those Initial Holders who own
SPP Units from tendering such SPP Units for redemption or conversion into Common
Stock during such 90-day period.
10. MISCELLANEOUS.
(a) REMEDIES. In the event of a breach by the Company or by a
Holder of any of their representations, warranties or obligations under this
Agreement, each Holder or the Company, respectively, in addition to being
entitled to exercise all rights granted by law, including recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary damages would not be adequate
compensation for any loss incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agree that, in the event of any
action for specific performance in respect of such breach, they shall waive the
defense that a remedy at law would be adequate.
(b) NO INCONSISTENT AGREEMENTS. The Company warrants that it is
not currently a party to, and will not enter into, any agreement which prevents
the Company from fulfilling its obligations hereunder.
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<PAGE> 16
(c) NO ADVERSE ACTION AFFECTING THE COMMON STOCK. Subject to the
Company's right to suspend use of the Prospectus pursuant to Section 2(d)
hereof, the Company will not take any action with respect to the Common Stock or
the SPP Units which would prevent the Holders from offering and selling such
Common Stock pursuant to the Shelf Registration Statement.
(d) PIGGYBACK REGISTRATIONS. From and after the date of this
Agreement, the Company shall not grant to any of its security holders (including
the Holders) the right to include in the Shelf Registration Statement any of its
securities other than the Common Stock. The Company has previously disclosed in
writing to the Initial Holders all Persons who have legally enforceable rights
(and the extent of such rights) at the date of this Agreement to include Company
securities for registration under the Shelf Registration Statement.
(e) AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof,
may be given, at any time by mutual agreement in writing of the Company, NML
(unless it no longer holds Common Stock) and the Holders of 50% of the aggregate
of the shares of the Common Stock then outstanding (excluding Common Stock held
by NML) and the shares of Common Stock issuable assuming conversion of all of
the then outstanding SPP Units. Notwithstanding the foregoing, any Holder may
enter into any written amendment, modification or supplement to this Agreement,
and waive or consent in writing to departures from the provisions hereof, at any
time, whether or not any other Holder is a party to such amendment,
modification, supplement, waiver or consent, but any such action will be
effective only as against the parties to that written document.
(f) NOTICES. All notices and other communications provided for
herein shall be made in writing by hand-delivery, air courier guaranteeing
overnight delivery, registered or certified first-class mail (return receipt
requested) or telecopy:
(i) if to the Company, to:
Summit Properties Inc.
212 South Tryon Street
Suite 500
Charlotte, NC 28281
Telecopy: (704) 334-4496
Attention: Michael Malone, General Counsel
with a copy to:
Goodwin, Procter & Hoar LLP
15
<PAGE> 17
Exchange Place
Boston, MA 02109
Telecopy: (617) 523-1231
Attention: David W. Watson, Esq.
(ii) if to NML, to:
The Northwestern Mutual Life Insurance Company
720 E. Wisconsin Avenue
Milwaukee, WI 53202
Telecopy: (414) 299-7016
Attention: Paul E. McElwee, Esq.
(iii) if to any other Holder, to the address of such Holder as it
appears in the common stock register of the Company or the
limited partnership register of SPP, as applicable, with a
copy to:
Trammell Crow Residential
541 South Orlando Avenue, Suite 210
Maitland, Florida 32751
Telecopy: (407) 645-3808
Attention: Douglas A. Hoeksema
and
Jones, Day, Reavis & Pogue
2001 Ross Avenue, Suite 2300
Dallas, Texas 75201
Telecopy (214) 969-5100
Attention: Michael K. Ording
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given, when delivered by hand,
if personally delivered; one Business Day after being timely delivered to an air
courier guaranteeing overnight delivery; three Business Days after being
deposited in the mail, postage prepaid, if mailed; and when receipt is
acknowledged by the recipient's telecopier machine, if telecopied.
(g) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and permitted assigns of each of
the parties hereto, including, without limitation, subsequent Holders of the
Common Stock and SPP Units. If any transferee (which at the time of the transfer
is a Holder or becomes a Holder by the terms of this Agreement as a result of
the transfer) of any Holder shall acquire the Common Stock or SPP Units, in any
manner, whether by operation of law or otherwise, such Common Stock or SPP
Units, as the case may be, shall be held subject to all the terms of this
Agreement and by taking and holding such Common Stock or SPP Units, such Person
shall be conclusively deemed to have agreed to be
16
<PAGE> 18
bound by and to perform all of the terms and provisions of this Agreement and
such Person shall be entitled to receive the benefits hereof. For sake of
clarity, any transferee of any Holder that is not at the time of transfer a
Holder or does not become a Holder by the terms of this Agreement as a result of
such transfer shall not be bound by this Agreement and shall not be entitled to
receive any of the benefits hereof. The Company may not assign its rights or
obligations hereunder without the prior written consent of each Holder, other
than by operation of law pursuant to a merger or consolidation to which the
Company is a party.
(h) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Agreement.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF DELAWARE WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW.
(j) SEVERABILITY. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provision, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction.
(k) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
All references made in this Agreement to "Section" and "paragraph" refer to such
Section or paragraph of this Agreement, unless expressly stated otherwise.
(l) ATTORNEYS' FEES. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover its reasonable attorneys fees in addition to any
other available remedy.
(m) ENTIRE AGREEMENT. This Agreement is intended by the parties as
a final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by the Company with
respect to the Common Stock. This Agreement supersedes all prior agreements and
understandings between the parties with respect to the subject matter hereof.
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<PAGE> 19
(n) SURVIVAL. The respective indemnities, agreements,
representations, warranties and each other provision set forth in this Agreement
or made pursuant hereto shall remain in full force and effect regardless of any
investigation (or statement as to the results thereof) made by or on behalf of
any Holder, any Person deemed to be an underwriter as described in Section 5(a)
hereof, any Person controlling any of the foregoing within the meaning of
Section 15 of the Securities Act and Section 20 of the Exchange Act, or any
director, trustee, officer, partner, employee, representative or agent of any
such Persons, and shall survive delivery of the Common Stock and the SPP Units
pursuant to the Purchase Agreement and any subsequent disposition of the Common
Stock or SPP Units by the Holders.
(o) HEIRS AND DEVISEES. Each of the Initial Holders (other than
NML) covenants and agrees that SPP Units and Common Stock will not be
transferred as a result of such Initial Holder's death to a heir or devisee who
is not an Accredited Investor unless (i) if such transfer involves SPP Units, it
is in compliance with the SPP Partnership Agreement, and (ii) at the time of any
such transfer to a heir or devisee, and after giving effect to such transfer,
there are no more than 35 such non-Accredited Investor heir or devisee
transferees in aggregate of all such Initial Holders. In addition, as a
condition for tendering for redemption any SPP Unit for Common Stock, any such
heir or devisee that is not an Accredited Investor must either have alone, or
with his or her retention of one or more purchaser representatives, such
knowledge and experience in financial and business matters that he or she is
capable of evaluating the merits and risks of acquiring the Common Stock.
[Intentionally Left Blank]
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<PAGE> 20
IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be duly executed as of the date first written above.
SUMMIT PROPERTIES INC.
By: /s/ Michael G. Malone
---------------------------------------
Name: Michael G. Malone
Title: Senior Vice President
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By: /s/ Carson D. Keyes
---------------------------------------
Name: Carson D. Keyes
Title: Vice President
/s/ J. Ronald Terwilliger
-------------------------------------------
J. Ronald Terwilliger
J. RONALD TERWILLIGER GRANTOR TRUST
By: /s/ J. Ronald Terwilliger
---------------------------------------
Name: J. Ronald Terwilliger
Title: Trustee
CROW RESIDENTIAL REALTY
INVESTORS, L.P.
By: Crow Family, Inc., a
Texas corporation, its
general partner
By: /s/ Timothy J. Hogan
---------------------------------------
Timothy J. Hogan
Vice President
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<PAGE> 21
/s/ Douglas A. Hoeksema
-------------------------------------------
Douglas A. Hoeksema
/s/ Randy J. Pace
-------------------------------------------
Randy J. Pace
/s/ Clifford A. Breining
-------------------------------------------
Clifford A. Breining
TCF RESIDENTIAL PARTNERSHIP, LTD.
By: Mill Spring Holdings, Inc.,
a Texas corporation, its
general partner
By: /s/ Timothy J. Hogan
---------------------------------------
Timothy J. Hogan
Vice President
/s/ Trammell S. Crow
-------------------------------------------
Trammell S. Crow
20
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3, relating to 589,792 shares of common stock of Summit Properties Inc.,
of our report dated January 24, 1997 appearing in the Annual Report on Form 10-K
of Summit Properties Inc. and our report dated March 24, 1997 appearing in the
Annual Report on Form 11-K of the Summit Properties Inc. 1996 Non-Qualified
Employee Stock Purchase Plan
We also consent to the reference to us under the heading "Experts" in such
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
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DELOITTE & TOUCHE LLP
Charlotte, North Carolina
April 4, 1997
