EXHIBIT 1.1
$150,000,000
GABLES REALTY LIMITED PARTNERSHIP
7.25% SENIOR NOTES DUE 2006
UNDERWRITING AGREEMENT
DATED FEBRUARY 15, 2001
XXXXXX BROTHERS INC.
CHASE SECURITIES INC.
FIRST UNION SECURITIES, INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
PNC CAPITAL MARKETS, INC.
WACHOVIA SECURITIES, INC.
$150,000,000
GABLES REALTY LIMITED PARTNERSHIP
7.25% Senior Notes due 2006
UNDERWRITING AGREEMENT
February 15, 2001
XXXXXX BROTHERS INC.
CHASE SECURITIES INC.
FIRST UNION SECURITIES, INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
PNC CAPITAL MARKETS, INC.
WACHOVIA SECURITIES, INC.
c/x Xxxxxx Brothers Inc.
0 Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
INTRODUCTORY. Gables Realty Limited Partnership, a Delaware
limited partnership (the "Operating Partnership") of which the sole general
partner is Gables GP, Inc. ("Gables GP"), a Texas corporation and a wholly-owned
subsidiary of Gables Residential Trust, a Maryland real estate investment trust
(the "REIT" and, together with the Operating Partnership and Gables GP, the
"Company"), proposes to sell to the Underwriters named in SCHEDULE 1 hereto (the
"Underwriters") the aggregate principal amounts listed in SCHEDULE 1 hereto of
the Operating Partnership's debt securities identified in SCHEDULE 2 hereto (the
"Securities"), to be issued under that certain indenture, dated as of March 23,
1998, as supplemented by that certain First Supplemental Indenture, dated as of
March 23, 1998, a Second Supplemental Indenture, dated as of September 30, 1998,
a Third Supplemental Indenture, dated as of October 8, 1998 and a Fourth
Supplemental Indenture, to be dated as of February 22, 2001 each by and between
the Operating Partnership and First Union National Bank (the "Trustee"), as
trustee (as so supplemented, the "Indenture").
The REIT and the Operating Partnership confirm their
agreements with the Underwriters as follows.
1. AGREEMENT TO SELL AND PURCHASE.
On the basis of the representations, warranties and agreements
contained herein, but subject to the terms and conditions set forth herein, the
Operating Partnership agrees to issue and sell the Securities to the
Underwriters as hereinafter provided, and the Underwriters agree to purchase
from the Operating Partnership the Securities at the purchase price set forth in
SCHEDULE 2 hereto plus accrued interest, if any, from the date specified in
SCHEDULE 2 hereto to the date of payment and delivery.
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The Company understands that the Underwriters intend (i) to
make a public offering of the Securities, and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
2. DELIVERY AND PAYMENT.
Payment for the Securities shall be made to the Operating
Partnership or to its order in immediately available funds in the amount and on
the date and time set forth in SCHEDULE 2 hereto or at such place and at such
other time on the same date or such other date, not later than the eighth
Business Day thereafter, as the Underwriters and the Operating Partnership may
agree in writing (or if the NYSE or American Stock Exchange or commercial banks
in the City of New York are not open on such day, the next day on which such
exchanges and banks are open). Such payment will be made upon delivery to the
Underwriters of the Securities registered in such names and in such
denominations as the Underwriters shall request not less than two full Business
Days prior to the date of delivery, with transfer taxes, if any, payable in
connection with transfer to the Underwriters duly paid by the Company. As used
herein, the term "Business Day" means any day other than a day on which banks
are permitted or required to be closed in New York City. The time and date of
such payment and delivery with respect to the Securities are referred to herein
as the "Closing Date." The Securities will be delivered through the book entry
facilities of The Depository Trust Company ("DTC") and, if requested by the
Underwriters, will be made available for inspection by the Underwriters no later
than 1:00 P.M. New York City time on the Business Day prior to the Closing Date
at such place in New York City as the Underwriters, DTC and the Operating
Partnership shall agree.
The cost of original issue tax stamps, if any, in connection
with the issuance and delivery of the Securities by the Operating Partnership to
the Underwriters shall be borne by the Company. The Company will pay and save
the Underwriters and any subsequent holder of the Securities harmless from any
and all liabilities with respect to or resulting from any failure or delay in
paying Federal and state stamp and other transfer taxes, if any, which may be
payable or determined to be payable in connection with the original issuance or
sale to the Underwriters of the Securities.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
REIT and the Operating Partnership, jointly and severally, represent, warrant
and covenant to the Underwriters that:
(a) The Operating Partnership meets the requirements
for use of Form S-3 and a registration statement (Registration No.
333-68359) on Form S-3 relating to the Securities, including a
prospectus (as amended, the "Base Prospectus"), has been carefully
prepared by the Company in conformity with the requirements of the
Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed
with the Commission and has become effective; and on or prior to the
Closing Date the Indenture shall have been qualified under the Trust
Indenture Act of 1939, as amended (together with the rules and
regulations of the Commission thereunder, the "Trust Indenture Act").
Such registration statement and prospectus may have been amended or
supplemented prior to the date of this Agreement; any such amendment or
supplement was so prepared and filed, and any such amendment filed
after the effective date of such registration statement has become
effective. No stop order suspending the effectiveness of the
registration statement has been issued, and no proceeding for that
purpose has been instituted or, to the Company's knowledge, threatened
by the Commission. Copies of such registration statement and
prospectus, any such amendments or supplements and all documents
incorporated by reference therein that were filed with the Commission
on or prior to the date of this Agreement have been delivered or made
available to the Underwriters. A prospectus supplement (the "Prospectus
Supplement") setting forth the terms of the Securities and of their
sale and distribution has been or will be so prepared and will
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be filed pursuant to Rule 424(b) of the Rules and Regulations on or
before the second business day after the date hereof (or such earlier
time as may be required by the Rules and Regulations). The term
"Registration Statement" means such registration statement as amended
at the time it became effective (the "Effective Date"), including
financial statements and all exhibits and any information deemed by
virtue of Rule 430A of the Rules and Regulations to be included in such
Registration Statement at the Effective Date and any prospectus
supplement filed thereafter with the Commission and shall include the
documents incorporated by reference therein pursuant to Item 12 of Form
S-3 which were filed under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). The term "Prospectus" means,
collectively, the Base Prospectus together with any prospectus
supplement, in the respective forms they are filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations, and includes the
documents incorporated by reference in the Base Prospectus and in any
prospectus supplement. Any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed
to be incorporated by reference therein. For purposes of this
Underwriting Agreement, all references to the Registration Statement,
the Prospectus or any amendment or supplement thereto shall be deemed
to include any copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System (XXXXX), and
such copy shall be identical (except to the extent permitted by
Regulation S-T) to any Registration Statement or Prospectus, as the
case may be, delivered to you for use in connection with the offering
of the Securities by the Operating Partnership.
(b) Each part of the Registration Statement, when
such part became or becomes effective, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, including the financial statements
included or to be included or incorporated by reference or to be
incorporated by reference in the Registration Statement or the
Prospectus, conformed or will conform in all material respects with the
requirements of the Act, the Rules and Regulations, the Exchange Act
and the rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and will contain all statements required to be stated
therein in accordance with the Act, the Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations; the Indenture,
on the date of filing thereof with the Commission and at the Closing
Date conformed or will conform in all material respects with the
requirements of the Trust Indenture Act; each part of the Registration
Statement, when such part became or becomes effective, did not or will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Closing Date, did not or will not include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing representations and
warranties in this Section 3(b) do not apply to (i) that part of the
Registration Statement which constitutes the Statement of Eligibility
and Qualification under the Trust Indenture Act (the "Form T-1") and
(ii) any statements or omissions made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to
the Company by such Underwriter specifically for inclusion in the
Registration Statement or the Prospectus or any amendment or supplement
thereto. The Company acknowledges that the only information furnished
in writing to the Company by the Underwriters specifically for
inclusion in the Registration Statement, any preliminary prospectus or
the Prospectus is the information set forth in EXHIBIT A hereto. The
Company has not distributed any offering material in connection with
the offering or sale of the Securities other than the Registration
Statement, the Prospectus, or other materials, if any, permitted by the
Act.
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(c) The documents incorporated or to be incorporated
by reference in the Registration Statement or the Prospectus or any
amendment or supplement thereto or from which information is so
incorporated by reference, when they became or become effective or were
or are filed with the Commission, as the case may be, complied or will
comply in all material respects with the requirements of the Act or the
Exchange Act, as applicable, the Exchange Act Rules and Regulations and
the Rules and Regulations.
(d) The only subsidiaries (as defined in the Rules
and Regulations) of the Company are the subsidiaries listed on SCHEDULE
3 hereto (the "subsidiaries"). The Company and each of its subsidiaries
is, and at the Closing Date will be, an entity duly organized or
formed, as the case may be, and, in the case of an entity that is not a
general partnership, validly existing and in good standing under the
laws of the jurisdiction of its organization or incorporation. The
Company and each of its subsidiaries has, and at the Closing Date will
have, full power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to
conduct its business as described in the Registration Statement and the
Prospectus. The Company and each of its subsidiaries is, and at the
Closing Date will be, duly licensed or qualified to do business and
(except for subsidiaries that are general partnerships) in good
standing as a foreign trust, limited partnership or corporation, as the
case may be, in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it
makes such licensing or qualification necessary except where the
failure to be so qualified does not have a material adverse effect on
the business, properties, financial position or results of the Company
and its subsidiaries, taken as a whole. Except for the stock or
partnership interests of the subsidiaries and as disclosed in the
Registration Statement, the Company does not own, and at the Closing
Date will not own, directly or indirectly, any shares of stock or any
other equity or long-term debt securities of any corporation or have
any equity interest in any firm, partnership, joint venture,
association or other entity. Complete and correct copies of the Amended
and Restated Declaration of Trust and the Second Amended and Restated
By-laws of the Company and the charter documents of each of its
subsidiaries and all amendments thereto have been delivered or made
available to the Underwriters and no changes therein will be made
subsequent to the date hereof and prior to the Closing Date.
(e) The outstanding securities of the REIT, have been
duly authorized, validly issued, fully paid and nonassessable and will
not be subject to any preemptive or similar right. The description of
the REIT's common shares of beneficial interest, par value $0.01 per
share (the "Common Shares") in the Registration Statement and the
Prospectus is, and at the Closing Date will be, in all material
respects, complete and accurate. Except as set forth in the Prospectus,
the REIT does not have outstanding, and at the Closing Date will not
have outstanding, any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell, any Common Shares, any
preferred shares of the REIT, any shares of capital stock of any
subsidiary or any such warrants, convertible securities or obligations
other than (i) pursuant to the REIT's dividend reinvestment plan and
(ii) the REIT's Fourth Amended and Restated 1994 Share Option and
Incentive Plan, as amended.
(f) The outstanding securities of the Operating
Partnership, have been duly authorized and validly issued and will not
be subject to any preemptive or similar right. Except as set forth in
the Prospectus, the Operating Partnership does not have outstanding,
and at the Closing Date will not have outstanding, any options to
purchase, or any rights or warrants to subscribe for, or any securities
or obligations convertible into, or any contracts or commitments to
issue or sell, any shares of capital stock of the Operating
Partnership. There are no requirements,
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restrictions or limitations in the terms of the preferred units of
partnership interest in the Operating Partnership ("Preferred Units")
applicable to the issuance and sale of the Securities.
(g) The Securities will be, as of the Closing Date,
duly authorized by the Operating Partnership for issuance and sale
pursuant to this Underwriting Agreement and the Indenture, and when
duly authenticated and delivered by the Trustee in accordance with the
terms of the Indenture (assuming the due authorization, execution and
delivery of the Indenture by the Trustee), and delivered to, and paid
for in full by, the Underwriters pursuant to this Underwriting
Agreement, will be valid and legally binding obligations of the
Operating Partnership entitled to the benefit of the Indenture and will
be enforceable against the Company in accordance with their terms,
subject to (a) applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, (b) general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or law), (c) the
discretion of the court before which any proceeding therefor may be
brought, and (d) applicable Federal and state securities laws and
public policy which may limit the application of provisions relating to
indemnification and contribution with respect to securities law matters
(clauses (a), (b), (c) and (d) are collectively referred to as the
"Enforceability Limitations"); the Indenture has been duly qualified
under the Trust Indenture Act and prior to the issuance of the
Securities will be duly authorized, executed and delivered by the
Operating Partnership, and assuming due authorization, execution and
delivery thereof by the Trustee, will constitute a valid and legally
binding obligation of the Operating Partnership, enforceable against
the Operating Partnership in accordance with its terms, subject to the
Enforceability Limitations; the Securities and the Indenture will
conform in all material respects to the statements relating thereto
contained in the Prospectus; and the Securities will be, in all
material respects, in the form contemplated by the Indenture.
(h) The financial statements and schedules of the
Company included or incorporated by reference in the Registration
Statement or the Prospectus present fairly the consolidated financial
condition of the Company as of the respective dates thereof and the
consolidated results of operations and cash flows of the Company for
the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in
the Prospectus. The pro forma financial statements of the Company, if
any, included in the Registration Statement and the Prospectus comply
in all material respects with the applicable requirements of Rule 11-02
of Regulation S-X of the Commission and the pro forma adjustments have
been properly applied to the historical amounts in the compilation of
such statements. No other financial statements or schedules of the
Company are required by the Act, the Exchange Act or the Rules and
Regulations to be included in the Registration Statement or the
Prospectus. Xxxxxx Xxxxxxxx LLP, independent public accountants (the
"Accountants"), who have reported on those of such financial statements
and schedules which are audited, are independent accountants with
respect to the Company as required by the Act and the Rules and
Regulations. The statements included in the Registration Statement with
respect to the Accountants pursuant to Rule 509 of Regulation S-K of
the Rules and Regulations are true and correct in all material
respects.
(i) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
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accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences.
(j) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus
and prior to the Closing Date, except as set forth in or contemplated
by the Registration Statement and the Prospectus, (i) there has not
been and will not have been any change in the capitalization of the
Company, or in the business, properties, business prospects, condition
(financial or otherwise) or results of operations of the Company and
its subsidiaries, arising for any reason whatsoever, other than
pursuant to the REIT's dividend reinvestment plan or by way of grants
of Common Shares or options to purchase Common Shares or the exercise
of such options, in any such case under the Company's Fourth Amended
and Restated 1994 Share Option and Incentive Plan, as amended, (ii)
neither the Company nor any of its subsidiaries has incurred nor will
it incur any material liabilities or obligations, direct or contingent,
nor has it entered into nor will it enter into any material
transactions other than pursuant to this Agreement and the transactions
referred to herein and (iii) the Company has not and will not have paid
or declared any dividends or other distributions of any kind on any
class of its capital stock.
(k) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for,
an "investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
(l) Except as set forth in the Registration Statement
and the Prospectus, there are no actions, suits or proceedings pending
or threatened against or affecting the Company or any of its
subsidiaries or any of their respective officers in their capacity as
such, before or by any Federal or state court, commission, regulatory
body, administrative agency or other governmental body, domestic or
foreign, wherein an unfavorable ruling, decision or finding might
materially and adversely affect the Company or any of its subsidiaries
or its business, properties, business prospects, condition (financial
or otherwise) or results of operations.
(m) The Company and each of its subsidiaries has, and
at the Closing Date will have, (i) all governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to carry
on its business as contemplated in the Prospectus, except where failure
to obtain any of the foregoing will not have a material adverse effect
on the business, properties, business prospects, condition (financial
or otherwise) or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Effect"), (ii)
complied in all material respects with all laws, regulations and orders
applicable to it or its business except where failure to comply with
any of the foregoing would not have a Material Adverse Effect, and
(iii) performed all its material obligations required to be performed
by it, and is not, and at the Closing Date will not be, in default,
under any indenture, mortgage, deed of trust, voting trust agreement,
loan agreement, bond, debenture, note agreement, lease, contract or
other agreement or instrument (collectively, a "contract or other
agreement") to which it is a party or by which its property is bound or
affected, the violation of which would have a Material Adverse Effect.
To the best knowledge of the Company and each of its subsidiaries, no
other party under any contract or other agreement to which it is a
party is in default thereunder in such a manner that, individually or
in the aggregate, would have a reasonable likelihood of causing a
Material Adverse Effect. The Company is not, nor at the Closing Date
will be, in violation of any provision of its Amended and Restated
Declaration of Trust and Second Amended and Restated By-laws. No
subsidiary of the Company is, nor at the Closing Date will any of them
be, in violation of any provision in their respective charter
documents.
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(n) No consent, approval, authorization or order of,
or any filing or declaration with, any court or governmental agency or
body is required for the consummation by the Company of the
transactions on its part herein contemplated, except such as have been
obtained under the Act or the Rules and Regulations and such as may be
required under state or Canadian securities or blue sky laws or the
by-laws and rules of the National Association of Securities Dealers,
Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Securities to be sold by the Company.
(o) The Operating Partnership has full power and
authority to enter into this Agreement and the Indenture. The REIT has
full power and authority to enter into this Agreement and the
Indenture. This Agreement has been duly authorized, executed and
delivered by the REIT and the Operating Partnership and constitutes a
valid and binding agreement of the REIT and the Operating Partnership
and is enforceable against the REIT and the Operating Partnership in
accordance with the terms hereof. The performance of this Agreement and
the Indenture and the consummation of the transactions contemplated
hereby and thereby will not result in the creation or imposition of any
lien, charge or encumbrance upon any of the assets of the Company or
any of its subsidiaries pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, or give any other party a right to
terminate any of its obligations under, or result in the acceleration
of any obligation under, the Amended and Restated Declaration of Trust
or Second Amended and Restated By-laws of the REIT or the Partnership
Agreement and any other organizational documents of the Operating
Partnership or the charter documents of Gables GP or any of the
Company's subsidiaries, any contract or other agreement to which the
Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of its properties is bound or
affected, or violate or conflict with any judgment, ruling, decree,
order, statute, rule or regulation of any court or other governmental
agency or body applicable to the business or properties of the Company
or any of its subsidiaries.
(p) The Company and each of its subsidiaries has good
and marketable title to all properties and assets described in the
Prospectus as owned by it, free and clear of all liens, charges,
encumbrances or restrictions, except such as (i) are described in the
Prospectus or (ii) are not material to the business of the Company or
its subsidiaries, taken as a whole. The Company and each of its
subsidiaries has valid, subsisting and enforceable leases for the
properties described in the Prospectus as leased by it, with such
exceptions as are not material and do not materially interfere with the
use made and proposed to be made of such properties by the Company and
such subsidiaries; no tenant under any of the leases pursuant to which
the Company leases its properties has an option or right of first
refusal to purchase the premises demised under such lease; the use and
occupancy of each of the properties of the Company complies in all
material respects with all applicable codes and zoning laws and
regulations; the Company has no knowledge of any pending or threatened
condemnation or zoning change that will in any material respect affect
the size of, use of, improvements of, construction on, or access to any
of the properties of the Company; and the Company has no knowledge of
any pending or threatened proceeding or action that will in any manner
affect the size of, use of, improvements on, construction on, or access
to any of the properties of the Company.
(q) Title insurance in favor of the Company (or the
subsidiary which holds title to such property) is maintained with
respect to each of the properties owned by the Company in an amount at
least equal to the greater of (i) the cost of acquisition of such
property or (ii) the cost of construction by the Company of the
improvements located on such property (measured at the time of such
construction), except, in each case, where the failure to maintain such
title insurance would not have a Material Adverse Effect on the
condition, financial or otherwise, or
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the earnings, business affairs or business prospects of the Company and
its subsidiaries taken as a whole. Title insurance in favor of the
mortgagee is maintained in an amount equal to the maximum commitment of
the related loan.
(r) The mortgages and deeds of trust encumbering the
properties and assets described in the Prospectus are not convertible
nor does the Company hold a participating interest therein.
(s) The Company has no knowledge of (i) the unlawful
presence of any hazardous substances, hazardous materials, toxic
substances or waste materials (collectively, "Hazardous Materials") on
any of the properties owned by it, or (ii) any unlawful spills,
releases, discharges or disposal of Hazardous Materials that have
occurred or are presently occurring off such properties as a result of
any construction on or operation and use of such properties, which
presence or occurrence would have a Material Adverse Effect. In
connection with the construction or operation and use of the properties
owned by the Company, the Company represents that, as of the date of
this Agreement, it has no knowledge of any failure to comply with all
applicable local, state and federal environmental laws, regulations,
ordinances and administrative and judicial orders relating to the
generation, recycling, reuse, sale, storage, handling, transport and
disposal of any Hazardous Materials, which failure would have a
Material Adverse Effect.
(t) Property and casualty insurance in favor of the
Company is maintained with respect to each of the properties owned by
it in an amount and on such terms as is reasonable and customary for
businesses of this type.
(u) There is no document or contract of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which is not described or filed as required. All such contracts and all
contracts relating to any tax exempt financings to which the Company or
any subsidiary is a party have been duly authorized, executed and
delivered by the Company or such subsidiary, constitute valid and
binding agreements of the Company or such subsidiary and are
enforceable against the Company or such subsidiary in accordance with
the terms thereof.
(v) No statement, representation, warranty or
covenant made by the Company in this Agreement or made in any
certificate or document required by this Agreement to be delivered to
the Underwriters was or will be, when made, inaccurate, untrue or
incorrect.
(w) Neither the Company nor any of its trustees,
officers or controlling persons has taken, directly or indirectly, any
action intended, or which might reasonably be expected, to cause or
result, under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(x) No holder of securities of the Company has
rights to the registration of any securities of the Company because of
the filing of the Registration Statement.
(y) Neither the Company nor any of its subsidiaries
is involved in any material labor dispute nor, to the knowledge of the
Company, is any such dispute threatened.
(z) The Company and its subsidiaries own, or are
licensed or otherwise have the full exclusive right to use, all
material trademarks and trade names which are used in or
8
necessary for the conduct of their respective businesses as described
in the Prospectus, including, without limitation, the name "Gables" for
use in connection with residential communities. No claims have been
asserted by any person to the use of any such trademarks or trade names
or challenging or questioning the validity or effectiveness of any such
trademark or trade name. The use, in connection with the business and
operations of the Company and its subsidiaries of such trademarks and
trade names does not, to the Company's knowledge, infringe on the
rights of any person.
(aa) Neither the Company nor any of its subsidiaries
nor, to the Company's knowledge, any employee or agent of the Company
or any subsidiary has made any payment of funds of the Company or any
subsidiary or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the
Prospectus.
(bb) The REIT has continuously been organized and
operated in conformity with the requirements for qualification as a
real estate investment trust under the Internal Revenue Code of 1986,
as amended (the "Code") for all taxable years commencing with its
taxable year ended December 31, 1994. The REIT has filed an election to
be taxable as a real estate investment trust for its taxable year ended
December 31, 1994, and such election has not been terminated. The
REIT's method of operation will permit it to continue to meet the
requirements for taxation as a real estate investment trust under the
Code. The REIT intends to continue to operate in a manner which would
permit it to qualify as a real estate investment trust under the Code.
4. AGREEMENTS OF THE REIT AND THE OPERATING PARTNERSHIP.
The REIT and the Operating Partnership agree with the Underwriters as follows:
(a) The Company will cause the Prospectus Supplement
to be filed as required by Section 3(a) hereof (but only if the
Underwriters have not reasonably objected thereto by notice to the
Company after having been furnished a copy a reasonable time prior to
filing) and will notify you promptly of such filing. The Company will
not, during such period as the Prospectus is required by law to be
delivered in connection with sales of the Securities by any Underwriter
or dealer (the "Prospectus Delivery Period"), file any amendment or
supplement to the Registration Statement or the Prospectus, unless a
copy thereof shall first have been submitted to the Underwriters within
a reasonable period of time prior to the filing thereof and the
Underwriters shall not have objected thereto in good faith.
(b) The Company will notify the Underwriters
promptly, and will confirm such advice in writing, (1) when any
post-effective amendment to the Registration Statement becomes
effective, (2) of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information, (3) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose or the threat
thereof, (4) of the happening of any event during the Prospectus
Delivery Period that in the judgment of the Company makes any statement
made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading and (5) of receipt
by the Company or any representative or attorney of the Company of any
other communication from the Commission relating to the Company, the
Registration Statement, or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort
to obtain the withdrawal of such order at the earliest possible moment.
9
(c) The Company will furnish to the Underwriters,
upon request and without charge, two signed copies of the Registration
Statement and of any post-effective amendment thereto, including
financial statements and schedules, and all exhibits thereto (including
any document filed under the Exchange Act and deemed to be incorporated
by reference into the Prospectus).
(d) The Company will comply with all the provisions
of any undertakings contained in the Registration Statement.
(e) The Company will deliver to each Underwriter,
without charge, as many copies of the Prospectus containing the
Prospectus Supplement or any amendment or supplement thereto as such
Underwriter may reasonably request. The Company consents to the use of
the Prospectus or any amendment or supplement thereto by the
Underwriters and by all dealers to whom the Securities may be sold,
both in connection with the offering or sale of the Securities and for
any period of time thereafter during which the Prospectus is required
by law to be delivered in connection therewith. If during such period
of time any event shall occur which in the judgment of the Company or
counsel to the Underwriters should be set forth in the Prospectus in
order to make any statement therein, in the light of the circumstances
under which it was made, not misleading, or if it is necessary to
supplement or amend the Prospectus to comply with law, the Company will
forthwith prepare and duly file with the Commission an appropriate
supplement or amendment thereto, and will deliver to each Underwriter,
without charge, such number of copies of such supplement or amendment
to the Prospectus as such Underwriter may reasonably request. The
Company shall not file any document under the Exchange Act before the
termination of the offering of the Securities by the Underwriters if
such document would be deemed to be incorporated by reference into the
Prospectus which is not approved by the Underwriters after reasonable
notice thereof.
(f) Prior to any public offering of the Securities
the Company will cooperate with the Underwriters and counsel to the
Underwriters in connection with the registration or qualification of
the Securities for offer and sale under the securities or blue sky laws
of such jurisdictions as the Underwriters may request including,
without limitation, jurisdictions outside of the United States;
PROVIDED, that in no event shall the Company be obligated to qualify to
do business in any jurisdiction where it is not now so qualified or to
take any action which would subject it to general service of process in
any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the
date hereof, the Company will, upon request for such item by an
Underwriter, furnish to such Underwriter such financial statements and
other periodic and special reports as the Company may from time to time
distribute generally to the holders of any class of its capital stock,
and will, upon request for such item by such Underwriter, furnish to
such Underwriter a copy of each annual or other report it shall be
required to file with the Commission.
(h) The Company will make generally available to
holders of its securities as soon as may be practicable but in no event
later than the last day of the fifteenth full calendar month following
the end of the Company's current fiscal quarter, an earnings statement
(which need not be audited but shall be in reasonable detail) for a
period of 12 months beginning after the date upon which the Prospectus
Supplement is filed pursuant to Rule 424 under the Act, and satisfying
the provisions of Section 11(a) of the Act (including Rule 158 of the
Rules and Regulations).
10
(i) Whether or not the transactions contemplated by
this Agreement are consummated or this Agreement is terminated, the
Company will pay, or reimburse if paid by the Underwriters, all fees,
costs and expenses incident to the performance of the obligations of
the Company under this Agreement, including but not limited to fees,
costs and expenses of or relating to (i) the preparation, printing and
filing of the Registration Statement and exhibits to it, the Prospectus
and any amendment or supplement to the Registration Statement or the
Prospectus, (ii) the preparation and delivery of notes representing the
Securities, (iii) the printing of this Agreement and any Dealer
Agreements, (iv) furnishing (including costs of shipping and mailing)
such copies of the Registration Statement, the Prospectus and any
preliminary prospectus, and all amendments and supplements thereto, as
may be requested for use in connection with the offering and sale of
the Securities by the Underwriters or by dealers to whom Securities may
be sold, (v) filings required to be made by or on behalf of the Company
or the Underwriters and the fees and disbursements and other charges
(other than counsel for the Underwriters) in connection therewith and
filings to be made by the Company with the Commission, and the fees,
disbursements and other charges of counsel for the Company in
connection therewith, (vi) the registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of
such jurisdictions designated pursuant to Section 4(f), including the
fees, disbursements and other reasonable charges of counsel to the
Underwriters in connection therewith, and the preparation and printing
of preliminary, supplemental and final blue sky memoranda, (vii)
counsel to the Company and any surveyors, engineers, appraisers,
photographers, accountants and other professionals engaged by or on
behalf of the Company, (viii) the Trustee, (ix) preparation of slides,
overheads and other presentation material to be used in any "road show"
or other presentation to potential investors and the hotel, travel and
other expenses of the Company's employees in connection with any such
"road show" or presentation, and (x) Xxxxx'x Investors Service, Inc.
("Xxxxx'x") and Standard and Poor's Rating Services ("S&P" and,
together with Xxxxx'x, the "Rating Agencies") in connection with the
rating of the Securities at the request of the Company; PROVIDED,
HOWEVER, that with respect to any fees, disbursements and other charges
of counsel for the Underwriters in connection with the registration and
qualification of the Securities under blue sky laws and the preparation
of blue sky memorandum, the Company shall not be responsible for
counsel fees, disbursements and other charges in excess of $15,000.
(j) If this Agreement shall be terminated by the
Company pursuant to any of the provisions hereof (otherwise than
pursuant to Section 8 hereof) or if for any reason the Company shall be
unable to perform its obligations hereunder, the Company will reimburse
the Underwriters for all out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Underwriters)
reasonably incurred by it in connection herewith.
(k) The Company will not at any time, directly or
indirectly, take any action intended, or which might reasonably be
expected, to cause or result in, or which will constitute,
stabilization of the price of the Securities to facilitate the sale or
resale of any of the Securities.
(l) The Company will apply the net proceeds from the
offering and sale of the Securities to be sold by the Company in the
manner set forth in the Prospectus under "Use of Proceeds."
(m) Unless the Board of Trustees of the REIT
determines in its reasonable business judgment that continued
qualification as a "real estate investment trust" under the Code is not
in the Company's best interest, the REIT will not terminate its
election to be taxed as a "real estate investment trust" under the
Code, and the Company will use its best efforts to, and will continue
to meet the requirements to, so qualify as a "real estate investment
trust."
11
(n) The Company will take all commercially reasonable
action necessary to enable the Rating Agencies to provide their
respective credit ratings of the Company, the Operating Partnership or
the Securities, as the case may be.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS.
The obligations of the Underwriters hereunder are subject to the following
conditions:
(a) The Prospectus shall have been filed as required
by Section 3(a) and (i) no stop order suspending the effectiveness of
the Registration Statement shall have been issued and no proceedings
for that purpose shall be pending or threatened by the Commission, (ii)
no order suspending the effectiveness of the Registration Statement or
the qualification or registration of the Securities under the
securities or blue sky laws of any jurisdiction shall be in effect and
no proceeding for such purpose shall be pending before or threatened or
contemplated by the Commission or the authorities of any such
jurisdiction, (iii) any request for additional information on the part
of the staff of the Commission or any such authorities shall have been
complied with to the satisfaction of the staff of the Commission or
such authorities and (iv) after the date hereof no amendment or
supplement to the Registration Statement or the Prospectus shall have
been filed unless a copy thereof was first submitted to the
Underwriters and the Underwriters did not object thereto in good faith.
(b) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
(i) there shall not have been a material adverse change in the general
affairs, business, business prospects, properties, management,
condition (financial or otherwise) or results of operations of
Operating Partnership and its subsidiaries, taken as a whole, whether
or not arising from transactions in the ordinary course of business, in
each case other than as set forth in or contemplated by the
Registration Statement and the Prospectus and (ii) neither the Company
nor any of its subsidiaries shall have sustained any material loss or
interference with its business or properties from fire, explosion,
flood or other casualty, whether or not covered by insurance, or from
any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration
Statement and the Prospectus, if in the judgment of the Underwriters
any such development makes it impracticable or inadvisable to
consummate the sale and delivery of the Securities by the Underwriters
and at the public offering price.
(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there shall have been no litigation or other proceeding instituted
against the Company or any of its subsidiaries or any of their
respective officers or directors or trustees, as the case may be, in
their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, in which litigation or
proceeding it is reasonably probable that an unfavorable ruling,
decision or finding would have a Material Adverse Effect.
(d) Each of the representations and warranties of the
REIT and the Operating Partnership contained herein shall be true and
correct in all material respects at the Closing Date, as if made at the
Closing Date, and all covenants and agreements contained herein to be
performed on the part of the Company and all conditions contained
herein to be fulfilled or complied with by the Company at or prior to
the Closing Date, shall have been duly performed, fulfilled or complied
with.
(e) Subsequent to the execution and delivery of this
Underwriting Agreement and prior to the Closing Date, there shall not
have occurred any downgrading in the
12
rating accorded the Securities or any other debt securities of the
Company by any Rating Agency nor shall any notice have been given to
the Company of (i) any intended or potential downgrading by any Rating
Agency in such securities, or (ii) any review or possible change by any
Rating Agency that does not indicate a stable, positive or improving
rating accorded such securities.
(f) The Underwriters shall have received one or more
opinions, dated the Closing Date and satisfactory in form and substance
to the Underwriters' counsel, from Xxxxxxx, Procter LLP, counsel to the
Company, (i) to the effect set forth in EXHIBIT B and (ii) concerning
the tax matters set forth below:
(i) 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 REIT under the Code, and the Company's
method of operation, as described in the Prospectus and in
company certificates delivered to such counsel, will enable it
to continue to meet the requirements for qualification and
taxation as a REIT under the Code; and
(ii) The statements in the Prospectus
Supplement and the Prospectus under the captions "Additional
Federal Income Tax Considerations and Consequences of Your
Investment" and "Federal Income Tax Considerations and
Consequences of Your Investment," to the extent such
information constitutes matters of law, summaries of legal
matters, or legal conclusions, have been reviewed by such
counsel and are accurate in all material respects as of the
date of such opinion.
(g) The Underwriters shall have received an opinion,
dated the Closing Date, from O'Melveny & Xxxxx LLP, Underwriters'
counsel, with respect to the Registration Statement, the Prospectus and
this Agreement, which opinion shall be satisfactory in all respects to
the Underwriters.
(h) Concurrently with the execution and delivery of
this Agreement, the Accountants shall have furnished to the
Underwriters a letter, dated the date of its delivery, addressed to the
Underwriters and in form and substance satisfactory to the
Underwriters, confirming that they are independent accountants with
respect to the Company as required by the Act and the Rules and
Regulations and with respect to the financial and other statistical and
numerical information contained in the Registration Statement or
incorporated by reference therein. At the Closing Date, the Accountants
shall have furnished to the Underwriters a letter, dated the date of
its delivery, which shall confirm, on the basis of a review in
accordance with the procedures set forth in the letter from the
Accountants, that nothing has come to their attention during the period
from the date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than three days prior to the Closing
Date which would require any change in their letter dated the date
hereof if it were required to be dated and delivered at the Closing
Date.
(i) At the Closing Date, there shall be furnished to
the Underwriters an accurate certificate, dated the date of its
delivery, signed by each of the Chief Executive Officer and the Chief
Financial Officer of each of (a) Gables GP on behalf of the Operating
Partnership and (b) the REIT, in form and substance satisfactory to the
Underwriters, to the effect that:
(i) The Prospectus has been filed as
required by Section 3(a) and no stop order suspending the
effectiveness of the Registration Statement under the Act or
the blue sky laws of any jurisdiction has been issued and, to
the best of their knowledge,
13
information and belief, no proceeding for such purpose is
pending before or threatened or contemplated by the Commission
or the authorities of any such jurisdiction.
(ii) Any request for additional information
on the part of the staff of the Commission or any such
authorities has been complied with to the satisfaction of the
staff of the Commission or such authorities.
(iii) Each signer of such certificate has
carefully examined the Registration Statement and the
Prospectus (including any documents filed under the Exchange
Act and deemed to be incorporated by reference into the
Prospectus) and (A) believes that as of the date of such
certificate, such documents are true and correct in all
material respects and do not omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein not untrue or misleading and (B) does
not know of any event that has occurred as a result of which
it is necessary to amend or supplement the Prospectus in order
to make the statements therein not untrue or misleading in any
material respect and there has been no document required to be
filed under the Exchange Act and the Exchange Act Rules and
Regulations that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not
been so filed.
(iv) Each of the representations and
warranties of the Company contained in this Agreement were,
when originally made, and are, at the time such certificate is
delivered, true and correct in all material respects.
(v) Each of the covenants required to be
performed by the Company herein on or prior to the delivery of
such certificate has been duly, timely and fully performed and
each condition herein required to be complied with by the
Company on or prior to the date of such certificate has been
duly, timely and fully complied with.
(vi) Since the execution and delivery of the
Underwriting Agreement and prior to the Closing Date, there
has not occurred any downgrading in the rating accorded the
Securities or any other debt securities of the Company by any
Rating Agency nor has any notice been given to the Company of
(A) any intended or potential downgrading by any Rating Agency
in such securities, or (B) any review or possible change by
any Rating Agency that does not indicate a stable, positive or
improving rating accorded such securities.
(j) The Securities shall be qualified for sale in
such states as the Underwriters may reasonably request, each such
qualification shall be in effect and not subject to any stop order or
other proceeding on the Closing Date.
(k) The Company shall have furnished to the
Underwriters such certificates, including, without limitation, one or
more certificates of the Secretary of the REIT and the Secretary of
Gables GP on behalf of the Operating Partnership, in addition to those
otherwise specifically mentioned herein, as the Underwriters may have
reasonably requested as to the accuracy and completeness at the Closing
Date of any statement in the Registration Statement or the Prospectus
or any documents filed under the Exchange Act and deemed to be
incorporated by reference into the Prospectus, as to the accuracy at
the Closing Date of the representations and warranties of the Company
herein as to the performance by the Company of its obligations
hereunder or as to the fulfillment of the conditions concurrent and
precedent to the obligations hereunder of the Underwriters.
14
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Operating Partnership and the REIT will
indemnify and hold each Underwriter, its directors, officers, employees
and agents and each person, if any, who controls it within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act harmless
from and against any and all losses, claims, liabilities, expenses and
damages (including, but not limited to, any and all investigative,
legal and other expenses reasonably incurred in connection with, and
any and all amounts paid in settlement of, any action, suit or
proceeding between any of the indemnified parties and any indemnifying
parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred, to which any
Underwriter, or any such person may become subject under the Act, the
Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, liabilities,
expenses or damages arise out of or are based on (i) any untrue
statement or alleged untrue statement of a material fact contained in
any preliminary prospectus, the Registration Statement or the
Prospectus or any amendment or supplement to the Registration Statement
or the Prospectus or in any documents filed under the Exchange Act and
deemed to be incorporated by reference into the Prospectus, or in any
application or other document executed by or on behalf of the Company
or based on written information furnished by or on behalf of the
Company filed in any jurisdiction in order to qualify the Securities
under the securities or blue sky laws thereof or filed with the
Commission, (ii) the omission or alleged omission to state in such
document a material fact required to be stated in it or necessary to
make the statements in it, in the light of the circumstances under
which they were made, not misleading or (iii) any act or failure to act
or any alleged act or failure to act by any Underwriter in connection
with, or relating in any manner to, the Securities or the offering
contemplated hereby, and which is included as part of or referred to in
any loss, claim, damage, liability, expense or action arising out of or
based upon matters covered by clause (i) or (ii) above (PROVIDED that
the Company shall not be liable under this clause (iii) to the extent
it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, damage, liability, expense or
action resulted directly from any such acts or failures to act
undertaken or omitted to be taken by such Underwriter through its gross
negligence or willful misconduct); PROVIDED, that the Company will not
be liable to the extent that such loss, claim, damage, liability,
expense or action arises from the sale of the Securities in the public
offering to any person by any Underwriter and is based on an untrue
statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to the
Underwriter furnished in writing to the Company by such Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. This indemnity agreement will be in
addition to any liability that the Operating Partnership or the REIT
might otherwise have.
(b) Each Underwriter will indemnify and hold harmless
the Operating Partnership, the REIT, each person, if any, who controls
the Operating Partnership or the REIT within the meaning of Section 15
of the Act or Section 20 of the Exchange Act, each trustee of the REIT
and each officer of the REIT or the Operating Partnership who signs the
Registration Statement to the same extent as the foregoing indemnity
from the Operating Partnership and the REIT to each Underwriter, but
only insofar as losses, claims, damages, liabilities, expenses or
actions arise out of or are based on any untrue statement or omission
or alleged untrue statement or omission made in reliance on and in
conformity with information relating to any Underwriter furnished in
writing to the Company by such Underwriter expressly for use in the
Registration Statement or the Prospectus. This indemnity will be in
addition to any liability that each Underwriter might otherwise have;
PROVIDED, HOWEVER, that in no case shall any Underwriter be liable or
responsible for any amount in excess of the underwriting discounts and
commissions received by such Underwriter.
15
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice
of commencement of any action against such party in respect of which a
claim is to be made against an indemnifying party or parties under this
Section 6, notify each such indemnifying party of the commencement of
such action, enclosing a copy of all papers served, but the omission so
to notify such indemnifying party will not relieve it from any
liability that it may have to any indemnified party under the foregoing
provisions of this Section 6 unless, and only to the extent that, such
omission results in the forfeiture of substantive rights or defenses by
the indemnifying party. If any such action is brought against any
indemnified party and it notifies the indemnifying party of its
commencement, the indemnifying party will be entitled to participate in
and, to the extent that it elects by delivering written notice to the
indemnified party promptly after receiving notice of the commencement
of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the
action, with counsel reasonably satisfactory to the indemnified party,
and after notice from the indemnifying party to the indemnified party
of its election to assume the defense, the indemnifying party will not
be liable to the indemnified party for any legal or other expenses
except as provided below and except for the reasonable costs of
investigation subsequently incurred by the indemnified party in
connection with the defense. The indemnified party will have the right
to employ its own counsel in any such action, but the fees, expenses
and other charges of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel by the
indemnified party has been authorized in writing by the indemnifying
party, (ii) the indemnified party has reasonably concluded (based on
advice of counsel) that there may be legal defenses available to it or
other indemnified parties that are different from or in addition to
those available to the indemnifying party, (iii) a conflict or
potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to
direct the defense of such action on behalf of the indemnified party)
or (iv) the indemnifying party has not in fact employed counsel to
assume the defense of such action within a reasonable time after
receiving notice of the commencement of the action, in each of which
cases the reasonable fees, disbursements and other charges of counsel
will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and
other charges of more than one additional firm admitted to practice in
such jurisdiction at any one time for all such indemnified party or
parties. All such fees, disbursements and other charges will be
reimbursed by the indemnifying party promptly as they are incurred. An
indemnifying party will not be liable for any settlement of any action
or claim effected without its written consent (which consent will not
be unreasonably withheld); PROVIDED, HOWEVER, no indemnifying party
shall, without the prior written consent of each indemnified party,
settle or compromise or consent to the entry of any judgment in any
pending or threatened claim, action or proceeding relating to the
matters contemplated by this Section 6 (whether or not any indemnified
party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party
from all liability arising or that may arise out of such claim, action
or proceeding.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnification provided for
in the foregoing paragraphs of this Section 6 is applicable in
accordance with its terms but for any reason is held to be unavailable
from the Company or the Underwriter, the Company and the Underwriters
will contribute to the total losses, claims, liabilities, expenses and
damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted,
but after deducting any contribution received by the Company from
persons other than the Underwriters, such as persons who control the
Company within the
16
meaning of the Act, officers of the Company who signed the Registration
Statement and trustees of the Company, who also may be liable for
contribution) to which the Company and any one or more of the
Underwriters may be subject in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from
the offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover page
of the Prospectus. If, but only if, the allocation provided by the
foregoing sentence is not permitted by applicable law, the allocation
of contribution shall be made in such proportion as is appropriate to
reflect not only the relative benefits referred to in the foregoing
sentence but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements or
omissions which resulted in such loss, claim, liability, expense or
damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or
the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this
Section 6(d) were to be determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purposes) or by any
other method of allocation which does not take into account the
equitable considerations referred to herein. The amount paid or payable
by an indemnified party as a result of the loss, claim, liability,
expense or damage, or action in respect thereof, referred to above in
this Section 6(d) shall be deemed to include, for purpose of this
Section 6(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section
6(d), no Underwriter shall be required to contribute any amount in
excess of the underwriting discounts and commissions received by it and
no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution
from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as
provided in this Section 6(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this
Section 6(d), any person who controls a party to this Agreement within
the meaning of the Act will have the same rights to contribution as
that party, and each officer of the Company who signed the Registration
Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution
may be made under this Section 6(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution may
be sought from any other obligation it or they may have under this
Section 6(d). No party will be liable for contribution with respect to
any action or claim settled without its written consent (which consent
will not be unreasonably withheld).
(e) The indemnity and contribution agreements
contained in this Section 6 and the representations and warranties of
the Company contained in this Agreement shall remain operative and in
full force and effect regardless of (i) any investigation made by or on
behalf of the Underwriters, (ii) acceptance of the Securities and
payment therefor or (iii) any termination of this Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, agreements and covenants of the Company herein or
in certificates delivered pursuant hereto,
17
and the agreements of the Underwriters contained in Section 6 hereof, shall
remain operative and in full force and effect regardless of any investigation
made by or on behalf of any Underwriter or any controlling persons, or the
Company or any of its officers, trustees, or any controlling persons, and shall
survive (i) termination of this Agreement and (ii) delivery of and payment for
the Securities hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to
take up and pay for the aggregate principal amount of Securities agreed
by such Underwriter or Underwriters to be purchased hereunder, upon
tender of such Securities in accordance with the terms hereof, and the
aggregate principal amount of Securities not purchased does not
aggregate more than 10% of the total aggregate principal amount of
Securities that the Underwriters are obligated to purchase hereunder at
the Closing Date, the remaining Underwriters shall be obligated to take
up and pay for (in proportion to their respective underwriting
obligations hereunder as set forth in SCHEDULE 1 hereto except as may
otherwise be determined by you) the Securities that the withdrawing or
defaulting Underwriter or Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to
take up and pay for the aggregate principal amount of Securities agreed
by such Underwriter or Underwriters to be purchased hereunder, upon
tender of such Securities in accordance with the terms hereof, and the
principal amount of Securities not purchased aggregates more than 10%
of the total principal amount of Securities that the Underwriters are
obligated to purchase hereunder at the Closing Date, and arrangements
satisfactory to you and the Company for the purchase of such Securities
by other persons are not made within 36 hours thereafter, this
Agreement shall terminate. In the event of any such termination the
Company shall not be under any liability to any Underwriter with
respect to Securities not purchased by reason of such termination
(except to the extent provided in Section 4(j), regarding payment of
expenses, and Section 6, regarding indemnification and contribution,
hereof) nor shall any Underwriter (other than an Underwriter who shall
have failed, otherwise than for some reason permitted under this
Agreement, to purchase the amount of Securities agreed by such
Underwriter to be purchased hereunder) be under any liability to the
Company with respect to such Securities (except to the extent provided
in Section 6 hereof).
9. TERMINATION. The obligations of the Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date, by
notice to the Company from the Underwriters, without liability on the part of
the Underwriters to the Company, if, prior to delivery and payment for the
Securities, in the sole judgment of the Underwriters, (i) trading in any of the
equity securities of the Company shall have been suspended by the Commission, by
an exchange that lists such equity securities or by the National Association of
Securities Dealers Automated Quotation National Market System, (ii) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum or maximum prices shall have been generally established on
such exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by either Federal or New York State authorities or (iv) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred the
effect of any of which is such as to make it impracticable or inadvisable to
market the Securities on the terms and in the manner contemplated by the
Prospectus.
18
10. NOTICES. Notice given pursuant to any of the
provisions of this Agreement shall be in writing and, unless otherwise
specified, shall be mailed or delivered (a) if to the Company, at the office of
the Company, 0000 Xxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, Attention:
President, or (b) if to the Underwriters, to the offices of Xxxxxx Brothers
Inc., 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate
Real Estate Department. Any such notice shall be effective only upon receipt.
Any notice under Section 10 hereof may be made by telex, facsimile or telephone,
but if so made shall be subsequently confirmed in writing.
11. PARTIES. This Agreement has been and is made solely for
the benefit of the Underwriters, the Operating Partnership and the REIT and of
the controlling persons, directors, trustees, and officers referred to in
Section 6, and their respective successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. The term
"successors and assigns" as used in this Agreement shall not include a
purchaser, as such purchaser, of Securities from the Underwriters.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. COUNTERPARTS. This Agreement may be signed in two or
more counterparts with the same effect as if the signatures thereto and hereto
were upon the same instrument.
14. SEVERABILITY. In case any provision in this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
15. WAIVER OF TRIAL BY JURY. The Operating Partnership, the
REIT and each of the Underwriters each hereby irrevocably waive any right they
may have to a trial by jury in respect of any claim based upon or arising out of
this Agreement or the transactions contemplated hereby.
16. MANAGING UNDERWRITER. Any action required or
permitted to be taken by the Underwriters under this Agreement may be taken by
them jointly or by Xxxxxx Brothers Inc.
[Signature page follows.]
19
Please confirm that the foregoing correctly sets forth the
agreement among the REIT, the Operating Partnership and the Underwriters.
Very truly yours,
GABLES REALTY LIMITED PARTNERSHIP
By: GABLES GP, INC.,
General Partner
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------
Xxxxxx X. Xxxxx, Xx.,
Chief Financial Officer
GABLES RESIDENTIAL TRUST
By: /s/ Xxxxxx X. Xxxxx, Xx.
--------------------------------
Xxxxxx X. Xxxxx, Xx.,
Chief Financial Officer
Confirmed as of the date first above mentioned:
XXXXXX BROTHERS, INC.
CHASE SECURITIES INC.
FIRST UNION SECURITIES, INC.
XXXX XXXXX XXXX XXXXXX, INCORPORATED
PNC CAPITAL MARKETS, INC.
WACHOVIA SECURITIES, INC.
By: XXXXXX BROTHERS INC.
By: /s/ Xxxxxxxxx X. Xxxxx, Xx.
-------------------------------------------------
Xxxxxxxxx X. Xxxxx, Xx.
Managing Director
20
SCHEDULE 1
UNDERWRITING COMMITMENTS
AGGREGATE PRINCIPAL
UNDERWRITER AMOUNT OF SECURITIES TO
BE PURCHASED
--------------------------------------------------------------------------- ----------------------------
Xxxxxx Brothers Inc..................................................... $ 115,000,000
Chase Securities Inc.................................................... 11,666,668
First Union Securities, Inc............................................. 5,833,333
Xxxx Xxxxx Xxxx Xxxxxx, Incorporated.................................... 5,833,333
PNC Capital Markets, Inc................................................ 5,833,333
Wachovia Securities, Inc................................................ 5,833,333
--------------------------------------------------------------------------- ----------------------------
Total.............................................................. $ 150,000,000
============================
21
SCHEDULE 2
DESCRIPTION OF SECURITIES AND
PRICING INFORMATION
TITLE OF SECURITIES: 7.25% Senior Notes due 2006
AGGREGATE PRINCIPAL AMOUNT: $150,000,000
MATURITY DATE: February 15, 2006
INTEREST RATE: 7.25 % per annum from February 22,
2001
COUPON PAYMENT DATES: August 15 and February 15
(commencing August 15, 2001)
PRICE TO PUBLIC: 99.83% plus accrued interest (if
any) from February 22, 2001 to
the Delivery Date
UNDERWRITING DISCOUNT: 0.60%
NET PRICE TO OPERATING
PARTNERSHIP: 99.23 plus accrued interest (if any)
from February 22, 2001 to the
Delivery Date
ACCRUED INTEREST FROM
FEBRUARY 22, 2001 TO THE
SCHEDULED DELIVERY DATE: $0
XXXXX PROCEEDS TO BE PAID
TO THE OPERATING PARTNERSHIP: $148,845,000
DELIVERY DATE AND TIME: Thursday, February 22, 2001,
approximately 10:00 a.m. (New York
City time)
22
SCHEDULE 3
SUBSIDIARIES*
Gables Realty Limited Partnership, a Delaware limited partnership
Gables-Tennessee Properties, LLC, a Tennessee limited liability company
Gables GP, Inc., a Texas corporation
Gables East Construction, Inc., a Georgia corporation
GBP Services, Inc., a Florida corporation
Gables Central Construction, Inc., a Texas corporation
Gables Residential Services, Inc., a Texas corporation
Pin Oak Green, a Texas general partnership
Pin Oak Park Apartments, a Texas general partnership
Candlewood Gen Par, Inc., a Georgia corporation
Candlewood-Indian Creek Limited Partnership, a Georgia limited partnership
GRT Villas Gen Par, Inc. (F.K.A. Candle Creek, Inc.), a Georgia corporation
GRT Villas Limited Partnership, a Texas limited partnership
Boca Place Associates, Ltd., a Florida limited partnership
Boynton Beach I Limited Partnership, a Florida limited partnership
CM Bay Associates, a Florida general partnership
Hampton Lakes Associates, a Florida general partnership
Hampton Lakes II Associates, a Florida general partnership
Hampton Place Joint Venture, a Florida general partnership
Kings Colony Associates, Ltd., a Florida limited partnership
Xxxxxx I Limited Partnership, a Florida limited partnership
San Xxxxxxx Joint Venture, a Florida general partnership
San Remo Limited Partnership, a Florida limited partnership
TCRDAD Vinings at Boynton Beach II Limited Partnership, a Florida limited
partnership
TCRDAD Wellington Limited Partnership, a Florida limited partnership
Town Colony Associates, a Florida general partnership
Town Colony II Associates, a Florida general partnership
Gables Lions Head Limited Partnership, a Texas limited partnership
Gables Rivercrest II Limited Partnership, a Texas limited partnership
Vinings Realty Partners L.L.C., a Florida limited liability company
* EXCLUDES THE FOLLOWING ENTITIES:
- Gables Residential Apartment Portfolio JV LLC (in which the Operating
Partnership has a 20% Class B Membership Interest)
- Metropolitan Apartments Joint Venture (in which the Operating Partnership
has a 25% general partner interest)
- Arbors of Harbor Town Joint Venture (Gables-Tennessee Properties, LLC has a
50% general partner interest in Harbor Town Partners, which has a 50%
general partner interest in Arbors of Harbor Town Joint Venture)
- CMS Tennessee Multifamily Joint Venture, LP (in which the Operating
Partnership has a 1% general partner interest and a 8% limited partner
interest)
23
EXHIBIT A
INFORMATION IN REGISTRATION STATEMENT AND PROSPECTUS
FURNISHED BY THE UNDERWRITERS
The following information appearing in the Prospectus has been
furnished by the Underwriters expressly for use in the preparation of the
Prospectus:
1. The names of the Underwriters.
2. The following information contained in the
Prospectus Supplement under the caption
"Underwriting":
a. The allocation of securities between the
Underwriters in the table following the
first paragraph; and
b. The information in the paragraph titled
"Dealers' Compensation"
A-1
EXHIBIT B
OPINION OF COMPANY COUNSEL
1. The Registration Statement has been declared effective under the
1933 Act. The Prospectus has been filed with the Commission pursuant to Rule 424
under the 1933 Act. To the best of our knowledge (based solely on an oral
representation of a member of the Commission's staff), no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act and no proceeding for that purpose has been instituted or threatened by the
Commission.
2. Each of (a) the Registration Statement, when it became effective,
(b) any amendment or supplement thereto, on the date of filing and effectiveness
thereof with the Commission and (c) the Prospectus and any supplement thereto,
as of the date thereof, complied as to form in all material respects with the
requirements of the 1933 Act and the rules and regulations thereunder (other
than (i) the financial statements and schedules and other financial and
statistical information and data included therein or omitted therefrom, and (ii)
any documents incorporated by reference into the Registration Statement, as to
which we express no opinion) it being understood that, in passing upon
compliance as to the form of the Registration Statement, we assume that the
statements made therein are correct and complete.
3. The descriptions in the Registration Statement and the Prospectus
(other than the documents incorporated by reference and other than with respect
to the matters in the Prospectus under the captions "Federal Income Tax
Considerations and Consequences of Your Investment" and "Additional Federal
Income Tax Considerations and Consequences of Your Investment," for which
reference is made to our separate opinion delivered to you this day) of statutes
are accurate in all material respects and fairly present the information
required to be disclosed therein. We do not know of any statutes or legal or
governmental proceedings required to be described in the Prospectus that are not
described as required, or of any contracts or documents of a character required
to be described in the Registration Statement or Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed.
4. Neither the REIT nor the Operating Partnership (after giving effect
to the sale of the Securities) is required to be registered under the Investment
Company Act of 1940, as amended.
5. The REIT has been duly organized and is validly existing as a real
estate investment trust in good standing under the laws of the State of
Maryland. Each of the REIT and the Operating Partnership has full power and
authority to conduct its business as described in the Registration Statement and
Prospectus.
6. The Operating Partnership has been duly formed and is validly
existing as a limited partnership in good standing under the laws of the State
of Delaware. All of the issued and outstanding partnership interests of the
Operating Partnership have been duly authorized and are validly issued.
7. Each Significant Subsidiary has been duly organized and is validly
existing as a limited partnership or corporation, as the case may be, in good
standing under the laws of its state of organization or formation as set forth
on EXHIBIT 1 hereto.
8. Except as set forth in EXHIBIT 2 hereto, the REIT, directly or
through Significant Subsidiaries, is the sole record owner of all of the capital
stock or partnership interests, as the case may be, of each Significant
Subsidiary.
B-1
9. Each of the Significant Subsidiaries has corporate or partnership
power, as the case may be, and authority to conduct its business as described in
the Prospectus.
10. Each of the Operating Partnership and the Significant Subsidiaries,
respectively, is duly qualified or registered as a foreign corporation or
foreign partnership, as the case may be, to transact business and is in good
standing in each jurisdiction listed in EXHIBIT 1 hereto.
11. All of the outstanding shares of the Company identified in the
Prospectus have been duly authorized and are validly issued, fully paid and
nonassessable and conform to the description thereof in the Prospectus.
12. (i) The Securities have been duly authorized, executed and
delivered by the Operating Partnership and, when duly authenticated in
accordance with the terms of the Indenture and delivered to and paid
for by the Underwriters in accordance with the terms of the
Underwriting Agreement, will constitute valid and binding obligations
of the Company entitled to the benefits provided by the Indenture and
enforceable against the Operating Partnership in accordance with their
terms;
(ii) the Indenture has been duly authorized, executed and delivered
by the Operating Partnership and constitutes a valid and binding
agreement of the Operating Partnership enforceable against the
Operating Partnership in accordance with its terms;
(iii) the Indenture has been duly qualified under the Trust
Indenture Act;
(iv) the Indenture and the Securities conform in all material
respects to the descriptions thereof in the Registration Statement and
the Prospectus.
13. The REIT and the Operating Partnership have full power and
authority to enter into the Underwriting Agreement, and the Underwriting
Agreement has been duly authorized, executed and delivered by each of the REIT
and the Operating Partnership. To our knowledge, the issuance and sale of the
Securities to the Underwriters on the terms contemplated in the Underwriting
Agreement will not result in the creation or imposition of any lien, charge or
encumbrance upon any of the assets of the REIT, the Operating Partnership, or
any of the Significant Subsidiaries, pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default or result in the acceleration of any obligation under, (i)
the Declaration of Trust or Bylaws of the REIT, (ii) the articles or certificate
of incorporation, partnership agreement or by-laws of any of the Significant
Subsidiaries, (iii) the limited partnership agreement of the Operating
Partnership, (iv) any agreement or instrument filed as an exhibit to the
Registration Statement and incorporated therein by reference to which the REIT,
the Operating Partnership or any of the Significant Subsidiaries is a party or
by or pursuant to which any of them or their respective properties is bound,
affected or financed, or (v) any statute, rule or regulation or judgment,
ruling, decree or order, known to us, of any court or other governmental agency
or body applicable to the business or properties of the REIT, the Operating
Partnership or any of the Significant Subsidiaries (except that (i) we express
no opinion as to the securities or blue sky laws of any jurisdiction other than
the United States and (ii) insofar as compliance with the federal securities
laws of the United States is concerned, our opinions are limited to numbered
paragraphs (1), (2), (3), (4) and (14) and (iii) our opinion in this paragraph
(13) should not be interpreted to address the disclosure requirements of the
securities laws, for which we make reference to our statements following
numbered paragraph (14) below), where such violation or default, individually or
in the aggregate, might have a material adverse effect on the business,
properties, business prospects, condition (financial or otherwise) or results of
operations of the REIT, the Operating Partnership and the Significant
Subsidiaries taken as a whole.
B-2
14. To our knowledge, no consent, approval, authorization or order of,
or filing with, any court or governmental agency or body is required in
connection with the issuance or sale of the Securities by the Company, except
(i) such as have been obtained under the 1933 Act or the Securities Exchange Act
of 1934, as amended, or (ii) such as may be required under state securities laws
or the by-laws or rules of the NASD in connection with the purchase and
distribution of the Securities by the Underwriters.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process are such that we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and we make no
representation that we have independently verified the accuracy, completeness or
fairness of such statements. Without limiting the foregoing, we assume no
responsibility for, and have not independently verified, the accuracy,
completeness or fairness of the financial statements or notes thereto, financial
schedules and other financial and statistical data incorporated by reference
into the Registration Statement, and we have not examined the accounting,
financial or statistical records from which such statements and notes, schedules
and data are derived. However, in the course of our acting as counsel to the
Company in connection with the preparation of the Registration Statement and the
Prospectus and the public offering of the Securities we participated in
conferences and telephone conversations with representatives of the Company,
Xxxxxx Xxxxxxxx LLP, accountants for the Company, your representatives and
representatives of O'Melveny & Xxxxx LLP, your counsel, during which conferences
and conversations the contents of the Registration Statement and the Prospectus
and related matters were discussed. In addition, we reviewed certain documents
made available to us by the Company or otherwise in our possession.
Based on our participation in the above-mentioned conferences
and conversations, our review of the documents described above and our
understanding of applicable law, we advise you that:
(a) No facts have come to our attention which cause us to believe
that the Registration Statement (excluding the financial
statements and notes thereto, financial schedules and other
financial or statistical information and data included or
incorporated by reference therein or omitted therefrom and the
Trustee's Statement of Eligibility and Qualification on Form
T-1 (the "T-1") incorporated by reference therein, as to which
we make no statement), at the time it became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(b) No facts have come to our attention which cause us to believe
that the Prospectus (excluding the financial statements and
notes thereto, financial schedules and other financial or
statistical information and data included or incorporated by
reference therein or omitted therefrom and the T-1, as to
which we make no statement), as of its date or the date
hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
B-3
