Exhibit 1.1
$180,000,000
GABLES REALTY LIMITED PARTNERSHIP
5.75% SENIOR NOTES DUE 2007
UNDERWRITING AGREEMENT
DATED JUNE 28, 2002
WACHOVIA SECURITIES, INC.
X.X. XXXXXX SECURITIES INC.
$180,000,000
GABLES REALTY LIMITED PARTNERSHIP
5.75 % Senior Notes due 2007
UNDERWRITING AGREEMENT
June 28, 2002
WACHOVIA SECURITIES, INC.
X.X. XXXXXX SECURITIES INC.
As representatives of the several underwriters
c/o Wachovia Securities, Inc.
Riverfront Plaza, West Tower
000 Xxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxx, Xxxxxxxx 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"), for whom Wachovia Securities, Inc. and X.X. Xxxxxx Securities
Inc. are acting as representatives, 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, a Fourth Supplemental Indenture, dated as of February 22, 2001 and a Fifth
Supplemental Indenture, to be dated as of July 8, 2002 each by and between the
Operating Partnership and Wachovia Bank, National Association (formerly known as
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.
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.
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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 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
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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
registration statement filed by the Company pursuant to Rule 462(b)
(Registration No. 333-91576) under the Securities Act is called the "Rule
462(b) Registration Statement", and from and after the date and time of
filing of the Rule 462(b) Registration Statement the term "Registration
Statement" shall also include the Rule 462(b) Registration Statement. 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, 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 Xxxxxx Xxxxxxxx LLP pursuant to Rule 509 of
Regulation S-K of the Rules and Regulations are true and correct in all
material respects. Additionally, any statements required by the Rules and
Regulations of the Act have been added to, or incorporated by reference
in, the Prospectus Supplement, reflecting that the Company terminated its
engagement of Xxxxxx Xxxxxxxx LLP and engaged Deloitte & Touche LLP,
independent public accountants.
(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
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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 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
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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.
(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
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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 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.
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(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 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
9
Statement, the Company will make every reasonable effort to obtain the
withdrawal of such order at the earliest possible moment.
(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
10
satisfying the provisions of Section 11(a) of the Act (including Rule 158
of the Rules and Regulations).
(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.
("Moody's") and Standard and Poor's Rating Services ("S&P" and, together
with Moody's, 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
11
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."
(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
12
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 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, Deloitte & Touche LLP 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, Deloitte & Touche LLP 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 Deloitte & Touche LLP, 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
13
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,
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) All of the statements made in the Company's audited
financial statements and notes thereto set forth in the Company's
Annual Report on 10-K for the year ended December 31, 2001 (the
"2001 Annual Report") are true, correct and complete as of the
date appearing on such statements and, since the date of the
filing of the 2001 Annual Report, no event has occurred or
condition exists which would cause the undersigned to doubt the
accuracy or completeness of such financial statements, in each
case in accordance with U.S. generally accepted accounting
principals.
(vii) 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.
14
(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 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.
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
15
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.
(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
16
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 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
17
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, 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).
18
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
proceed with the offering, sale or delivery of the Securities on the terms and
in the manner contemplated by the Prospectus.
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 Wachovia Securities, Inc. 000 Xxxxx Xxxxxxx
Xxxxxx, XX-0, Xxxxxxxxx, XX 00000, Attention: Syndicate Desk. 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
Wachovia Securities, 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:
WACHOVIA SECURITIES, INC.
X.X. XXXXXX SECURITIES INC.
BANC OF AMERICA SECURITIES LLC
PNC CAPITAL MARKETS, INC.
SUNTRUST CAPITAL MARKETS, INC.
XXXXX FARGO BROKERAGE SERVICES, LLC
AMSOUTH BANK
SOUTHTRUST SECURITIES, INC.
By: X.X. XXXXXX SECURITIES INC.
WACHOVIA SECURITIES, INC.,
as representatives of the several underwriters
By: WACHOVIA SECURITIES, INC.,
By: /s/ XXXXXXX XXXXXX
-------------------------------------
AUTHORIZED SIGNATORY
S-1
SCHEDULE 1
UNDERWRITING COMMITMENTS
AGGREGATE PRINCIPAL
UNDERWRITER AMOUNT OF SECURITIES TO
BE PURCHASED
--------------------------------------------------------------------------- ----------------------------
Wachovia Securities, Inc................................................ $72,000,000
X.X. Xxxxxx Securities Inc.............................................. 72,000,000
Banc of America Securities LLC ......................................... 8,100,000
PNC Capital Markets, Inc................................................ 8,100,000
SunTrust Capital Markets, Inc........................................... 8,100,000
Xxxxx Fargo Brokerage Services, LLC..................................... 8,100,000
AmSouth Bank............................................................ 1,800,000
Southtrust Securities, Inc.............................................. 1,800,000
------------------------------------------------------------------------------------------------------------
Total.............................................................. $180,000,000
============================
Schedule 1-1
SCHEDULE 2
DESCRIPTION OF SECURITIES AND
PRICING INFORMATION
TITLE OF SECURITIES: 5.75% Senior Notes due 2007
-------------------
AGGREGATE PRINCIPAL AMOUNT: $180,000,000
--------------------------
MATURITY DATE: July 15, 2007
-------------
INTEREST RATE: 5.75% per annum from July 8, 2002
-------------
COUPON PAYMENT DATES: January 15 and July 15
-------------------- (commencing January 15, 2003)
PRICE TO PUBLIC: 99.732% plus accrued interest
--------------- (if any) from July 8, 2002 to the
Delivery Date
UNDERWRITING DISCOUNT: 0.60%
---------------------
NET PRICE TO OPERATING
PARTNERSHIP: 99.132% plus accrued interest
---------------------- (if any) from July 8, 2002 to the
Delivery Date
ACCRUED INTEREST FROM
JULY 8, 2002 TO THE
SCHEDULED DELIVERY DATE: $0
--------------------------
PROCEEDS TO BE PAID
TO THE OPERATING PARTNERSHIP: $178,437,600.00
-------------------------------
DELIVERY DATE AND TIME: Monday, July 8, 2002,
---------------------- approximately 10:00 a.m.
(
New York City time)
Schedule 2-1
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:
o Gables Residential Apartment Portfolio JV LLC (in which the Operating
Partnership has a 20% Class B Membership Interest)
o Metropolitan Apartments Joint Venture (in which the Operating Partnership
has a 25% general partner interest)
o 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)
o CMS Tennessee Multifamily Joint Venture, LP (in which the Operating
Partnership has a 1% general partner interest and a 8% limited partner
interest)
Schedule 3-1
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 among 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 (which term, for purposes of this opinion,
includes any Rule 462(b) 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.
B-1
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.
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)
B-2
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.
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, previous
accountants for the Company and Deloitte & Touche 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
EXHIBIT 1 TO OPINION OF COMPANY COUNSEL
SIGNIFICANT SUBSIDIARIES OF THE COMPANY
JURISDICTION OF
NAME ORGANIZATION OR FORMATION FOREIGN QUALIFICATIONS
--------------------------------- ------------------------- ----------------------
Gables Realty Limited Partnership Delaware GA, TX, FL
Gables GP, Inc. Texas GA, FL
Gables Residential Services, Inc. Texas AZ, CA, CO, OH, MI, NC, SC, FL,
LA, TN, KY, MD, PA, VA
B-4
EXHIBIT 2 TO OPINION OF COMPANY COUNSEL
CAPITALIZATION OF SIGNIFICANT SUBSIDIARIES
GABLES GP, INC.
Common Stock: Company 100%
GABLES REALTY LIMITED PARTNERSHIP (as of June 28, 2002)
Limited Partnership Units: 5,958,058 Units owned by persons other than (19.34%)
the Company or Gables GP, Inc.
Limited Partnership Units: 24,535,497 Units owned by the Company (79.66%)
General Partnership Units: 308,016 Units owned by Gables GP, Inc. (1%)
Series A Preferred Units: 4,554,000 Series A Preferred Units owned by (99%)
the Company
46,000 Series A Preferred Units owned by (1%)
Gables GP, Inc.
Series Z Preferred Units: 178,200 Series Z Preferred Units owned by the (99%)
Company
1,800 Series Z Preferred Units owned by (1%)
Gables GP, Inc.
Series B Preferred Units 2,000,000 Series B Preferred Units owned by (100%)
persons other than the Company or Gables GP,
Inc.
GABLES RESIDENTIAL SERVICES, INC.
Class A Common Stock (voting) Operating Partnership 200 Shares
Class B Common Stock (nonvoting): Operating Partnership 19,600 Shares
B-5
