1
EXHIBIT 1.1
$15,000,000
GABLES REALTY LIMITED PARTNERSHIP
6.600% SENIOR NOTES DUE 2001
UNDERWRITING AGREEMENT
DATED OCTOBER 5, 1998
PAINEWEBBER INCORPORATED
2
$15,000,000
GABLES REALTY LIMITED PARTNERSHIP
6.600% Senior Notes due 2001
UNDERWRITING AGREEMENT
October 5, 1998
PAINEWEBBER INCORPORATED
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 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 Underwriter named in SCHEDULE 1 hereto (the
"Underwriter") 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,
and a Third Supplemental Indenture, to be dated as of October 8, 1998, each by
and between the Operating Partnership and First Union National Bank (the
"Trustee"), as trustee (as so supplemented, the "Indenture").
The REIT and the Operating Partnership confirm their
agreements with the Underwriter 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 Underwriter
as hereinafter provided, and the Underwriter agrees 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 Underwriter intends (i) to
make a public offering of the Securities, and (ii) initially to offer the
Securities upon the terms set forth in the Prospectus.
2
3
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 Underwriter 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
Underwriter of the Securities registered in such names and in such denominations
as the Underwriter 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 Underwriter 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 Underwriter, will be
made available for inspection by the Underwriter 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 Underwriter, 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 Underwriter shall be borne by the Company. The Company will pay and save the
Underwriter 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 Underwriter 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 Underwriter that:
(a) The Operating Partnership meets the
requirements for use of Form S3 and a registration statement
(Registration No. 333-30093) 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 Underwriter. A prospectus supplement (the "Prospectus
Supplement") setting forth the terms of the Securities and of their
sale and distribution has been or
3
4
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 became effective (the "Effective
Date"), including financial statements and all exhibits and any
information deemed by virtue of Rule 430A of the Rules and Regulations
to be included in such Registration Statement at the Effective Date and
any prospectus supplement filed thereafter with the Commission and
shall include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 which were filed under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). The term "Prospectus"
means, collectively, the Base Prospectus together with any prospectus
supplement, in the respective forms they are filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations, and includes the
documents incorporated by reference in the Base Prospectus and in any
prospectus supplement. Any reference herein to the terms "amend,"
"amendment" or "supplement" with respect to the Registration Statement
or the Prospectus shall be deemed to refer to and include the filing
after the execution hereof of any document with the Commission deemed
to be incorporated by reference therein. For purposes of this
Underwriting Agreement, all references to the Registration Statement,
the Prospectus or any amendment or supplement thereto shall be deemed
to include any copy filed with the Commission pursuant to its
Electronic Data Gathering Analysis and Retrieval System (XXXXX), and
such copy shall be identical (except to the extent permitted by
Regulation S-T) to any Registration Statement or Prospectus, as the
case may be, delivered to you for use in connection with the offering
of the Securities by the Operating Partnership.
(b) Each part of the Registration Statement,
when such part became or becomes effective, and the Prospectus and any
amendment or supplement thereto, on the date of filing thereof with the
Commission and at the Closing Date, including the financial statements
included or to be included or incorporated by reference or to be
incorporated by reference in the Registration Statement or the
Prospectus, conformed or will conform in all material respects with the
requirements of the Act, the Rules and Regulations, the Exchange Act
and the rules and regulations thereunder (the "Exchange Act Rules and
Regulations") and will contain all statements required to be stated
therein in accordance with the Act, the Rules and Regulations, the
Exchange Act and the Exchange Act Rules and Regulations; the Indenture,
on the date of filing thereof with the Commission and at the Closing
Date conformed or will conform in all material respects with the
requirements of the Trust Indenture Act; each part of the Registration
Statement, when such part became or becomes effective, did not or will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; the Prospectus and any amendment or
supplement thereto, on the date of filing thereof with the Commission
and at the Closing Date, did not or will not include an untrue
statement of a material fact or omit to state a material fact necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading. The foregoing representations and
warranties in this Section 3(b) do not apply to (i) that part of the
Registration Statement which constitutes the Statement of Eligibility
and Qualification under the Trust Indenture Act (the "Form T-1") and
(ii) any statements or omissions made in reliance on and in conformity
with information relating to any Underwriter furnished in writing to
the Company by such Underwriter specifically for inclusion in the
Registration Statement or the Prospectus or any amendment or supplement
thereto. The Company acknowledges that the only information furnished
in writing to the Company by the Underwriter specifically for inclusion
in the Registration Statement, any preliminary
4
5
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.
(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 Underwriter 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 Third Amended and Restated 1994 Share Option and
Incentive Plan, as amended.
5
6
(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, 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 Underwriter pursuant to this Underwriting
Agreement, will be valid and legally binding obligations of the
Operating Partnership entitled to the benefit of the Indenture and will
be enforceable against the Company in accordance with their terms,
subject to (a) applicable bankruptcy, insolvency, reorganization,
moratorium and similar laws affecting creditors' rights and remedies
generally, (b) general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or law), (c) the
discretion of the court before which any proceeding therefor may be
brought, and (d) applicable Federal and state securities laws and
public policy which may limit the application of provisions relating to
indemnification and contribution with respect to securities law matters
(clauses (a), (b), (c) and (d) are collectively referred to as the
"Enforceability Limitations"); the Indenture has been duly qualified
under the Trust Indenture Act and prior to the issuance of the
Securities will be duly authorized, executed and delivered by the
Operating Partnership, and assuming due authorization, execution and
delivery thereof by the Trustee, will constitute a valid and legally
binding obligation of the Operating Partnership, enforceable against
the Operating Partnership in accordance with its terms, subject to the
Enforceability Limitations; the Securities and the Indenture will
conform in all material respects to the statements relating thereto
contained in the Prospectus; and the Securities will be, in all
material respects, in the form contemplated by the Indenture.
(h) The financial statements and schedules of
the Company included or incorporated by reference in the Registration
Statement or the Prospectus present fairly the consolidated financial
condition of the Company as of the respective dates thereof and the
consolidated results of operations and cash flows of the Company for
the respective periods covered thereby, all in conformity with
generally accepted accounting principles applied on a consistent basis
throughout the entire period involved, except as otherwise disclosed in
the Prospectus. The pro forma financial statements of the Company, if
any, included in the Registration Statement and the Prospectus comply
in all material respects with the applicable requirements of Rule 11-02
of Regulation S-X of the Commission and the pro forma adjustments have
been properly applied to the historical amounts in the compilation of
such statements. No other financial statements or schedules of the
Company are required by the Act, the Exchange Act or the Rules and
Regulations to be included in the Registration Statement or the
Prospectus. Xxxxxx Xxxxxxxx LLP, independent public accountants (the
"Accountants"), who have reported on those of such financial statements
and schedules which are audited, are independent accountants with
respect to the Company as required by the Act and the Rules and
Regulations. The statements included in the Registration Statement
6
7
with respect to the Accountants pursuant to Rule_509 of Regulation S-K
of the Rules and Regulations are true and correct in all material
respects.
(i) The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that
(i)_transactions are executed in accordance with management's general
or specific authorization; (ii)_transactions are recorded as necessary
to permit preparation of financial statements in conformity with
generally accepted accounting principles and to maintain accountability
for assets; (iii)_access to assets is permitted only in accordance with
management's general or specific authorization; and (iv)_the recorded
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 Third
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,
7
8
in default, under any indenture, mortgage, deed of trust, voting trust
agreement, loan agreement, bond, debenture, note agreement, lease,
contract or other agreement or instrument (collectively, a "contract or
other agreement") to which it is a party or by which its property is
bound or affected, the violation of which would have a Material Adverse
Effect. To the best knowledge of the Company and each of its
subsidiaries, no other party under any contract or other agreement to
which it is a party is in default thereunder in such a manner that,
individually or in the aggregate, would have a reasonable likelihood of
causing a Material Adverse Effect. The Company is not, nor at the
Closing Date will be, in violation of any provision of its Amended and
Restated Declaration of Trust and Second Amended and Restated By-laws.
No subsidiary of the Company is, nor at the Closing Date will any of
them be, in violation of any provision in their respective charter
documents.
(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 Underwriter 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
8
9
has an option or right of first refusal to purchase the premises
demised under such lease; the use and occupancy of each of the
properties of the Company complies in all material respects with all
applicable codes and zoning laws and regulations; the Company has no
knowledge of any pending or threatened condemnation or zoning change
that will in any material respect affect the size of, use of,
improvements of, construction on, or access to any of the properties of
the Company; and the Company has no knowledge of any pending or
threatened proceeding or action that will in any manner affect the size
of, use of, improvements on, construction on, or access to any of the
properties of the Company.
(q) Title insurance in favor of the Company (or
the subsidiary which holds title to such property) is maintained with
respect to each of the properties owned by the Company in an amount at
least equal to the greater of (i) the cost of acquisition of such
property or (ii) the cost of construction by the Company of the
improvements located on such property (measured at the time of such
construction), except, in each case, where the failure to maintain such
title insurance would not have a material adverse effect on the
condition, financial or otherwise, or 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.
9
10
(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 Underwriter was or will be, when made, inaccurate, untrue or
incorrect.
(w) Neither the Company nor any of its trustees,
officers or controlling persons has taken, directly or indirectly, any
action intended, or which might reasonably be expected, to cause or
result, under the Act or otherwise, in, or which has constituted,
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(x) No holder of securities of the Company has
rights to the registration of any securities of the Company because of
the filing of the Registration Statement.
(y) Neither the Company nor any of its
subsidiaries is involved in any material labor dispute nor, to the
knowledge of the Company, is any such dispute threatened.
(z) The Company and its subsidiaries own, or are
licensed or otherwise have the full exclusive right to use, all
material trademarks and trade names which are used in or 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 Underwriter as follows:
(a) The Company will cause the Prospectus
Supplement to be filed as required by Section 3(a) hereof (but only if
the Underwriter has 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
10
11
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 Underwriter within a reasonable period of time
prior to the filing thereof and the Underwriter shall not have objected
thereto in good faith.
(b) The Company will notify the Underwriter
promptly, and will confirm such advice in writing, (1)_when any
post-effective amendment to the Registration Statement becomes
effective, (2)_of any request by the Commission for amendments or
supplements to the Registration Statement or the Prospectus or for
additional information, (3)_of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the initiation of any proceedings for that purpose or the threat
thereof, (4)_of the happening of any event during the Prospectus
Delivery Period that in the judgment of the Company makes any statement
made in the Registration Statement or the Prospectus untrue or that
requires the making of any changes in the Registration Statement or the
Prospectus in order to make the statements therein, in light of the
circumstances in which they are made, not misleading and (5)_of receipt
by the Company or any representative or attorney of the Company of any
other communication from the Commission relating to the Company, the
Registration Statement, or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort
to obtain the withdrawal of such order at the earliest possible moment.
(c) The Company will furnish to the Underwriter,
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 the Underwriter,
without charge, as many copies of the Prospectus containing the
Prospectus Supplement or any amendment or supplement thereto as the
Underwriter may reasonably request. The Company consents to the use of
the Prospectus or any amendment or supplement thereto by the
Underwriter 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 Underwriter 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 the Underwriter,
without charge, such number of copies of such supplement or amendment
to the Prospectus as the 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 Underwriter if
such document would be deemed to be incorporated by
11
12
reference into the Prospectus which is not approved by the Underwriter
after reasonable notice thereof.
(f) Prior to any public offering of the
Securities the Company will cooperate with the Underwriter and counsel
to the Underwriter 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 Underwriter 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 the
Underwriter, furnish to the 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 the Underwriter, furnish to the
Underwriter a copy of each annual or other report it shall be required
to file with the Commission.
(h) The Company will make generally available to
holders of its securities as soon as may be practicable but in no event
later than the last day of the fifteenth full calendar month following
the end of the Company's current fiscal quarter, an earnings statement
(which need not be audited but shall be in reasonable detail) for a
period of 12 months beginning after the date upon which the Prospectus
Supplement is filed pursuant to Rule 424 under the Act, and satisfying
the provisions of Section 11(a) of the Act (including Rule 158 of the
Rules and Regulations).
(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 Underwriter, 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 Underwriter or by dealers to whom Securities may
be sold, (v)_filings required to be made by or on behalf of the Company
or the Underwriter, including without limitation filings to be made by
the Underwriter with the NASD, and the fees and disbursements and other
charges (other than counsel for the Underwriter) 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 Underwriter 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
12
13
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 Underwriter 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. The filing fee paid to the NASD shall not be considered to
be "fees, disbursements or other charges" for the purposes of this
Section 4(i) and shall be paid by the Company.
(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 Underwriter for all out-of-pocket expenses (including the fees,
disbursements and other charges of counsel to the Underwriter)
reasonably incurred by it in connection herewith.
(k) The Company will not at any time, directly
or indirectly, take any action intended, or which might reasonably be
expected, to cause or result in, or which will constitute,
stabilization of the price of the Securities to facilitate the sale or
resale of any of the Securities.
(l) The Company will apply the net proceeds from
the offering and sale of the Securities to be sold by the Company in
the manner set forth in the Prospectus under "Use of Proceeds."
(m) Unless the Board of Trustees of the REIT
determines in its reasonable business judgment that continued
qualification as a "real estate investment trust" under the Code is not
in the Company's best interest, the REIT will not terminate its
election to be taxed as a "real estate investment trust" under the
Code, and the Company will use its best efforts to, and will continue
to meet the requirements to, so qualify as a "real estate investment
trust."
(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 UNDERWRITER. In
addition to the execution and delivery of the Price Determination Agreement, the
obligations of the Underwriter 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
13
14
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 Underwriter
and the Underwriter 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 Underwriter any
such development makes it impracticable or inadvisable to consummate
the sale and delivery of the Securities by the Underwriter and at the
public offering price.
(c) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there shall have been no litigation or other proceeding instituted
against the Company or any of its subsidiaries or any of their
respective officers or directors or trustees, as the case may be, in
their capacities as such, before or by any Federal, state or local
court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, in which litigation or
proceeding it is reasonably probable that an unfavorable ruling,
decision or finding would have a Material Adverse Effect.
(d) Each of the representations and warranties
of the REIT and the Operating Partnership contained herein shall be
true and correct in all material respects at the Closing Date, as if
made at the Closing Date, and all covenants and agreements contained
herein to be performed on the part of the Company and all conditions
contained herein to be fulfilled or complied with by the Company at or
prior to the Closing Date, shall have been duly performed, fulfilled or
complied with.
(e) Subsequent to the execution and delivery of
this Underwriting Agreement and prior to the Closing Date, there shall
not have occurred any downgrading in the 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 Underwriter shall have received one or
more opinions, dated the Closing Date and satisfactory in form and
substance to the Underwriter's counsel, from Xxxxxxx, Procter & Xxxx
LLP, counsel to the Company, (i) to the effect set forth in EXHIBIT_B
and (ii)
14
15
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) Subject to a discussion of the
Taxpayer Relief Act of 1997, which may be included in such
opinion, the statements in the Prospectus Supplement and the
Prospectus under the captions "Certain Federal Income Tax
Consequences" and "Federal Income Tax Considerations," 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 Underwriter shall have received an
opinion, dated the Closing Date, from O'Melveny & Xxxxx LLP,
Underwriter's counsel, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in
all respects to the Underwriter.
(h) Concurrently with the execution and delivery
of this Agreement, the Accountants shall have furnished to the
Underwriter a letter, dated the date of its delivery, addressed to the
Underwriter and in form and substance satisfactory to the Underwriter,
confirming that they are independent accountants with respect to the
Company as required by the Act and the Rules and Regulations and with
respect to the financial and other statistical and numerical
information contained in the Registration Statement or incorporated by
reference therein. At the Closing Date, the Accountants shall have
furnished to the Underwriter a letter, dated the date of its delivery,
which shall confirm, on the basis of a review in accordance with the
procedures set forth in the letter from the Accountants, that nothing
has come to their attention during the period from the date of the
letter referred to in the prior sentence to a date (specified in the
letter) not more than three days prior to the Closing Date which would
require any change in their letter dated the date hereof if it were
required to be dated and delivered at the Closing Date.
(i) At the Closing Date, there shall be
furnished to the Underwriter an accurate certificate, dated the date of
its delivery, signed by each of the Chief Executive Officer and the
Chief Financial Officer of each of (a) Gables GP on behalf of the
Operating Partnership and (b) the REIT, in form and substance
satisfactory to the Underwriter, 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
15
16
Commission or any such authorities has been complied with to
the satisfaction of the staff of the Commission or such
authorities.
(iii) Each signer of such certificate has
carefully examined the Registration Statement and the
Prospectus (including any documents filed under the Exchange
Act and deemed to be incorporated by reference into the
Prospectus) and (A) believes that as of the date of such
certificate, such documents are true and correct in all
material respects and do not omit to state a material fact
required to be stated therein or necessary in order to make
the statements therein not untrue or misleading and (B) does
not know of any event that has occurred as a result of which
it is necessary to amend or supplement the Prospectus in order
to make the statements therein not untrue or misleading in any
material respect and there has been no document required to be
filed under the Exchange Act and the Exchange Act Rules and
Regulations that upon such filing would be deemed to be
incorporated by reference into the Prospectus that has not
been so filed.
(iv) Each of the representations and
warranties of the Company contained in this Agreement were,
when originally made, and are, at the time such certificate is
delivered, true and correct in all material respects.
(v) Each of the covenants required to
be performed by the Company herein on or prior to the delivery
of such certificate has been duly, timely and fully performed
and each condition herein required to be complied with by the
Company on or prior to the date of such certificate has been
duly, timely and fully complied with.
(vi) Since the execution and delivery of
the Underwriting Agreement and prior to the Closing Date,
there has not occurred any downgrading in the rating accorded
the Securities or any other debt securities of the Company by
any Rating Agency nor has any notice been given to the Company
of (A) any intended or potential downgrading by any Rating
Agency in such securities, or (B) any review or possible
change by any Rating Agency that does not indicate a stable,
positive or improving rating accorded such securities.
(j) The Securities shall be qualified for sale
in such states as the Underwriter 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
Underwriter such certificates, including, without limitation, one or
more certificates of the Secretary of the REIT and the Secretary of
Gables GP on behalf of the Operating Partnership, in addition to those
otherwise specifically mentioned herein, as the Underwriter 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 Underwriter.
16
17
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Operating Partnership and the REIT will
indemnify and hold the 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 the
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 the 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 the 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 the 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 the Underwriter
expressly for inclusion in the Registration Statement, any preliminary
prospectus or the Prospectus. This indemnity agreement will be in
addition to any liability that the Operating Partnership or the REIT
might otherwise have.
(b) The 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 the
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 the Underwriter
furnished in writing to the Company by the Underwriter expressly for
use in the Registration Statement or the
17
18
Prospectus. This indemnity will be in addition to any liability that
the Underwriter might otherwise have; provided, however, that in no
case shall the Underwriter be liable or responsible for any amount in
excess of the underwriting discounts and commissions received by the
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 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.
18
19
(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 Underwriter
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 Underwriter, 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 the
Underwriter 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 Underwriter on the other. The relative benefits received
by the Company on the one hand and the Underwriter 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
Underwriter, 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 Underwriter, 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 Underwriter, 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 Underwriter 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 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), the Underwriter shall not 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 Underwriter's obligations to contribute as
provided in this Section 6(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this
Section 6(d), any person who controls a party to this Agreement within
the meaning of the Act will have the same rights to contribution as
that party, and each officer of the Company who signed the Registration
Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution
may be made under this Section 6(d), will notify any such party or
parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution may
be sought from any other obligation it or they may have under this
Section
19
20
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 Underwriter, (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
Underwriter contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
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. [Reserved]
9. TERMINATION. The obligations of the Underwriter under
this Agreement may be terminated at any time on or prior to the Closing Date, by
notice to the Company from the Underwriter, without liability on the part of the
Underwriter to the Company, if, prior to delivery and payment for the
Securities, in the sole judgment of the Underwriter, (i) trading in any of the
equity securities of the Company shall have been suspended by the Commission, by
an exchange that lists such equity securities or by the National Association of
Securities Dealers Automated Quotation National Market System, (ii) trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum or maximum prices shall have been generally established on
such exchange, or additional material governmental restrictions, not in force on
the date of this Agreement, shall have been imposed upon trading in securities
generally by such exchange or by order of the Commission or any court or other
governmental authority, (iii) a general banking moratorium shall have been
declared by either Federal or New York State authorities or (iv) any material
adverse change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred the
effect of any of which is such as to make it impracticable or inadvisable to
market the Securities on the terms and in the manner contemplated by the
Prospectus.
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: Xxxxxx X.
Xxxxxxx, or (b) if to the Underwriter, to the offices of PaineWebber
Incorporated, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx_Xxxx, Xxx Xxxx 00000, Attention:
Corporate Real Estate Department. Any such notice shall be effective only upon
receipt. Any notice under Section 10 hereof may be made by telex, facsimile or
telephone, but if so made shall be subsequently confirmed in writing.
11. PARTIES. This Agreement has been and is made solely
for the benefit of the Underwriter, 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
20
21
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 Underwriter.
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 the Underwriter 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.
[Signature page follows.]
21
22
Please confirm that the foregoing correctly sets forth the agreement
among the REIT, the Operating Partnership and the Underwriter.
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:
PAINEWEBBER INCORPORATED
By: /s/ Xxxxxxxxx X. Xxxxx, Xx.
--------------------------------------
Xxxxxxxxx X. Xxxxx, Xx.
Managing Director
22
23
SCHEDULE 1
UNDERWRITING COMMITMENTS
Aggregate Principal
Underwriter Amount of Securities
to be Purchased
=============================================== =============================
PaineWebber Incorporated....................... 15,000,000
=============================
Total................................. $15,000,000
=============================
23
24
SCHEDULE 2
DESCRIPTION OF SECURITIES AND
PRICING INFORMATION
TITLE OF SECURITIES: 6.600% Senior Notes due 2001
AGGREGATE PRINCIPAL AMOUNT: $15,000,000
MATURITY DATE: October 1, 2001
INTEREST RATE: 6.600% per annum from October 1, 1998
COUPON PAYMENT DATES: April 1 and October 1
PRICE TO PUBLIC: 100.00% plus accrued interest from
October 1, 1998 to the Delivery Date
UNDERWRITING DISCOUNT: 0.350%
NET PRICE TO OPERATING
PARTNERSHIP: 99.650% plus accrued interest from
October 1, 1998 to the Delivery Date
ACCRUED INTEREST FROM
OCTOBER 1, 1998 TO THE
DELIVERY DATE: $19,250.00
GROSS PROCEEDS TO BE PAID
TO THE OPERATING PARTNERSHIP: $14,947,500.00 plus accrued interest from
October 1, 1998 to the Delivery Date
24
25
DELIVERY DATE AND TIME: Thursday, October 8, 1998, 10:00 a.m.
(New York City time)
25
26
SCHEDULE 3
SUBSIDIARIES
Gables Realty Limited Partnership, a Delaware limited partnership
Gables-Tennessee Properties, a Tennessee general partnership
Gables GP, Inc., a Texas corporation
Gables East Construction, Inc., a Georgia corporation
East Apartment Management, Inc., a Georgia corporation
Gables Central Construction, Inc., a Texas corporation
Central Apartment Management, 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
26
27
EXHIBIT_A
INFORMATION IN REGISTRATION STATEMENT AND PROSPECTUS
FURNISHED BY THE UNDERWRITER
The following information appearing in the Prospectus has been
furnished by the Underwriter expressly for use in the preparation of the
Prospectus:
1. The names of the Underwriter.
2. The following information contained in the Prospectus
Supplement under the heading "Underwriting":
a. The information in the second paragraph.
27
28
EXHIBIT_B
OPINION OF COMPANY COUNSEL
1. The Registration Statement has been declared effective under
the 1933 Act. The Prospectus has been filed with the Commission pursuant to Rule
424 under the 1933 Act. To the best of our knowledge (based solely on an oral
representation of a member of the Commission's staff), no stop order suspending
the effectiveness of the Registration Statement has been issued under the 1933
Act and no proceeding for that purpose has been instituted or threatened by the
Commission.
2. Each part of the Registration Statement, when such part became
effective, and the Prospectus and any amendment or supplement thereto, on the
date of filing thereof with the Commission and as of the date hereof, 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," 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 Subsidiary has been duly organized and, except for
Subsidiaries which are general partnerships, 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.
28
29
8. Except as set forth in EXHIBIT 2 hereto, the REIT, directly or
through Subsidiaries, is the sole record owner of all of the capital stock or
partnership interests, as the case may be, of each Subsidiary.
9. Each of the 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 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 Underwriter 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 Underwriter 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 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 bylaws of any of the 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 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 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
29
30
the federal securities laws of the United States is concerned, our opinions are
limited to numbered paragraphs (1), (2), (3), (4) and (14) and (iii) our opinion
in this paragraph (13) should not be interpreted to address the disclosure
requirements of the securities laws, for which we make reference to our
statements following numbered paragraph (14) below), where such violation or
default, individually or in the aggregate, might have a material adverse effect
on the business, properties, business prospects, condition (financial or
otherwise) or results of operations of the REIT, the Operating Partnership and
the 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 bylaws or rules of the NASD in connection with the purchase and
distribution of the Securities by the Underwriter.
The limitations inherent in the independent verification of
factual matters and the character of determinations involved in the registration
process are such that we are not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus and we make no
representation that we have independently verified the accuracy, completeness or
fairness of such statements. Without limiting the foregoing, we assume no
responsibility for, and have not independently verified, the accuracy,
completeness or fairness of the financial statements or notes thereto, financial
schedules and other financial and statistical data incorporated by reference
into the Registration Statement, and we have not examined the accounting,
financial or statistical records from which such statements and notes, schedules
and data are derived. However, in the course of our acting as counsel to the
Company in connection with the preparation of the Registration Statement and the
Prospectus and the public offering of the Securities we participated in
conferences and telephone conversations with representatives of the Company,
Xxxxxx Xxxxxxxx LLP, accountants for the Company, your representatives and
representatives of O'Melveny & Xxxxx LLP, your counsel, during which conferences
and conversations the contents of the Registration Statement and the Prospectus
and related matters were discussed. In addition, we reviewed certain documents
made available to us by the Company or otherwise in our possession.
Based on our participation in the above-mentioned conferences
and conversations, our review of the documents described above and our
understanding of applicable law, we advise you that:
(a) No facts have come to our attention which cause us to believe
that the Registration Statement (excluding the financial
statements and notes thereto, financial schedules and other
financial or statistical information and data included or
incorporated by reference therein or omitted therefrom and the
Trustee's Statement of Eligibility and Qualification on Form
T-1 (the "T-1") incorporated by reference therein, as to which
we make no statement), at the time it became effective,
contained an untrue statement of a material fact or omitted to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and
(b) No facts have come to our attention which cause us to believe
that the Prospectus (excluding the financial statements and
notes thereto, financial schedules and other financial or
statistical information and data included or incorporated by
reference
30
31
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.
31
