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Exhibit 1.1
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$100,000,000
GABLES REALTY LIMITED PARTNERSHIP
6.80% SENIOR NOTES DUE 2005
UNDERWRITING AGREEMENT
DATED MARCH 18, 1998
PAINEWEBBER INCORPORATED
XXXXXX BROTHERS INC.
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$100,000,000
GABLES REALTY LIMITED PARTNERSHIP
6.80% Senior Notes due 2005
UNDERWRITING AGREEMENT
March 18, 1998
PAINEWEBBER INCORPORATED
XXXXXX BROTHERS INC.
c/o PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
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 Underwriters named in SCHEDULE 1 hereto (the
"Underwriters") the aggregate principal amounts listed in SCHEDULE 1 hereto of
the Operating Partnership's debt securities identified in SCHEDULE 2 hereto (the
"Securities"), to be issued under an indenture, dated as of March 23, 1998, as
supplemented by a First Supplemental Indenture, to be dated as of March 23,
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 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, 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 any 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 will be made available
for inspection by the Underwriters by 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
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. 333-30093) on
Form S-3 relating to the Securities, including a 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
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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). Each
form of prospectus, or prospectus and prospectus supplement, subject to
completion and heretofore made available for use in offering the
Securities, including, without limitation, the prospectus supplement
subject to completion dated March 12, 1998, is referred to herein as a
"preliminary prospectus." 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, any preliminary
prospectus 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, any preliminary 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, Prospectus or
preliminary 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, each preliminary prospectus on the date of
filing thereof with the Commission 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, any preliminary prospectus 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; each preliminary prospectus, on the date of filing thereof
with the Commission, and 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
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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, any preliminary prospectus 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, any preliminary
prospectus, the Prospectus, or any other materials, if any, permitted by
the Act.
(c) The documents incorporated or to be incorporated by
reference in the Registration Statement, any preliminary prospectus, 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 Gables Tennessee
Properties, Pin Oak Park Apartments and Pin Oak Green, which 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
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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 Second 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,
restrictions or limitations in the terms of the Series A Preferred Units
of the Operating Partnership 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.
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(h) The financial statements and schedules of the Company
included or incorporated by reference in the Registration Statement or the
Prospectus present fairly the consolidated financial condition of the
Company as of the respective dates thereof and the consolidated results of
operations and cash flows of the Company for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the entire period
involved, except as otherwise disclosed in the Prospectus. The pro forma
financial statements of the Company, if any, included in the Registration
Statement and the Prospectus comply in all material respects with the
applicable requirements of Rule 11-02 of Regulation S-X of the Commission
and the pro forma adjustments have been properly applied to the historical
amounts in the compilation of such statements. No other financial
statements or schedules of the Company are required by the Act, the
Exchange Act or the Rules and Regulations to be included in the
Registration Statement or the Prospectus. Xxxxxx Xxxxxxxx LLP, independent
public accountants (the "Accountants"), who have reported on those of such
financial statements and schedules which are audited, are independent
accountants with respect to the Company as required by the Act and the
Rules and Regulations. The statements included in the Registration
Statement with respect to the Accountants pursuant to Rule 509 of
Regulation S-K of the Rules and Regulations are true and correct in all
material respects.
(i) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded 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 Second 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.
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(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, (ii) complied in all respects
with all laws, regulations and orders applicable to it or its business and
(iii) performed all its 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 on the business, properties,
financial position or results of operations of the Company and its
subsidiaries, taken as a whole. 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 on the business, properties, business
prospects, condition (financial or otherwise) or results of operations of
the Company and its subsidiaries, taken as a whole. 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 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
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or provisions of, or constitute a default under, or give any other party a
right to terminate any of its obligations under, or result in the
acceleration of any obligation under, the Amended and Restated Declaration
of Trust or Second Amended and Restated By-laws of the REIT or the
Partnership Agreement and any other organizational documents of the
Operating Partnership or the charter documents of Gables GP or any of the
Company's subsidiaries, any contract or other agreement to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries or any of its properties is bound or affected, or
violate or conflict with any judgment, ruling, decree, order, statute,
rule or regulation of any court or other governmental agency or body
applicable to the business or properties of the Company or any of its
subsidiaries.
(p) The Company and each of its subsidiaries has good and
marketable title to all properties and assets described in the Prospectus
as owned by it, free and clear of all liens, charges, encumbrances or
restrictions, except such as (i) are described in the Prospectus or (ii)
are not material to the business of the Company or its subsidiaries, taken
as a whole. The Company and each of its subsidiaries has valid, subsisting
and enforceable leases for the properties described in the Prospectus as
leased by it, with such exceptions as are not material and do not
materially interfere with the use made and proposed to be made of such
properties by the Company and such subsidiaries; no tenant under any of
the leases pursuant to which the Company leases its properties has an
option or right of first refusal to purchase the premises demised under
such lease; the use and occupancy of each of the properties of the Company
complies in all material respects with all applicable codes and zoning
laws and regulations; the Company has no knowledge of any pending or
threatened condemnation or zoning change that will in any material respect
affect the size of, use of, improvements of, construction on, or access to
any of the properties of the Company; and the Company has no knowledge of
any pending or threatened proceeding or action that will in any manner
affect the size of, use of, improvements on, construction on, or access to
any of the properties of the Company.
(q) Title insurance in favor of the Company (or the subsidiary
which holds title to such property) is maintained with respect to each of
the properties owned by the Company in an amount at least equal to the
greater of (i) the cost of acquisition of such property or (ii) the cost
of construction by the Company of the improvements located on such
property (measured at the time of such construction), except, in each
case, where the failure to maintain such title insurance would not have a
material adverse effect on the condition, financial or otherwise, or 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
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operation and use of such properties, which presence or occurrence would
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. 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 on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its subsidiaries taken as a whole.
(t) Property and casualty insurance in favor of the Company is
maintained with respect to each of the properties owned by it in an amount
and on such terms as is reasonable and customary for businesses of this
type.
(u) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectus or to be
filed as an exhibit to the Registration Statement which is not described
or filed as required. All such contracts and all contracts relating to any
tax exempt financings to which the Company or any subsidiary is a party
have been duly authorized, executed and delivered by the Company or such
subsidiary, constitute valid and binding agreements of the Company or such
subsidiary and are enforceable against the Company or such subsidiary in
accordance with the terms thereof.
(v) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document
required by this Agreement to be delivered to the Underwriters was or will
be, when made, inaccurate, untrue or incorrect.
(w) Neither the Company nor any of its trustees, officers or
controlling persons has taken, directly or indirectly, any action
intended, or which might reasonably be expected, to cause or result, under
the Act or otherwise, in, or which has constituted, stabilization or
manipulation of the price of any security of the Company to facilitate the
sale or resale of the Securities.
(x) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
(y) Neither the Company nor any of its subsidiaries is
involved in any material labor dispute nor, to the knowledge of the
Company, is any such dispute threatened.
(z) The Company and its subsidiaries own, or are licensed or
otherwise have the full exclusive right to use, all material trademarks
and trade names which are used in or 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
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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.
(cc) The Company caused its existing loan with the Teachers
Insurance and Annuity Association to become an unsecured facility in
accordance with the terms of the loan agreement.
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 you 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
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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 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
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capital stock, and will, upon request for such item by such Underwriter,
furnish to such Underwriter a copy of each annual or other report it shall
be required to file with the Commission.
(h) The Company will make generally available to holders of
its securities as soon as may be practicable but in no event later than
the last day of the fifteenth full calendar month following the end of the
Company's current fiscal quarter, an earnings statement (which need not be
audited but shall be in reasonable detail) for a period of 12 months
beginning after the date upon which the Prospectus Supplement is filed
pursuant to Rule 424 under the Act, and satisfying the provisions of
Section 11(a) of the Act (including Rule 158 of the Rules and
Regulations).
(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,
including without limitation filings to be made by the Underwriters with
the NASD, 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. 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.
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(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 Directors 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 UNDERWRITERS. In addition to
the execution and delivery of the Price Determination Agreement, 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,
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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 materially and adversely
affect the business, properties, business prospects, condition (financial
or otherwise) or results of operations of the Company and its subsidiaries
taken as a whole.
(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 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 & Xxxx LLP, counsel to the
Company, (i) to the effect set forth in EXHIBIT B and (ii) concerning the
qualification of the Company as a real estate investment trust under the
Code.
(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.
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(h) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Underwriters a
letter, dated the date of its delivery, addressed to the Underwriters and
in form and substance satisfactory to the Underwriters, confirming that
they are independent accountants with respect to the Company as required
by the Act and the Rules and Regulations and with respect to the financial
and other statistical and numerical information contained in the
Registration Statement or incorporated by reference therein. At the
Closing Date, the Accountants shall have furnished to the Underwriters a
letter, dated the date of its delivery, which shall confirm, on the basis
of a review in accordance with the procedures set forth in the letter from
the Accountants, that nothing has come to their attention during the
period from the date of the letter referred to in the prior sentence to a
date (specified in the letter) not more than three days prior to the
Closing Date which would require any change in their letter dated the date
hereof if it were required to be dated and delivered at the Closing Date.
(i) At the Closing Date, there shall be furnished to the
Underwriters an accurate certificate, dated the date of its delivery,
signed by each of the Chief Executive Officer and the Chief Financial
Officer of each of (a) Gables GP on behalf of the Operating Partnership
and (b) the REIT, in form and substance satisfactory to the Underwriters,
to the effect that:
(i) The Prospectus has been filed as required by Section 3(a)
and no stop order suspending the effectiveness of the Registration
Statement 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.
(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 is in
effect 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.
(iii) 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.
(iv) 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) 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) no event 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.
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(v) 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.
(vi) 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.
(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.
(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) Prior to the Closing Date, the Securities shall have been
duly authorized for listing by the New York Stock Exchange upon official
notice of issuance.
(l) The Company shall have furnished to the Underwriters such
certificates, including, without limitation, one or more certificates of
the Secretary of the REIT and the Secretary of Gables GP on behalf of the
Operating Partnership, in addition to those otherwise specifically
mentioned herein, as the Underwriters may have reasonably requested as to
the accuracy and completeness at the Closing Date 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 harmless each Underwriter, the directors, officers, employees and
agents of each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act 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
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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 and filed in any jurisdiction in
either case in order to qualify the Securities under the securities 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 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, liability, expense or damage
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, liability, expense or damage 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, liability, expense or damage arises from the sale
of the Securities in the public offering to any person by any Underwriter
and is based on an untrue statement or omission or alleged untrue
statement or omission made in reliance on and in conformity with
information relating to the Underwriter furnished in writing to the
Company by such Underwriter expressly for inclusion in the Registration
Statement, any preliminary prospectus or the Prospectus. This indemnity
agreement will be in addition to any liability that the Operating
Partnership or the REIT might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Operating Partnership, the REIT, each person, if any, who controls the
Operating Partnership or the REIT within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act, each trustee of the REIT and each
officer of the REIT or the Operating Partnership who signs the
Registration Statement to the same extent as the foregoing indemnity from
the Operating Partnership and the REIT to each Underwriter, but only
insofar as losses, claims, liabilities, expenses or damages 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
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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 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 (1)
the employment of counsel by the indemnified party has been authorized in
writing by the indemnifying party, (2) 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, (3) 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
(4) 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 separate 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). 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,
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officers of the Company who signed the Registration Statement and trustees
of the Company, who also may be liable for contribution) to which the
Company and any one or more of the Underwriters may be subject in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriters on the other.
The relative benefits received by the Company on the one hand and the
Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters, in each case as set forth in the
table on the cover page of the Prospectus. If, but only if, the allocation
provided by the foregoing sentence is not permitted by applicable law, the
allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one
hand, and the Underwriters, on the other, with respect to the statements
or omissions which resulted in such loss, claim, liability, expense or
damage, or action in respect thereof, as well as any other relevant
equitable considerations with respect to such offering. Such relative
fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or
the Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement
or omission. The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 6(d) were to
be determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purposes) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as
a result of the loss, claim, liability, expense or damage, or action in
respect thereof, referred to above in this Section 6(d) shall be deemed to
include, for purpose of this Section 6(d), any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discounts and
commissions received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) will be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations to contribute
as provided in this Section 6(d) are several in proportion to their
respective underwriting obligations and not joint. For purposes of this
Section 6(d), any person who controls a party to this Agreement within the
meaning of the Act will have the same rights to contribution as that
party, and each officer of the Company who signed the Registration
Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim for contribution may
be made under this Section 6(d), will notify any such party or parties
from whom contribution may be sought, but the omission so to notify will
not relieve the party or parties from whom contribution may be sought from
any other obligation it or they may have under this Section 6(d). No party
will be liable for contribution with respect to any action or claim
settled without its written consent (which consent will not be
unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained
in this Agreement shall
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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).
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
20
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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 Underwriters, 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 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.
[Signature page follows.]
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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:
PAINEWEBBER INCORPORATED
XXXXXX BROTHERS INC.
By: PAINEWEBBER INCORPORATED
By: /s/ Xxxxxxxxx X. Xxxxx, Xx.
--------------------------------------
Xxxxxxxxx X. Xxxxx, Xx.
Managing Director
S - 1
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SCHEDULE 1
UNDERWRITING COMMITMENTS
Aggregate Principal
Amount of Securities
Underwriter to be Purchased
----------------------------------------------- ---------------------
PaineWebber Incorporated....................... $60,000,000
Xxxxxx Brothers Inc............................ 40,000,000
---------------------
Total.................................... $100,000,000
=====================
Schedule 1 - Page 1
25
SCHEDULE 2
DESCRIPTION OF SECURITIES AND
PRICING INFORMATION
TITLE OF SECURITIES: 6.80% Senior Notes due 2005
AGGREGATE PRINCIPAL AMOUNT: $100,000,000
MATURITY DATE: March 15, 2005
INTEREST RATE: 6.80% per annum from March 15, 1998
COUPON PAYMENT DATES: March 15 and September 15
PRICE TO PUBLIC: 99.751% plus accrued interest from March
15, 1998 to the Delivery Date
UNDERWRITING DISCOUNT: 0.625%
NET PRICE TO OPERATING
PARTNERSHIP: 99.126% plus accrued interest from
March 15, 1998 to the Delivery Date
ACCRUED INTEREST FROM
MARCH 15, 1998 TO THE
DELIVERY DATE: $151,111.11
GROSS PROCEEDS TO BE PAID
TO THE OPERATING PARTNERSHIP: $99,277,111.11
DELIVERY DATE AND TIME: March 23, 1998, 10:00 a.m. (New York City
time)
Schedule 2 - Page 1
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SCHEDULE 3
SUBSIDIARIES
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
Alpha Insurance Agency, Inc., a Georgia 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
Schedule 3 - Page 1
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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 following information contained in the Prospectus Supplement
under the heading "Underwriting":
a. The allocation of securities between the Underwriters in
the first paragraph; and
b. The information in the second paragraph.
Exhibit A - Page 1
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
Gables-Tennessee Properties, Pin Oak Park Apartments and Pin Oak Green, which
are general partnerships, is
Exhibit B - Page 1
29
validly existing as a limited partnership or corporation, as the case may be, in
good standing under the laws of its state of organization or formation as set
forth on EXHIBIT 1 hereto.
8. Except as set forth in EXHIBIT 2 hereto, the REIT, directly or through
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
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
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 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
Exhibit B - Page 2
30
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 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
by-laws or rules of the NASD in connection with the purchase and distribution of
the Securities by the Underwriters.
The limitations inherent in the independent verification of factual
matters and the character of determinations involved in the registration process
are such that we are not passing upon and do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and we make no representation that we
have independently verified the accuracy, completeness or fairness of such
statements. Without limiting the foregoing, we assume no responsibility for, and
have not independently verified, the accuracy, completeness or fairness of the
financial statements or notes thereto, financial schedules and other financial
and statistical data incorporated by reference into the Registration Statement,
and we have not examined the accounting, financial or statistical records from
which such statements and notes, schedules and data are derived. However, in the
course of our acting as counsel to the Company in connection with the
preparation of the Registration Statement and the Prospectus and the public
offering of the Securities we participated in conferences and telephone
conversations with representatives of the Company, Xxxxxx Xxxxxxxx LLP,
accountants for the Company, your representatives and representatives of
O'Melveny & Xxxxx LLP, your counsel, during which conferences and conversations
the contents of the Registration Statement and the Prospectus and related
matters were discussed. In addition, we reviewed certain documents made
available to us by the Company or otherwise in our possession.
Based on our participation in the above-mentioned conferences and
conversations, our review of the documents described above and our understanding
of applicable law, we advise you that:
(a) No facts have come to our attention which cause us to believe that
the Registration Statement (excluding the financial statements and
notes thereto, financial schedules and other financial or
statistical information and data included or incorporated by
reference therein or omitted therefrom and the Trustee's Statement
of Eligibility and Qualification on Form T-1 (the "T-1")
incorporated by reference therein, as to which we make no
statement), at the time it became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and
Exhibit B - Page 3
31
(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.
Exhibit B - Page 4
