EXHIBIT 1.1
MID-AMERICA APARTMENT COMMUNITIES, INC.
9.5% Cumulative Preferred Stock
UNDERWRITING AGREEMENT
October 10, 1996
XXXXXX XXXXXX & COMPANY, INC.
X.X. XXXXXXXX & CO.
c/o Xxxxxx Xxxxxx & Company, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Dear Sirs:
Mid-America Apartment Communities, Inc., a Tennessee
corporation (the "Company"), proposes to issue and sell to Xxxxxx
Xxxxxx & Company, Inc. and X.X. Xxxxxxxx & Co. (the
"Underwriters," which term shall also include any underwriters
substituted as provided in Section 10 hereof) an aggregate of
1,750,000 shares of 9.5% Cumulative Preferred Stock, $.01 par
value per share (the "Preferred Stock") of the Company (the "Firm
Shares"). The Firm Shares are to be sold to each Underwriter,
acting severally and not jointly, in such amounts as are set
forth in Schedule A opposite the name of such Underwriter.
The Company also grants to the Underwriters, severally and
not jointly, the option described in Section 2 to purchase, on
the same terms as the Firm Shares, up to 250,000 additional
shares of Preferred Stock (the "Option Shares") solely to cover
over-allotments. The Firm Shares, together with all or any part
of the Option Shares, are collectively herein called the
"Shares." Capitalized terms used and not otherwise defined
herein shall have the meanings set forth in the Registration
Statement, as defined below.
Section 1. Representations and Warranties of the Company.
The Company and the Partnership jointly and severally represent
and warrant to each of the Underwriters as follows:
(a) The Company has filed with the Securities and
Exchange Commission (the "Commission") a registration
statement, on Form S-3 registration number 333-3274, and
Amendments Xx. 0, Xx. 0, Xx. 0 and No. 4 thereto, including
the related prospectus included in the Registration
Statement, for the registration under the Securities Act of
1933 (the "1933 Act"), as amended, and the rules and
regulations of the Commission thereunder (the "1933 Act
Regulations"), of the offering and sale of up to
$150,000,000 aggregate issue price of securities, including
the Shares. The Company may have filed one or more
additional amendments thereto, including each related
prospectus, and one or more preliminary prospectus
supplements thereto, each of which has previously been
furnished to the Underwriters. The Company has filed with,
or shall promptly hereafter file with the Commission a final
prospectus supplement specifically relating to the Shares
pursuant to Rule 424 under the Act. The Company has
included in such Registration Statement and the Preliminary
Prospectus, each as amended or supplemented at the time of
execution of this Agreement (the "Execution Time"), and has
included or will include in the Prospectus all information
required by the Act to be included therein with respect to
the Shares and the offering thereof, which information,
except to the extent the Underwriters shall agree in writing
to a modification, shall be in all substantive respects in
the form furnished to the Underwriters prior to the
Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional
information and other changes as the Company has advised the
Underwriters, prior to the Execution Time, will be included
or made therein.
The term "Registration Statement" as used in this
Agreement shall mean such registration statement at the time
such registration statement became effective (the "Effective
Time") including any prospectus included with such
Registration Statement, each document incorporated therein
by reference and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Time (as
hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term
shall also include all Rule 430A Information deemed to be
included in such registration statement at the time such
registration statement becomes effective as provided by Rule
430A of the 1933 Act Regulations. The term "Preliminary
Prospectus" shall mean any preliminary prospectus supplement
describing the Shares and the form of base prospectus
included in the Registration Statement at the Effective Time
and each document incorporated therein by reference. The
term "Prospectus" as used in this Agreement shall mean the
final prospectus supplement relating to the Shares,
accompanied by such base prospectus, in the form in which it
is filed with the Commission after the Execution Time
pursuant to Rule 424(b) of the 1933 Act Regulations and each
document incorporated therein by reference. The term "Rule
430A Information" means information with respect to the
Shares and the offering thereof permitted pursuant to Rule
430A of the 1933 Act Regulations to be omitted from the
Registration Statement when it becomes effective.
(b) No order preventing or suspending the use of any
Preliminary Prospectus has been issued by the Commission,
and no proceedings for that purpose have been instituted or
threatened by the Commission or the state securities or blue
sky authority of any jurisdiction, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the 1933 Act and
the 1933 Act Regulations, and did not contain any untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in
conformity with information furnished in writing to the
Company by an Underwriter expressly authorizing its use in
the Registration Statement.
(c) The Registration Statement has been declared
effective by the Commission under the Act; 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 knowledge of the Company, threatened
by the Commission.
(d) When the Prospectus is first filed pursuant to
Rule 424(b) of the 1933 Act Regulations, when any amendment
to the Registration Statement becomes effective, when any
amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Time and Date of Delivery (as
hereinafter defined), (i) the Registration Statement, the
Prospectus and any amendments thereof and supplements
thereto will conform in all material respects with the
applicable requirements of the 1933 Act and the 1933 Act
Regulations, and (ii) neither the Registration Statement,
the Prospectus nor any amendment or supplement thereto will
contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary in order to make the statements therein not
misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter
expressly authorizing its use in the Registration Statement.
(e) Each document incorporated by reference in the
Registration Statement (an "Incorporated Document"), as of
the date such Incorporated Document was filed with the
Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission
thereunder (the "Exchange Act"), and when read together with
the other information in the Preliminary Prospectus or
Prospectus (as applicable), as of the Execution Time and at
the Closing Date, did not and will not contain any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such
documents are filed with the Commission, will conform in all
material respects to the requirements of the Exchange Act,
as applicable, and when read together with the other
information in the Prospectus, as of the Execution Time and
at the Closing Date, did not and will not contain any untrue
statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not
misleading.
(f) The conditions for the use by the Company of a
registration statement on Form S-3 set forth in the General
Instructions to Form S-3 have been satisfied and the Company
is entitled to use such form for the transactions
contemplated herein.
(g) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Tennessee with all requisite corporate
power and authority to own, lease and operate its properties
and the properties it proposes to own, lease and operate as
described in the Registration Statement and the Prospectus
and to conduct its business as now conducted and as proposed
to be conducted as described in the Registration Statement
and the Prospectus and to enter into and perform its
obligations under this Agreement. The Company has been duly
qualified to do business and is in good standing as a
foreign corporation in each jurisdiction in which the
ownership or leasing of its properties or the nature or
conduct of its business as now conducted or proposed to be
conducted as described in the Registration Statement and the
Prospectus requires such qualification, except where the
failure to do so would not have a material adverse effect on
the Company, the Partnership or any Property. Except as
described in the Prospectus, the Company does not own or
control, directly or indirectly, or own any capital stock or
other beneficial interest in, any corporation, association
or other entity.
(h) Each of the Company's subsidiaries set forth on
Schedule B (the "Subsidiaries") has been duly organized and
is validly existing under the laws of its jurisdiction of
organization with all requisite authority to own, lease and
operate its properties and the properties it proposes to
own, lease and operate as described in the Registration
Statement and the Prospectus and to conduct its business as
now conducted and as proposed to be conducted as described
in the Registration Statement and the Prospectus. Each of
the Subsidiaries has been duly qualified or registered to do
business and is in good standing as a foreign entity in each
jurisdiction in which the ownership or leasing of its
properties or the nature or conduct of its business as now
conducted or proposed to be conducted as described in the
Registration Statement and the Prospectus requires such
qualification, except where the failure to do so would not
have a material adverse effect on the Company and its
Subsidiaries, taken as a whole, or any Property. The
Company is and, at the Closing Time, will be the sole
general partner of Mid-America Apartments, LP (the
"Partnership") and will be the holder of 8,615,566 units of
limited partnership interest in the Partnership ("Units") or
approximately 77.9% of the outstanding Units, and the holder
of 1,750,000 9.5% Series A Cumulative Preferred Units of
Partnership ("Preferred Units"), or 100% of the outstanding
Preferred Units. Except as describe above, the Company is
the sole direct or indirect owner of all of the equity
interests in each of the Subsidiaries and such interests are
owned by the Company free and clear of all liens,
encumbrances, equities or claims.
(i) The Company has full legal right, power and
authority to enter into and perform this Agreement, to
issue, sell and deliver the Shares as provided herein and to
consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered
by the Company and constitutes a valid and binding agreement
of the Company, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization or other laws of
general applicability relating to or affecting creditors'
rights, or by general equity principles and except to the
extent the indemnification provisions set forth in Section 7
of this Agreement may be limited by federal or state
securities laws or the public policy underlying such laws.
(j) The Partnership has full legal right, power and
authority to enter into and perform this Agreement and to
consummate the transactions contemplated herein. This
Agreement has been duly authorized, executed and delivered
by the Partnership and constitutes a valid and binding
agreement of the Partnership enforceable in accordance with
its terms, except to the extent that enforceability may be
limited by bankruptcy, insolvency, reorganization or other
laws of general applicability relating to or affecting
creditors' rights, or by general equity principles and
except to the extent the indemnification provisions set
forth in Section 7 of this Agreement may be limited by
federal or state securities laws or the public policy
underlying such laws.
(k) The Amended and Restated Agreement of Limited
Partnership of the Partnership, including all amendments
thereto (the "Partnership Agreement") has been duly and
validly authorized, executed and delivered by the Company
and the Partnership, as the case may be, and constitutes a
valid and binding agreement of the parties thereto,
enforceable in accordance with their respective terms;
provided, however, that the enforceability of the
Partnership Agreement may be limited by bankruptcy,
insolvency, reorganization or other laws of general
applicability relating to or affecting creditors' rights or
by general principles of equity, whether considered at law
or in equity.
(l) Each consent, approval, authorization, order,
license, certificate, permit, registration, designation or
filing by or with any governmental agency or body necessary
for the valid authorization, issuance, sale and delivery of
the Shares and the execution, delivery and performance of
this Agreement and the consummation by the Company and the
Partnership of the transactions contemplated hereby has been
made or obtained and is in full force and effect.
(m) Except as disclosed in the Prospectus and the
Registration Statement, neither the issuance, sale and
delivery by the Company of the Shares, nor the execution,
delivery and performance of this Agreement, nor the
consummation of the transactions contemplated hereby or
thereby by the Company or the Partnership will conflict with
or result in a breach or violation of any of the terms and
provisions of, or (with or without the giving of notice or
the passage of time or both) constitute a default under, the
charter, by-laws, certificate of limited partnership or
partnership agreement, as the case may be, of the Company or
any of the Subsidiaries; any indenture, mortgage, deed of
trust, loan agreement, note, lease or other agreement or
instrument to which the Company or any of the Subsidiaries
is a party or to which they, any of them, any of their
respective properties or other assets or any Property is
subject; or any applicable statute, judgment, decree, order,
rule or regulation of any court or governmental agency or
body applicable to any of the foregoing or any of their
respective properties; or result in the creation or
imposition of any lien, charge, claim or encumbrance upon
any property or asset of any of the foregoing.
(n) The issuance and sale of the Shares to the
Underwriters hereunder have been duly authorized by the
Company. When issued and delivered against payment therefor
as provided in this Agreement, the Shares will be duly
authorized and validly issued, fully paid and nonassessable.
No preemptive rights of shareholders exist with respect to
any of the Shares. The Shares conform to the description of
the Preferred Stock contained in the Prospectus. No person
or entity holds a right to require or participate in the
registration under the 1933 Act of the Shares pursuant to
the Registration Statement; and no person holds a right to
require registration under the 1933 Act of any shares of
preferred stock of the Company at any other time. No person
or entity has a right of participation or first refusal with
respect to the sale of the Shares by the Company. The form
of certificates evidencing the Shares complies with all
applicable legal requirements.
(o) The Company has an authorized, issued and
outstanding capitalization as set forth in the Prospectus
under the caption "Capitalization." Immediately after the
Closing Time, 10,946,016 shares of Common Stock will be
issued and outstanding, 1,750,000 shares of Preferred Stock
will be issued and outstanding and no shares of any other
class of capital stock will be issued and outstanding. All
of the issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued, are
fully paid and nonassessable, have been or will have been
offered, sold and issued by the Company in compliance with
all applicable laws (including, without limitation, federal
and state securities laws), and conform to the description
of the Common Stock and Preferred Stock contained in the
Prospectus. None of the issued shares of capital stock of
the Company have been issued in violation of any preemptive
or similar rights. Except as disclosed in the Prospectus,
there is no outstanding option, warrant or other right
calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of capital stock of the
Company or any security convertible into or exchangeable for
capital stock of the Company.
(p) Immediately after the Closing Time, 11,060,518
Units and 1,750,000 Preferred Units will be issued and
outstanding and all of such Units and Preferred Units will
be validly issued, fully paid and nonassessable. None of
the issued Units or Preferred Units has been or will be
issued or is owned or held in violation of any preemptive
right. The Units and Preferred Units have been or will be
offered, sold and issued by the Partnership in compliance
with all applicable laws (including, without limitation,
federal and state securities laws).
(q) The financial statements (including the related
notes) included or incorporated by reference in the
Registration Statement and the Prospectus present fairly the
financial position of the respective entity or entities
presented therein as of the dates indicated and the results
of operations and cash flows for the respective entity or
entities presented therein for the periods specified, all in
conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods
specified. The financial statement schedules included in
the Registration Statement and the amounts in the Prospectus
under the captions "Prospectus Summary - Summary Financial
and Operating Data" and "Selected Financial and Operating
Data" present fairly the information required to be shown
therein and have been compiled on a basis consistent with
the financial statements included or incorporated by
reference in the Registration Statement and the Prospectus.
No other financial statements or schedules are required by
Form S-3 or otherwise to be included in the Registration
Statement or the Prospectus. The unaudited pro forma
combined financial information (including the related notes
and supporting schedules) included in the Prospectus
complies as to form in all material respects to the
applicable accounting requirements of the 1933 Act and the
1933 Act Regulations and management of the Company believes
that the assumptions underlying the pro forma adjustments
are reasonable. All necessary pro forma adjustments have
been properly applied to the historical amounts in the
compilation of the information and such information fairly
presents with respect to the respective entity or entities
presented therein the financial position, results of
operations and other information purported to be shown
therein at the respective dates and for the respective
periods specified.
(r) KPMG Peat Marwick LLP, who has examined and is
reporting upon the audited financial statements and
schedules included or incorporated by reference in the
Registration Statement, are, and were during the periods
covered by their Reports included or incorporated by
reference in the Registration Statement and the Prospectus,
independent public accountants within the meaning of the
1933 Act and the 1933 Act Regulations.
(s) Neither the Company, any of its Subsidiaries nor
any Property has sustained, since December 31, 1995, any
material loss or interference with its business from fire,
explosion, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any labor
dispute or arbitrators' or court or governmental action,
order or decree, otherwise than as set forth or contemplated
in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and
the Prospectus, and except as otherwise stated in the
Registration Statement and Prospectus, there has not been
(i) any material change in the capital stock or partnership
interests, as applicable, long-term debt, obligations under
capital leases or short-term borrowings of the Company and
its Subsidiaries, taken as a whole, (ii) any material
adverse change, or any development which could reasonably be
seen as involving a prospective material adverse change, in
or affecting the business, prospects, properties, assets,
results of operations or condition (financial or other) of
the Company, any of its Subsidiaries or any Property, (iii)
any liability or obligation, direct or contingent, incurred
or undertaken by the Company, any of its Subsidiaries or any
Property, which is material to the business or condition
(financial or other) of the Company and its Subsidiaries,
taken as a whole, except for liabilities or obligations
incurred in the ordinary course of business, (iv) any
declaration or payment of any dividend or distribution of
any kind on or with respect to the capital stock of the
Company or with respect to the partnership interests of the
Partnership, or (v) any transaction that is material to the
Company and its Subsidiaries, taken as a whole, except
transactions in the ordinary course of business or as
otherwise disclosed in the Registration Statement and the
Prospectus.
(t) The Company or any of its Subsidiaries will have,
at the Closing Time, good and marketable title in fee simple
to all real property and the improvements located thereon
owned by them, free and clear of all liens, encumbrances,
claims, security interests, restrictions and defects except
such as are described in the Prospectus. All liens,
encumbrances, claims, security interests, restrictions and
defects affecting the Properties which are required to be
disclosed in the Prospectus are disclosed therein. Neither
the Company nor any of the Subsidiaries owns or leases any
real property, except as described in the Prospectus. No
person has an option or right of first refusal to purchase
all or part of any Property or any interest therein. Each
of the Properties complies with all applicable codes, laws
and regulations (including, without limitation, building and
zoning codes, laws and regulations and laws relating to
access to the Properties), except if and to the extent
disclosed in the Prospectus and except for such failures to
comply that would not individually or in the aggregate have
a material adverse impact on the condition, financial or
otherwise, or on the earnings, assets, business affairs or
business prospects of the Company and its Subsidiaries
considered as one enterprise. Neither the Company nor any
of its Subsidiaries has knowledge of any pending or
threatened condemnation proceedings, zoning change, or other
proceeding or action that will in any manner affect the size
of, use of, improvements on, construction on or access to a
Property, except such proceedings or actions that would not
have a material adverse effect on the condition, financial
or otherwise, or on the earnings, assets, business affairs
or business prospects of or with respect to the Company and
its Subsidiaries, considered as one enterprise. Neither the
Company nor any of its Subsidiaries nor, to the knowledge of
the Company and the Partnership, the current owner of the
Napa Valley Apartments, Little Rock Arkansas (the "Proposed
Property") is in default under any of the leases governing
the apartment units at any of the Properties or the Proposed
Property and the Company knows of no event, but for the
passage of time or the giving of notice, or both, which
would constitute a default under any of such leases, except
such default that would not have a material adverse effect
on the condition, financial or otherwise, or on the
earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise.
The Company or its applicable Subsidiary has obtained
an owner's title insurance policy or commitment from a title
insurance company to issue such a policy on each of the
Properties and will obtain such a policy with respect to the
Proposed Property with coverage in an amount at least equal
to the greater of (a) the cost of acquisition of such
property, including the principal amount of any indebtedness
assumed with respect to the property, or (b) the current
replacement cost of the improvements located on such
property.
(u) Neither the Company nor any of its Subsidiaries is
in violation of its respective charter, by-laws, certificate
of limited partnership or partnership agreement, as the case
may be, and except as disclosed in the Prospectus, no
default exists, and no event has occurred, nor state of
facts exists, which, with notice or after the lapse of time
to cure or both, would constitute a default in the due
performance and observance of any obligation, agreement,
term, covenant, consideration or condition contained in any
material indenture, mortgage, deed of trust, loan agreement,
note, lease or other agreement or instrument to which any
such entity is a party or to which any such entity or any of
its properties is subject. Neither the Company nor any of
its Subsidiaries, nor with respect to the Proposed Property
to the Company's knowledge, the current owner thereof, is in
violation of, or in default with respect to, any statute,
rule, regulation, order, judgment or decree, except as may
be properly described in the Prospectus or such as in the
aggregate do not now have and will not in the future
reasonably be expected to have a material adverse effect on
the financial position, results of operations or business of
the Company and its Subsidiaries, taken as a whole.
(v) Except as described in the Prospectus, there is
not pending or, to the knowledge of the Company, threatened,
any action, suit, proceeding, inquiry or investigation
against any of the Properties, the Company, any of the
Subsidiaries, any of their respective officers, directors
and partners, or the current owner of the Proposed Property,
or to which the properties, assets or rights of such
entities (limited with respect to the current owner of the
Proposed Property to the Proposed Property and the related
assets and rights) are subject, before or brought by any
court or governmental agency or body or board of
arbitrators, which could reasonably be expected to result in
any material adverse change in the business, prospects,
properties, assets, results of operations or condition
(financial or otherwise) of any of such entities (limited
with respect to the current owner of the Proposed Property
to the Proposed Property) or which could adversely affect
the consummation of the transactions contemplated by this
Agreement; provided, however, that the foregoing
representations are limited to the knowledge of the Company
and the Partnership to the extent they relate to the current
owner of the Proposed Property.
(w) The descriptions in the Registration Statement and
the Prospectus of the contracts, leases and other legal
documents therein described present fairly the information
required to be shown, and there are no contracts, leases, or
other documents of a character required to be described in
the Registration Statement or the Prospectus or to be filed
as exhibits to the Registration Statement which are not
described or filed as required. To the knowledge of the
Company and the Partnership, there are no statutes or
regulations applicable to the Company or any of the
Subsidiaries or certificates, permits or other
authorizations from governmental regulatory officials or
bodies required to be obtained or maintained by the Company
or any of the Subsidiaries of a character required to be
disclosed in the Registration Statement or the Prospectus
which have not been so disclosed and properly described
therein. All agreements between the Company or any of the
Subsidiaries and third parties expressly referenced in the
Prospectus are legal, valid and binding obligations of the
Company or one or more of its Subsidiaries, enforceable in
accordance with their respective terms, except to the extent
enforceability may be limited by bankruptcy, insolvency,
reorganization or other laws of general applicability
relating to or affecting creditors' rights and by general
equitable principles.
(x) No relationship, direct or indirect, exists
between or among the Company or any of its Subsidiaries on
the one hand, and the directors, trustees, officers,
shareholders, customers or suppliers of the Company or any
of its Subsidiaries on the other hand, which is required by
the Act to be described in the Registration Statement and
the Prospectus which is not so described.
(y) Each of the Company and its Subsidiaries owns,
possesses or has obtained all material permits, licenses,
franchises, certificates, consents, orders, approvals and
other authorizations of governmental or regulatory
authorities as are necessary to own or lease, as the case
may be, and to operate its respective property and to carry
on its business as presently conducted, or as contemplated
in the Prospectus to be conducted, and neither the Company
nor the Partnership has received any notice of proceedings
relating to revocation or modification of any such licenses,
permits, certificates, consents, orders, approvals or
authorizations.
(z) Neither the Company nor any of its Subsidiaries is
required to own or possess any license or other rights to
use any patents, trademarks, service marks, trade names,
copyrights, software and design licenses, trade secrets,
manufacturing processes, other intangible property rights
and know-how (collectively "Intangibles") to entitle any of
them to conduct their respective businesses as such
businesses are now, and as they are proposed to be,
conducted or operated as described in the Prospectus, and
neither the Company nor any of its Subsidiaries has received
notice of infringement upon or of conflict with (and the
Company and the Partnership know of no such infringement
upon or of conflict with) asserted rights of others with
respect to any Intangibles which could materially and
adversely affect the business, prospects, properties,
assets, results of operation or condition (financial or
otherwise) of the Company or any of its Subsidiaries.
(aa) To the Company's and the Partnership's knowledge,
the system of internal accounting controls of the Company
and its Subsidiaries, taken as a whole, is sufficient to
meet the broad objectives of internal accounting controls
insofar as those objectives pertain to the prevention or
detection of errors or irregularities in amounts that would
be material in relation to the Company's financial
statements; and, to the Company's and the Partnership's
knowledge, neither the Company nor any of its Subsidiaries,
nor any employee or agent thereof, has made any payment of
funds of the Company or any of its Subsidiaries, as the case
may be, or received or retained any funds, and no funds of
the Company or any of its Subsidiaries, as the case may be,
have been set aside to be used for any payment, in each case
in violation of any law, rule or regulation.
(bb) Each of the Company and its Subsidiaries (to the
extent not consolidated with the Company) has filed on a
timely basis all necessary federal, state, local and foreign
income and franchise tax returns required to be filed
through the date hereof and has paid all taxes shown as due
thereon; and no tax deficiency has been asserted against
either such entity, nor does either such entity know of any
tax deficiency which is likely to be asserted against any
such entity which, if determined adversely to any such
entity, could materially adversely affect the business,
prospects, properties, assets, results of operations or
condition (financial or otherwise) of any such entity,
respectively. All tax liabilities are adequately provided
for on the respective books of such entities.
(cc) Each of the Company and its Subsidiaries maintains
insurance (issued by insurers of recognized financial
responsibility) of the types and in the amounts generally
deemed adequate for their respective businesses and, to the
best of the Company's and the Partnership's knowledge,
consistent with insurance coverage maintained by similar
companies in similar businesses, including, but not limited
to, insurance covering real and personal property owned or
leased by the Company and its Subsidiaries against theft,
damage, destruction, acts of vandalism and all other risks,
including liability for personal injury, customarily insured
against, all of which insurance is in full force and effect.
(dd) To the best of the Company's and the Partnership's
knowledge, no general labor problem exists or is imminent
with the employees of the Company or any of its
Subsidiaries.
(ee) Each of the Company and its Subsidiaries, and each
of their officers, directors and controlling persons, has
not taken and will not take, directly or indirectly, any
action resulting in a violation of Rule 10b-6 under the 1934
Act Regulations, or designed to, or that might reasonably be
expected to, cause or result in or that has constituted or
that reasonably might be expected to constitute the
stabilization or manipulation of the price of any security
of the Company or to facilitate the sale or resale of the
Shares.
(ff) To the Company's knowledge, the Company does no
business with any person or affiliate located in Cuba within
the meaning of Florida Rule 3E-900.001.
(gg) The Company has not incurred any liability for a
fee, commission or other compensation on account of the
employment of a broker or finder in connection with the
transactions contemplated by this Agreement other than as
contemplated hereby.
(hh) Except as otherwise disclosed in the Prospectus,
neither the Company, any of its Subsidiaries nor any current
or former owner of any Property or the Proposed Property has
authorized or conducted or has knowledge of the generation,
transportation, storage, presence, use, treatment, disposal,
release, or other handling of any hazardous substance,
hazardous waste, hazardous material, hazardous constituent,
toxic substance, pollutant, contaminant, asbestos, radon,
polychlorinated biphenyls ("PCBs"), petroleum product or
waste (including crude oil or any fraction thereof), natural
gas, liquefied gas, synthetic gas or other material defined,
regulated, controlled or potentially subject to any
remediation requirement under any environmental law
(collectively, "Hazardous Materials"), on, in, under or
affecting any Property, the Proposed Property or any real
property currently leased or owned or by any means
controlled by the Company or any of its Subsidiaries (the
"Real Property") except in material compliance with
applicable laws; to the knowledge of the Company and the
Partnership, the Real Property and the Company's and its
Subsidiaries' and the current and former owners of the
Proposed Properties' operations with respect to the Real
Property are in compliance with all federal, state and local
laws, ordinances, rules, regulations and other governmental
requirements relating to pollution, control of chemicals,
management of waste, discharges of materials into the
environment, health, safety, natural resources, and the
environment (collectively, "Environmental Laws"), and the
Company, its Subsidiaries and the current owner of the
Proposed Property have, and are in compliance with, all
licenses, permits, registrations and government
authorizations necessary to operate under all applicable
Environmental Laws. Except as otherwise disclosed in the
Prospectus, neither the Company, its Subsidiaries nor the
current owner of a Proposed Property or, to the knowledge of
the Company and the Partnership, any former owner of any
Property has received any written or oral notice from any
governmental entity or any other person and there is no
pending or threatened claim, litigation or any
administrative agency proceeding that: alleges a violation
of any Environmental Laws by the Company or any of its
Subsidiaries; or, with respect to the Proposed Property, the
current owner thereof, alleges that the Company, any of its
Subsidiaries or, with respect to the Proposed Property, the
current owner thereof, is a liable party or a potentially
responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601,
et seq., or any state superfund law; has resulted in or
could result in the attachment of an environmental lien on
any of the Real Property; or alleges that the Company, any
of its Subsidiaries or the current owner of the Proposed
Property is liable for any contamination of the environment,
contamination of the Real Property, damage to natural
resources, property damage, or personal injury based on
their activities or the activities of their predecessors or
third parties (whether at the Real Property or elsewhere)
involving Hazardous Materials, whether arising under the
Environmental Laws, common law principles, or other legal
standards. In the ordinary course of its business, the
Company conducts a periodic review of the effect of
Environmental Laws on the business, operations and
properties of the Company and its Subsidiaries, in the
course of which it identifies and evaluates associated costs
and liabilities (including, without limitation, any capital
or operating expenditures) required for clean-up, closure of
properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on
operating activities and any potential liabilities to third
parties.
(ii) The Company is organized in conformity with the
requirements for qualification as a real estate investment
trust under the Internal Revenue Code of 1986, as amended
(the "Code"), and the Company's method of operation will
enable it to meet the requirements for taxation as a real
estate investment trust under the Code. The Subsidiaries of
the Company that are partnerships will be treated as
partnerships for federal income purposes and not as
corporations or associations taxable as corporations.
(jj) Neither the Company nor any of its Subsidiaries,
will become as a result of the transactions contemplated
hereby, or will conduct their respective businesses in a
manner in which any such entity would become, "an investment
company," or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act
of 1940, as amended (the "1940 Act") and is not required to
be registered under the 1940 Act.
(kk) None of the entities which prepared appraisals of
certain of the Properties, nor the entities which prepared
Phase I environmental assessment reports with respect to the
Properties, was employed for such purpose on a contingent
basis or has any substantial interest in the Company or any
of its Subsidiaries, and none of their directors, officers
or employees is connected with the Company or any of its
Subsidiaries as a promoter, selling agent, voting trustee,
officer, director or employee.
(ll) The Shares have been approved for listing, upon
official notice of issuance, on the New York Stock Exchange
(the "NYSE").
Any certificate signed by any officer of the Company on
behalf of the Company or the Partnership and delivered to you or
to counsel for the Underwriters shall be deemed a representation
and warranty by such entity to each Underwriter as to the matters
covered thereby.
Section 2. Sale and Delivery of the Shares to the
Underwriters; Closing.
(a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein
set forth, the Company agrees to sell to each Underwriter, and
each Underwriter agrees, severally and not jointly, to purchase
from the Company the number of Firm Shares set forth opposite the
name of such Underwriter in Schedule A (the proportion which each
Underwriter's share of the total number of the Firm Shares bears
to the total number of Firm Shares is hereinafter referred to as
such Underwriter's "underwriting obligation proportion"), at a
purchase price of $24.03125 per share.
(b) In addition, on the basis of the representations and
warranties herein contained, and subject to the terms and
conditions herein set forth, the Company hereby grants an option
to the Underwriters, severally and not jointly, to purchase up to
an additional 250,000 Option Shares at the same purchase price as
shall be applicable to the Firm Shares. The option hereby
granted will expire if not exercised within the thirty (30) day
period after the first date on which the Firm Shares are released
by you for sale to the public, by giving written notice to the
Company. The option granted hereby may be exercised in whole or
in part (but not more than once), only for the purpose of
covering over-allotments that may be made in connection with the
offering and distribution of the Firm Shares. The notice of
exercise shall set forth the number of Option Shares as to which
the several Underwriters are exercising the option, and the time
and date of payment and delivery thereof. Such time and date of
delivery (the "Date of Delivery") shall be determined by you but
shall not be later than seven full business days after the
exercise of such option, nor in any event prior to the Closing
Time. If the option is exercised as to all or any portion of the
Option Shares, the Option Shares as to which the option is
exercised shall be purchased by the Underwriters, severally and
not jointly, in their respective underwriting obligation
proportions.
(c) Payment of the purchase price for and delivery of
certificates in definitive form representing the Firm Shares
shall be made at the offices of Xxxxxx Xxxxxx & Company, Inc., 00
Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000 or at such other place as
shall be agreed upon by the Company and you, at 10:00 a.m.
E.D.T., on October 16, 1996 (the "Closing Time"). The place of
closing for the Firm Shares and the Closing Time may be varied by
agreement between you and the Company. In addition, in the event
that any or all of the Option Shares are purchased by the
Underwriters, payment of the purchase price for and delivery of
certificates in definitive form representing the Option Shares
shall be made at the offices of Xxxxxx Xxxxxx & Company, Inc. in
the manner set forth above, or at such other place as the Company
and you shall determine, on the Date of Delivery as specified in
the notice from you to the Company. Payment for the Firm Shares
and the Option Shares shall be made to the Company by certified
or official bank check or checks in New York Clearing House or
similar next day funds payable to the order of the Company,
against delivery to you for the respective accounts of the
Underwriters of the Shares to be purchased by them.
(d) The certificates representing the Shares to be
purchased by the Underwriters shall be in such denominations and
registered in such names as you may request in writing at least
three full business days before the Closing Time or the Date of
Delivery, as the case may be. The certificates representing the
Shares will be made available at the offices of Xxxxxx Xxxxxx &
Company, Inc. or at such other place as Xxxxxx Xxxxxx & Company,
Inc. may designate for examination and packaging not later than
10:00 a.m. on the last business day prior to the Closing Time or
the Date of Delivery, as the case may be.
(e) You intend to offer the Shares to the public as set
forth in the Prospectus, but after the initial public offering of
such Shares you may in your discretion vary the public offering
price.
Section 3. Certain Covenants of the Company and the
Partnership. The Company and the Partnership covenant and agree
with each Underwriter as follows:
(a) To file with the Secretary of State of Tennessee
and cause to become effective the Designating Amendment in
such form as has been approved by the Underwriters, prior to
the Closing Time.
(b) To amend the Partnership Agreement to create the
Preferred Units prior to the Closing.
(c) If the Company elects to rely upon Rule 430A of
the 1933 Act Regulations or the filing of the Prospectus is
otherwise required under Rule 424(b) of the 1933 Act
Regulations, and subject to the provisions of Section 3(b)
of this Agreement, the Company will comply with the
requirements of Rule 430A and will file the Prospectus,
properly completed, pursuant to the applicable provisions of
Rule 424(b) within the time period prescribed. The Company
will notify you immediately, and confirm the notice in
writing, (i) when any post-effective amendment to the
Registration Statement shall have become effective, or any
amended Prospectus shall have been filed, (ii) of the
receipt of any comments from the Commission, (iii) of any
request by the Commission to amend the Registration
Statement or amend or supplement the Prospectus or for
additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or
suspending the use of any Preliminary Prospectus or the
suspension of the qualification of the Shares for offering
or sale in any jurisdiction, or of the institution or
threatening of any proceeding for any such purposes. The
Company will use every reasonable effort to prevent the
issuance of any such stop order or of any order preventing
or suspending such use and, if any such order is issued, to
obtain the withdrawal thereof at the earliest possible
moment.
(d) The Company will not at any time file or make any
amendment to the Registration Statement or any amendment or
supplement if you shall not have previously been advised and
furnished a copy thereof a reasonable time prior to the
proposed filing, or if you or counsel for the Underwriters
shall object to such amendment or supplement.
(e) The Company has furnished or will furnish to you,
at its expense, as soon as available, as many signed copies
of the Registration Statement as originally filed and of all
amendments thereto, whether filed before or after the
Registration Statement became effective, copies of all
exhibits and documents filed therewith and signed copies of
all consents and certificates of experts, as you may
reasonably request, and has furnished or will furnish to
each Underwriter one (1) conformed copy of the Registration
Statement as originally filed and of each amendment thereto
(but without exhibits).
(f) The Company will deliver to each Underwriter, at
the Company's expense, from time to time, as many copies of
each Preliminary Prospectus as such Underwriter may
reasonably request, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act.
The Company will deliver to each Underwriter, at the
Company's expense, from time to time as requested during the
period when the Prospectus is required to be delivered under
the 1933 Act, such number of copies of the Prospectus (as
supplemented or amended) as each Underwriter may reasonably
request. The Company will comply to the best of its ability
with the 1933 Act and the 1933 Act Regulations so as to
permit the completion of the distribution of the Shares as
contemplated in this Agreement and in the Prospectus. If
any event shall occur as a result of which it is necessary
to amend or supplement the Prospectus in order to make the
Prospectus not contain any untrue statement of a material
fact or omit to state any material fact necessary in order
to make the statements therein, in light of the
circumstances existing at the time it is delivered to a
purchaser, not misleading, or, if for any reason it shall be
necessary to amend or supplement the Prospectus in order to
comply with the 1933 Act or the 1934 Act, the Company will
notify you and, upon your request, prepare and furnish
without charge to each Underwriter and to any dealer in
securities as many copies as you may from time to time
reasonably request of an amended Prospectus or a supplement
to the Prospectus (in form and substance reasonably
satisfactory to counsel for the Underwriters) which will
amend or supplement the Prospectus so that it will not
contain an untrue statement or omit to state a material fact
necessary in order to make the statements therein, in light
of the circumstances existing at the time it is delivered to
a purchaser, not misleading, and the Company will prepare
and deliver to the Underwriters a reasonable number of an
amended or supplemented Prospectus complying with Section
10(a)(3) of the 0000 Xxx.
(g) To file timely all reports and any definitive
proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act for so long as the
delivery of a Prospectus is required in connection with the
offering or sale of the Shares.
(h) The Company will use its best efforts to qualify
the Shares for offering and sale under the applicable
securities laws and real estate syndication laws of such
states and other jurisdictions as you may designate. In
each jurisdiction in which the Shares have been so
qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to
continue such qualification in effect for a period of not
less than one year from the effective date of the
Registration Statement; provided, however, that the Company
shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified or to make
any undertakings in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The
Company will file such statements and reports as may be
required by the laws of each jurisdiction in which the
Shares have been qualified as above provided.
(i) The Company will make generally available to its
security holders as soon as practicable, but in any event
not later than 90 days after the close of the period covered
thereby, an earnings statement complying with the provisions
of Rule 158 of the 1933 Act Regulations and covering a
period of 12 months beginning not later than the first day
of the Company's fiscal quarter next following the effective
date (as defined in Rule 158) of the Registration Statement.
(j) The Company and the Partnership will use the net
proceeds received from the sale of the Shares in the manner
specified in the Prospectus under the caption "Use of
Proceeds."
(k) The Company will furnish to its security holders,
as soon as practicable after the end of each respective
period, annual reports (including financial statements
audited by independent public accountants) and unaudited
quarterly reports of operations for each of the first three
quarters of the fiscal year. During a period of five years
after the date hereof, the Company will furnish to you
promptly upon becoming available: (i) statements of
operations of the Company for each of the first three
quarters in the form furnished to the Company's security
holders; (ii) a balance sheet of the Company as of the end
of such fiscal year, together with statements of operations,
of cash flows and of security holders' equity of the Company
for such fiscal year, accompanied by a copy of the
certificate or report thereon of independent public
accountants; (iii) copies of all reports (financial or
otherwise) mailed to security holders; (iv) copies of all
reports and financial statements furnished to or filed with
the Commission or any securities exchange; (v) every
material press release in respect of the Company or its
affairs which is released or prepared by the Company, and
(vi) any additional information of a public nature
concerning the Company, its Subsidiaries or the Properties
that you may reasonably request. During such five-year
period, the foregoing financial statements shall be on a
consolidated basis to the extent that the accounts of the
Company are consolidated with any subsidiaries, and shall be
accompanied by similar financial statements for any
significant subsidiary that is not so consolidated.
(i) For a period of 90 days from the date hereof, the
Company will not, without your prior written consent,
directly or indirectly, sell, offer to sell, grant any
option for the sale of, or otherwise dispose of, any shares
of capital or securities convertible into capital stock,
other than (i) to the Underwriters pursuant to this
Agreement; (ii) the issuance of Units or other securities
convertible into capital stock in connection with the
acquisition of a multifamily property, provided that the
recipients of such Units agree in writing to the
restrictions on transfer contained in the Partnership
Agreement; (iii) in connection with the Company's Employee
Stock Ownership Plan or 1994 Restricted Stock and Stock
Option Plan; or (iv) in connection with the Company's
Dividend Reinvestment and Stock Purchase Plan which is in
the process of being adopted.
(l) The Company will maintain a transfer agent and, if
necessary under the jurisdiction of incorporation of the
Company, a registrar (which may be the same entity as the
transfer agent) for its Preferred Stock.
(m) The Company will use its best efforts to maintain
the listing of the Shares on the NYSE.
(n) The Company will comply with all the provisions of
any undertakings contained in the Registration Statement.
(o) The Company and the Partnership will conduct their
affairs in such a manner so as to ensure that neither the
Company nor any of its Subsidiaries will be an "investment
company" or an entity "controlled" by an "investment
company" within the meaning of the 1940 Act.
(p) The Company will not, and will use its best
efforts to cause its officers, directors and affiliates not
to (i) take, directly or indirectly, prior to completion of
the distribution of the Shares contemplated by this
Agreement, any action resulting in a violation of Rule 10b-6
under the 1934 Act Regulations, or designed to stabilize or
manipulate the price of any security of the Company, or
which may cause or result in, or which might in the future
reasonably be expected to cause or result in, the
stabilization or manipulation of the price of any security
of the Company, to facilitate the sale or resale of any of
the Shares, (ii) sell, bid for, purchase or pay anyone any
compensation for soliciting purchases of the Shares, or
(iii) pay or agree to pay to any person any compensation for
soliciting any order to purchase any other securities of the
Company.
(q) If at any time during the 30-day period after the
Registration Statement became effective, any rumor,
publication or event relating to or affecting the Company
shall occur as a result of which in your reasonable opinion
the market price of the Preferred Stock has been or is
likely to be materially affected (regardless of whether such
rumor, publication or event necessitates a supplement to or
amendment of the Prospectus) and after written notice from
you advising the Company to the effect set forth above, the
Company agrees to forthwith prepare, consult with you
concerning the substance of, and disseminate a press release
or other public statement, reasonably satisfactory to you,
responding to or commenting on such rumor, publication or
event.
(r) The Company will use its best efforts (i) to meet
the requirements to qualify as a real estate investment
trust under the Code and (ii) to cause each of its
Subsidiaries that is organized as a partnership to be
treated as a partnership for federal income tax purposes.
(s) Subject to the terms hereof, the Company and the
Partnership will do and perform their respective obligations
to the extent required to consummate the transactions
contemplated hereby and thereby.
(t) Prior to the Closing Time, the Company and the
Partnership will notify you in writing immediately if any
event occurs that renders any of the representations and
warranties of the Company or the Partnership contained
herein inaccurate or incomplete in any respect.
(u) To its knowledge, the Company has complied and
will endeavor to comply with all provisions of Section
517.075 of the Florida Securities and Investor Protection
Act, and all regulations thereunder relating to issuers
doing business with Cuba.
Section 4. Payment of Expenses. The Company will pay
and bear all costs, fees and expenses incident to the performance
of its obligations under this Agreement (excluding fees and
expenses of counsel for the Underwriters, except as specifically
set forth below), including (a) the preparation, printing and
filing of the Registration Statement (including financial
statements and exhibits), as originally filed and as amended, the
Preliminary Prospectuses and the Prospectus and any amendments or
supplements thereto, and the cost of furnishing copies thereof to
the Underwriters, (b) the preparation, printing and distribution
of this Agreement, any Agreement Among Underwriters, any Selected
Dealers Agreement, the certificates representing the Shares, the
Blue Sky Memoranda and any instruments relating to any of the
foregoing, (c) the issuance and delivery of the Shares to the
Underwriters, including any transfer taxes payable upon the sale
of the Shares to the Underwriters (other than transfer taxes on
resales by the Underwriters), (d) the fees and disbursements of
the Company's counsel and accountants, (e) the qualification of
the Shares under the applicable securities and real estate
syndication laws in accordance with Section 3(h) of this
Agreement and any filing for review of the offering with the
National Association of Securities Dealers, Inc., including
filing fees and fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the
Blue Sky Memoranda, (f) all costs, fees and expenses in
connection with the application for listing the Shares on the
NYSE, (g) the transfer agent's and registrar's fees and all
miscellaneous expenses referred to in Item 14 of the Registration
Statement, (h) costs related to travel and lodging incurred by
the Company and its representatives relating to meetings with and
presentations to prospective purchasers of the Shares reasonably
determined by the Underwriters to be necessary or desirable to
effect the sale of the Shares to the public, and (i) all other
costs and expenses incident to the performance of the Company's
obligations hereunder (including costs incurred in closing the
purchase of the Option Shares, if any) that are not otherwise
specifically provided for in this section. The Company, upon
your request, will provide funds in advance for filing fees in
connection with "blue sky" qualifications.
If the sale of the Shares provided for herein is not
consummated because any condition to the obligations of the
Underwriters set forth in Section 5 hereof is not satisfied,
because of any termination pursuant to Section 9 hereof or
because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any
provision hereof other than by reason of default by any of the
Underwriters, the Company will reimburse the Underwriters
severally on demand for all reasonable out-of-pocket expenses,
including fees and disbursements of Underwriters' counsel,
reasonably incurred by the Underwriters in reviewing the
Registration Statement and the Prospectus, and in investigating
and making preparations for the marketing of the Shares.
Section 5. Conditions of Underwriters' Obligations. The
obligations of the Underwriters to purchase and pay for the
Shares that they have respectively agreed to purchase pursuant to
this Agreement (including any Option Shares as to which the
option granted in Section 2 has been exercised and the Date of
Delivery determined by you is the same as the Closing Time) are
subject to the accuracy of the representations and warranties of
the Company and the Partnership contained herein or in
certificates of any officer of the Company and the Partnership
delivered pursuant to the provisions hereof, to the performance
by the Company and the Partnership of their obligations
hereunder, and to the following further conditions:
(a) The Prospectus shall have been filed with the
Commission pursuant to Rule 424 within the applicable time
prior prescribed for such filing by such Rule.
(b) At the Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been
issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending or,
to your knowledge or the knowledge of the Company, shall be
contemplated by the Commission, and any request on the part
of the Commission for additional information shall have been
complied with to the satisfaction of counsel for the
Underwriters.
(c) The Designating Amendment shall have been filed
with the Secretary of State of Tennessee and become
effective.
(d) Subsequent to the execution and delivery of this
Agreement and prior to the Closing Time, there shall not
have occurred any downgrading, nor shall any notice have
been given of (i) any intended or potential downgrading or
(ii) any review or possible change that does not indicate an
improvement, in the rating accorded any securities of or
guaranteed by the Company by any "nationally recognized
statistical rating organization," as such term is defined
for purposes of Rule 436(g)(2) under the Act.
(e) At the Closing Time, you shall have received a
favorable opinion of Baker, Donelson, Bearman & Xxxxxxxx,
counsel for the Company and the Partnership, dated as of the
Closing Time in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Company has been duly incorporated
and is validly existing as a corporation in good
standing under the laws of the State of Tennessee with
all requisite corporate power and authority to own,
lease and operate its properties and the properties it
proposes to own, lease and operate as described in the
Registration Statement and the Prospectus and to
conduct its business as now conducted and as proposed
to be conducted as described in the Registration
Statement and the Prospectus. The Company has been
duly qualified or registered to do business and is in
good standing as a foreign corporation in the states of
Arkansas, Florida, Georgia, Kentucky, Mississippi,
Missouri, North Carolina, Ohio, South Carolina, Texas
and Virginia. There are no other jurisdictions in
which the ownership or leasing of the Company's
properties or the nature or conduct of its business as
now conducted or proposed to be conducted as described
in the Registration Statement and the Prospectus
requires such qualification, except where the failure
to do so would not have a material adverse effect on
the Company, the Partnership or any Property. To such
counsel's knowledge, except for the Subsidiaries, the
Company does not own or control, directly or
indirectly, any corporation, association or other
entity.
(ii) The Partnership has been duly organized
and is validly existing as a limited partnership under
the Tennessee Revised Uniform Limited Partnership Act,
as amended, with all requisite partnership power and
authority to own, lease and operate its properties and
to conduct its business as now conducted and as
proposed to be conducted as described in the
Registration Statement and the Prospectus. The
Partnership has been duly qualified or registered to do
business and is in good standing as a foreign
partnership in the states of Arkansas, Florida,
Georgia, Kentucky, Mississippi, Missouri, North
Carolina, Ohio, South Carolina and Texas. There are
no other jurisdictions in which the ownership or
leasing of the Partnership's properties or the nature
or conduct of its business as now conducted or proposed
to be conducted as described in the Registration
Statement and the Prospectus requires such
qualification, except where the failure to do so would
not have a material adverse effect on the Company, the
Partnership or any Property. The Company is the sole
general partner of the Partnership, and at the Closing
Time, will be the sole general partner of the
Partnership and will be the holder of 8,615,566 Units
or approximately 77.9% of the outstanding Units and
1,750,000 Preferred Units or 100% of the outstanding
Preferred Units.
(iii) Each Subsidiary of the Company
(other than the Partnership) has been duly organized
and is validly existing under the laws of its
jurisdiction of organization with all requisite power
and authority to conduct its business as now conducted
and as proposed to be conducted in the Registration
Statement and the Prospectus. The Company is the sole
direct or indirect owner of all of the equity interests
in the Subsidiaries (other than the Partnership) and
such interests are owned by the Company or one of its
Subsidiaries free and clear of any perfected liens,
encumbrances and restrictions and, to such counsel's
knowledge, any other lien, encumbrance or restriction.
(iv) The Company has full legal right, power
and authority to enter into, deliver and perform this
Agreement, to issue, sell and deliver the Shares as
provided herein and to consummate the transactions
contemplated herein. This Agreement has been duly
authorized, executed and delivered by the Company and,
assuming due authorization, execution and delivery by
the other parties hereto, constitutes a valid and
binding agreement of the Company, enforceable in
accordance with its terms, except to the extent
enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general
applicability relating to or affecting creditors'
rights and by general equity principles and except to
the extent that enforcement of the indemnification
provisions set forth in Section 7 of this Agreement may
be limited by federal or state securities laws or the
public policy underlying such laws.
(v) The Partnership has full legal right,
power and authority to enter into, deliver and perform
this Agreement and to consummate the transactions
contemplated herein. This Agreement has been duly
authorized, executed and delivered by the Partnership
and, assuming due authorization, execution and delivery
by the other parties hereto, constitutes a valid and
binding agreement of the Partnership enforceable in
accordance with its terms, except to the extent
enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general
applicability relating to or affecting creditors'
rights and by general principles of equity, whether
considered at law or in equity, and except to the
extent that enforcement of the indemnification
provisions set forth in Section 7 of this Agreement may
be limited by federal or state securities laws or the
public policy underlying such laws.
(vi) Each consent, approval, authorization,
order, license, certificate, permit, registration,
designation or filing by or with any governmental
agency or body necessary for the valid authorization,
issuance, sale and delivery of the Shares, the
execution, delivery and performance of this Agreement
and the consummation by the Company and the Partnership
of the transactions contemplated hereby has been made
or obtained and is in full force and effect, except
such as may be necessary under state securities or real
estate syndication laws or by the National Association
of Securities Dealers, Inc. in connection with the
purchase and distribution of the Shares by the
Underwriters, as to which such counsel need express no
opinion.
(vii) Neither the issuance, sale and
delivery by the Company of the Shares, nor the
execution, delivery and performance of this Agreement
nor the consummation of the transactions contemplated
hereby by the Company and the Partnership will violate
any of the terms and provisions of, or constitute a
default under the charter, by-laws, certificate of
limited partnership or partnership agreement, as the
case may be, of the Company or the Partnership; or, to
such counsel's knowledge, and except as disclosed in
the Prospectus, of or under any material indenture,
mortgage, deed of trust, loan agreement, note, lease or
other agreement or instrument to which the Company or
the Partnership is a party or to which either of them,
any of their respective properties or other assets or
any Property is subject; or, to such counsel's
knowledge, violate any applicable statute, judgment,
decree, order, rule or regulation of any court or
governmental agency or body; or, to such counsel's
knowledge, result in the creation or imposition of any
lien, charge, claim or encumbrance upon any property or
asset of any of the foregoing.
(viii) The description of the Company's
authorized capital stock contained in the Registration
Statement and the Prospectus under the caption
"Description of Series A Preferred Stock" meets the
requirements of Item 9 of Form S-3 under the 1933 Act,
and the Preferred Stock conforms in all material
respects as to legal matters to the description thereof
contained in the Registration Statement and the
Prospectus.
(ix) The issuance and sale of the Shares to
the Underwriters hereunder have been duly authorized by
the Company. When issued and delivered against payment
therefor as provided in this Agreement, the Shares will
be validly issued, fully paid and nonassessable. No
preemptive rights of shareholders exist with respect to
any of the Shares. To such counsel's knowledge, no
person or entity holds a right to participate in the
registration under the 1933 Act of the Shares pursuant
to the Registration Statement. To such counsel's
knowledge, no person or entity has a right of
participation or first refusal with respect to the sale
of the Shares by the Company. To the knowledge of such
counsel, except as disclosed in the Prospectus, there
is no outstanding option, warrant or other right
calling for the issuance of, and no commitment, plan or
arrangement to issue, any shares of capital stock of
the Company or any security convertible into or
exchangeable for capital stock of the Company except
pursuant to the Company's Employee Stock Purchase Plan,
its 1994 Restricted Stock and Stock Option Plan and a
proposed Dividend Reinvestment and Stock Purchase Plan.
The form of certificate evidencing the Shares complies
with all applicable legal requirements.
(x) All of the issued Units have been duly
and validly authorized by the Partnership. None of the
outstanding Units has been issued or is owned or held
in violation of any preemptive rights. The Preferred
Units to be issued to the Company at the Closing Time
have been duly and validly authorized by the
Partnership and will be issued, offered and sold in
compliance with all applicable laws (including, without
limitation, federal and state securities laws). When
issued and delivered against payment therefor as
provided in the Partnership Agreement, such Preferred
Units will be duly and validly issued, fully paid and
nonassessable. The outstanding Units have been issued,
offered and sold at or prior to the Closing Time in
compliance with all applicable laws (including, without
limitation, federal and state securities laws).
Immediately after the Closing Date, 11,060,518 Units
and 1,750,000 Preferred Units will be issued and
outstanding.
(xi) To the knowledge of such counsel,
neither the Company nor any of its Subsidiaries is in
violation of its respective charter, by-laws,
certificate of limited partnership or partnership
agreement, as the case may be, and to the knowledge of
such counsel, no material default exists and no event
has occurred which, with notice or after the lapse of
time to cure or both, would constitute a material
default in the due performance and observance of any
obligation, agreement, term, covenant, or condition
contained in any indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or
instrument known to such counsel. To the knowledge of
such counsel, neither the Company nor any of its
Subsidiaries is in violation of, or in default with
respect to, any statute, rule, regulation, order,
judgment or decree, except as may be properly described
in the Prospectus or such as in the aggregate do not
now have and will not in the future have a material
adverse effect on the financial position, results of
operations or business of the Company and its
subsidiaries, taken as a whole.
(xii) To the knowledge of such counsel and
except as described in the Prospectus, there is not
pending or threatened any action, suit, proceeding,
inquiry or investigation against any Property, the
Company or any of its Subsidiaries or any of their
respective partners, officers or directors or to which
the properties, assets or rights of any such entity are
subject, which, if determined adversely to any such
entity, would individually or in the aggregate have a
material adverse effect on the financial position,
results of operations or business of the Company and it
subsidiaries, taken as a whole, or which is required to
be disclosed in the Registration Statement.
(xiii) The descriptions in the Registration
Statement and the Prospectus of the contracts, leases
and other legal documents therein described present
fairly the information required to be shown and there
are no contracts, leases or other documents known to
such counsel of a character required to be described in
the Registration Statement or the Prospectus or to be
filed as exhibits to the Registration Statement which
are not described or filed as required. There are no
statutes or regulations applicable to the Company, its
Subsidiaries or the Properties or certificates, permits
or other authorizations from governmental regulatory
officials or bodies required to be obtained or
maintained by the Company, its Subsidiaries or the
Properties, known to such counsel, of a character
required to be disclosed in the Registration Statement
or the Prospectus which have not been so disclosed and
properly described therein. To such counsel's
knowledge, all agreements between the Company or any of
its Subsidiaries, respectively, and third parties
expressly referenced in the Prospectus are legal, valid
and binding obligations, enforceable in accordance with
their respective terms, except to the extent
enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws of general
applicability relating to or affecting creditors'
rights and to general equitable principles.
(xiv) The Shares have been approved for
listing on the NYSE upon official notice of issuance.
(xv) The Company is organized in conformity
with the requirements for qualification as a real
estate investment trust pursuant to Sections 856
through 860 of the Code, and the Company's proposed
method of operation will enable it to meet the
requirements for qualification and taxation as a real
estate investment trust under the Code. Each of the
Subsidiaries that is organized as a partnership will be
treated as a partnership for federal income purposes
and not as a corporation or an association taxable as a
corporation.
(xvi) The Registration Statement has become
effective under the 1933 Act and, to the knowledge of
such counsel, no stop order suspending the
effectiveness of the Registration Statement has been
issued and no proceeding for that purpose has been
instituted or is pending or contemplated under the 1933
Act. Other than financial statements and other
financial and operating data and schedules contained
therein, as to which counsel need express no opinion
(i) the Registration Statement, all Preliminary
Prospectuses, the Prospectus and any amendment or
supplement thereto, at the time they became effective
or were filed, complied as to form in all material
respects with the 1933 Act and the 1933 Act Regulations
and (ii) the documents incorporated by reference in the
Registration Statement all Preliminary Prospectuses,
the Prospectus and any amendment or supplement thereto,
at the time they became effective or were filed,
complied as to form in all material respects with the
Exchange Act and the rules and regulations of the
Commission thereunder.
(xvii) Neither the Company nor any of its
Subsidiaries is, or solely as a result of the
consummation of the transactions contemplated hereby
will become, an "investment company," or a company
"controlled" by an "investment company," within the
meaning of the 1940 Act.
(xviii) The descriptions in the Prospectus
of statutes, regulations, legal or governmental
proceedings are accurate and present fairly a summary
of the information required to be shown under the 1933
Act and the 1933 Act Regulations. The information in
the Prospectus under the captions "Certain Federal
Income Tax Considerations," and "Federal Income Tax
Considerations" to the extent that such information
constitutes matters of law or legal conclusions, has
been reviewed by such counsel, is correct in all
material respects and the discussion thereunder does
not omit any material provisions with respect to the
matters covered and presents fairly the information
required to be disclosed therein under the 1933 Act and
the 1933 Act Regulations.
(xix) Based solely on such counsel's
participation in conferences during which the contents
thereof were discussed, and without any independent
inquiry, such counsel has no reason to believe that the
Registration Statement or any documents incorporated by
reference therein (except for financial statements and
schedules and other financial and operating data
included therein, as to which counsel need make no
statement), at the time such Registration Statement
became effective, and as of the date of such opinion,
contained or contains any untrue statement of a
material fact or omitted or omits to state any material
fact required to be stated therein or necessary to make
statements therein not misleading, or that the
Prospectus (except for financial statements and
schedules and other financial and operating data
included therein, as to which counsel need make no
statement), or any amendment or supplement thereto made
prior to the Closing Time, as of its issue date, and as
of the date of such opinion, contained or contains any
untrue statement of a material fact or omitted or omits
to state a material fact required to be stated therein
or necessary to make the statements therein, in light
of the circumstances under which they are made, not
misleading.
In rendering the foregoing opinion, such
counsel may rely on the following:
(A) as to matters involving the
application of laws other than the laws of the
United States and jurisdictions in which they are
admitted, to the extent such counsel deems proper
and to the extent specified in such opinion, upon
an opinion or opinions of other counsel familiar
with the applicable laws (in form and substance
and from counsel reasonably satisfactory to
Underwriters' counsel),
(B) as to matters of fact, to the
extent they deem proper, on certificates of
responsible officers of the Company and the
Partnership and certificates or other written
statements of officers or departments of various
jurisdictions having custody of documents
respecting the existence or good standing of such
entities. The opinion of counsel for the Company
shall state that the opinion of any other counsel,
or certificate or written statement, on which such
counsel is relying is in form satisfactory to such
counsel and that you and they are justified in
relying thereon. Copies of all such opinions,
statements or certificates shall be delivered to
Underwriters' counsel.
(f) At the Closing Time, you shall have received a
favorable opinion from Hunton & Xxxxxxxx, counsel for the
Underwriters, dated as of the Closing Time, with respect to
the incorporation of the Company, the issuance and sale of
the Shares, the Registration Statement, the Prospectus and
other related matters as the Underwriters may reasonably
require, and the Company shall have furnished to such
counsel such documents as they may reasonably request for
the purpose of enabling them to pass on such matters.
(g) At the Closing Time, (i) the Registration
Statement and the Prospectus, as they may then be amended or
supplemented, shall contain all statements that are required
to be stated therein under the 1933 Act and the 1933 Act
Regulations and in all material respects shall conform to
the requirements of the 1933 Act and the 1933 Act
Regulations; the Company shall have complied in all material
respects with Rule 430A and neither the Registration
Statement nor the Prospectus, as they may then be amended or
supplemented, shall 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, (ii) there shall not have been,
since the respective dates as of which information is given
in the Registration Statement, any material adverse change
in the business, prospects, properties, assets, results of
operations or condition (financial or otherwise) of the
Company, any of its Subsidiaries or the Properties, whether
or not arising in the ordinary course of business, (iii) no
action, suit or proceeding at law or in equity shall be
pending or, to the best of the Company's knowledge,
threatened against the Company or any of its Subsidiaries,
or affecting the Properties, that would be required to be
set forth in the Prospectus other than as set forth therein
and no proceedings shall be pending or, to the best
knowledge of the Company, threatened against the Company,
any of its Subsidiaries or the Properties before or by any
federal, state or other commission, board or administrative
agency wherein an unfavorable decision, ruling or finding
could materially adversely affect the business, prospects,
assets, results of operations or condition (financial or
otherwise) of the Company or any of its Subsidiaries, other
than as set forth in the Prospectus, (iv) the Company and
the Partnership shall have complied with all agreements and
satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Time, and (v) the
representations and warranties of the Company and the
Partnership set forth in Section 1 shall be accurate as
though expressly made at and as of the Closing Time. At the
Closing Time, you shall have received a certificate executed
by the President and Chief Financial Officer of the Company
and the general partner of the Partnership, dated as of the
Closing Time, to such effect and with respect to the
following additional matters: (A) the Registration
Statement has become effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration
Statement or preventing or suspending the use of the
Prospectus has been issued, and no proceedings for that
purpose have been instituted or are pending or, to the best
of their knowledge, threatened under the 1933 Act; (B) they
have reviewed the Registration Statement and the Prospectus
and, when the Registration Statement became effective and at
all times subsequent thereto up to the delivery of such
certificate, the Registration Statement and the Prospectus
and any amendments or supplements thereto contained all
statements and information required to be included therein
or necessary to make the statements therein not misleading
and neither the Registration Statement nor the Prospectus
nor any amendment or supplement thereto included any untrue
statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading, and, since the
effective date of the Registration Statement, there has
occurred no event required to be set forth in an amended or
supplemented Prospectus that has not been so set forth; and
(C) certain other factual matters specified by you.
(h) At the time that this Agreement is executed by the
Company, you shall have received from KPMG Peat Marwick LLP
a letter, dated the date hereof, in form and substance
satisfactory to you, together with signed or reproduced
copies of such letter for each of the other Underwriters,
confirming that they are independent public accountants with
respect to the Company and the Partnership and the
Properties within the meanings of the 1933 Act and 1933 Act
Regulations, and stating in effect that:
(i) in their opinion, the financial
statements and any supplementary financial information
and schedules included or incorporated by reference in
the Registration Statement and covered by their opinion
therein comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations;
(ii) on the basis of limited procedures (set
forth in detail in such letter and made in accordance
with such procedures as may be specified by you) not
constituting an audit in accordance with generally
accepted auditing standards, consisting of (but not
limited to) a reading of the latest available unaudited
financial statements of the Company, a reading of the
minute books of the Company, inquiries of officials of
the Company responsible for financial and accounting
matters, a reading of the unaudited pro forma financial
statements included or incorporated by reference in the
Registration Statement and Prospectus, and such other
inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused
them to believe that:
(A) the unaudited financial
statements and supporting schedules and other
unaudited financial data of the Company included
or incorporated by reference in the Registration
Statement do not comply as to form in all material
respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act
Regulations or that any material modifications
should be made to such financial information for
them to be in conformity with generally accepted
accounting principles ;
(B) any other unaudited income
statement data and balance sheet items included or
incorporated by reference in the Prospectus do not
agree with the corresponding items in the
unaudited financial statements from which such
data and items were derived or that any such
unaudited data and items were not determined on a
basis substantially consistent with the basis for
the corresponding items in the audited financial
statements included in the Prospectus;
(C) any unaudited pro forma
financial information included in the Prospectus
does not comply as to form in all material
respects with the applicable accounting
requirements of the 1933 Act and the 1933 Act
Regulations or that the pro forma adjustments have
not been properly applied to historical amounts in
the compilation of that information;
(D) at a specified date not more
than five (5) days prior to the date of delivery
of such letter, there was any change in the
Company's capital stock, any increase in the
Company's notes payable or any decrease in
shareholders' equity or in the Company's real
estate assets less accumulated depreciation
(except for normal depreciation) or total assets
from that set forth in the Company's balance sheet
at June 30, 1996, or changes in any other items
specified by the Underwriters, from that set forth
in the Company's consolidated balance sheet as of
June 30, 1996, except as described in such letter,
and
(E) for the period from June 30,
1996 to a specified date not more than five (5)
days prior to the date of delivery of such letter,
there were any decreases in total revenues or net
income for the Company, in each case as compared
with the corresponding period of the preceding
year, except in each case for decreases which the
Prospectus discloses have occurred or may occur or
which are described in such letter; and
(iii) in addition to the procedures referred
to in clause (ii) above and the examination referred to
in their Reports included or incorporated by reference
in the Registration Statement, they have carried out
certain specified procedures, not constituting an audit
in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages
and financial information specified by you which are
derived from the general accounting records of the
Company, which appear or are incorporated by reference
in the Registration Statement or the exhibits or
schedules thereto or the Prospectus and are specified
by you, and have compared such amounts, percentages and
financial information with the accounting records of
the Company and with material derived from such records
and have found them to be in agreement for a period of
three (3) years.
(i) At the Closing Time, you shall have received from
KPMG Peat Marwick LLP a letter, in form and substance
satisfactory to you and dated as of the Closing Time, to the
effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (h) above, except that the
specified date referred to shall be a date not more than
five days prior to the Closing Time.
(j) In the event that either of the letters to be
delivered pursuant to subsections (h) and (i) above sets
forth any such changes, decreases or increases, it shall be
a further condition to your obligations that you shall have
reasonably determined, after discussions with officers of
the Company responsible for financial and accounting matters
and with KPMG Peat Marwick LLP that such changes, decreases
or increases as are set forth in such letters do not reflect
a material adverse change in the capital stock, long-term
debt, total assets, real estate assets less accumulated
depreciation, net current assets or shareholders' equity of
the Company as compared with the amounts shown in the
condensed consolidated balance sheet of the Company at June
30, 1996, or a material adverse change in revenues or net
income for the Company, in each case as compared with the
results of the Company for the corresponding period of the
prior year.
(k) At the Closing Time, counsel for the Underwriters
shall have been furnished with all such letters, documents,
certificates and opinions as they may request for the
purpose of enabling them to pass upon the issuance and sale
of the Shares as contemplated in this Agreement and the
matters referred to in Section 5(f) and in order to evidence
the accuracy and completeness of any of the representations,
warranties or statements of the Company or the Partnership,
the performance of any of the covenants of the Company or
the Partnership, or the fulfillment of any of the conditions
herein contained; and all proceedings taken by the Company
at or prior to the Closing Time in connection with the
authorization, issuance and sale of the Shares as
contemplated in this Agreement shall be satisfactory in form
and substance to you and to counsel for the Underwriters.
The Company and the Partnership will furnish you with such
number of conformed copies of such opinions, certificates,
letters and documents as you shall reasonably request.
(l) The NASD, upon review of the terms of the public
offering of the Shares, shall not have objected to such
offering, such terms or the Underwriters' participation in
the same.
(m) At or prior to the Closing Time, the Firm Shares
and the Option Shares, if any, shall have been duly listed
on the NYSE subject to official notice of issuance.
(n) Subsequent to the date hereof there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally or in
securities of the Company on the NYSE, on the American Stock
Exchange or in the over-the-counter market, (ii) a general
moratorium on commercial banking activities in Tennessee or
New York declared by either Federal or state authorities, as
the case may be, or (iii) the outbreak or escalation of
hostilities involving the United States or the declaration
by the United States of a national emergency or war if the
effect of any such event specified in this clause (iii) in
your reasonable judgment makes it impracticable or
inadvisable to proceed with the public offering or the
delivery of the Shares on the terms and in the manner
contemplated in the Prospectus.
(o) The Partnership shall have provided to the
Underwriters copies of owner's title insurance policies
relating to each of the Properties and a copy of the
proposed title commitment of the Proposed Property.
If any of the conditions specified in this Section 5 shall
not have been fulfilled when and as required by this Agreement to
be fulfilled, this Agreement may be terminated by you on notice
to the Company at any time at or prior to the Closing Time, and
such termination shall be without liability of any party to any
other party, except as provided in Section 4. Notwithstanding
any such termination, the provisions of Section 7 shall remain in
effect.
Section 6. Conditions to Purchase of Option Shares. In
the event that the Underwriters exercise the option granted in
Section 2 hereof to purchase all or any part of the Option Shares
and the Date of Delivery determined by you pursuant to Section 2
hereof is later than the Closing Time, the obligations of the
several Underwriters to purchase and pay for the Option Shares
that they shall have respectively agreed to purchase pursuant to
this Agreement are subject to the accuracy of the representations
and warranties of the Company and the Partnership herein
contained, to the performance by the Company and the Partnership
of their obligations hereunder and to the following further
conditions:
(a) The Registration Statement shall remain effective
at the Date of Delivery, and, at the Date of Delivery, no
stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no
proceedings for that purpose shall have been instituted or
shall be pending or, to the knowledge of the Company, shall
be contemplated by the Commission, and any request on the
part of the Commission for additional information shall have
been complied with to the satisfaction of counsel for the
Underwriters.
(b) At the Date of Delivery, the provisions of
Sections 5(g)(i) through 5(g)(v) shall have been complied
with at and as of the Date of Delivery and, at the Date of
Delivery, you shall have received a certificate executed by
the President and Chief Financial Officer of the Company and
the general partner of the Partnership, dated as of the Date
of Delivery, to such effect and to the effect set forth in
clauses (A), (B) and (C) of Section 5(g).
(c) At the Date of Delivery, you shall have received
an opinion of Baker, Donelson, Bearman & Xxxxxxxx, P.C.,
counsel for the Company and the Partnership, together with
signed or reproduced copies of such opinion for each of the
other Underwriters, in form and substance satisfactory to
counsel for the Underwriters, dated as of the Date of
Delivery, relating to the Option Shares and otherwise to the
same effect as the opinion required by Section 5(e).
(d) At the Date of Delivery, you shall have received
an opinion of Hunton & Xxxxxxxx, counsel for the
Underwriters, dated as of the Date of Delivery, relating to
the Option Shares and otherwise to the same effect as the
opinion required by Section 5(f).
(e) At the Date of Delivery, you shall have received a
letter from KPMG Peat Marwick LLP, in form and substance
satisfactory to you and dated as of the Date of Delivery, to
the effect that they reaffirm the statements made in the
letter furnished pursuant to Section 5(h), except that the
specified date referred to shall be a date not more than
five days prior to the Date of Delivery.
(f) At the Date of Delivery, counsel for the
Underwriters shall have been furnished with all such
documents, certificates and opinions as they may request for
the purpose of enabling them to pass upon the issuance and
sale of the Option Shares as contemplated in this Agreement
and the matters referred to in Section 6(a) and in order to
evidence the accuracy and completeness of any of the
representations, warranties or statements of the Company and
the Partnership, the performance of any of the covenants of
the Company and the Partnership, or the fulfillment of any
of the conditions herein contained; and all proceedings
taken by the Company at or prior to the Date of Delivery in
connection with the authorization, issuance and sale of the
Option Shares as contemplated in this Agreement shall be
satisfactory in form and substance to you and to counsel for
the Underwriters.
(g) At or prior to the Date of Delivery, the Option
Shares shall have been duly listed on the NYSE subject to
official notice of issuance.
Section 7. Indemnification and Contribution. (a) The
Company and the Partnership, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses,
claims, damages or liabilities, joint or several, to which such
Underwriter may become subject under the 1933 Act, the 1934 Act
or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are
based upon any breach of any warranty or covenant of the Company
or the Partnership herein contained or 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 thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arise
out of or are based upon the performance by the Underwriters in
any capacity of any services to the Company, and will reimburse
each Underwriter for any legal or other expenses reasonably
incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action;
provided, however, that the Company or the Partnership shall not
be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any such amendment
or supplement, in reliance upon and in conformity with written
information furnished to the Company by any Underwriter expressly
for use therein. In addition to its other obligations under this
Section 7(a), the Company and the Partnership agree that, as an
interim measure during the pendency of any such claim, action,
investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or
omission, described in this Section 7(a), they will reimburse the
Underwriters on a monthly basis for all reasonable legal and
other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of the
Company's and the Partnership's obligation to reimburse the
Underwriters for such expenses and the possibility that such
payments might later be held to have been improper by a court of
competent jurisdiction. Any such interim reimbursement payments
that are not made to an Underwriter within thirty (30) days of a
request for reimbursement shall bear interest at the prime rate
(or reference rate or other commercial lending rate for borrowers
of the highest credit standing) published from time to time by
The Wall Street Journal (the "Prime Rate") from the date of such
request. This indemnity agreement shall be in addition to any
liabilities that the Company and the Partnership may otherwise
have. Neither the Company nor the Partnership will, without the
prior written consent of each Underwriter, settle or compromise
or consent to the entry of any judgment in any pending or
threatened action or claim or related cause of action or portion
of such cause of action in respect of which indemnification may
be sought hereunder (whether or not such Underwriter is a party
to such action or claim), unless such settlement, compromise or
consent includes an unconditional release of such Underwriter
from all liability arising out of such action or claim (or
related cause of action or portion thereof).
The indemnity agreement in this Section 7(a) shall extend
upon the same terms and conditions to, and shall inure to the
benefit of, each person, if any, who controls any Underwriter
within the meaning of the 1933 Act or the 1934 Act to the same
extent as such agreement applies to the Underwriters.
(b) Each Underwriter, severally, but not jointly, and in
proportion to their respective underwriting commitments, will
indemnify and hold harmless the Company against any losses,
claims, damages or liabilities to which the Company may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any breach of any
warranty or covenant by you herein contained or 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
thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or
omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by
such Underwriter expressly for use therein; and will reimburse
the Company for any legal or other expenses reasonably incurred
by the Company in connection with investigating or defending any
such loss, claim, damage, liability or action. In addition to
its other obligations under this Section 7(b), the Underwriters
agree that, as an interim measure during the pendency of any such
claim, action, investigation, inquiry or other proceeding arising
out of or based upon any statement or omission, or any alleged
statement or omission, described in this Section 7(b), they will
reimburse the Company on a monthly basis for all reasonable legal
and other expenses incurred in connection with investigating or
defending any such claim, action, investigation, inquiry or other
proceeding, notwithstanding the absence of a judicial
determination as to the propriety and enforceability of their
obligation to reimburse the Company for such expenses and the
possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. Any such interim
reimbursement payments that are not made to the Company within 30
days of a request for reimbursement shall bear interest at the
Prime Rate from the date of such request. This indemnity
agreement shall be in addition to any liabilities that the
Underwriters may otherwise have.
The indemnity agreement in this Section 7(b) shall extend
upon the same terms and conditions to, and shall inure to the
benefit of, each officer and director of the Company and each
person, if any, who controls the Company within the meaning of
the 1933 Act or the 1934 Act to the same extent as such agreement
applies to the Company.
(c) Promptly after receipt by an indemnified party under
subsection (a) or (b) above of notice of the commencement of any
action, such indemnified party shall, if a claim in respect
thereof is to be made against the indemnifying party under such
subsection, notify the indemnifying party in writing of the
commencement thereof; no indemnification provided for in Section
7(a) or 7(b) shall be available to any party who shall fail to
give notice as provided in this Section 7(c) if the party to whom
notice was not given was unaware of the proceeding to which such
notice would have related and was prejudiced by the failure to
give such notice, but the failure so to notify the indemnifying
party will not relieve the indemnifying party from any liability
that it may have to any indemnified party otherwise than under
this Section 7. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof with counsel satisfactory
to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party),
except that if the indemnified party has been advised by counsel
in writing that there are one or more defenses available to the
indemnified party which are different from or additional to those
available to the indemnifying party, then the indemnified party
shall have the right to employ separate counsel and in that event
the reasonable fees and expenses of such separate counsel for the
indemnified party shall be paid by the indemnifying party;
provided, however, that if the indemnifying party is the Company,
the Company shall only be obligated to pay the reasonable fees
and expenses of a single law firm (in addition to those of its
own counsel and any reasonably necessary local counsel) employed
by all of the indemnified parties and the persons referred to in
Section 7(a) hereof. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) It is agreed that any controversy arising out of the
operation of the interim reimbursement arrangements set forth in
Section 7(a) and 7(b) hereof, including the amounts of any
requested reimbursement payments, the method of determining such
amounts and the basis on which such amounts shall be apportioned
among the indemnifying parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the
National Association of Securities Dealers, Inc. Any such
arbitration must be commenced by service of a written demand for
arbitration or a written notice of intention to arbitrate,
therein electing the arbitration tribunal. In the event the
party demanding arbitration does not make such designation of an
arbitration tribunal in such demand or notice, then the party
responding to said demand or notice is authorized to do so. Any
such arbitration will be limited to the operation of the interim
reimbursement provisions contained in Sections 7(a) and 7(b)
hereof and will not resolve the ultimate propriety or
enforceability of the obligation to indemnify for expenses that
is created by the provisions of Sections 7(a) and 7(b).
(e) In order to provide for just and equitable contribution
in circumstances under which the indemnity provided for in this
Section 7 is for any reason judicially determined (by the entry
of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial
of the right of appeal) to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the
Company and the Partnership, on the one hand, and the
Underwriters, on the other hand, shall contribute to the
aggregate losses, liabilities, claims, damages and expenses of
the nature contemplated by such indemnity incurred by the Company
and the Partnership and one or more of the Underwriters, as
incurred, in such proportions that (a) the Underwriters are
responsible for that portion represented by the percentage that
the underwriting discount appearing on the cover page of the
Prospectus bears to the initial public offering price (before
deducting expenses) appearing thereon, and (b) the Company and
the Partnership are responsible for the balance, provided,
however, that no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation; provided, further, that if the
allocation provided above is not permitted by applicable law, the
Company and the Partnership, on the one hand, and the
Underwriters, on the other, shall contribute to the aggregate
losses in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative
fault of the Company and the Partnership, on the one hand, and
the Underwriters, on the other, in connection with the statements
or omissions which resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable
considerations. Relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material
fact relates to information supplied by the Company or the
Partnership, on the one hand, or by the Underwriters, on the
other hand, and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission. The Company, the Partnership and the
Underwriters agree that it would not be just and equitable if
contributions pursuant to this Section 7(e) were determined by
pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations
referred to above in this Section 7(e). The amount paid or
payable by a party as a result of the losses, claims, damages or
liabilities referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending such action or
claim. Notwithstanding the provisions of this Section 7(e), no
Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged
omission. The Underwriters' obligations in this Section 7(e) to
contribute are several in proportion to their respective
underwriting obligations and not joint. For purposes of this
Section 7(e), each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the
same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed
the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company.
Section 8. Representations, Warranties and Agreements to
Survive Delivery. The representations, warranties, indemnities,
agreements and other statements of the Company or the Partnership
or officers of the Company set forth in or made pursuant to this
Agreement will remain operative and in full force and effect
regardless of any investigation made by or on behalf of the
Company, the Partnership or any Underwriter or controlling
person, with respect to an Underwriter or the Company or the
Partnership, and will survive delivery of and payment for the
Shares or termination of this Agreement for a period of two (2)
years.
Section 9. Effective Date of Agreement and Termination.
(a) This Agreement shall become effective immediately as to
Sections 4 and 7 and, as to all other provisions at 10:00 a.m.
E.D.T. on the first full business day following the date of
execution of this Agreement; but this Agreement shall
nevertheless become effective at such earlier time as you may
determine on and by notice to the Company or by release of any of
the Shares for sale to the public. For the purposes of this
Section 9, the Shares shall be deemed to have been so released
upon the release of publication of any newspaper advertisement
relating to the Shares or upon the release by you of telegrams or
facsimile transmission (i) advising the Underwriters that the
Shares are released for public offering, or (ii) offering the
Shares for sale to securities dealers, whichever may occur first.
By giving notice before the time this Agreement becomes
effective, you or the Company, may prevent this Agreement from
becoming effective, without liability of any party to any other
party, except that the Company shall remain obligated to pay
costs and expenses to the extent provided in Section 4 hereof.
(b) You may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Time (i) in
accordance with the last paragraph of Section 5 of this
Agreement, or (ii) if there has been since the respective dates
as of which information is given in the Registration Statement,
any material adverse change, or any development involving a
prospective material adverse change, in or affecting the
business, prospects, management, properties, assets, results of
operations or condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole, whether or not arising in
the ordinary course of business, or (iii) if there has occurred
or accelerated any outbreak of hostilities or other national or
international calamity or crisis or change in economic or
political conditions the effect of which on the financial markets
of the United States is such as to make it, in your judgment,
impracticable to market the Shares or enforce contracts for the
sale of the Shares, or (iv) if trading in any securities of the
Company has been suspended by the Commission or by the NYSE, or
if trading generally on the NYSE, the American Stock Exchange or
in the over-the-counter market has been suspended, or limitations
on prices for trading (other than limitations on hours or numbers
of days of trading) have been fixed, or minimum or maximum ranges
for prices for securities have been required, by the NYSE, the
American Stock Exchange or the NASD or by order of the Commission
or any other governmental authority, or (v) if a banking
moratorium has been declared by federal or New York or Tennessee
authorities, or (vi) any federal or state statute, regulation,
rule or order of any court or other governmental authority has
been enacted, published, decreed or otherwise promulgated which
in your reasonable opinion materially adversely affects or will
materially adversely affect the business or operations of the
Company, any of its Subsidiaries or any Property, or (vii) any
action has been taken by any federal, state or local government
or agency in respect of its monetary or fiscal affairs which in
your reasonable opinion has a material adverse effect on the
securities markets in the United States.
(a) If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any
party to any other party, except to the extent provided in
Section 4. Notwithstanding any such termination, the provisions
of Section 7 shall remain in effect.
Section 10. Default by One or More of the Underwriters.
If one or more of the Underwriters shall fail at the Closing Time
to purchase the Shares that it or they are obligated to purchase
pursuant to this Agreement (the "Defaulted Securities"), you
shall have the right, within 36 hours thereafter, to make
arrangements for the non-defaulting Underwriters or any other
underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and
upon the terms set forth in this Agreement; if, however, you have
not completed such arrangements within such 36-hour period, then:
(a) If the aggregate number of Firm Shares which are
Defaulted Securities does not exceed 10% of the aggregate
number of Firm Shares to be purchased pursuant to this
Agreement, the non-defaulting Underwriter shall be obligated
to purchase the full amount thereof in the proportions that
their respective underwriting obligation proportions bear to
the aggregate underwriting obligation proportions of all non-
defaulting Underwriters, and
(b) If the aggregate number of Firm Shares which are
Defaulted Securities exceeds 10% of the aggregate number of
Firm Shares to be purchased pursuant to this Agreement, this
Agreement shall terminate without liability on the part of
the non-defaulting Underwriter.
No action taken pursuant to this Section 10 shall
relieve the defaulting Underwriter from liability in respect
of its default.
In the event of any such default that does not result
in a termination of this Agreement, either you or the
Company shall have the right to postpone the Closing Time
for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus
or in any other documents or arrangements, and the Company
agrees promptly to file any amendments to the Registration
Statement or supplements to the Prospectus that may thereby
be made necessary. As used in this Agreement, the term
"Underwriter" includes any person substituted for an
Underwriter under this Section 10.
Section 11. Default by the Company. If the Company shall
fail at the Closing Time to sell and deliver the aggregate number
of Firm Shares that it is obligated to sell, then this Agreement
shall terminate without any liability on the part of any non-
defaulting party, except to the extent provided in Section 4 and
except that the provisions of Section 7 shall remain in effect.
No action taken pursuant to this Section shall relieve the
Company from liability, if any, in respect to such default.
Section 12. Notices. All notices and other
communications under this Agreement shall be in writing and shall
be deemed to have been duly given if delivered, mailed or
transmitted by any standard form of telecommunication. Notices
to the Underwriters shall be directed c/o Xxxxxx Xxxxxx &
Company, Inc., 00 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000,
Attention: Xxxxx Xxxxx, Managing Director (with a copy sent in
the same manner to Hunton & Xxxxxxxx, X.X. Xxx 000, Xxxxxxxxx,
Xxxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, Esq.); and notices
to the Company and the Partnership shall be directed to them at
Mid-America Apartment Communities, Inc., 0000 Xxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxxxx X. Xxxxx,
President (with a copy sent in the same manner to Baker,
Donelson, Bearman, & Xxxxxxxx, P.C., 000 Xxxxxxx Xxxxxx, 00xx
Xxxxx, Xxxxxxx, Xxxxxxxxx 00000, Attention: Xxxx X. Good, Esq.).
Section 13. Parties. This Agreement is made solely for
the benefit of and is binding upon the Underwriters, the Company
and the Partnership and, to the extent provided in Section 7, any
person controlling the Company, the Partnership, or any of the
Underwriters, the officers and directors of the Company, and
their respective executors, administrators, successors and
assigns and, subject to the provisions of Section 10, no other
person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include
any purchaser, as such purchaser, from any of the several
Underwriters of the Shares.
All of the obligations of the Underwriters hereunder are
several and not joint.
Section 14. Governing Law and Time. This Agreement shall
be governed by the laws of the State of Tennessee. Specified
time of the day refers to United States Eastern Time. Time shall
be of the essence of this Agreement.
Section 15. Counterparts. This Agreement may be executed
in one or more counterparts and when a counterpart has been
executed by each party, all such counterparts taken together
shall constitute one and the same agreement.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof,
whereupon this instrument will become a binding agreement among
the Company, the Partnership and the several Underwriters in
accordance with its terms. It is understood that your acceptance
of this letter on behalf of the Underwriters is pursuant to the
authorities set forth in a form of Agreement Among Underwriters,
the form of which shall be submitted to the Company for
examination, upon request, but without warranty on your part as
to the authority of the signers thereof.
Section 16. Power of Attorney. X.X. Xxxxxxxx & Co.
hereby confers upon Xxxxxx Xxxxxx & Company, Inc. full power and
authority to act for it in connection with all matters pertaining
to this Agreement.
Very truly yours,
MID-AMERICA APARTMENT COMMUNITIES, INC.
By: /s/ Simon X.X. Xxxxxxxxx
----------------------------
Name: Simon X.X. Xxxxxxxxx
Title: Chief Financial Officer
MID-AMERICA APARTMENTS, L.P.
By: MID-AMERICA APARTMENT COMMUNITIES, INC.
---------------------------------------
General Partner
By: /s/ Simon X.X. Xxxxxxxxx
---------------------------
Name: Simon X.X. Xxxxxxxxx
Title: Chief Financial Officer
Confirmed and accepted as of the date first above written:
XXXXXX XXXXXX & COMPANY, INC.
----------------------------------
By: /s/ Xxxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxxx X. Xxxxx
Title: Managing Director
X.X. XXXXXXXX & CO.
---------------------------------
By: /s/ Xxxxx Xxxxx Xxxxx
----------------------
Name: Xxxxx Xxxxx Xxxxx
Title: Partner
SCHEDULE A
Number of
Firm Shares
Underwriters to be Purchased
----------------------------- ----------------
Xxxxxx Xxxxxx & Company, Inc. 875,000
X.X. Xxxxxxxx & Co. 875,000
--------
Total 1,750,000
=========
SCHEDULE B
Subsidiaries of the Company
Mid-America Apartments, LP
MAC of Delaware, Inc.
MAAC, Inc.
Mid-America Apartment Communities of Texas, L.P.
America First Austin REIT, Inc.
America First Florida REIT, Inc.
America First South Carolina REIT, Inc.
America First Tennessee REIT, Inc.
America First Texas REIT, Inc.
America First Arizona REIT, Inc.
Madison, XX
Xxxxxxx, LP
River Hills Partnership
Pine Trails JV, LP
Fairways - Columbia LP
MAAC, Tanglewood LP
Woodridge JV, XX
Xxxxx of Post House, LP
