Exhibit 1
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
9 1/4% Series C Cumulative Redeemable Preferred
Shares of Beneficial Interest
(Liquidation Preference $25.00 Per Share)
TERMS AGREEMENT
Dated: June 14, 2001
To: COLONIAL PROPERTIES TRUST
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Chairman of the Board of Trustees
Ladies and Gentlemen:
We (the "Underwriters") understand that Colonial Properties Trust, an
Alabama real estate investment trust (the "Company"), proposes to issue and sell
preferred shares of beneficial interest, $.01 par value (the "Preferred Shares")
(such Preferred Shares being hereinafter referred to as the "Underwritten
Securities"). Subject to the terms and conditions set forth or incorporated by
reference herein, the Underwriters named below offer to purchase, severally and
not jointly, the respective numbers of Initial Underwritten Securities (as
defined in the Underwriting Agreement dated June 14, 2001 (the "Underwriting
Agreement")) set forth below opposite their respective names and a proportionate
number of the Option Securities (as defined in the Underwriting Agreement), to
the extent any are purchased, at the purchase price, and with the underwriting
discount, set forth below.
Number of
Shares of
Initial
Underwritten
Securities
----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated................................................................................. 1,650,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated................................................................. 200,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated........................................................................... 50,000
▇▇▇▇▇▇▇▇▇▇ & Co. Inc................................................................................. 50,000
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc....................................................................... 50,000
----------
TOTAL................................................................................................ 2,000,000
==========
The Underwritten Securities shall have the following terms:
Title of Securities: 9 1/4% Series C Cumulative Redeemable Preferred Shares of
Beneficial Interest, par value $0.01 per share
Number of Shares: 2,000,000
Current Ratings: ▇▇▇▇▇'▇: ba1
Standard & Poor's: BB+
Fitch, Inc.: BBB-
Dividend Rate: 9 1/4% per annum, Payable: last day of March, June, September aNd
December, commencing on or about September 30, 2001
Liquidation Preference: $25.00 per share
Ranking: As set forth in the Prospectus Supplement dated June 14, 2001
Public offering price
per share: $25.00, plus accrued dividends from the date of original issue
of the Initial Underwritten Securities
Purchase price per share: $25.00, plus accrued dividends from the date of original issue
of the Initial Underwritten Securities
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Underwriting discount
per share: $.7875, to be paid by Colonial Realty Limited Partnership
Conversion Provisions: None
Redemption Provisions: As set forth in the Prospectus Supplement dated June 14, 2001
Sinking Fund Requirements: None
Number of Option Securities,
if any, that may be
purchased by the
Underwriters: 300,000
Delayed Delivery Contracts: Not authorized
Additional co-managers,
if any: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
Other terms: The Company will not, between the date hereof and the Closing
Time, with respect to the Preferred Shares, without the prior
written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., offer or sell, grant
any option for the sale of, or enter into any agreement to
sell, any securities of the same class or series or ranking on
a parity with such Preferred Shares (other than the Preferred
Shares which are to be sold pursuant hereto).
The Company will use its best efforts to list the Preferred
Shares on the New York Stock Exchange.
Closing date and
location: June 19, 2001, at 9:00 A.M., New York City time, at Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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All the provisions contained in the document attached as Annex A hereto
entitled "Colonial Properties Trust - Preferred Shares, Common Shares, and
Common Share Warrants - Underwriting Agreement" are hereby incorporated by
reference in their entirety herein and shall be deemed to be a part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Terms defined in such document are used herein as therein defined.
Please accept this offer no later than seven o'clock P.M. (New York
City time) on June 14, 2001 by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
Acting on behalf of themselves
and the other named Underwriters
Accepted:
COLONIAL PROPERTIES TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chief Financial Officer
and Secretary
COLONIAL REALTY LIMITED PARTNERSHIP,
the Operating Partnership
By: Colonial Properties Trust,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chief Financial Officer
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COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
Preferred Shares, Common Shares, and Common Share Warrants
UNDERWRITING AGREEMENT
June 14, 2001
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
4 World Financial Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Colonial Properties Trust, an Alabama real estate investment trust (the
"Company") and the direct general partner of Colonial Realty Limited
Partnership, a limited Partnership organized under the laws of the State of
Delaware (the "Operating Partnership"), proposes to issue and sell preferred
shares of beneficial interest ("Preferred Shares"), common shares of beneficial
interest, $.01 par value ("Common Shares"), and warrants exercisable for Common
Shares ("Common Share Warrants"), from time to time, in one or more offerings on
terms to be determined at the time of sale. Each series of Preferred Shares may
vary as to the specific number of shares, title, stated value, liquidation
preference, issuance price, ranking, dividend rate or rates (or method of
calculation), dividend payment dates, redemption provisions, sinking fund
requirements, conversion or exchange provisions and any other variable terms
established by the Company's Board of Trustees. The Common Share Warrants will
be issued pursuant to a warrant agreement (the "Warrant Agreement") between the
Company and a warrant agent (the "Warrant Agent"). As used herein, "Securities"
shall mean the Preferred Shares, Common Shares and Common Share Warrants; and
"Warrant Securities" shall mean the Common Shares issuable upon exercise of
Common Share Warrants. As used herein, "you" and "your", unless the context
otherwise requires, shall mean the parties to whom this underwriting agreement
(this "Agreement") is addressed together with the other parties, if any,
identified in the applicable Terms Agreement (as defined herein) as additional
co-managers with respect to Underwritten Securities (as hereinafter defined)
purchased pursuant thereto.
Whenever the Company determines to make an offering of Securities
through you or through an underwriting syndicate managed by you, the Company
will enter into an agreement
(the "Terms Agreement") providing for the sale of such Securities (the
"Underwritten Securities") to, and the purchase and offering thereof by, you and
such other underwriters, if any, selected by you as have authorized you to enter
into such Terms Agreement on their behalf (the "Underwriters", which term shall
include you whether acting alone in the sale of the Underwritten Securities or
as a member of an underwriting syndicate and any Underwriter substituted
pursuant to Section 10 hereof). The Terms Agreement relating to the offering of
Underwritten Securities shall specify the number of Underwritten Securities of
each class or series to be initially issued (the "Initial Underwritten
Securities"), the names of the Underwriters participating in such offering
(subject to substitution as provided in Section 10 hereof), the number of
Initial Underwritten Securities which each such Underwriter severally agrees to
purchase, the names of such of you or such other Underwriters acting as
co-managers, if any, in connection with such offering, the price at which the
Initial Underwritten Securities are to be purchased by the Underwriters from the
Company, the initial public offering price, if any, the time, date and place of
delivery and payment, any delayed delivery arrangements and any other variable
terms of the Initial Underwritten Securities (including but not limited to,
current ratings, designations, liquidation preferences, conversion or exchange
provisions, redemption provisions and sinking fund requirements (in the case of
Preferred Shares only) and the terms of the Warrant Securities and the terms,
prices and dates upon which such Warrant Securities may be purchased). In
addition, each Terms Agreement shall specify whether the Company has agreed to
grant to the Underwriters an option to purchase additional Underwritten
Securities to cover over-allotments, if any, and the number of Underwritten
Securities subject to such option (the "Option Securities"). As used herein, the
term "Underwritten Securities" shall include the Initial Underwritten Securities
and all or any portion of the Option Securities agreed to be purchased by the
Underwriters as provided herein, if any. The Terms Agreement, which shall be
substantially in the form of Exhibit A hereto, may take the form of an exchange
of any standard form of written telecommunication between you and the Company.
Each offering of Underwritten Securities through you or through an underwriting
syndicate managed by you will be governed by this Agreement, as supplemented by
the applicable Terms Agreement.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-38613) for the
registration of up to $297,406,250 of the Securities and Warrant Securities and
certain of the Company's debt securities, under the Securities Act of 1933, as
amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations"), and the Company has filed such
amendments thereto as may have been required prior to the execution of the
applicable Terms Agreement. Such registration statement (as amended, if
applicable) has been declared effective by the Commission. Such registration
statement and the prospectus constituting a part thereof, in each case as
supplemented by a prospectus supplement relating to the offering of Underwritten
Securities (the "Prospectus Supplement"), including in each case all documents
incorporated therein by reference as of the date of the relevant Prospectus
Supplement and the information, if any, deemed to be a part thereof pursuant to
Rule 430A(b) or Rule 434 of the 1933 Act Regulations as from time to time
amended or supplemented pursuant to the 1933 Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), or otherwise, are collectively referred to
herein as the "Registration Statement" and the "Prospectus", respectively;
PROVIDED, HOWEVER, that a Prospectus Supplement shall be deemed to have
supplemented the Prospectus only with respect to the offering of Underwritten
Securities to which it relates. All references in
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this Agreement to financial statements and schedules and other information which
is "contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act
which is or is deemed to be incorporated by reference in the Registration
Statement or the Prospectus, as the case may be. If the Company elects to rely
on Rule 434 under the 1933 Act Regulations, all references to the Prospectus
shall be deemed to include, without limitation, the form of prospectus and the
abbreviated term sheet, taken together, provided to the Underwriters by the
Company in reliance on Rule 434 under the 1933 Act (the "Rule 434 Prospectus").
If the Company files a registration statement to register a portion of the
Securities and Warrant Securities and relies on Rule 462(b) for such
registration statement to become effective upon filing with the Commission (the
"Rule 462 Registration Statement"), then any reference to "Registration
Statement" herein shall be deemed to be to both the registration statement
referred to above (No. 333-38613) and the Rule 462 Registration Statement, as
each such registration statement may be amended pursuant to the 1933 Act.
Section 1. REPRESENTATIONS AND WARRANTIES.
The Company and the Operating Partnership each severally represents and
warrants to you, as of the date hereof, and to you and each other Underwriter
named in the applicable Terms Agreement, as of the date thereof (in each case, a
"Representation Date"), as follows:
(i) The Registration Statement and the Prospectus, at the time
the Registration Statement became effective and at each time thereafter
on which the Company filed an Annual Report on Form 10-K with the
Commission, complied, and as of each Representation Date will comply,
in all material respects with the requirements of the 1933 Act and the
1933 Act Regulations; the Registration Statement, at the time the
Registration Statement became effective and at each time thereafter on
which the Company filed an Annual Report on Form 10-K with the
Commission, did not, and at each time thereafter on which any amendment
to the Registration Statement becomes effective or the Company files an
Annual Report on Form 10-K with the Commission and as of each
Representation Date, and at the Closing Time (as hereinafter defined),
will not, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and the Prospectus, as of
the date hereof, does not, and as of each Representation Date will not,
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
PROVIDED, HOWEVER, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by any
Underwriter through you expressly for use in the Registration Statement
or Prospectus.
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(ii) The accountants who certified the financial statements
and supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations;
and there have been no disagreements with any accountants or
"reportable events" (as defined in Item 304 of Regulation S-K
promulgated by the Commission), in either case as required to be
disclosed in the Prospectus or elsewhere pursuant to such Item 304.
(iii) The historical financial statements of the Company
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the financial position of the Company,
its consolidated Subsidiaries (as defined herein) and the Operating
Partnership as at the dates indicated and the results of operations for
the periods specified; except as otherwise stated in the Registration
Statement and the Prospectus, said financial statements have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis and comply with the applicable accounting
requirements of the 1933 Act (including, without limitation, Rule 3-14
of Regulation S-X promulgated by the Commission), and all adjustments
necessary for a fair presentation of the results for such periods have
been made; the supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the information required to be stated therein; and the selected
financial data (both historical and pro forma) included or incorporated
by reference in the Registration Statement and the Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with the related financial statements presented therein.
(iv) The historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the revenue and those
operating expenses included in such summaries of the properties related
thereto for the periods specified in conformity with generally accepted
accounting principles; the pro forma consolidated financial statements
included or incorporated by reference in the Registration Statement and
the Prospectus present fairly the pro forma financial position of the
Company and its consolidated Subsidiaries as of the dates indicated and
the results of operations for the periods specified; and such pro forma
financial statements have been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with the
audited financial statements of the Company included or incorporated by
reference in the Registration Statement and the Prospectus, the
assumptions on which such pro forma financial statements have been
prepared are reasonable and are set forth in the notes thereto, and
such pro forma financial statements have been prepared, and the pro
forma adjustments set forth therein have been applied, in accordance
with the applicable accounting requirements of the 1933 Act and the
1933 Act Regulations (including, without limitation, Regulation S-X
promulgated by the Commission), and such pro forma adjustments have
been properly applied to the historical amounts in the compilation of
such statements.
(v) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (a) there has been no material adverse change
in the condition, financial or otherwise, or in the
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earnings, business affairs or business prospects of the Company, and
its Subsidiaries (which term, as used in this Agreement, includes
majority-owned corporations, partnerships and other entities,
including, the Operating Partnership, Colonial VRS, L.L.C., Colonial
Properties Services Limited Partnership (the "Management Partnership")
and Colonial Properties Services, Inc. (the "Management Corporation"),
and includes direct and indirect Subsidiaries, if any) considered as
one enterprise, or any of the real property or improvements thereon
owned by either the Company or any of its Subsidiaries (each
individually a "Property" and collectively the "Properties"), whether
or not arising in the ordinary course of business, (b) no material
casualty loss or material condemnation or other material adverse event
with respect to any of the Properties has occurred, (c) there have been
no transactions entered into by the Company or any of its Subsidiaries,
other than those in the ordinary course of business, which are material
with respect to the Company, and its Subsidiaries considered as one
enterprise, and (d) except for regular quarterly dividends on the
Company's Common Shares or dividends or distributions declared, paid or
made in accordance with the terms of any series of the Company's
Preferred Shares, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(vi) The Company has been duly organized and is validly
existing as a real estate investment trust in good standing under the
laws of the State of Alabama, with power and authority to own, lease
and operate its Properties and to conduct its business as described in
the Prospectus and to enter into and perform its obligations under this
Agreement and the Terms Agreement and the Company is duly qualified to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the
failure to so qualify or to be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and
its Subsidiaries considered as one enterprise.
(vii) The Agreement of Limited Partnership of the Operating
Partnership, as amended and restated (the "Agreement of Limited
Partnership"), has been duly and validly authorized, executed and
delivered by the Company, as general partner of the Operating
Partnership, and by the limited partners of the Operating Partnership
and is a valid and binding agreement of the Company and such limited
partners of the Operating Partnership, enforceable in accordance with
its terms, except as limited by (a) the effect of bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to or affecting the rights or remedies of
creditors or (b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at law, and the
discretion of the court before which any proceeding therefor may be
brought. The Operating Partnership has been duly formed and is validly
existing and is in good standing under the laws of the State of
Delaware, has power and authority to own, lease and operate its
Properties and to conduct its business as described in the Prospectus
and is duly qualified to transact business and is in good standing in
each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in good
standing would not have a material adverse effect on the condition,
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financial or otherwise, or the earnings, business affairs or business
prospects of the Company, its Subsidiaries and the Operating
Partnership considered as one enterprise.
(viii) Each Subsidiary of the Company has been duly formed and
is validly existing and in good standing under the laws of the
jurisdiction of its origin, has power and authority to own, lease and
operate its Properties and to conduct its business as described in the
Prospectus and is duly qualified to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify or to be in
good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company, its Subsidiaries and the Operating
Partnership considered as one enterprise. Except as otherwise stated in
the Prospectus, all of the issued and outstanding capital stock or
other ownership interests in each such Subsidiary have been duly
authorized and validly issued, are fully paid and non-assessable and
are owned by the Company, directly or through Subsidiaries, free and
clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity, except for security interests granted in respect of
indebtedness of the Company or any of its Subsidiaries and described in
the Prospectus.
(ix) Each of the partnership agreements to which the Company
or any of its Subsidiaries is a party has been duly authorized,
executed and delivered by the parties thereto and constitutes the valid
agreement thereof, enforceable in accordance with its terms, except as
limited by (a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
or affecting the rights or remedies of creditors or (b) the effect of
general principles of equity, whether enforcement is considered in a
proceeding in equity or at law, and the discretion of the court before
which any proceeding therefor may be brought; and the execution,
delivery and performance of any of such agreements by the Company or
any of its Subsidiaries, as applicable, did not, at the time of
execution and delivery, and does not constitute a breach of, or default
under, the charter, by-laws, partnership agreement (or other
organizational documents) of such party or any material contract, lease
or other instrument to which such party is a party or by which its
properties may be bound or any law, administrative regulation or
administrative or court decree.
(x) The authorized, issued and outstanding capital shares of
the Company is as set forth in the applicable prospectus supplement
under "Capitalization" (except for subsequent issuances, if any,
pursuant to reservations, agreements, employee benefit plans, dividend
reinvestment or stock purchase plans, employee and director stock
option or restricted stock plans or upon the exercise of options or
convertible securities referred to in the Prospectus); and such shares
have been duly authorized and validly issued and are fully paid and
non-assessable and are not subject to preemptive or other similar
rights.
(xi) The Underwritten Securities being sold pursuant to this
Agreement and the applicable Terms Agreement have, as of each
Representation Date, been duly authorized by the Company, and such
Underwritten Securities have been duly authorized for issuance and sale
pursuant to this Agreement and such Terms Agreement, and such
Underwritten Securities, when issued and delivered by the Company
pursuant to this
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Agreement against payment of the consideration set forth in such Terms
Agreement or any Delayed Delivery Contract (as hereinafter defined),
will be validly issued, fully paid and non-assessable, and the issuance
of such Underwritten Securities will not be subject to preemptive or
other similar rights; the Preferred Shares, if applicable, conform to
the provisions established by the Board of Trustees of the Company; and
the Underwritten Securities being sold pursuant to the applicable Terms
Agreement conform in all material respects to all statements relating
thereto contained in the Prospectus.
(xii) If applicable, the Common Share Warrants have been duly
authorized and, when issued and delivered pursuant to this Agreement
and countersigned by the Warrant Agent as provided in the Warrant
Agreement, will have been duly executed, countersigned, issued and
delivered and will constitute valid and legally binding obligations of
the Company entitled to the benefits provided by the Warrant Agreement
under which they are to be issued; the issuance of the Warrant
Securities upon exercise of the Common Share Warrants will not be
subject to preemptive or other similar rights; and the Common Share
Warrants conform in all material respects to all statements relating
thereto contained in the Prospectus.
(xiii) If applicable, the Common Shares issuable upon
conversion of any of the Preferred Shares or the Warrant Securities
will have been duly and validly authorized and reserved for issuance
upon such conversion by all necessary corporate action and such shares,
when issued upon such conversion, will be duly authorized and validly
issued and will be fully paid and non-assessable, and the issuance of
such shares upon conversion will not be subject to preemptive or other
similar rights; the Common Shares issuable upon conversion of any of
the Preferred Shares or the Warrant Securities, conform in all material
respects to all statements relating thereto contained in the
Prospectus.
(xiv) The applicable Warrant Agreement, if any, will have been
duly authorized, executed and delivered by the Company prior to the
issuance of any applicable Underwritten Securities, and each
constitutes a valid and legally binding agreement of the Company
enforceable in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency or other similar laws relating
to or affecting creditors' rights generally and by general equity
principles (regardless of whether enforcement is considered in a
proceeding in equity or at law); and the Warrant Agreement, if any,
conforms in all material respects to all statements relating thereto
contained in the Prospectus.
(xv) None of the Company or any of its Subsidiaries is in
violation of its charter, by-laws, partnership agreement or other
organizational documents or in default in the performance or observance
of any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
instrument to which the Company or any of its Subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any of its Subsidiaries is
subject, except for any such violation or default that would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and
its Subsidiaries considered as one enterprise, and the execution,
delivery and performance of this Agreement, the
7
applicable Terms Agreement or the applicable Warrant Agreement, if any,
and the consummation of the transactions contemplated herein and
therein and compliance by the Company and the Operating Partnership
(with respect to this Agreement), each severally, with obligations
hereunder and thereunder have been duly authorized by all necessary
corporate, trust or partnership action, and will not materially
conflict with or constitute a material breach of, or material default
under, or result in the creation or imposition of any material lien,
charge or encumbrance upon any property or assets of the Company or any
of its Subsidiaries pursuant to, any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Company or
any of its Subsidiaries is a party or by which any of them may be
bound, or to which any of the property or assets of the Company or any
of its Subsidiaries is subject, nor will such action result in any
violation of the charter, by-laws, the partnership agreement or other
organizational documents of the Company or any of its Subsidiaries, or
any applicable law, administrative regulation or administrative or
court decree.
(xvi) The Company has qualified as a real estate investment
trust ("REIT") for its taxable years ended December 31, 1996, December
31, 1997, December 31, 1998, December 31, 1999 and December 31, 2000
and the Company is organized and operates in a manner that will enable
it to qualify to be taxed as a REIT under the Code for the taxable year
ended December 31, 2001 and thereafter provided the Company continues
to meet the asset composition, source of income, shareholder
diversification, distributions, record keeping, and other requirements
of the Code which are necessary for the Company to qualify as a REIT.
(xvii) None of the Company or any of its Subsidiaries is
required to be registered as an "investment company" under the
Investment Company Act of 1940, as amended (the "1940 Act").
(xviii) There is no action, suit or proceeding before or by
any court or governmental agency or body, domestic or foreign, now
pending, or, to the knowledge of the Company or any of its Subsidiaries
threatened against or affecting the Company or any of its Subsidiaries
which is required to be disclosed in the Prospectus (other than as
disclosed therein), or which might result in any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, or which might materially
and adversely affect the property or assets thereof or which might
materially and adversely affect the consummation of this Agreement, the
applicable Terms Agreement, or the applicable Warrant Agreement, if
any, or the transactions contemplated herein or therein; all pending
legal or governmental proceedings to which the Company or any of its
Subsidiaries is a party or of which any property or assets of the
Company or any of its Subsidiaries is subject which are not described
in the Prospectus, including ordinary routine litigation incidental to
the business, are, considered in the aggregate, not material to the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as
one enterprise; and there are no contracts or documents of the Company
or any of its Subsidiaries which are required to be filed as exhibits
to the Registration Statement by the 1933 Act or by the 1933 Act
Regulations which have not been so filed.
8
(xix) The Company and its Subsidiaries own or possess any
trademarks, service marks, trade names or copyrights required in order
to conduct their respective businesses as described in the Prospectus,
other than those the failure to possess or own would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and
its Subsidiaries considered as one enterprise.
(xx) No authorization, approval, permit or consent of any
court or governmental authority or agency is necessary in connection
with the consummation by the Company or the Operating Partnership of
the transactions contemplated by this Agreement, the applicable Terms
Agreement, or any Depositary Agreement, except such as have been
obtained or as may be required under the 1933 Act or the 1933 Act
Regulations, state securities laws, real estate syndication laws or
under the rules and regulations of the National Association of
Securities Dealers, Inc.
(xxi) The Company and its Subsidiaries possess such
certificates, authorizations or permits issued by the appropriate
state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses as described in the Prospectus,
other than those the failure to possess or own would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company and
its Subsidiaries considered as one enterprise, and neither the Company
nor any of its Subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would materially and
adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise.
(xxii) The Company has full right, power and authority under
its organizational documents to enter into this Agreement, the
applicable Terms Agreement and the Delayed Delivery Contracts, if any,
and this Agreement has been, and as of each Representation Date, the
applicable Terms Agreement and the Delayed Delivery Contracts, if any,
will have been, duly authorized, executed and delivered by the Company.
(xxiii) The Operating Partnership has full right, power and
authority under its organizational documents to enter into this
Agreement and this Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(xxiv) The documents incorporated or deemed to be incorporated
by reference in the Prospectus, at the time they were or hereafter are
filed with the Commission, complied and will comply in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act
Regulations"), and, when read together with the other information in
the Prospectus, at the time the Registration Statement became effective
and as of the applicable Representation Date or Closing Time (as
defined herein) or during the period specified in Section 3(f), did not
and will not include an untrue statement of a material fact or omit to
9
state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
(xxv) There are no persons with registration or other similar
rights to have any securities registered pursuant to the Registration
Statement.
(xxvi) None of the Company or any of its Subsidiaries, or any
of the officers, directors, trustees or partners thereof has taken nor
will any of them take, directly or indirectly, any action resulting in
a violation of Regulation M under the 1934 Act or designed to cause or
result in, or which has constituted or which reasonably might be
expected to constitute, the stabilization or manipulation of the price
of the Underwritten Securities, Common Shares issuable upon conversion
of any of the Preferred Shares or facilitation of the sale or resale of
the Underwritten Securities.
(xxvii) Except as otherwise disclosed in the Prospectus and
except as would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Company and its Subsidiaries considered as one
enterprise: (a) except for the portions of Macon Mall, Bel Air Mall and
Fashion Square Mall that are leased by the Company pursuant to a
long-term subordinated ground lease, the Company or its Subsidiaries
have good and marketable title in fee simple to all real property and
improvements described in the Prospectus as being owned in fee and, at
the Closing Time, the Company and its Subsidiaries will have good and
marketable title in fee simple to all real property and improvements as
described in the Prospectus as being owned in fee; (b) all liens,
charges, encumbrances, claims or restrictions on or affecting the real
property and improvements owned by the Company or any of its
Subsidiaries which are required to be disclosed in the Prospectus are
disclosed therein; (c) none of the Company or any of its Subsidiaries,
or to the knowledge of the Company, any lessee of any portion of the
real property or improvements owned by the Company or any of its
Subsidiaries, is in default under any of the leases pursuant to which
the Company or any of its Subsidiaries leases such real property or
improvements, and the Company and its Subsidiaries know of no event
which, but for the passage of time or the giving of notice, or both,
would constitute a default under any of such leases; (d) all the real
property and improvements owned by the Company or its Subsidiaries
comply with all applicable codes and zoning laws and regulations; and
(e) the Company and its Subsidiaries have no knowledge of any pending
or threatened condemnation, zoning change or other proceeding or action
that would in any manner affect the size of, use of, improvements on,
construction on, or access to any of the real property or improvements
owned by the Company, any of its Subsidiaries or the Operating
Partnership.
(xxviii) The Company, its Subsidiaries or the Operating
Partnership has adequate title insurance on each Property owned in fee
by the Company or its Subsidiaries.
(xxix) Except as otherwise disclosed in the Prospectus, each
of the Company and the Operating Partnership has no knowledge of: (a)
the unlawful presence of any hazardous substances, hazardous materials,
toxic substances or waste materials (collectively, "Hazardous
Materials") on any of the Properties or (b) any unlawful spills,
10
releases, discharges or disposal of Hazardous Materials that have
occurred or are presently occurring on or from the Properties as a
result of any construction on or operation and use of the Properties,
which presence or occurrence would have a material adverse effect on
the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company, its Subsidiaries and the
Operating Partnership considered as one enterprise; and in connection
with the construction on or operation and use of the Properties, each
of the Company, and the Operating Partnership has no knowledge of any
material failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and
judicial orders relating to the generation, recycling, reuse, sale,
storage, handling, transport and disposal of any Hazardous Materials
that could have a material adverse effect on the condition, financial
or otherwise, or the earnings, business affairs or business prospects
of the Company, its Subsidiaries and the Operating Partnership
considered as one enterprise.
Any certificate signed by any officer of the Company in such capacity
or as indirect general partner of the Operating Partnership and delivered to you
or to counsel for the Underwriters in connection with the offering of the
Underwritten Securities shall be deemed a representation and warranty by the
Company or the Operating Partnership, as the case may be, to each Underwriter
participating in such offering as to the matters covered thereby on the date of
such certificate.
Section 2. PURCHASE AND SALE.
The several commitments of the Underwriters to purchase the
Underwritten Securities pursuant to the applicable Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
herein contained and shall be subject to the terms and conditions herein set
forth.
In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
may grant, if so provided in the applicable Terms Agreement relating to the
Initial Underwritten Securities, an option to the Underwriters named in such
Terms Agreement, severally and not jointly, to purchase up to the number of
Option Securities set forth therein at the same price per Option Security as is
applicable to the Initial Underwritten Securities less the amount of any
distribution payable with respect to an Initial Underwritten Security but not
payable with respect to an Option Security. Such option, if granted, will expire
30 days or such lesser number of days as may be specified in the applicable
Terms Agreement after the Representation Date relating to the Initial
Underwritten Securities, and may be exercised in whole or in part from time to
time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Underwritten
Securities upon notice by you to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time, date and place of payment and delivery for such Option Securities.
Any such time and date of delivery (a "Date of Delivery") shall be determined by
you, but shall not be later than three full business days and not be earlier
than two full business days after the exercise of said option, unless otherwise
agreed upon by you and the Company. If the option is exercised as to all or any
portion of the Option Securities, each of the Underwriters, acting severally and
not jointly, will purchase that proportion of the total number of Option
Securities
11
then being purchased which the number of Initial Underwritten Securities each
such Underwriter has severally agreed to purchase as set forth in the applicable
Terms Agreement bears to the total number of Initial Underwritten Securities
(except as otherwise provided in the applicable Terms Agreement), subject to
such adjustments as you in your discretion shall make to eliminate any sales or
purchases of fractional Initial Underwritten Securities.
Payment of the purchase price for, and delivery of, the Underwritten
Securities to be purchased by the Underwriters shall be made at the offices of
Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, 58th Floor, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such other place as shall be agreed upon by you and
the Company, at 9:00 A.M., New York City time, on the third business day (unless
postponed in accordance with the provisions of Section 10) following the date of
the applicable Terms Agreement or, if pricing takes place after 4:30 p.m. New
York City time on the date of the applicable Terms Agreement, on the fourth
business day (unless postponed in accordance with the provisions of Section 10)
following the date of the applicable Terms Agreement or at such other time as
shall be agreed upon by you and the Company (each such time and date being
referred to as a "Closing Time"). In addition, in the event that any or all of
the Option Securities are purchased by the Underwriters, payment of the purchase
price for, and delivery of certificates representing, such Option Securities,
shall be made at the above-mentioned offices of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
or at such other place as shall be agreed upon by you and the Company on each
Date of Delivery as specified in the notice from you to the Company. Unless
otherwise specified in the applicable Terms Agreement, payment shall be made by
wire transfer of immediately available funds to the Company against delivery to
you for the respective accounts of the Underwriters for the Underwritten
Securities to be purchased by them. The Underwritten Securities shall be in such
authorized denominations and registered in such names as you may request in
writing at least one business day prior to the applicable Closing Time or Date
of Delivery, as the case may be. The Underwritten Securities, which may be in
temporary form, will be made available for examination and packaging by you on
or before the first business day prior to the Closing Time or Date of Delivery,
as the case may be.
If authorized by the applicable Terms Agreement, the Underwriters named
therein may solicit offers to purchase Underwritten Securities from the Company
pursuant to delayed delivery contracts ("Delayed Delivery Contracts")
substantially in the form of Exhibit B hereto with such changes therein as the
Company may approve. As compensation for arranging Delayed Delivery Contracts,
the Company will pay to you at Closing Time, for the respective accounts of the
Underwriters, a fee specified in the applicable Terms Agreement for each of the
Underwritten Securities for which Delayed Delivery Contracts are made at the
Closing Time as is specified in the applicable Terms Agreement. Any Delayed
Delivery Contracts are to be with institutional investors of the types described
in the Prospectus. At the Closing Time, the Company will enter into Delayed
Delivery Contracts (for not less than the minimum number of Underwritten
Securities per Delayed Delivery Contract specified in the applicable Terms
Agreement) with all purchasers proposed by the Underwriters and previously
approved by the Company as provided below, but not for an aggregate number of
Underwritten Securities in excess of that specified in the applicable Terms
Agreement. The Underwriters will not have any responsibility for the validity or
performance of Delayed Delivery Contracts.
You shall submit to the Company, at least two business days prior to
the Closing Time, the names of any institutional investors with which it is
proposed that the Company will enter
12
into Delayed Delivery Contracts and the number of Underwritten Securities to be
purchased by each of them, and the Company will advise you, at least two
business days prior to the Closing Time, of the names of the institutions with
which the making of Delayed Delivery Contracts is approved by the Company and
the number of Underwritten Securities to be covered by each such Delayed
Delivery Contract.
The number of Underwritten Securities agreed to be purchased by the
several Underwriters pursuant to the applicable Terms Agreement shall be reduced
by the number of Underwritten Securities covered by Delayed Delivery Contracts,
as to each Underwriter as set forth in a written notice delivered by you to the
Company; PROVIDED, HOWEVER, that the total number of Underwritten Securities to
be purchased by all Underwriters shall be the total number of Underwritten
Securities covered by the applicable Terms Agreement, less the number of
Underwritten Securities covered by Delayed Delivery Contracts.
Section 3. COVENANTS OF THE COMPANY AND THE OPERATING PARTNERSHIP. Each
of the Company and the Operating Partnership covenants with you, and with each
Underwriter participating in the offering of Underwritten Securities, as
follows:
Immediately following the execution of the applicable Terms Agreement,
the Company will prepare a Prospectus Supplement setting forth the number of
Underwritten Securities covered thereby and their terms not otherwise specified
in the Prospectus pursuant to which the Underwritten Securities are being
issued, the names of the Underwriters participating in the offering and the
number of Underwritten Securities which each severally has agreed to purchase,
the names of the Underwriters acting as co-managers in connection with the
offering, the price at which the Underwritten Securities are to be purchased by
the Underwriters from the Company, the initial public offering price, if any,
the selling concession and reallowance, if any, any delayed delivery
arrangements, and such other information as you and the Company deem appropriate
in connection with the offering of the Underwritten Securities; and the Company
will, by the close of business in New York on the business day immediately
succeeding the date of the applicable Terms Agreement, transmit copies of the
Prospectus Supplement to the Commission for filing pursuant to Rule 424(b) of
the 1933 Act Regulations and will furnish to the Underwriters named therein as
many copies of the Prospectus (including such Prospectus Supplement) as you
shall reasonably request. If the Company elects to rely on Rule 434 under the
1933 Act Regulations, the Company will prepare an abbreviated term sheet that
complies with the requirements of Rule 434 under the 1933 Act Regulations and
will provide the Underwriters with copies of the form of Rule 434 Prospectus, in
such number as the Underwriters may reasonably request, and file or transmit for
filing with the Commission the form of Prospectus complying with Rule 434(c)(2)
of the 1933 Act Regulations in accordance with Rule 424(b) of the 1933 Act
Regulations by the close of business in New York on the business day immediately
succeeding the date of the applicable Terms Agreement.
The Company will notify you immediately, and confirm such notice in
writing, of (i) the effectiveness of any amendment to the Registration
Statement, (ii) the transmittal to the Commission for filing of any Prospectus
Supplement or other supplement or amendment to the Prospectus or any document to
be filed pursuant to the 1934 Act, (iii) the receipt of any comments from the
Commission, (iv) any request by the Commission for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus or for
additional
13
information, and (v) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose. The Company will make every reasonable effort to
prevent the issuance of any such stop order and, if any stop order is issued, to
obtain the lifting thereof at the earliest possible moment.
At any time when the Prospectus is required to be delivered under the
1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities, the Company will give you notice of its intention to file or prepare
any amendment to the Registration Statement or any amendment or supplement to
the Prospectus, whether pursuant to the 1933 Act, 1934 Act or otherwise
(including any revised Prospectus which the Company proposes for use by the
Underwriters in connection with an offering of Underwritten Securities which
differs from the Prospectus on file at the Commission at the time the
Registration Statement first becomes effective, whether or not such revised
Prospectus is required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, or any abbreviated term sheet prepared in reliance on Rule 434 of
the 1933 Act Regulations), and will furnish you with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or preparation, as the case may be, and will not file or prepare any such
amendment or supplement or other documents in a form to which you or counsel for
the Underwriters shall reasonably object.
The Company will deliver to each Underwriter as many signed and
conformed copies of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) as such Underwriter reasonably requests.
The Company will furnish to each Underwriter, from time to time during
the period when the Prospectus is required to be delivered under the 1933 Act or
the 1934 Act in connection with sales of the Underwritten Securities, such
number of copies of the Prospectus (as amended or supplemented) as such
Underwriter may reasonably request for the purposes contemplated by the 1933
Act, the 1933 Act Regulations, the 1934 Act or the 1934 Act Regulations.
If at any time when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in connection with sales of the Underwritten
Securities any event shall occur or condition exist as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters or counsel
for the Company, to amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time it is
delivered to a purchaser, or if it shall be necessary, in the reasonable opinion
of either such counsel, at any such time to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, then the Company will promptly prepare and file
with the Commission such amendment or supplement, whether by filing documents
pursuant to the 1933 Act, the 1934 Act or otherwise, as may be necessary to
correct such untrue statement or omission or to make the Registration Statement
and Prospectus comply with such requirements, and the Company will furnish to
the Underwriters a reasonable number of copies of such amendment or supplement.
14
The Company will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities, the Warrant Securities, if any, and Common
Shares issuable upon conversion of the Preferred Shares for offering and sale
under the applicable securities laws and real estate syndication laws of such
states and other jurisdictions of the United States as you may designate. In
each jurisdiction in which the Underwritten Securities, the Warrant Securities,
if any, and Common Shares issuable upon conversion of the Preferred 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 so long as may be required for the distribution of the Underwritten
Securities and the Warrant Securities; PROVIDED, HOWEVER, that the Company shall
not be obligated to (A) qualify as a foreign entity in any jurisdiction where it
is not so qualified, (B) file any general consent to service of process, or (C)
take any action that would subject it to income taxation in any such
jurisdiction.
With respect to each sale of Underwritten Securities, the Company will
make generally available to its security holders as soon as practicable, but not
later than 90 days after the close of the period covered thereby, an earnings
statement (in form complying with the provisions of Rule 158 of the 1933 Act
Regulations) covering a twelve month period beginning not later than the first
day of the Company's fiscal quarter next following the "effective date" (as
defined in such Rule 158) of the Registration Statement.
The Company will use its best efforts to meet the requirements to
qualify as a "real estate investment trust" under the Code for the taxable year
in which sales of the Underwritten Securities are to occur.
The Company, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act in connection with sales of the
Underwritten Securities, will file all documents required to be filed with the
Commission pursuant to Section 13, 14 or 15 of the 1934 Act within the time
periods prescribed by the 1934 Act and the 1934 Act Regulations.
If the Preferred Shares are convertible into Common Shares, the Company
will reserve and keep available at all times, free of preemptive or other
similar rights, a sufficient number of Common Shares for the purpose of enabling
the Company to satisfy any obligations to issue such shares upon conversion of
the Preferred Shares, as the case may be, or upon the exercise of the Common
Share Warrants.
If applicable, the Company will use its best efforts to list the Common
Shares on the New York Stock Exchange or such other national exchange on which
the Company's Common Shares are then listed.
If Preferred Shares are convertible into Common Shares, the Company
will use its best efforts to list the Common Shares issuable on Conversion of
the Preferred Shares on the New York Stock Exchange or such other national
exchange on which the Company's Common Shares are then listed.
Section 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of its obligations under this Agreement or the
applicable Terms Agreement, including (i) the printing and filing of the
Registration Statement as originally filed and of each
15
amendment thereto, (ii) the reproduction and filing of this Agreement and the
applicable Terms Agreement, (iii) the preparation, issuance and delivery of the
Underwritten Securities and the Warrant Securities, if any, to the Underwriters,
(iv) the fees and disbursements of the Company's counsel and accountants, (v)
the qualification of the Underwritten Securities, the Warrant Securities and the
Common Shares issuable upon conversion of Preferred Shares, if any, under
securities laws and real estate syndication laws in accordance with the
provisions of Section 3(g), including filing fees and the fees and disbursements
of counsel for the Underwriters in connection therewith and in connection with
the preparation of any Blue Sky Survey, (vi) the reproduction and delivery to
the Underwriters of copies of any Blue Sky Survey, (vii) the printing and
delivery to the Underwriters of copies of the Registration Statement as
originally filed and of each amendment thereto, each preliminary prospectus and
of the Prospectus and any amendments or supplements thereto, (viii) the
providing and delivery to the Underwriters of copies of the applicable Warrant
Agreement, if any, (ix) any fees charged by nationally recognized statistical
rating organizations for the Rating of the Securities, (x) the fees and
expenses, if any, incurred with respect to the listing of the Underwritten
Securities, or the Common Shares issuable on conversion of the Preferred Shares,
if any, on any national securities exchange, and (xi) the fees and expenses, if
any, incurred with respect to any filing with the National Association of
Securities Dealers, Inc.
If the applicable Terms Agreement is terminated by you in accordance
with the provisions of Section 5, Section 9(b)(i) or 9(b)(ii), the Company shall
reimburse the Underwriters named in such Terms Agreement for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
Section 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The several
obligations of the Underwriters to purchase Underwritten Securities pursuant to
the applicable Terms Agreement are subject to the accuracy of the
representations and warranties of the Company and the Operating Partnership
herein contained, to the accuracy of the statements of the Company's officers on
behalf of the Company, and on behalf of the Company in its capacity as indirect
general partner of the Operating Partnership, made in any certificate pursuant
to the provisions hereof, to the performance by each of the Company and the
Operating Partnership of all of its covenants and other obligations hereunder,
and to the following further conditions:
(a) At Closing Time and at any Date of Delivery, (i) no stop order
suspending the effectiveness of the Registration Statement shall have been
issued under the 1933 Act or proceedings therefor initiated or threatened by the
Commission, (ii) if Preferred Shares are being offered, the rating assigned by
any nationally recognized statistical rating organization to any preferred stock
of the Company as of the date of the applicable Terms Agreement shall not have
been lowered since such date nor shall such rating organization have publicly
announced that it has placed any preferred stock of the Company on what is
commonly termed a "watch list" for possible downgrading, and (iii) there shall
not have come to your attention any facts that would reasonably cause you to
believe that the Prospectus, together with the applicable Prospectus Supplement,
at the time it was required to be delivered to purchasers of the Underwritten
Securities, included an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in light of
the circumstances existing at such time, not misleading.
16
(b) At Closing Time, you shall have received:
(1) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇
& ▇▇▇▇▇▇▇ L.L.P., counsel for the Company and the Operating
Partnership, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly organized and is
validly existing and in good standing as a real estate
investment trust under the laws of the State of Alabama. Based
solely on the certificates of public officials, the Company is
authorized to transact business in the States of Florida and
Georgia as of the dates of the respective certificates
specified in such opinion.
(ii) The Management Corporation was incorporated and
is validly existing and in good standing under the laws of the
State of Alabama. The Management Corporation is authorized to
transact business in the State of Florida as of the date of
the certificate specified in such opinion.
(iii) Each of the Operating Partnership and the
Management Partnership was formed and is validly existing as a
partnership under the laws of the State of Delaware as of the
dates of the respective certificates specified in such
opinion. Each of the Operating Partnership and the Management
Partnership is in good standing under the laws of the State of
Delaware as of the dates of the respective certificates
specified in such opinion. Based solely on certificates of
public officials, each of the Operating Partnership and the
Management Partnership is registered to do business in
Alabama, and the Operating Partnership is authorized to
transact business in the States of Florida and Georgia as of
the dates of the respective certificates specified in such
opinion. The Management Partnership is authorized to transact
business in the State of Florida as of the date of the
certificate specified in such opinion.
(iv) Each of the Company and the Management
Corporation has full trust or corporate power to own, lease or
operate the Properties and to conduct its business as
described in the Prospectus. The Management Partnership has
the partnership power and partnership authority under its
partnership agreement and the Delaware Revised Uniform Limited
Partnership Act (the "Delaware Act") to conduct its business
as described in the Prospectus. The Operating Partnership has
the partnership power and partnership authority under the
Agreement of Limited Partnership and the Delaware Act to own,
lease and operate the Properties and to conduct its business
as described in the Prospectus.
(v) The Company has an authorized capitalization as
set forth in the Prospectus under the captions "Description of
Preferred Shares of Beneficial Interest" and "Description of
Common Shares of Beneficial Interest," and all of
17
the issued shares of beneficial interest of the Company as set
forth in the Prospectus have been duly authorized and,
assuming receipt of consideration therefor as provided in the
resolutions authorizing issuance thereof of the Company's
Board of Trustees, are validly issued, fully paid and
non-assessable. All of the issued shares of capital stock of
the Management Corporation have been duly authorized and,
assuming receipt of consideration therefor as provided in the
applicable resolutions authorizing the issuance thereof of the
board of directors of each such subsidiary, are validly
issued, fully paid and non-assessable. All of the outstanding
partnership interests of the Operating Partnership and the
Management Partnership have been authorized for issuance, are
validly issued and, assuming receipt of the consideration
therefor as provided in the respective partnership agreements
and any resolutions authorizing issuance thereof, are fully
paid.
(vi) Except as set forth in the Prospectus, to such
counsel's knowledge, there are no preemptive or other rights
to subscribe for or to purchase, nor any restriction upon the
voting or transfer of, any Underwritten Securities pursuant to
the Company's declaration of trust or the Company's by-laws or
any agreement or other instrument to which the Company is a
party.
(vii) Each of this Agreement, the applicable Terms
Agreement and the Delayed Delivery Contracts, if any, has been
duly authorized, executed and delivered on behalf of the
Company.
(viii) This Agreement has been duly authorized,
executed and delivered by the Operating Partnership.
(ix) The Underwritten Securities being issued and
sold pursuant to this Agreement and the applicable Terms
Agreement have been duly and validly authorized by all
necessary corporate action on the part of the Company; and
such Underwritten Securities, when issued and delivered by the
Company pursuant to this Agreement against payment of the
consideration set forth in such Terms Agreement or any Delayed
Delivery Contract, will be validly issued, fully paid and
non-assessable, and, if applicable, the Preferred Shares, as
the case may be, conform to the provisions set forth by the
Board of Trustees.
(x) If applicable, the Common Share Warrants have
been duly authorized and, when issued and delivered pursuant
to this Agreement and countersigned by the Warrant Agent as
provided in the Warrant Agreement, will have been duly
executed, countersigned, issued and delivered and will
constitute valid and legally binding obligations of the
Company entitled to the benefits provided by the Warrant
Agreement under which they are to be issued.
18
(xi) If applicable, the Common Shares issuable upon
conversion of any of the Preferred Shares or the exercise of
Warrant Securities have been duly and validly authorized and
reserved for issuance upon such conversion or exercise by all
necessary action on the part of the Company and such shares,
when issued upon such conversion in accordance with the
charter of the Company, the Warrant Agreement, the Terms
Agreement and the Delayed Delivery Contract, as the case may
be, will be duly authorized and validly issued and will be
fully paid and non-assessable, and the issuance of such shares
upon such conversion will not be subject to preemptive or
other similar rights arising by operation of law or otherwise.
(xii) The applicable Warrant Agreement, if any, has
been duly authorized, executed and delivered by the Company,
and (assuming due authorization, execution and delivery by the
Warrant Agent in the case of the Warrant Agreement),
constitutes a valid and legally binding agreement of the
Company enforceable in accordance with its terms; and the
Warrant Agreement, if any, conforms in all material respects
to all statements relating thereto contained in the
Prospectus.
(xiii) If applicable, the relative rights,
preferences, interests and powers of the Preferred Shares, as
the case may be, are as set forth by the Board of Trustees
relating thereto, and all such provisions are valid under
Alabama law.
(xiv) Except as set forth in the Prospectus, to such
counsel's knowledge, based on an officer's certificate from
the Company, there are no proceedings before or by any court,
governmental agency, or arbitrator pending or threatened
against the Company or any of its Subsidiaries which, if
determined adversely to the Company or any of its
Subsidiaries, would have a material adverse effect on the
financial condition, results of operations or business of the
Company and its Subsidiaries, considered as one enterprise.
(xv) The Registration Statement was declared
effective under the 1933 Act as of the date and time specified
in such opinion, the Prospectus was filed with the Commission
pursuant to Rule 424 of the 1933 Act Regulations on the date
specified in such opinion, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for
that purpose is pending or threatened by the Commission.
(xvi) The Registration Statement and the Prospectus,
excluding the documents incorporated by reference therein, as
of their respective effective or issue dates (other than the
financial statements and supporting schedules included therein
or omitted therefrom, and other financial information and data
included
19
therein or omitted therefrom, as to which such counsel need
not express an opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the rules
and regulations thereunder.
(xvii) The documents incorporated by reference in the
Prospectus (other than the financial statements and supporting
schedules and other financial information and data included
therein or omitted therefrom, as to which such counsel need
not express an opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to
form in all material respects with the requirements of the
1934 Act and the rules and regulations promulgated thereunder.
(xviii) The Company has qualified as a REIT for its
taxable years ended December 31, 1996, December 31, 1997,
December 31, 1998, December 31, 1999 and December 31, 2000 and
the Company is organized and operates in a manner that will
enable it to qualify to be taxed as a REIT under the Code for
the taxable year ended December 31, 2001 and thereafter
provided the Company continues to meet the asset composition,
source of income, shareholder diversification, distributions,
record keeping, and other requirements of the Code which are
necessary for the Company to qualify as a REIT.
(xix) The statements contained in the Prospectus
under the heading "Description of Common Shares of Beneficial
Interest," insofar as they describe Alabama statutory law
governing real estate investment trusts organized under the
laws of the State of Alabama, constitute a fair summary
thereof.
(xx) The Underwritten Securities, Warrant Securities
and the Common Shares issuable upon conversion of the
Preferred Shares conform in all material respects to the
description thereof contained in the Prospectus, and the form
of certificate used to evidence the Underwritten Securities
complies in all material respects with all applicable
statutory requirements under the laws of the State of Alabama.
(xxi) To such counsel's knowledge, there are no
contracts or other documents entered into subsequent to the
Company's Annual Report on Form 10-K for the year ended
December 31, 2000 which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement
by the 1933 Act or by the 1933 Act Regulations which have not
been described or filed as exhibits to the Registration
Statement or incorporated therein by reference as permitted by
the 1933 Act Regulations.
20
(xxii) The execution, delivery and performance as of
the date hereof by the Company and the Operating Partnership
of the Underwriting Agreement and the Terms Agreement, do not
(i) result in a breach of or a default under any of the
agreements filed as Exhibits 10.1, 10.2.1, 10.2.2, 10.2.3,
10.2.4, 10.2.5, 10.2.6, 10.2.7, 10.2.8, 10.2.9, 10.2.10,
10.2.11, 10.2.12, 10.2.13, 10.5, 10.13 and 10.14 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 2000, (ii) violate the provisions of the
declaration of trust, articles of incorporation, charter,
partnership agreement or by-laws of the Company, the Operating
Partnership, the Management Partnership or the Management
Corporation, or (iii) to such counsel's knowledge, violate any
order, statute, rule or regulation of any federal or Delaware
or Alabama court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or
any of the Properties. The foregoing opinion shall not be
deemed to address any federal securities law matters
specifically covered elsewhere in such counsel's opinion
letter. Except for the registration of the Underwritten
Securities under the 1933 Act and such filings, consents,
approvals, authorizations, registrations or qualifications as
have been made or obtained prior to the date of such counsel's
opinion, or may be required under the 1934 Act, the 1940 Act
and applicable state securities laws (as to which such counsel
need not express an opinion) in connection with the purchase
and distribution of the Underwritten Securities, no consent,
approval, authorization or order of, or filing or registration
with, the Commission or any Delaware or Alabama court or
governmental agency or body is required to be obtained or made
by the Company for the execution, delivery and performance of
the Underwriting Agreement and the applicable Terms Agreement
by the Company and the Operating Partnership, and the
consummation of the transactions contemplated thereby.
(xxiii) Neither the Company nor any of its
Subsidiaries is an "investment company" as such term is
defined in the ▇▇▇▇ ▇▇▇.
(2) The favorable opinion, dated as of Closing Time, of
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.C., special real estate counsel to the
Company, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The issuance and sale of the Shares being
delivered on such Date of Delivery by the Company and the
compliance by the Company and the Operating Partnership with
all the provisions of this Agreement and the consummation of
the transactions contemplated hereby did not and will not
result in a breach or violation of any of the terms of
provisions of, or constitute a default under, or result in the
creation or imposition of any lien, charge or encumbrance upon
any of the Properties or any other properties or assets of the
Company or any of its Subsidiaries pursuant to, any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any
of its Subsidiaries is a party or by which the Company or any
of its Subsidiaries is bound or to which any of the Properties
is subject.
21
(ii) The descriptions of or references to any
contracts, indentures, mortgages, loan agreements, notes,
leases or other instruments described or referred to in the
Registration Statement or the Prospectus or to be filed as
exhibits thereto other than those described or referred to
therein or filed as exhibits thereto, are correct in all
material respects, and, to the best of their knowledge and
information, no default exists in the due performance or
observance of any material obligation, agreement, covenant or
condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other instrument so described,
referred to or filed which would have a material adverse
effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the
Company and its Subsidiaries considered as one enterprise.
(3) The favorable opinion, dated as of Closing Time, of Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, with respect to
the matters set forth in (i), (vii) to (xiii), inclusive, (xv) and
(xvi) of subsection (b)(1).
(4) In giving their opinions required by subsections (b)(1),
(b)(2) and (b)(3), respectively, of this Section, ▇▇▇▇▇ & ▇▇▇▇▇▇▇
L.L.P., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.C. and Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇
llp shall each additionally state that nothing has come to their
attention that causes them to believe that the Registration Statement
(except for financial statements and schedules and other financial
data, as to which counsel need make no statement) at the time it became
effective (or, if an amendment to the Registration Statement or an
Annual Report on Form 10-K has been filed by the Company with the
Commission subsequent to the effectiveness of the Registration
Statement, then at the time such amendment becomes effective or at the
time of the most recent filing of such Annual Report, as the case may
be) or at the Representation Date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading or that the Prospectus or any amendment or supplement
thereto (except for financial statements and schedules and other
financial data, as to which counsel need make no statement), at the
Representation Date or at Closing Time, included or includes an untrue
statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. In giving
their opinions required by subsections (b)(1), (b)(2) and (b)(3),
respectively, of this Section, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇, P.C. and Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP may rely, (1) as to
all matters of fact, upon certificates and written statements of
officers and employees of and accountants for the Company and Operating
Partnership, (2) with respect to certain other matters, upon
certificates of appropriate government officials in such jurisdiction,
and ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. and Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP may
additionally rely, as to matters involving the laws of the State of
Alabama, upon the opinion of Sirote & Permutt P.C. (or other counsel
reasonably satisfactory to counsel for the Underwriters) in form and
substance satisfactory to counsel for the Underwriters.
22
(5) The favorable opinion, dated as of Closing Time, of Sirote
& Permutt, P.C., Alabama counsel for the Company and the Operating
Partnership, relating to matters of Alabama law.
(c) At Closing Time and any relevant Date of Delivery, there shall not
have been, since the date of the applicable Terms Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
Subsidiaries considered as one enterprise, or any of the Properties, whether or
not arising in the ordinary course of business; no proceedings shall be pending
or, to the knowledge of the Company, or the Operating Partnership, threatened
against the Company, any of its Subsidiaries, or any of the Properties before or
by any Federal, state or other commission board or administrative agency wherein
an unfavorable decision, ruling or finding would materially and adversely affect
the business, property, financial condition or income of the Company and its
Subsidiaries, considered as one enterprise or any of the Properties; and you
shall have received a certificate of the President and Chief Executive Officer
or a Vice President of the Company and of the Senior Vice President and
Secretary of the Company, and a certificate of the Secretary of the Company, in
its capacity as general partner of the Operating Partnership, dated as of such
Closing Time, to the effect that (i) there has been no such material adverse
change and (ii) the representations and warranties in Section 1 are true and
correct with the same force and effect as though such Closing Time were a
Representation Date. As used in this Section 5(c), the term "Prospectus" means
the Prospectus in the form first used to confirm sales of the Underwritten
Securities.
(d) At the time of the execution of the applicable Terms Agreement, you
shall have received a letter dated such date from PricewaterhouseCoopers LLP, in
form and substance reasonably satisfactory to you, to the effect that (i) they
are independent public accountants with respect to the Company and its
Subsidiaries within the meaning of the 1933 Act and the 1933 Act Regulations
thereunder; (ii) it is their opinion that the consolidated financial statements
and financial statement schedules of the Company and its Subsidiaries included
or incorporated by reference in the Registration Statement and the Prospectus
and audited by them and covered by their opinions therein comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations; (iii) they have performed limited procedures,
not constituting an audit, including a reading of the latest available unaudited
interim consolidated financial statements of the Company, a reading of the
minute books of the Company, inquiries of certain officials of the Company who
have responsibility for financial and accounting matters and such other
inquiries and procedures as may be specified in such letter, and on the basis of
such limited review and procedures (which shall include, without limitation, the
procedures specified by the American Institute of Certified Public Accountants
for a review of interim financial information as described in SAS No. 71,
Interim Financial Information, with respect to the unaudited condensed
consolidated financial statement of the Company and its Subsidiaries included or
incorporated by reference in the Registration Statement), nothing has come to
their attention which causes them to believe (A) that any material modifications
should be made to the unaudited condensed financial statements of the Company
and its Subsidiaries included in the Registration Statement for them to be in
conformity with generally accepted accounting principles or that such unaudited
financial statements do not comply as to form in all material respects with the
applicable accounting requirements of the 1934 Act and the 1934 Act Regulations,
or (B) at a specified date not more than three days prior to Closing Time, there
has
23
been any change in the capital shares of the Company or in the consolidated
indebtedness of the Company and its Subsidiaries or any decrease in consolidated
total assets or net assets of the Company, as compared with the amounts shown in
the most recent consolidated balance sheet included or incorporated by reference
in the Registration Statement and the Prospectus or, during the period from the
date of the most recent consolidated statement of operations included or
incorporated by reference in the Registration Statement and the Prospectus to a
specified date not more than three days prior to Closing Time, there were any
decreases, as compared with the corresponding period in the preceding year, in
consolidated revenues, operating income, net income or net income per share of
the Company and its Subsidiaries, except in all instances for changes, increases
or decreases which the Registration Statement and the Prospectus disclose have
occurred or may occur; (iv) they have compared the information in the Prospectus
under selected captions with the disclosure requirements of Regulation S-K and
on the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects with the
disclosure requirements of Items 301 and 302, respectively, of Regulation S-K;
and (v) in addition to the examination referred to in their opinion and the
limited procedures referred to in clause (iii) above, they have carried out
certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial information which are included or
incorporated by reference in the Registration Statement and Prospectus and which
are specified by you, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial and other
records of the Company and its Subsidiaries identified in such letter.
(e) At Closing Time, you shall have received a letter, dated as of
Closing Time, from PricewaterhouseCoopers LLP, to the effect that they reaffirm
the statements made in the letter furnished pursuant to subsection (d) of this
Section, except that the "specified date" referred to shall be a date not more
than three days prior to such Closing Time.
(f) At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Underwritten Securities and the Warrant Securities as herein contemplated and
related proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Operating
Partnership in connection with the issuance and sale of the Underwritten
Securities and the Warrant Securities, as herein contemplated shall be
reasonably satisfactory in form and substance to you and counsel for the
Underwriters.
(g) In the event that the Underwriters exercise their option provided
in a Terms Agreement as set forth in Section 2(b) hereof to purchase all or any
portion of the Option Securities, the representations and warranties of the
Company and the Operating Partnership contained herein and the statements in any
certificates furnished by the Company and the Operating Partnership hereunder
shall be true and correct as of each Date of Delivery and, at the relevant Date
of Delivery, you shall have received:
(1) A certificate, dated such Date of Delivery, of the
President and Chief Executive Officer or a Vice President of the
Company and of the chief financial or chief
24
accounting officer of the Company and of the President and Chief
Executive Officer of the Company, in its capacity as general partner of
the Operating Partnership, confirming that the certificates delivered
at the Closing Time pursuant to Section 5(c) hereof remain true and
correct as of such Date of Delivery.
(2) The favorable opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P., counsel
for the Company and the Operating Partnership, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Sections 5(b)(1) and 5(b)(4) hereof.
(3) The favorable opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, P.C.,
special real estate counsel to the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Sections 5(b)(2) and 5(b)(4) hereof.
(4) The favorable opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Sections
5(b)(3) and 5(b)(4) hereof.
(5) The favorable opinion of Sirote & Permutt, P.C., Alabama
counsel for the Company and the Operating Partnership, in form and
substance reasonably satisfactory to counsel for the Underwriters,
dated such Date of Delivery, relating to matters of Alabama law and
otherwise to the same effect as the opinion required by Section 5(b)(5)
hereof.
(6) A letter from PricewaterhouseCoopers LLP, in form and
substance reasonably satisfactory to you and dated such Date of
Delivery, substantially the same in form and substance as the letter
furnished to you pursuant to Section 5(e) hereof, except that the
"specified date" in the letter furnished pursuant to this Section
5(g)(6) shall be a date not more than three days prior to such Date of
Delivery.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, the applicable Terms Agreement
may be terminated by you by notice to the Company at any time at or prior to the
Closing Time or Date of Delivery, as the case may be, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof.
Section 6. INDEMNIFICATION. (a) The Company and the Operating
Partnership, jointly and severally, hereby agree to indemnify and hold harmless
each Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act as follows:
(1) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the
information deemed to be part of the Registration Statement pursuant to
Rule 430A(b) or Rule 434 of the 1933 Act Regulations, if applicable, or
the omission or alleged omission
25
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in the Prospectus (or any amendment or supplement thereto) or
the omission, or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(2) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the indemnifying
party; and
(3) against any and all expense whatsoever (including, the
fees and disbursements of counsel chosen by you) reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceedings by any governmental agency or body,
commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under (1) or
(2) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) and the Prospectus (or any amendment or supplement thereto).
Each Underwriter severally agrees to indemnify and hold harmless the
Company and the Operating Partnership, the trustees of the Company, each of the
officers who signed the Registration Statement and each person, if any, who
controls the Company or the Operating Partnership within the meaning of Section
15 of the 1933 Act, against any and all loss, liability, claim, damage and
expense described in the indemnity contained in subsection (a) of this Section,
but only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any amendment
thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through you expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
which it may have otherwise than on account of this indemnity agreement. An
indemnifying party may participate at its own expense in the defense of such
action. If it so elects within a reasonable time after receipt of such notice,
an indemnifying party, jointly with any other indemnifying parties receiving
such notice, may
26
assume the defense of such action with counsel chosen by it and approved by the
indemnified parties defendant in such action, unless such indemnified parties
reasonably object to such assumption on the ground that there may be legal
defenses available to them which are different from or in addition to those
available to such indemnifying party. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
For purposes of this Section 6, all references to the Registration
Statement, any preliminary prospectus or the Prospectus, or any amendment or
supplement to any of the foregoing, shall be deemed to include, without
limitation, any electronically transmitted copies thereof, including, without
limitation, any copies filed with the Commission pursuant to ▇▇▇▇▇.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 is for any reason held to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company, the Operating
Partnership and the Underwriters with respect to the offering of the
Underwritten Securities shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company, the Operating Partnership and one or more of
the Underwriters in respect of such offering, as incurred, in such proportions
that the Underwriters are responsible for that portion represented by the
percentage that the underwriting discount appearing on the cover page of the
Prospectus in respect of such offering bears to the initial public offering
price appearing thereon and the Company and the Operating Partnership are
responsible for the balance; PROVIDED, HOWEVER, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Underwritten Securities
purchased by it pursuant to the applicable Terms Agreement 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 in respect of such losses,
liabilities, claims, damages and expenses. For purposes of this Section, 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 trustee of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company or the
Operating Partnership within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company and the Operating
Partnership. The Underwriter's obligations to contribute pursuant to this
Section 7 are several in proportion to their respective underwriting commitments
and not joint. For purposes of this Section 7, the Company and the Operating
Partnership shall be deemed one party jointly and severally liable for any
obligations hereunder.
27
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or the applicable Terms Agreement, or contained in certificates of
officers of the Company and the Operating Partnership submitted pursuant hereto,
shall remain operative and in full force and effect, regardless of any
termination of this Agreement or the applicable Terms Agreement, or
investigation made by or on behalf of any Underwriter or any controlling person,
or by or on behalf of the Company or the Operating Partnership, and shall
survive delivery of and payment for the Underwritten Securities.
Section 9. TERMINATION OF AGREEMENT. (a) This Agreement (excluding the
applicable Terms Agreement) may be terminated for any reason at any time by the
Company, the Operating Partnership or by you upon the giving of 30 days' written
notice of such termination to the other parties hereto.
You may also terminate the applicable Terms Agreement, by notice to the
Company, at any time at or prior to the Closing Time or any Date of Delivery (i)
if there has been, since the date of such Terms Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company, any of its
Subsidiaries or the Operating Partnership, whether or not arising in the
ordinary course of business, or (ii) if Preferred Shares are being offered and
the rating assigned by any nationally recognized statistical rating organization
to any preferred stock of the Company as of the date of the applicable Terms
Agreement shall have been lowered since such date or if any such rating
organization shall have publicly announced that it has placed any preferred
stock of the Company on what is commonly termed a "watch list" for possible
downgrading; (iii) if there has occurred any material adverse change in the
financial markets in the United States or elsewhere or any outbreak of
hostilities or escalation thereof or other calamity or crisis the effect of
which is such as to make it, in your judgment, impracticable to market the
Underwritten Securities or enforce contracts for the sale of the Underwritten
Securities, or (iv) if trading in any of the securities of the Company has been
suspended or limited by the Commission or the New York Stock Exchange, or if
trading generally on either the New York Stock Exchange or the American Stock
Exchange has been suspended or limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices for securities have been required,
by either of said Exchanges or by order of the Commission or any other
governmental authority, or if a banking moratorium has been declared by either
Federal, New York or Alabama authorities. As used in this Section 9(b), the term
"Prospectus" means the Prospectus in the form first used to confirm sales of the
Underwritten Securities.
In the event of any such termination, (x) the covenants set forth in
Section 3 with respect to any offering of Underwritten Securities shall remain
in effect so long as any Underwriter owns any such Underwritten Securities
purchased from the Company pursuant to the applicable Terms Agreement and (y)
the covenant set forth in Section 3(h) hereof, the provisions of Section 4
hereof, the indemnity and contribution agreements set forth in Sections 6 and 7
hereof, and the provisions of Sections 8 and 13 hereof 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 Underwritten
Securities which it or they are obligated to purchase under the applicable Terms
Agreement (the "Defaulted
28
Securities"), then you shall have the right, within 24 hours thereafter, to make
arrangements for one or more of 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 herein set
forth; if, however, you shall not have completed such arrangements within such
24-hour period, then:
if the total number of Defaulted Securities does not exceed 10% of the
total number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the non-defaulting Underwriters named in such Terms Agreement shall
be obligated, severally and not jointly, to purchase the full amount thereof in
the proportions that their respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting Underwriters, or
if the total number of Defaulted Securities exceeds 10% of the total
number of Underwritten Securities to be purchased pursuant to such Terms
Agreement, the applicable Terms Agreement shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default under this Agreement and
the applicable Terms Agreement.
In the event of any such default which does not result in a termination
of the applicable Terms 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 the
Prospectus or in any other documents or arrangements.
Section 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed c/o Merrill ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce,
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, 4 World Financial Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇. Case III, Managing Director; and
notices to the Company shall be directed to it at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇, attention: Chief Financial Officer.
Section 12. PARTIES. This Agreement and the applicable Terms Agreement
shall each inure to the benefit of and be binding upon you and the Company, the
Operating Partnership and any Underwriter who becomes a party to such Terms
Agreement, and their respective successors. Nothing expressed or mentioned in
this Agreement or the applicable Terms Agreement is intended or shall be
construed to give any person, firm or corporation, other than those referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or such
Terms Agreement or any provision herein or therein contained. This Agreement and
the applicable Terms Agreement and all conditions and provisions hereof and
thereof are intended to be for the sole and exclusive benefit of the parties
hereto and thereto and their respective successors and said controlling persons
and officers and directors and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No purchaser of
Underwritten Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.
29
Section 13. GOVERNING LAW AND TIME. This Agreement and the applicable
Terms Agreement shall be governed by and construed in accordance with the laws
of the State of New York applicable to agreements made and to be performed in
said State. Specified times of day refer to New York City time.
Section 14. COUNTERPARTS. This Agreement and the applicable Terms
Agreement may be executed in one or more counterparts, and if executed in more
than one counterpart the executed counterparts shall constitute a single
instrument.
30
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts will become a binding agreement
between you, the Company and the Operating Partnership in accordance with its
terms.
Very truly yours,
COLONIAL PROPERTIES TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chief Financial Officer
and Secretary
COLONIAL REALTY LIMITED PARTNERSHIP,
the Operating Partnership
By: Colonial Properties Trust
(its general partner)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: Chief Financial Officer
CONFIRMED AND ACCEPTED,
as of the date first
above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
Acting on behalf of themselves
and the other named Underwriters
31
Exhibit A
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
[Title of Securities]
TERMS AGREEMENT
Dated: , 200_
To: COLONIAL PROPERTIES TRUST
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Chairman of the Board of Trustees
Dear Sirs:
We (the "Representative") understand that Colonial Properties Trust, an
Alabama real estate investment trust (the "Company"), proposes to issue and sell
the number of [Preferred Shares of beneficial interest (the "Preferred Shares")]
[common shares of beneficial interest $.01 par value (the "Common Shares")] [and
warrants exercisable for Common Shares ("Common Share Warrants")] (such
[Preferred Shares] [Common Shares] [Common Share Warrants] being [collectively
hereinafter referred to as the "Underwritten Securities")]. Subject to the terms
and conditions set forth or incorporated by reference herein, the underwriters
named below (the "Underwriters") offer to purchase, severally and not jointly,
the respective numbers of [Initial Underwritten Securities (as defined in the
Underwriting Agreement referenced to below)] set forth below opposite their
respective names, and a proportionate share of Option Securities (as defined in
the Underwriting Agreement referred to below) to the extent any are purchased)
at the purchase price set forth below.
32
Number of Shares
of Initial
Underwriter Underwritten Securities
---------- -----------------------
----------
Total $
==========
The Underwritten Securities shall have the following terms:
Title of Securities:
Number of Shares:
[Current Ratings:]
[Dividend Rate: [$ ] [ %], Payable:]
[Stated Value:]
[Liquidation Preference:]
[Ranking:]
Public offering price per share: $ [, plus accumulated dividends, if
any, from , 200 .]
Purchase price per share: $ [, plus accumulated dividends, if any,
from , 200 .]
[Conversion provisions:]
[Redemption provisions:]
[Sinking fund requirements:]
Number of Option Securities, if any, that may be purchased by the
Underwriters:
Delayed Delivery Contracts: [authorized] [not authorized]
[Date of Delivery:
Minimum Contract:
Maximum number of Shares:
Fee: ]
Additional co-managers, if any:
Other terms:
Closing date and location:
COMMON SHARE WARRANTS
Number of Common Share Warrants to be issued:
Warrant Agent:
Issuable jointly with Common Shares: [Yes] [No]
[Number of Common Stock Warrants issued
with each share of
Beneficial Interest:]
[Detachable data:]
Date from which Common Share Warrants are exercisable:
Date on which Common Share Warrants expire:
Exercise price(s) of Common Share Warrants:
Initial public offering price: $
Purchase price: $
Title of Warrant Securities:
33
Principal amount purchasable upon exercise of one Common Share Warrant:
Interest rate: Payable:
Date of maturity:
Redemption provisions:
Sinking fund requirements:
[Delayed Delivery Contracts: [authorized][not authorized]
[Date of delivery:
Minimum contract:
Maximum aggregate principal amount:
Fee: %]
Other terms:
[Closing date and location:]]
All the provisions contained in the document attached as Annex A hereto
entitled "Colonial Properties Trust - Preferred Shares, Common Shares, and
Common Share Warrants - Underwriting Agreement" are hereby incorporated by
reference in their entirety herein and shall be deemed to be a part of this
Terms Agreement to the same extent as if such provisions had been set forth in
full herein. Terms defined in such document are used herein as therein defined.
34
Please accept this offer no later than seven o'clock P.M. (New York
City time) on June 14, 2001 by signing a copy of this Terms Agreement in the
space set forth below and returning the signed copy to us.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, INCORPORATED
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By:
---------------------------------------
Name:
Title:
Acting on behalf of themselves
and the other named Underwriters
Accepted:
COLONIAL PROPERTIES TRUST
By:
----------------------------------------------
Name:
Title:
COLONIAL REALTY LIMITED PARTNERSHIP,
the Operating Partnership
By: Colonial Properties Trust
(its general partner)
By:
---------------------------------------------
Name:
Title:
35
Exhibit B
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
[Title of Securities]
DELAYED DELIVERY CONTRACT
, 200_
COLONIAL PROPERTIES TRUST
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Attention: Chairman of the Board of Directors
Dear Sirs:
The undersigned hereby agrees to purchase from Colonial Properties
Trust (the "Company"), and the Company agrees to sell to the undersigned on
__________, 200__ (the "Delivery Date"), of the Company's [insert title of
security] (the "Securities"), offered by the Company's Prospectus dated
__________, 200_, as supplemented by its Prospectus Supplement dated
___________, 200__, receipt of which is hereby acknowledged at a purchase price
of [$__________] [and, $__________ per Warrant, respectively] to the Delivery
Date, and on the further terms and conditions set forth in this contract.
Payment for the Securities which the undersigned has agreed to purchase
on the Delivery Date shall be made to the Company or its order by certified or
official bank check in Federal or other same day funds at the office of
, on the Delivery Date, upon delivery to the undersigned
of the Securities to be purchased by the undersigned in definitive form and in
such denominations and registered in such names as the undersigned may designate
by written or telegraphic communication addressed to the Company not less than
five full business days prior to the Delivery Date.
The obligation of the undersigned to take delivery of and make payment
for Securities on the Delivery Date shall be subject only to the conditions that
(1) the purchase of Securities to be made by the undersigned shall not on the
Delivery Date be prohibited under the laws of the jurisdiction to which the
undersigned is subject and (2) the Company, on or before __________, 200__,
shall have sold to the Underwriters of the Securities (the "Underwriters") such
principal amount of the Securities as is to be sold to them pursuant to the
Terms Agreement dated
36
__________, 200__ between the Company and the Underwriters. The obligation of
the undersigned to take delivery of and make payment for Securities shall not be
affected by the failure of any purchaser to take delivery of and make payments
for Securities pursuant to other contracts similar to this contract. The
undersigned represents and warrants to you that its investment in the Securities
is not, as of the date hereof, prohibited under the laws of any jurisdiction to
which the undersigned is subject and which govern such investment.
Promptly after completion of the sale to the Underwriters, the Company
will mail or deliver to the undersigned at its address set forth below notice to
such effect, accompanied by a copy of the opinion of counsel for the Company
delivered to the Underwriters in connection therewith.
By the execution hereof, the undersigned represents and warrants to the
Company that all necessary corporate action for the due execution and delivery
of this contract and the payment for and purchase of the Securities has been
taken by it and no further authorization or approval of any governmental or
other regulatory authority is required for such execution, delivery, payment or
purchase, and that, upon acceptance hereof by the Company and mailing or
delivery of a copy as provided below, this contract will constitute a valid and
binding agreement of the undersigned in accordance with its terms.
This contract will inure to the benefit of and binding upon the parties
hereto and their respective successors, but will not be assignable by either
party hereto without the written consent of the other.
It is understood that the Company will not accept Delayed Delivery
Contracts for a number of Securities in excess of ________ and that the
acceptance of any Delayed Delivery Contract is in the Company's sole discretion
and, without limiting the foregoing, need not be on a first-come, first-served
basis. If this contract is acceptable to the Company, it is requested that the
Company sign the form of acceptance on a copy hereof and mail or deliver a
signed copy hereof to the undersigned at its address set forth below. This will
become a binding contract between the Company and the undersigned when such copy
is so mailed or delivered.
This Agreement shall be governed by the laws of the State of New York.
Yours very truly,
-----------------------------
(Name of Purchaser)
By
-----------------------------
(Title)
-----------------------------
-----------------------------
(Address)
Accepted as of the date first above written.
37
COLONIAL PROPERTIES TRUST
By
-------------------------------
(Title)
PURCHASER-PLEASE COMPLETE AT TIME OF SIGNING
The name and telephone number of the representative of the Purchaser
with whom details of delivery on the Delivery Date may be discussed are as
follows: (Please print.)
------------------------------------------------------------------------
Name Telephone No.
(including Area Code)
38