Exhibit 1
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
8.75% Series A Cumulative Redeemable Preferred
Shares of Beneficial Interest
(Liquidation Preference $25.00 Per Share)
TERMS AGREEMENT
---------------
Dated: November 3, 1997
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 November 3, 1997 (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
Underwriter Securities
----------- ------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated................. 1,250,000
▇▇▇▇▇▇ Brothers Inc.................... 1,250,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co., Incorporated..... 1,250,000
▇▇▇▇▇ ▇▇▇▇▇▇ Inc....................... 1,250,000
---------
TOTAL............... 5,000,000
=========
The Underwritten Securities shall have the following terms:
Title of Securities: 8.75% Series A Cumulative Redeemable Preferred
Shares of Beneficial Interest, par value $0.01
per share
Number of Shares: 5,000,000
Current Ratings: ▇▇▇▇▇'▇: ba1
Standard & Poor's: BB+
Duff & ▇▇▇▇▇▇: BBB-
Dividend Rate: 8.75% per annum, Payable: last day
of March, June, September and
December, commencing December 31, 1997
Liquidation Preference: $25.00 per share
Ranking: As set forth in the Prospectus
Supplement dated November 3, 1997
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
Underwriting discount
per share: $.7875, to be paid by Colonial
Realty Limited Partnership
Conversion Provisions: None
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Redemption Provisions: As set forth in the Prospectus
Supplement dated November 3, 1997
Sinking Fund Requirements: None
Number of Option Securities,
if any, that may be
purchased by the
Underwriter: 750,000
Delayed Delivery Contracts: Not authorized
Additional co-managers,
if any: ▇▇▇▇▇▇ Brothers Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
Other terms: The provisions of Section 3(n) of the
Underwriting Agreement will not be applicable to
the Preferred Shares, provided, however,
-------- -------
that 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: November 6, 1997, at 9:00 A.M., New York City
time, at ▇▇▇▇▇ & ▇▇▇▇ 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 November 3, 1997 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
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By /s/ ▇▇▇▇ ▇. Case
---------------------------------------
Name: ▇▇▇▇ ▇. Case
Title: Vice President
Accepted:
COLONIAL PROPERTIES TRUST
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
COLONIAL REALTY LIMITED PARTNERSHIP,
the Operating Partnership
By: Colonial Properties Holding
Company, Inc.
(its general partner)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief Executive Officer
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COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
Preferred Shares, Common Shares, and Common Share Warrants
UNDERWRITING AGREEMENT
----------------------
November 3, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
World Financial Center
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Colonial Properties Trust, an Alabama real estate investment trust (the
"Company") and a limited partner and the indirect general partner of Colonial
Realty Limited Partnership, a limited Partnership organized under the laws 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
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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. 333-18259) for the
registration of up to $216,762,500 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 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
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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 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. 333-18259) and the Rule 462 Registration
Statement, as each such registration statement may be amended pursuant to the
1933 Act.
Section 1. Representations and Warranties.
------------------------------
(a) 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:
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(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.
(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.
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(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 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
6
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 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 Colonial Properties Holding Company, Inc.
("CPHC"), the Operating Partnership, Colonial Properties Services Limited
Partnership and Colonial Properties Services, Inc., 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.
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(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 Colonial Properties Holding Company, Inc., a wholly-owned Subsidiary of
the Company ("CPHC"), as general partner of the Operating Partnership, and
by the limited partners of the Operating Partnership, including the
Company, and is a valid and binding agreement of CPHC 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
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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.
(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
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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
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
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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
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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
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.
12
(xvi) The Company has qualified as a real estate investment
trust ("REIT") for its taxable years ended December 31, 1993, December 31,
1994, December 31, 1995, and December 31, 1996 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, 1997 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;
13
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.
(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
14
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 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
15
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 portion of Macon Mall that is 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
16
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, 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.
(b) 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
17
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.
-----------------
(a) 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.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company
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
18
Option Securities 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.
(c) Payment of the purchase price for, and delivery of, the Underwritten
Securities to be purchased by the Underwriters shall be made at the office of
▇▇▇▇▇ & ▇▇▇▇ LLP, 58th Floor, One World Trade Center, New York, New York 10048-
0557, 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 ▇▇▇▇▇ & Wood 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 to the Company by
certified or official bank check or checks in Federal or similar same-day funds
payable to the order of 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
19
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 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
20
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:
(a) 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
21
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.
(b) 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 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.
(c) 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.
22
(d) 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.
(e) 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.
(f) 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.
(g) The Company will endeavor, in cooperation with the Underwriters, to
qualify the Underwritten Securities, the Warrant
23
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.
(h) 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.
(i) 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.
(j) 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.
(k) If the Preferred Shares are convertible into Common Shares, the
Company will reserve and keep available at all times,
24
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.
(l) 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.
(m) 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.
(n) Neither the Company nor the Operating Partnership will, during a period
of 90 days from the date of the applicable Terms Agreement, with respect to the
Underwritten Securities covered thereby, without your prior written consent,
offer or sell, grant any option for the sale of, or enter into any agreement to
sell, any of the Company's or the Operating Partnership's equity securities
(other than the Underwritten Securities which are to be sold pursuant to such
Terms Agreement), except for Common shares issued, or to be issued pursuant to
this Agreement, pursuant to dividend reinvestment and stock purchase plans,
employee and director stock option and restricted stock plans, pursuant to
redemption of limited partnership interests in the Operating Partnership or as
partial or full payment for properties acquired or to be acquired by the Company
or the Operating Partnership.
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 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,
25
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
26
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, (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.
(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.
(ii) Each of the Subsidiaries has been organized and is
validly existing and is in good standing as a trust, partnership or
corporation (as indicated on a schedule attached to such opinion)
under
27
the laws of its respective jurisdiction of organization (as
indicated on a schedule attached to such opinion).
(iii) Based solely on certificates of public officials, each of
the Company and its Subsidiaries is qualified to do business in the
jurisdictions indicated on a schedule attached to such opinion.
(iv) Each of the Company and its Subsidiaries has full trust,
corporate or partnership power and authority, as the case may be, to
own, lease and operate the Properties (in the case of the Operating
Partnership only) and to conduct its business as described in the
Prospectus.
(v) The Company has an authorized capitalization as set forth
under the caption "Description of Common Shares of Beneficial
Interest" in the Prospectus, and all of the issued shares of capital
stock of the Company have been duly authorized and, assuming receipt
of consideration therefor as provided in the resolutions authorizing
issuance thereof of the board of trustees of the Company, are validly
issued and conform in all material respects to the description thereof
contained in the Prospectus under the caption "Capitalization" in the
Prospectus Supplement. All of the issued shares of capital stock of
each corporate Subsidiary of the Company have been duly authorized
and, assuming receipt of consideration therefor as provided in the
applicable resolutions authorizing issuance thereof of the board of
directors, are validly issued and are fully paid, non-assessable and
(except as set forth in the Prospectus) are owned of record by the
Company, to the knowledge of such counsel, free and clear of all
liens, charges and encumbrances. The partnership units of each
partnership Subsidiary have been authorized for issuance and are
validly issued and fully paid. CPHC is a wholly owned Subsidiary of
the Company and the sole general partner of the Operating Partnership.
28
(vi) Except as set forth in the Prospectus, to the knowledge
of counsel, 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 bylaws or any agreement or other instrument.
(vii) Each of this Agreement, the applicable Terms Agreement
and the Delayed Delivery Contracts, if any, has been duly authorized,
executed and delivered by the Company.
(viii) This Agreement has been duly authorized, executed and
delivered by the Operating Partnership.
(ix) The Underwritten Securities being 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 the issuance of such Underwritten Securities will not
be subject to preemptive or other similar rights 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.
29
(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,
30
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, as of
their respective effective or issue dates (other than the financial
statements and supporting schedules and other financial and
statistical information and data included therein or omitted
therefrom, as to which such counsel need express no opinion), comply
as to form in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations.
(xvii) The documents incorporated by reference in the Prospectus
and any further amendment or supplement to any such incorporated
document made by the Company prior to the applicable Date of Delivery
(other than the financial statements and related schedules therein, as
to which such counsel need express no 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 1933 Act and the 1934 Act and the rules and regulations of the
Commission thereunder.
(xviii) The Company has qualified as a REIT for its taxable years
ended December 31, 1993, December 31, 1994, December 31, 1995, and
December 31, 1996 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, 1997 and
31
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 statements relating thereto
contained in the Prospectus and the form of certificate used to
evidence the Underwritten Securities, is in due and proper form and
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 subsequent to July 30, 1997 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.
(xxii) The compliance by the Company and the Operating
Partnership with all of the provisions of this Agreement and the
applicable Terms Agreement and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by all
necessary corporate action, and the issuance and delivery of the
Underwritten Securities being sold pursuant to this Agreement and the
applicable Terms
32
Agreement and the compliance by the Company and the Operating
Partnership with all of the provisions of this Agreement and the
applicable Terms Agreement and the consummation of the transactions
contemplated hereby and thereby did not and will not result in a
breach or default under any of Exhibits 10.1, 10.2, 10.6, 10.13 and
10.17 to the Company's Annual Report on Form 10-K for the year ended
December 31, 1996, or, to such counsel's knowledge, 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 such Exhibit, nor will such actions
result in any violation of the provisions of the charter or by-laws of
the Company or any of its Subsidiaries or any federal, Delaware or
Alabama statute, order, rule or regulation known to such counsel or
any federal, 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 addressed
elsewhere in such opinion letter); and, except for the registration of
the Underwritten Securities under the 1933 Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the 1934 Act and applicable state securities laws in
connection with the purchase and distribution of the Underwritten
Securities, no consent, approval, authorization or order of, or filing
or registration with, any federal, Delaware or Alabama court or
governmental agency or body is required for the execution, delivery
and performance of this Agreement and the applicable Terms Agreement
by the Company and Operating Partnership and the consummation of the
transactions contemplated hereby and thereby.
(xxiii) None of the Company, any of its Subsidiaries or the
Operating Partnership is an "investment company" as such term is
defined in the Investment Company Act of 1940.
33
(2) The favorable opinion, dated as of Closing Time, of Leitman,
Siegal, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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.
(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.
34
(3) The favorable opinion, dated as of Closing Time, of ▇▇▇▇▇ & Wood
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., Leitman,
Siegal, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C. and ▇▇▇▇▇ & Wood 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 and statistical 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 and statistical 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.,
Leitman, Siegal, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C. and ▇▇▇▇▇ & Wood 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
35
▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P. and ▇▇▇▇▇ & Wood 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.
(c) At Closing Time, 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 CPHC 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 Coopers & ▇▇▇▇▇▇▇ L.L.P., 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
36
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 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
37
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 Coopers & ▇▇▇▇▇▇▇ L.L.P., 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
38
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 accounting officer of the Company and of the President
and Chief Executive Officer of CPHC, 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 Leitman, Siegal, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 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.
39
(4) The favorable opinion of ▇▇▇▇▇ & Wood 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) A letter from Coopers & ▇▇▇▇▇▇▇ L.L.P., 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)(4) 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
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
40
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).
(b) 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 (including the directors and officers of CPHC), against any
and all loss, liability, claim, damage and expense described in the indemnity
contained in subsection (a) of this Section, but
41
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).
(c) 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 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.
(d) 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
42
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. Notwith standing 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
43
purposes of this Section 7, the Company and the Operating Partnership shall be
deemed one party jointly and severally liable for any obligations hereunder.
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.
(b) You may also terminate the applicable Terms Agreement, by notice to
the Company, at any time at or prior to the Closing Time (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
44
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.
(c) 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 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:
(a) 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,
45
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
(b) 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, World Financial Center, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇ ▇. Case, Vice President; 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
46
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.
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.
47
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: President and Chief
Executive Officer
COLONIAL REALTY LIMITED PARTNERSHIP,
the Operating Partnership
By: Colonial Properties Holding
Company, Inc.
(its general partner)
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President and Chief
Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first
above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By: /s/ ▇▇▇▇ ▇. Case
-----------------------------------
Name: ▇▇▇▇ ▇. Case
Title: Vice President
48
Exhibit A
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
[Title of Securities]
TERMS AGREEMENT
---------------
Dated: , 199_
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.
A-1
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 , 19 .]
Purchase price per share: $ [, plus accumulated dividends,
if any, from , 19 .]
[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:
A-2
Initial public offering price: $
Purchase price: $
Title of Warrant Securities:
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.
A-3
Please accept this offer no later than o'clock P.M. (New York City
time) on 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
▇▇▇▇▇▇ BROTHERS INC.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
By
------------------------------
Acting on behalf of itself and
the other named Underwriters.
Accepted:
COLONIAL PROPERTIES TRUST
By
----------------------------
Name:
Title:
A-4
Exhibit B
COLONIAL PROPERTIES TRUST
(an Alabama Real Estate Investment Trust)
[Title of Securities]
DELAYED DELIVERY CONTRACT
-------------------------
, 199_
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
__________, 19__ (the "Delivery Date"), of the Company's [insert title of
security] (the "Securities"), offered by the Company's Prospectus dated
__________, 19__, as supplemented by its Prospectus Supplement dated
___________, 19__, 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
B-1
, 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 __________, 19__, 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 __________, 19__ 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
B-2
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.
COLONIAL PROPERTIES TRUST
By___________________________
(Title)
B-3
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.)
Telephone No.
(including
Name Area Code)
---- -------------
B-4