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EXHIBIT 1
4,000,000 Shares
GABLES RESIDENTIAL TRUST
8.30% Series A Cumulative Redeemable Preferred Shares
(Liquidation Preference $25.00 Per Share)
UNDERWRITING AGREEMENT
July 21, 1997
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
As Representatives of the Several
Underwriters named in Schedule 1 Hereto
c/o PAINEWEBBER INCORPORATED
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
INTRODUCTORY. Gables Residential Trust, a Maryland real estate
investment trust (the "COMPANY"), proposes to sell an aggregate of 4,000,000
shares (the "FIRM SHARES") of the Company's 8.30% Series A Cumulative Redeemable
Preferred Shares of Beneficial Interest (Liquidation Preference $25.00 Per
Share), $0.01 par value per share (the "SERIES A PREFERRED SHARES"), to the
Underwriters listed in Schedule 1 hereto (collectively, the "UNDERWRITERS") for
whom you are acting as representatives (in such capacity, the
"REPRESENTATIVES"). The Company has also agreed to grant to the Representatives
an option (the "OPTION") to purchase up to an additional 600,000 Series A
Preferred Shares (the "OPTION SHARES") on the terms and for the purposes set
forth in Section 1(b) hereof. The Firm Shares and the Option Shares are
hereinafter collectively referred to as the "SHARES."
The public offering price per share for the Shares and the purchase
price per share for the Shares to be paid by the Underwriters shall be agreed
upon by the Company and the Underwriters, and such agreement shall be set forth
in a separate written instrument substantially in the form of Exhibit A hereto
(the "PRICE DETERMINATION AGREEMENT"). The Price Determination Agreement may
take the form of an exchange of any standard form of written telecommunication
among the Company and the Representatives and shall specify such applicable
information as is indicated in Exhibit A hereto. The offering of the Shares will
be governed by this Agreement, as supplemented by the Price Determination
Agreement. From and after the date of the execution and delivery of the Price
Determination Agreement, this Agreement shall be deemed to incorporate, and,
unless the context otherwise indicates, all references contained herein to "this
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Agreement" and to the phrase "herein" shall be deemed to include, the Price
Determination Agreement.
The Company confirms as follows its agreements with the
Underwriters.
1. AGREEMENT TO SELL AND PURCHASE.
(a) On the basis of the representations, warranties and
agreements of the Company herein contained and subject to all the terms and
conditions of this Agreement, the Company agrees to sell to each Underwriter
named below, and each Underwriter, severally and not jointly, agrees to purchase
from the Company at the purchase price per share for the Shares to be agreed
upon by the Underwriters and the Company and set forth in the Price
Determination Agreement the number of Shares set forth opposite the name of such
Underwriter in Schedule 1. If the Company elects to rely on Rule 430A (as
hereinafter defined), Schedule 1 may be attached to the Price Determination
Agreement.
(b) Subject to all the terms and conditions of this Agreement,
the Company grants the Option to the several Underwriters to purchase up to
600,000 Option Shares from the Company at the same price per share as the
Underwriters shall pay for the Firm Shares. The Option may be exercised only to
cover over-allotments in the sale of the Firm Shares by the Representatives and
may be exercised in whole or in part at any time (but not more than once) on or
before the 30th day after the date of this Agreement, upon written or
telegraphic notice (the "OPTION SHARES NOTICE") by the Representatives to the
Company. The date for the closing of the sale of the Option Shares (the "OPTION
CLOSING DATE"), shall be determined by you but shall be no later than 10 days
after delivery of the Option Shares Notice. On the Option Closing Date, the
Company agrees to issue and sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, that
Underwriter's proportionate share (based upon the respective underwriting
obligations of the several Underwriters hereunder as set forth in Schedule 1
hereto except as may be adjusted by you to eliminate fractions) of the number of
Option Shares specified in such notice. The right to purchase the Option Shares
or any portion thereof may be surrendered and terminated at any time upon notice
by the Representatives to the Company.
(c) The public offering price per share for the Firm Shares
and the purchase price per share for the Firm Shares to be paid by the
Underwriters shall be agreed upon and set forth in the Price Determination
Agreement.
2. DELIVERY AND PAYMENT. Delivery of the Firm Shares shall be made
to the Underwriters against payment of the purchase price by wire transfer of
same day funds at the office of PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Such payments shall be made at 10:00 a.m.,
New
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York City time, on the fourth business day following the date of this Agreement
(or if the NYSE or American Stock Exchange or commercial banks in the City of
New York are not open on such day, the next day on which such exchanges and
banks are open), or at such time on such other date, not later than eight full
business days after the date of this Agreement, as may be agreed upon by the
Company and the Representatives (such date is hereinafter referred to as the
"CLOSING DATE").
To the extent the Option is exercised, delivery of the Option Shares
against payment by the Representatives (in the manner specified above) will take
place at the offices specified above at the time and date (which may be the
Closing Date) specified in the Option Shares Notice.
If requested by the Representatives no later than the date of this
agreement, certificates evidencing the Shares shall be in definitive form and
shall be registered in such names and in such denominations as the
Representatives shall request at least two business days prior to the Closing
Date or the Option Closing Date, as the case may be, by written notice to the
Company. For the purpose of expediting the checking and packaging of
certificates for the Shares, the Company agrees to make such certificates
available for inspection at least 24 hours prior to the Closing Date or the
Option Closing Date, as the case may be.
The cost of original issue tax stamps, if any, in connection with
the issuance and delivery of the Firm Shares and Option Shares by the Company to
the Underwriters shall be borne by the Company. The Company will pay and save
the Underwriters and any subsequent holder of the Shares harmless from any and
all liabilities with respect to or resulting from any failure or delay in paying
Federal and state stamp and other transfer taxes, if any, which may be payable
or determined to be payable in connection with the original issuance or sale to
the Underwriters of the Firm Shares and Option Shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents, warrants and covenants to the Underwriters that:
(a) The Company meets the requirements for use of Form S-3 and
a registration statement (Registration No. 333-14329) on Form S-3 relating to
the Shares, including a prospectus, has been carefully prepared by the Company
in conformity with the requirements of the Securities Act of 1933, as amended
(the "ACT"), and the rules and regulations (the "RULES AND REGULATIONS") of the
Securities and Exchange Commission (the "COMMISSION") thereunder and has been
filed with the Commission and has become effective. Such registration statement
and prospectus may have been amended or supplemented prior to the date of this
Agreement; any such amendment or supplement was so prepared and filed, and any
such amendment
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filed after the effective date of such registration statement has become
effective. No stop order suspending the effectiveness of the registration
statement has been issued, and no proceeding for that purpose has been
instituted or, to the Company's knowledge, threatened by the Commission. Copies
of such registration statement and prospectus, any such amendments or
supplements and all documents incorporated by reference therein that were filed
with the Commission on or prior to the date of this Agreement have been
delivered or made available to the Underwriters. A prospectus supplement (the
"PROSPECTUS SUPPLEMENT") setting forth the terms of the Series A Preferred
Shares and of their sale and distribution have been or will be so prepared and
will be filed pursuant to Rule 424(b) of the Rules and Regulations on or before
the second business day after the date hereof (or such earlier time as may be
required by the Rules and Regulations). The term "REGISTRATION STATEMENT" means
such registration statement as amended at the time it becomes or became
effective (the "Effective Date"), including financial statements and all
exhibits and any information deemed by virtue of Rule 430A of the Rules and
Regulations to be included in such Registration Statement at the Effective Date
and any prospectus supplement filed thereafter with the Commission and shall
include the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 which were filed under the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"). The term "PROSPECTUS" means, collectively, the Base
Prospectus together with any prospectus supplement, in the respective forms they
are filed with the Commission pursuant to Rule 424(b) of the Rules and
Regulations, and includes the documents incorporated by reference in the Base
Prospectus and in any prospectus supplement. Any reference herein to the terms
"amend," "amendment" or "supplement" with respect to Registration Statement or
Prospectus shall be deemed to refer to and include the filing after the
execution hereof of any document with the Commission deemed to be incorporated
by reference therein.
(b) Each part of the Registration Statement, when such part
became or becomes effective and the Prospectus and any amendment or supplement
thereto, on the date of filing thereof with the Commission and at the Closing
Date, and if later, the Option Closing Date, including the financial statements
included or to be included or incorporated by reference or to be incorporated by
reference into the Prospectus, conformed or will conform in all material
respects with the requirements of the Act, the Exchange Act, the rules and
regulations thereunder (the "EXCHANGE ACT RULES AND REGULATIONS") and the Rules
and Regulations and will contain all statements required to be stated therein in
accordance with the Act, the Exchange Act, the Exchange Act Rules and
Regulations and the Rules and Regulations; each part of the Registration
Statement, when such part became or becomes effective, did not or will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading; and the Prospectus and any amendment or
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supplement thereto, on the date of filing thereof with the Commission and at the
Closing Date, did not or will not include an untrue statement of a material fact
or omit to state a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing representations and warranties in this Section 3(b) do not apply to
any statements or omissions made in reliance on and in conformity with
information relating to any Underwriter furnished in writing to the Company by
such Underwriter specifically for inclusion in the Registration Statement or
Prospectus or any amendment or supplement thereto. The Company acknowledges that
the only information furnished in writing to the Company by the Underwriters
specifically for inclusion in the Registration Statement or Prospectus is the
information set forth in Exhibit B hereto. The Company has not distributed any
offering material in connection with the offering or sale of the Shares other
than the Registration Statement, the Prospectus, or any other materials, if any,
permitted by the Act.
(c) The documents incorporated or to be incorporated by
reference in the Registration Statement, the Prospectus or any amendment or
supplement thereto or from which information is so incorporated by reference,
when they became or become effective or were or are filed with the Commission,
as the case may be, complied or will comply in all material respects with the
requirements of the Act or the Exchange Act, as applicable, the Exchange Act
Rules and Regulations and the Rules and Regulations.
(d) The only subsidiaries (as defined in the Rules and
Regulations) of the Company are the subsidiaries listed on Exhibit C hereto (the
"SUBSIDIARIES"). The Company and each of its subsidiaries is, and at the Closing
Date will be, an entity duly organized or formed, as the case may be, and, in
the case of an entity that is not a general partnership, validly existing and in
good standing under the laws of the jurisdiction of its organization or
incorporation. The Company and each of its subsidiaries has, and at the Closing
Date will have, full power and authority to conduct all the activities conducted
by it, to own or lease all the assets owned or leased by it and to conduct its
business as described in the Registration Statement and the Prospectus. The
Company and each of its subsidiaries is, and at the Closing Date will be, duly
licensed or qualified to do business and (except Gables Tennessee Properties,
Pin Oak Park Apartments and Pin Oak Green, which are general partnerships) in
good standing as a foreign trust, limited partnership or corporation, as the
case may be, in all jurisdictions in which the nature of the activities
conducted by it or the character of the assets owned or leased by it makes such
licensing or qualification necessary except where the failure to be so qualified
does not have a material adverse effect on the business, properties, financial
position or results of the Company and its subsidiaries, taken as a whole.
Except for the stock or partnership interests of the subsidiaries and as
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disclosed in the Registration Statement, the Company does not own, and at the
Closing Date will not own, directly or indirectly, any shares of stock or any
other equity or long-term debt securities of any corporation or have any equity
interest in any firm, partnership, joint venture, association or other entity.
Complete and correct copies of the Amended and Restated Declaration of Trust and
the Second Amended and Restated By-laws of the Company and the charter documents
of each of its subsidiaries and all amendments thereto have been delivered or
made available to the Underwriters and no changes therein, other than an
amendment to the Partnership Agreement of Gables Realty Limited Partnership to
reflect the issuance of preferred units of limited partnership having economic
rights and preferences analogous to the Series A Preferred Shares, will be made
subsequent to the date hereof and prior to the Closing Date or, if later, the
Option Closing Date.
(e) The outstanding securities of the Company, including the
outstanding Common Shares, have been, and the Shares to be issued and sold by
the Company upon such issuance and payment pursuant hereto of the purchase price
thereof will be, duly authorized, validly issued, fully paid and nonassessable
and will not be subject to any preemptive or similar right. The description of
the Common Shares and the Series A Preferred Shares in the Registration
Statement and the Prospectus is, and at the Closing Date will be, in all
material respects, complete and accurate. Except as set forth in the Prospectus,
the Company does not have outstanding, and at the Closing Date will not have
outstanding, any options to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts or
commitments to issue or sell, any Common Shares, any preferred shares of the
Company, any shares of capital stock of any subsidiary or any such warrants,
convertible securities or obligations other than pursuant to the Company's
dividend reinvestment plan.
(f) The financial statements and schedules of the Company
included or incorporated by reference in the Registration Statement or the
Prospectus present fairly the consolidated financial condition of the Company as
of the respective dates thereof and the consolidated results of operations and
cash flows of the Company for the respective periods covered thereby, all in
conformity with generally accepted accounting principles applied on a consistent
basis throughout the entire period involved, except as otherwise disclosed in
the Prospectus. No other financial statements or schedules of the Company are
required by the Act, the Exchange Act or the Rules and Regulations to be
included in the Registration Statement or the Prospectus. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP,
independent public accountants (the "ACCOUNTANTS"), who have reported on those
of such financial statements and schedules which are audited, are independent
accountants with respect to the Company as required by the Act and the Rules and
Regulations. The statements included in the Registration Statement with respect
to the Accountants pursuant
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to Rule 509 of Regulation S-K of the Rules and Regulations are true and correct
in all material respects.
(g) The Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorization; (ii)
transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(h) Subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus and prior to the
Closing Date, except as set forth in or contemplated by the Registration
Statement and the Prospectus, (i) there has not been and will not have been any
change in the capitalization of the Company, or in the business, properties,
business prospects, condition (financial or otherwise) or results of operations
of the Company and its subsidiaries, arising for any reason whatsoever, other
than pursuant to the Company's dividend reinvestment plan or by way of grants of
Common Shares or options to purchase Common Shares or the exercise of such
options, in any such case under the Company's Second Amended and Restated 1994
Share Option and Incentive Plan, as amended, (ii) neither the Company nor any of
its subsidiaries has incurred nor will it incur any material liabilities or
obligations, direct or contingent, nor has it entered into nor will it enter
into any material transactions other than pursuant to this Agreement and the
transactions referred to herein and (iii) the Company has not and will not have
paid or declared any dividends or other distributions of any kind on any class
of its capital stock.
(i) The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended.
(j) Except as set forth in the Registration Statement and the
Prospectus, there are no actions, suits or proceedings pending or threatened
against or affecting the Company or any of its subsidiaries or any of their
respective officers in their capacity as such, before or by any Federal or state
court, commission, regulatory body, administrative agency or other governmental
body, domestic or foreign, wherein an unfavorable ruling, decision or finding
might materially and adversely affect the Company or any of its subsidiaries or
its business, properties, business prospects, condition (financial or otherwise)
or results of operations.
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(k) The Company and each of its subsidiaries has, and at the
Closing Date will have, (i) all governmental licenses, permits, consents,
orders, approvals and other authorizations necessary to carry on its business as
contemplated in the Prospectus, (ii) complied in all respects with all laws,
regulations and orders applicable to it or its business and (iii) performed all
its obligations required to be performed by it, and is not, and at the Closing
Date will not be, in default, under any indenture, mortgage, deed of trust,
voting trust agreement, loan agreement, bond, debenture, note agreement, lease,
contract or other agreement or instrument (collectively, a "CONTRACT OR OTHER
AGREEMENT") to which it is a party or by which its property is bound or
affected, the violation of which would have a material adverse effect on the
business, properties, financial position or results of operations of the Company
and its subsidiaries, taken as a whole. To the best knowledge of the Company and
each of its subsidiaries, no other party under any contract or other agreement
to which it is a party is in default in any material respect thereunder. The
Company is not, nor at the Closing Date will be, in violation of any provision
of its Amended and Restated Declaration of Trust and Amended and Restated
By-laws. No subsidiary of the Company is, nor at the Closing Date will any of
them be, in violation of any provision in their respective charter documents.
(l) No consent, approval, authorization or order of, or any
filing or declaration with, any court or governmental agency or body is required
for the consummation by the Company of the transactions on its part herein
contemplated, except such as have been obtained under the Act or the Rules and
Regulations and such as may be required under state or Canadian securities or
Blue Sky laws or the by-laws and rules of the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the purchase and distribution by
the Underwriters of the Shares to be sold by the Company.
(m) The Company has full corporate power and corporate
authority to enter into this Agreement. This Agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company and is enforceable against the Company in accordance
with the terms hereof. The performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of the
Company or any of its subsidiaries pursuant to the terms or provisions of, or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, or give any other party a right to terminate any of
its obligations under, or result in the acceleration of any obligation under,
the Amended and Restated Declaration of Trust or Second Amended and Restated
By-laws of the Company or the charter documents of any of its subsidiaries, any
contract or other agreement to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or
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any of its properties is bound or affected, or violate or conflict with any
judgment, ruling, decree, order, statute, rule or regulation of any court or
other governmental agency or body applicable to the business or properties of
the Company or any of its subsidiaries.
(n) The Company and each of its subsidiaries has good and
marketable title to all properties and assets described in the Prospectus as
owned by it, free and clear of all liens, charges, encumbrances or restrictions,
except such as (i) are described in the Prospectus or (ii) are not material to
the business of the Company or its subsidiaries, taken as a whole. The Company
and each of its subsidiaries has valid, subsisting and enforceable leases for
the properties described in the Prospectus as leased by it, with such exceptions
as are not material and do not materially interfere with the use made and
proposed to be made of such properties by the Company and such subsidiaries; no
tenant under any of the leases pursuant to which the Company leases its
properties has an option or right of first refusal to purchase the premises
demised under such lease; the use and occupancy of each of the properties of the
Company complies in all material respects with all applicable codes and zoning
laws and regulations; the Company has no knowledge of any pending or threatened
condemnation or zoning change that will in any material respect affect the size
of, use of, improvements of, construction on, or access to any of the properties
of the Company; and the Company has no knowledge of any pending or threatened
proceeding or action that will in any manner affect the size of, use of,
improvements on, construction on, or access to any of the properties of the
Company.
(o) Title insurance in favor of the Company (or the subsidiary
which holds title to such property) is maintained with respect to each of the
properties owned by the Company in an amount at least equal to the greater of
(i) the cost of acquisition of such property or (ii) the cost of construction by
the Company of the improvements located on such property (measured at the time
of such construction), except, in each case, where the failure to maintain such
title insurance would not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries taken as a whole. Title insurance in favor
of the mortgagee is maintained in an amount equal to the maximum commitment of
the related loan.
(p) The mortgages and deeds of trust encumbering the
properties and assets described in the Prospectus are not convertible nor does
the Company hold a participating interest therein.
(q) The Company has no knowledge of (i) the unlawful presence
of any hazardous substances, hazardous materials, toxic substances or waste
materials (collectively, "HAZARDOUS MATERIALS") on any of the properties owned
by it, or
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(ii) any unlawful spills, releases, discharges or disposal of Hazardous
Materials that have occurred or are presently occurring off such properties as a
result of any construction on or operation and use of such properties, which
presence or occurrence would have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business prospects
of the Company and its subsidiaries taken as a whole. In connection with the
construction or operation and use of the properties owned by the Company, the
Company represents that, as of the date of this Agreement, it has no knowledge
of any failure to comply with all applicable local, state and federal
environmental laws, regulations, ordinances and administrative and judicial
orders relating to the generation, recycling, reuse, sale, storage, handling,
transport and disposal of any Hazardous Materials, which failure would have a
material adverse effect on the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company and its
subsidiaries taken as a whole.
(r) Property and casualty insurance in favor of the Company is
maintained with respect to each of the properties owned by it in an amount and
on such terms as is reasonable and customary for businesses of this type.
(s) There is no document or contract of a character required
to be described in the Registration Statement or the Prospectus or to be filed
as an exhibit to the Registration Statement which is not described or filed as
required. All such contracts and all contracts relating to any tax exempt
financings to which the Company or any subsidiary is a party have been duly
authorized, executed and delivered by the Company or such subsidiary, constitute
valid and binding agreements of the Company or such subsidiary and are
enforceable against the Company or such subsidiary in accordance with the terms
thereof.
(t) No statement, representation, warranty or covenant made by
the Company in this Agreement or made in any certificate or document required by
this Agreement to be delivered to the Underwriters was or will be, when made,
inaccurate, untrue or incorrect.
(u) Neither the Company nor any of its trustees, officers or
controlling persons has taken, directly or indirectly, any action intended, or
which might reasonably be expected, to cause or result, under the Act or
otherwise, in, or which has constituted, stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of the
Shares.
(v) No holder of securities of the Company has rights to the
registration of any securities of the Company because of the filing of the
Registration Statement.
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(w) The Company has applied to have the Shares duly authorized
for listing on the New York Stock Exchange.
(x) Neither the Company nor any of its subsidiaries is
involved in any material labor dispute nor, to the knowledge of the Company, is
any such dispute threatened.
(y) The Company and its subsidiaries own, or are licensed or
otherwise have the full exclusive right to use, all material trademarks and
trade names which are used in or necessary for the conduct of their respective
businesses as described in the Prospectus. No claims have been asserted by any
person to the use of any such trademarks or trade names or challenging or
questioning the validity or effectiveness of any such trademark or trade name.
The use, in connection with the business and operations of the Company and its
subsidiaries of such trademarks and trade names does not, to the Company's
knowledge, infringe on the rights of any person.
(z) Neither the Company nor any of its subsidiaries nor, to
the Company's knowledge, any employee or agent of the Company or any subsidiary
has made any payment of funds of the Company or any subsidiary or received or
retained any funds in violation of any law, rule or regulation or of a character
required to be disclosed in the Prospectus.
(aa) The Company has continuously been organized and operated
in conformity with the requirements for qualification as a real estate
investment trust under the Internal Revenue Code of 1986, as amended (the
"CODE") for all taxable years commencing with its taxable year ended December
31, 1994. The Company has filed an election to be taxable as a real estate
investment trust for its taxable year ended December 31, 1994, and such election
has not been terminated. The Company's method of operation will permit it to
continue to meet the requirements for taxation as a real estate investment trust
under the Code. The Company intends to continue to operate in a manner which
would permit it to qualify as a real estate investment trust under the Code.
4. AGREEMENTS OF THE COMPANY. The Company agrees with the
Underwriters as follows:
(a) The Company will cause the Prospectus Supplement to be
filed as required by Section 3(a) hereof (but only if you have not reasonably
objected thereto by notice to the Company after having been furnished a copy a
reasonable time prior to filing) and will notify you promptly of such filing.
The Company will not during such period as the Prospectus is required by law to
be delivered in connection with sales of the Shares by any Underwriters or
dealer, file any amendment or supplement to the Registration Statement or the
Prospectus, unless a copy thereof shall first have been submitted to the
Representatives within a reasonable period of time prior to the
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filing thereof and the Representatives shall not have objected thereto in good
faith.
(b) The Company will notify the Representatives promptly, and
will confirm such advice in writing, (1) when any post-effective amendment to
the Registration Statement becomes effective, (2) of any request by the
Commission for amendments or supplements to the Registration Statement or the
Prospectus or for additional information, (3) of the issuance by the Commission
of any stop order suspending the effectiveness of the Registration Statement or
the initiation of any proceedings for that purpose or the threat thereof, (4) of
the happening of any event during the period mentioned in the second sentence of
Section 4(e) that in the judgment of the Company makes any statement made in the
Registration Statement or the Prospectus untrue or that requires the making of
any changes in the Registration Statement or the Prospectus in order to make the
statements therein, in light of the circumstances in which they are made, not
misleading and (5) of receipt by the Company or any representative or attorney
of the Company of any other communication from the Commission relating to the
Company, the Registration Statement, or the Prospectus. If at any time the
Commission shall issue any order suspending the effectiveness of the
Registration Statement, the Company will make every reasonable effort to obtain
the withdrawal of such order at the earliest possible moment.
(c) The Company will furnish to the Representatives, upon
request and without charge, two signed copies of the Registration Statement and
of any post-effective amendment thereto, including financial statements and
schedules, and all exhibits thereto (including any document filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus).
(d) The Company will comply with all the provisions of any
undertakings contained in the Registration Statement.
(e) The Company will deliver to each Underwriter, without
charge, as many copies of the Prospectus containing the Prospectus Supplement or
any amendment or supplement thereto as such Underwriter may reasonably request.
The Company consents to the use of the Prospectus or any amendment or supplement
thereto by the Underwriters and by all dealers to whom the Shares may be sold,
both in connection with the offering or sale of the Shares and for any period of
time thereafter during which the Prospectus is required by law to be delivered
in connection therewith. If during such period of time any event shall occur
which in the judgment of the Company or counsel to the Underwriters should be
set forth in the Prospectus in order to make any statement therein, in the light
of the circumstances under which it was made, not misleading, or if it is
necessary to supplement or amend the Prospectus to comply with law, the Company
will
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forthwith prepare and duly file with the Commission an appropriate supplement or
amendment thereto, and will deliver to each Underwriter, without charge, such
number of copies of such supplement or amendment to the Prospectus as such
Underwriter may reasonably request. The Company shall not file any document
under the Exchange Act before the termination of the offering of the Shares by
the Underwriters if such document would be deemed to be incorporated by
reference into the Prospectus which is not approved by the Representatives after
reasonable notice thereof.
(f) Prior to any public offering of the Shares the Company
will cooperate with the Underwriters and counsel to the Underwriters in
connection with the registration or qualification of the Shares for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representatives may request including, without limitation, jurisdictions outside
of the United States; provided, that in no event shall the Company be obligated
to qualify to do business in any jurisdiction where it is not now so qualified
or to take any action which would subject it to general service of process in
any jurisdiction where it is not now so subject.
(g) During the period of five years commencing on the date
hereof, the Company will, upon request for such item by a Representative,
furnish to such Representative such financial statements and other periodic and
special reports as the Company may from time to time distribute generally to the
holders of any class of its capital stock, and will furnish to such
Representative a copy of each annual or other report it shall be required to
file with the Commission.
(h) The Company will make generally available to holders of
its securities as soon as may be practicable but in no event later than the last
day of the fifteenth full calendar month following the end of the Company's
current fiscal quarter, an earnings statement (which need not be audited but
shall be in reasonable detail) for a period of 12 months beginning after the
date upon which the Prospectus Supplement is filed pursuant to Rule 424 under
the Act, and satisfying the provisions of Section 11(a) of the Act (including
Rule 158 of the Rules and Regulations).
(i) Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement is terminated, the Company will pay,
or reimburse if paid by the Underwriters, all fees, costs and expenses incident
to the performance of the obligations of the Company under this Agreement,
including but not limited to fees, costs and expenses of or relating to (1) the
preparation, printing and filing of the Registration Statement and exhibits to
it, the Prospectus and any amendment or supplement to the Registration Statement
or the Prospectus, (2) the preparation and delivery of certificates representing
the Shares, (3) the printing of this Agreement and any Dealer Agreements, (4)
furnishing (including costs of
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shipping and mailing) such copies of the Registration Statement, the Prospectus
and any Preliminary Prospectus, and all amendments and supplements thereto, as
may be requested for use in connection with the offering and sale of the Shares
by the Underwriters or by dealers to whom Shares may be sold, (5) the listing of
the Shares on the New York Stock Exchange, (6) filings required to be made by or
on behalf of the Company or the Underwriters, including without limitation
filings to be made by the Underwriters with the NASD, and the fees and
disbursements and other charges (other than counsel for the Underwriters) in
connection therewith and filings to be made by the Company with the Commission,
and the fees, disbursements and other charges of counsel for the Company in
connection therewith, (7) the registration or qualification of the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
designated pursuant to Section 4(f), including the fees, disbursements and other
reasonable charges of counsel to the Underwriters in connection therewith, and
the preparation and printing of preliminary, supplemental and final Blue Sky
memoranda, (8) counsel to the Company and any surveyors, engineers, appraisers,
photographers, accountants and other professionals engaged by or on behalf of
the Company, (9) the transfer agent and registrar for the Shares, and (10)
preparation of slides, overheads and other presentation material to be used in
any "road show" or other presentation to potential investors and the hotel,
travel and other expenses of the Company's employees in connection with any such
"road show" or presentation; provided, however, that with respect to any fees,
disbursements and other charges of counsel for the Underwriters in connection
with the registration and qualification of the Shares under Blue Sky laws and
the preparation of Blue Sky memorandum, the Company shall not be responsible for
counsel fees, disbursements and other charges in excess of $15,000. The filing
fee paid to the NASD shall not be considered to be "fees, disbursements or other
charges" for the purposes of this Section 4(i) and shall be paid by the Company.
(j) If this Agreement shall be terminated by the Company
pursuant to any of the provisions hereof (otherwise than pursuant to Section 8
hereof) or if for any reason the Company shall be unable to perform its
obligations hereunder, the Company will reimburse the Underwriters for all
out-of-pocket expenses (including the fees, disbursements and other charges of
counsel to the Underwriters) reasonably incurred by it in connection herewith.
(k) The Company will not at any time, directly or indirectly,
take any action intended, or which might reasonably be expected, to cause or
result in, or which will constitute, stabilization of the price of the Series A
Preferred Shares to facilitate the sale or resale of any of the Shares.
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(l) The Company will apply the net proceeds from the offering
and sale of the Shares to be sold by the Company in the manner set forth in the
Prospectus under "Use of Proceeds."
(m) The Company will not, with respect to the Shares, invoke
the authority granted under Section 5.7 of the Amended and Restated Declaration
of Trust (the "DECLARATION OF TRUST") of the Company to revoke the exception
contained in Section 5.6.2 of the Declaration of Trust under which shares
transferred to an Underwriter in a public offering will not be deemed to be
Excess Shares (as defined in the Declaration of Trust), notwithstanding the fact
that the shares owned beneficially by the Underwriter may exceed the Ownership
Limit (as defined in the Declaration of Trust).
(n) The Company will continue to elect to qualify as a "real
estate investment trust" under the Code, and will use its best efforts to
continue to meet the requirements to qualify as a "real estate investment
trust."
(o) The Company will use commercially reasonable efforts to
cause its existing loan with the Teachers Insurance and Annuity Association to
become an unsecured facility in accordance with the terms of the loan agreement
by September 1, 1997.
5. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. In addition to
the execution and delivery of the Price Determination Agreement, the obligations
of the Underwriters hereunder are subject to the following conditions:
(a) The Prospectus shall have been filed as required by
Section 3(a) and (i) no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall be pending or threatened by the Commission, (ii) no order
suspending the effectiveness of the Registration Statement or the qualification
or registration of the Shares under the securities or Blue Sky laws of any
jurisdiction shall be in effect and no proceeding for such purpose shall be
pending before or threatened or contemplated by the Commission or the
authorities of any such jurisdiction, (iii) any request for additional
information on the part of the staff of the Commission or any such authorities
shall have been complied with to the satisfaction of the staff of the Commission
or such authorities and (iv) after the date hereof no amendment or supplement to
the Registration Statement or the Prospectus shall have been filed unless a copy
thereof was first submitted to the Representatives and the Representatives did
not object thereto in good faith, and the Representatives shall have received
certificates, dated the Closing Date and the Option Closing Date and signed by
the Chief Executive Officer or the Chairman of the Board of Trustees of the
Company and the Chief Financial Officer of the Company (who may, as to
proceedings
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threatened, rely upon the best of their information and belief), to the effect
of clauses (i), (ii) and (iii).
(b) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) there shall not have
been a material adverse change in the general affairs, business, business
prospects, properties, management, condition (financial or otherwise) or results
of operations of the Company and its subsidiaries, taken as a whole, whether or
not arising from transactions in the ordinary course of business, in each case
other than as set forth in or contemplated by the Registration Statement and the
Prospectus and (ii) neither the Company nor any of its subsidiaries shall have
sustained any material loss or interference with its business or properties from
fire, explosion, flood or other casualty, whether or not covered by insurance,
or from any labor dispute or any court or legislative or other governmental
action, order or decree, which is not set forth in the Registration Statement
and the Prospectus, if in the judgment of the Representatives any such
development makes it impracticable or inadvisable to consummate the sale and
delivery of the Shares by the Underwriters and at the public offering price.
(c) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have been no
litigation or other proceeding instituted against the Company or any of its
subsidiaries or any of their respective officers or directors or trustees, as
the case may be, in their capacities as such, before or by any Federal, state or
local court, commission, regulatory body, administrative agency or other
governmental body, domestic or foreign, in which litigation or proceeding it is
reasonably probable that an unfavorable ruling, decision or finding would
materially and adversely affect the business, properties, business prospects,
condition (financial or otherwise) or results of operations of the Company and
its subsidiaries taken as a whole.
(d) Each of the representations and warranties of the Company
contained herein shall be true and correct in all material respects at the
Closing Date and, with respect to the Option Shares, at the Option Closing Date,
as if made at the Closing Date and, with respect to the Option Shares, at the
Option Closing Date, and all covenants and agreements contained herein to be
performed on the part of the Company and all conditions contained herein to be
fulfilled or complied with by the Company at or prior to the Closing Date and,
with respect to the Option Shares, at or prior to the Option Closing Date, shall
have been duly performed, fulfilled or complied with.
(e) The Representatives shall have received one or more
opinions, dated the Closing Date and, with respect to the Option Shares, the
Option Closing Date, and satisfactory in form
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and substance to the Underwriters' counsel from ▇▇▇▇▇▇▇, Procter & ▇▇▇▇ LLP,
counsel to the Company, (i) to the effect set forth in Exhibit D and (ii)
concerning the qualification of the Company as a real estate investment trust
under the Code.
(f) The Representatives shall have received an opinion, dated
the Closing Date and the Option Closing Date, from O'Melveny & ▇▇▇▇▇ LLP,
Underwriters' counsel, with respect to the Registration Statement, the
Prospectus and this Agreement, which opinion shall be satisfactory in all
respects to the Representatives.
(g) Concurrently with the execution and delivery of this
Agreement, the Accountants shall have furnished to the Representatives a letter,
dated the date of its delivery, addressed to the Representatives and in form and
substance satisfactory to the Representatives, confirming that they are
independent accountants with respect to the Company as required by the Act and
the Rules and Regulations and with respect to the financial and other
statistical and numerical information contained in the Registration Statement or
incorporated by reference therein. At the Closing Date and, as to the Option
Shares, the Option Closing Date, the Accountants shall have furnished to the
Representatives a letter, dated the date of its delivery, which shall confirm,
on the basis of a review in accordance with the procedures set forth in the
letter from the Accountants, that nothing has come to their attention during the
period from the date of the letter referred to in the prior sentence to a date
(specified in the letter) not more than three days prior to the Closing Date and
the Option Closing Date which would require any change in their letter dated the
date hereof if it were required to be dated and delivered at the Closing Date
and the Option Closing Date.
(h) At the Closing Date and, as to the Option Shares, the
Option Closing Date, there shall be furnished to the Representatives an accurate
certificate, dated the date of its delivery, signed by each of the Chief
Executive Officer and the Chief Financial Officer of the Company, in form and
substance satisfactory to the Representatives, to the effect that:
(i) Each signer of such certificate has carefully
examined the Registration Statement and the Prospectus (including any
documents filed under the Exchange Act and deemed to be incorporated by
reference into the Prospectus) and (A) as of the date of such certificate,
such documents are true and correct in all material respects and do not
omit to state a material fact required to be stated therein or necessary
in order to make the statements therein not untrue or misleading and (B)
no event has occurred as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein not
untrue or misleading in any material respect and there has been no
document required to be filed under the Exchange Act
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and the Exchange Act Rules and Regulations that upon such filing would be
deemed to be incorporated by reference into the Prospectus that has not
been so filed.
(ii) Each of the representations and warranties of the
Company contained in this Agreement were, when originally made, and are,
at the time such certificate is delivered, true and correct in all
material respects.
(iii) Each of the covenants required to be performed by the
Company herein on or prior to the delivery of such certificate has been
duly, timely and fully performed and each condition herein required to be
complied with by the Company on or prior to the date of such certificate
has been duly, timely and fully complied with.
(i) The Shares shall be qualified for sale in such states as
the Representatives may reasonably request, each such qualification shall be in
effect and not subject to any stop order or other proceeding on the Closing Date
and the Option Closing Date.
(j) Prior to the Closing Date, the Company shall have applied
to have the Shares approved for listing on the New York Stock Exchange.
(k) The Company shall have furnished to the Representatives
such certificates, in addition to those specifically mentioned herein, as the
Representatives may have reasonably requested as to the accuracy and
completeness at the Closing Date and the Option Closing Date of any statement in
the Registration Statement or the Prospectus or any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, as
to the accuracy at the Closing Date and the Option Closing Date of the
representations and warranties of the Company herein as to the performance by
the Company of its obligations hereunder or as to the fulfillment of the
conditions concurrent and precedent to the obligations hereunder of the
Underwriters.
6. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company will indemnify and hold harmless each
Underwriter, the directors, officers, employees and agents of each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act from and against any and
all losses, claims, liabilities, expenses and damages (including, but not
limited to, any and all investigative, legal and other expenses reasonably
incurred in connection with, and any and all amounts paid in settlement of, any
action, suit or proceeding between any of the indemnified parties and any
indemnifying parties or between any indemnified party and any third party, or
otherwise, or any claim asserted), as and when incurred, to which
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any Underwriter, or any such person may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, liabilities, expenses or
damages arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus, the
Registration Statement or the Prospectus or any amendment or supplement to the
Registration Statement or the Prospectus or in any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Prospectus, or
in any application or other document executed by or on behalf of the Company or
based on written information furnished by or on behalf of the Company and filed
in any jurisdiction in either case in order to qualify the Shares under the
securities laws thereof or filed with the Commission, (ii) the omission or
alleged omission to state in such document a material fact required to be stated
in it or necessary to make the statements in it not misleading or (iii) any act
or failure to act or any alleged act or failure to act by any Underwriter in
connection with, or relating in any manner to, the Shares or the offering
contemplated hereby, and which is included as part of or referred to in any
loss, claim, liability, expense or damage arising out of or based upon matters
covered by clause (i) or (ii) above (provided that the Company shall not be
liable under this clause (iii) to the extent it is finally judicially determined
by a court of competent jurisdiction that such loss, claim, liability, expense
or damage resulted directly from any such acts or failures to act undertaken or
omitted to be taken by such Underwriter through its gross negligence or willful
misconduct); provided that the Company will not be liable to the extent that
such loss, claim, liability, expense or damage arises from the sale of the
Shares in the public offering to any person by any Underwriter and is based on
an untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to the Underwriter
furnished in writing to the Company by such Underwriter expressly for inclusion
in the Registration Statement, any preliminary prospectus or the Prospectus.
This indemnity agreement will be in addition to any liability that the Company
might otherwise have.
(b) Each Underwriter will indemnify and hold harmless the
Company, each person, if any, who controls the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, each trustee of the
Company and each officer of the Company who signs the Registration Statement to
the same extent as the foregoing indemnity from the Company to each Underwriter,
but only insofar as losses, claims, liabilities, expenses or damages arise out
of or are based on any untrue statement or omission or alleged untrue statement
or omission made in reliance on and in conformity with information relating to
any Underwriter furnished in writing to the Company by such Underwriter
expressly for use in the Registration Statement or the Prospectus. This
indemnity will be in addition to any liability that each Underwriter might
otherwise have; provided,
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however, that in no case shall any Underwriter be liable or responsible for any
amount in excess of the underwriting discounts and commissions received by such
Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 6 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 6, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission so to notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provisions of this Section 6 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel satisfactory to the indemnified party, and
after notice from the indemnifying party to the indemnified party of its
election to assume the defense, the indemnifying party will not be liable to the
indemnified party for any legal or other expenses except as provided below and
except for the reasonable costs of investigation subsequently incurred by the
indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
expenses and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on advice of counsel) that there may be
legal defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (3) a conflict
or potential conflict exists (based on advice of counsel to the indemnified
party) between the indemnified party and the indemnifying party (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (4) the indemnifying party has not
in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the reasonable fees, disbursements and other charges of
counsel will be at the expense of the indemnifying party or parties. It is
understood that the indemnifying party or parties shall not, in connection with
any proceeding or related proceedings in the same jurisdiction, be liable for
the reasonable fees, disbursements and other charges of more than one separate
firm admitted to practice in such jurisdiction at any one time for all
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such indemnified party or parties. All such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. An indemnifying party will not be liable for any settlement of any
action or claim effected without its written consent (which consent will not be
unreasonably withheld). No indemnifying party shall, without the prior written
consent of each indemnified party, settle or compromise or consent to the entry
of any judgment in any pending or threatened claim, action or proceeding
relating to the matters contemplated by this Section 6 (whether or not any
indemnified party is a party thereto), unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising or that may arise out of such claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in the foregoing
paragraphs of this Section 6 is applicable in accordance with its terms but for
any reason is held to be unavailable from the Company or the Underwriters, the
Company and the Underwriters will contribute to the total losses, claims,
liabilities, expenses and damages (including any investigative, legal and other
expenses reasonably incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding or any claim asserted, but after
deducting any contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the meaning of the
Act, officers of the Company who signed the Registration Statement and trustees
of the Company, who also may be liable for contribution) to which the Company
and any one or more of the Underwriters may be subject in such proportion as
shall be appropriate to reflect the relative benefits received by the Company on
the one hand and the Underwriters on the other. The relative benefits received
by the Company on the one hand and the Underwriters on the other shall be deemed
to be in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus. If, but only if, the
allocation provided by the foregoing sentence is not permitted by applicable
law, the allocation of contribution shall be made in such proportion as is
appropriate to reflect not only the relative benefits referred to in the
foregoing sentence but also the relative fault of the Company, on the one hand,
and the Underwriters, on the other, with respect to the statements or omissions
which resulted in such loss, claim, liability, expense or damage, or action in
respect thereof, as well as any other relevant equitable considerations with
respect to such offering. Such relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact relates to information supplied by
the Company or the Underwriters, the intent of the parties and their relative
knowledge, access to
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information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable
if contributions pursuant to this Section 6(d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purposes) or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, liability, expense or
damage, or action in respect thereof, referred to above in this Section 6(d)
shall be deemed to include, for purpose of this Section 6(d), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 6(d), no Underwriter shall be required to contribute
any amount in excess of the underwriting discounts and commissions received by
it and no person found guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) will be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The
Underwriters' obligations to contribute as provided in this Section 6(d) are
several in proportion to their respective underwriting obligations and not
joint. For purposes of this Section 6(d), any person who controls a party to
this Agreement within the meaning of the Act will have the same rights to
contribution as that party, and each officer of the Company who signed the
Registration Statement will have the same rights to contribution as the Company,
subject in each case to the provisions hereof. Any party entitled to
contribution, promptly after receipt of notice of commencement of any action
against such party in respect of which a claim for contribution may be made
under this Section 6(d), will notify any such party or parties from whom
contribution may be sought, but the omission so to notify will not relieve the
party or parties from whom contribution may be sought from any other obligation
it or they may have under this Section 6(d). No party will be liable for
contribution with respect to any action or claim settled without its written
consent (which consent will not be unreasonably withheld).
(e) The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company contained in
this Agreement shall remain operative and in full force and effect regardless of
(i) any investigation made by or on behalf of the Underwriters, (ii) acceptance
of the Shares and payment therefor or (iii) any termination of this Agreement.
7. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY. All
representations, warranties, agreements and covenants of the Company herein or
in certificates delivered pursuant hereto, and the agreements of the several
Underwriters contained in Section 6 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
Underwriter or any controlling persons, or the
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Company or any of its officers, trustees, or any controlling persons, and shall
survive (i) termination of this Agreement and (ii) delivery of and payment for
the Shares hereunder.
8. SUBSTITUTION OF UNDERWRITERS.
(a) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Shares in accordance with the terms
hereof, and the amount of Shares not purchased does not aggregate more than 10%
of the total amount of Shares that the Underwriters are obligated to purchase
hereunder at the Closing Date, the remaining Underwriters shall be obligated to
take up and pay for (in proportion to their respective underwriting obligations
hereunder as set forth in Schedule 1 hereto except as may otherwise be
determined by you) the Shares that the withdrawing or defaulting Underwriter or
Underwriters agreed but failed to purchase.
(b) If any Underwriter or Underwriters shall fail to take up and pay
for the amount of Shares agreed by such Underwriter or Underwriters to be
purchased hereunder, upon tender of such Shares in accordance with the terms
hereof, and the amount of Shares not purchased aggregates more than 10% of the
total amount of Shares that the Underwriters are obligated to purchase hereunder
at the Closing Date, and arrangements satisfactory to you and the Company for
the purchase of such Shares by other persons are not made within 36 hours
thereafter, this Agreement shall terminate. In the event of any such termination
the Company shall not be under any liability to any Underwriter with respect to
Shares not purchased by reason of such termination (except to the extent
provided in Section 4(i) and Section 6 hereof) nor shall any Underwriter (other
than an Underwriter who shall have failed, otherwise than for some reason
permitted under this Agreement, to purchase the amount of Shares agreed by such
Underwriter to be purchased hereunder) be under any liability to the Company
with respect to such Shares (except to the extent provided in Section 6 hereof).
9. TERMINATION. The obligations of the Underwriters under this
Agreement may be terminated at any time on or prior to the Closing Date (or,
with respect to the Option Shares, on or prior to the Option Closing Date), by
notice to the Company from the Representatives, without liability on the part of
the Underwriter to the Company, if, prior to delivery and payment for the Shares
(or the Option Shares, as the case may be), in the sole judgment of the
Representatives, (i) trading in any of the equity securities of the Company
shall have been suspended by the Commission, by an exchange that lists such
equity securities or by the National Association of Securities Dealers Automated
Quotation National Market System, (ii) trading in securities generally on the
New York Stock Exchange shall have been suspended or limited or minimum or
maximum prices shall have been
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generally established on such exchange, or additional material governmental
restrictions, not in force on the date of this Agreement, shall have been
imposed upon trading in securities generally by such exchange or by order of the
Commission or any court or other governmental authority, (iii) a general banking
moratorium shall have been declared by either Federal or New York State
authorities or (iv) any material adverse change in the financial or securities
markets in the United States or in political, financial or economic conditions
in the United States or any outbreak or material escalation of hostilities or
declaration by the United States of a national emergency or war or other
calamity or crisis shall have occurred the effect of any of which is such as to
make it, in the sole judgment of the Representatives, impracticable or
inadvisable to market the Shares on the terms and in the manner contemplated by
the Prospectus.
10. NOTICES. Notice given pursuant to any of the provisions of this
Agreement shall be in writing and, unless otherwise specified, shall be mailed
or delivered (a) if to the Company, at the office of the Company, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, or (b) if to
the Representatives, to the offices of PaineWebber Incorporated, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Real Estate
Department. Any such notice shall be effective only upon receipt. Any notice
under Section 10 hereof may be made by telex, facsimile or telephone, but if so
made shall be subsequently confirmed in writing.
11. PARTIES. This Agreement has been and is made solely for the
benefit of the Underwriters and the Company and of the controlling persons,
directors, trustees, and officers referred to in Section 6, and their respective
successors and assigns, and no other person shall acquire or have any right
under or by virtue of this Agreement. The term "successors and assigns" as used
in this Agreement shall not include a purchaser, as such purchaser, of Shares
from the Underwriters.
In all dealings with the Company under this Agreement, you shall act
on behalf of each of the several Underwriters, and any action under this
Agreement taken by the Representatives on behalf of the Underwriters will be
binding upon the Underwriters. Any action required or permitted to be taken by
the Representatives under this Agreement may be taken jointly by them or by
PaineWebber Incorporated.
12. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
13. COUNTERPARTS. This Agreement may be signed in two or more
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
24
25
14. SEVERABILITY. In case any provision in this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
15. WAIVER OF TRIAL BY JURY. The Company and each of the
Underwriters each hereby irrevocably waive any right they may have to a trial by
jury in respect of any claim based upon or arising out of this Agreement or the
transactions contemplated hereby.
Please confirm that the foregoing correctly sets forth the agreement
among the Company and the Underwriters.
Very truly yours,
GABLES RESIDENTIAL TRUST
By: ____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
Confirmed as of the date first
above mentioned on behalf of the
undersigned and as Representatives
of the several Underwriters named
in Schedule 1.
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: PAINEWEBBER INCORPORATED
By: ____________________________
Name: ___________________________
Title: __________________________
25
26
SCHEDULE 1
AMOUNT OF
UNDERWRITER SHARES
----------- TO BE PURCHASED
---------------
PaineWebber Incorporated 1,500,000
▇▇▇▇▇ ▇▇▇▇▇▇ Inc. 1,500,000
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation 100,000
▇.▇. ▇▇▇▇▇▇▇ & Sons, Inc. 100,000
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. 100,000
▇▇▇▇▇▇ Brothers Inc. 100,000
▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc. 100,000
Prudential Securities Incorporated 100,000
The ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ Company, Inc. 100,000
▇▇▇▇▇ & Company 50,000
First Albany Corporation 50,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Inc. 50,000
▇▇▇▇▇▇, ▇▇▇▇▇ & Co., Inc. 50,000
US Clearing Corp. 50,000
Wheat First Butcher Singer 50,000
---------
Total 4,000,000
=========
Schedule 1
27
EXHIBIT A
GABLES RESIDENTIAL TRUST
---------------------
Price Determination Agreement
July 21, 1997
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
As Representatives of the
Several Underwriters
c/o PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated concurrently
herewith (the "UNDERWRITING AGREEMENT"), between Gables Residential Trust, a
Maryland real estate investment trust (the "COMPANY"), and the several
underwriters listed in Schedule 1 thereto (the "UNDERWRITERS") for whom you are
acting as representatives (in such capacity, the "REPRESENTATIVES"). The
Underwriting Agreement provides for the purchase by the Underwriters from the
Company, subject to the terms and conditions set forth therein, of an aggregate
of 4,000,000 shares (the "FIRM SHARES") of the Company's 8.30% Series A
Cumulative Redeemable Preferred Shares of Beneficial Interest (Liquidation
Preference $25.00 Per Share), $0.01 par value per share. This Agreement is the
Price Determination Agreement referred to in the Underwriting Agreement.
Pursuant to Section 1 of the Underwriting Agreement, the undersigned
agree with the Underwriters as follows:
1. The public offering price per share for the Firm Shares
shall be $25.00.
2. The purchase price per share for the Firm Shares to be paid
by the Underwriters shall be $24.2125 representing an amount equal to the public
offering price set forth above, less $0.7875 per share.
A-1
28
The Company represents and warrants to the Underwriters that the
representations and warranties of the Company set forth in Section 3 of the
Underwriting Agreement are accurate as though expressly made at and as of the
date hereof.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
If the foregoing is in accordance with your understanding of the
agreement between the Underwriters and the Company, please sign and return to
the Company a counterpart hereof, whereupon this instrument along with all
counterparts and together with the Underwriting Agreement shall be a binding
agreement between the Underwriters and the Company in accordance with its terms
and the terms of the Underwriting Agreement.
Very truly yours,
GABLES RESIDENTIAL TRUST
By: _________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Chief Executive Officer
Confirmed as of the date first
above mentioned on behalf of the
undersigned and as Representatives
of the several Underwriters named
in Schedule 1 to the Underwriting
Agreement.
PAINEWEBBER INCORPORATED
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
By: PAINEWEBBER INCORPORATED
By: ____________________________
Name: ___________________________
Title: __________________________
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
Information in Registration Statement and Prospectus
Furnished by the Underwriters
The following information appearing in the Prospectus has been
furnished by the Underwriters expressly for use in the preparation of the
Prospectus:
1. The following information contained in the Prospectus Supplement
under the heading "Underwriting":
a. The allocation of shares between the
Underwriters in the first paragraph;
b. The information in the second paragraph; and
c. The information in the second sentence of the
fifth paragraph.
B-1
30
EXHIBIT C
Subsidiaries of the Company
Gables GP, Inc.
Gables Realty Limited Partnership
Central Apartment Management, Inc.
East Apartment Management, Inc.
Alpha Insurance Agency, Inc.
Gables Central Construction, Inc.
Gables East Construction, Inc.
Gables - Tennessee Properties
Pin Oak Park Apartments
Pin Oak Green
Candlewood Gen Par, Inc.
Candlewood - Indian Creed Limited Partnership
GRT Villas Gen Par, Inc. (f.k.a. Candle Creek, Inc.)
GRT Villas Limited Partnership
C-1
31
EXHIBIT D
Form of Opinion of
Counsel to the Company
D-1
32
APPENDIX TO OPINION
D-2