<PAGE>
As filed with the Securities and Exchange Commission on May 22, 1996
REGISTRATION NO. 333-________
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
COLONIAL REALTY LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
DELAWARE 63-1098468
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2101 SIXTH AVE.
SUITE 750
BIRMINGHAM, ALABAMA 35202
(205) 250-8700
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
THOMAS H. LOWDER
2101 SIXTH AVE.
SUITE 750
BIRMINGHAM, ALABAMA 35202
(205) 250-8700
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent For Service)
----------------------
COPIES TO:
J. WARREN GORRELL, JR.
ALAN L. DYE
HOGAN & HARTSON L.L.P.
COLUMBIA SQUARE
555 THIRTEENTH STREET, N.W.
WASHINGTON, D.C. 20004-1109
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
=================================================================================================================================
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE AMOUNT TO BE AGGREGATE PRICE AGGREGATE OFFERING REGISTRATION
REGISTERED (1) REGISTERED (2) PER UNIT PRICE (2)(3) FEE (3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities................. $250,000,000 (2) $250,000,000 $86,206.90
=================================================================================================================================
</TABLE>
(1) This Registration Statement also covers delayed delivery contracts which may
be issued by the Registrant under which the counterparty may be required to
purchase Debt Securities.
(2) In U.S. Dollars or the equivalent thereof denominated in one or more foreign
currencies or units of two or more foreign currencies or composite
currencies (such as European Currency Units). The proposed maximum initial
offering price per unit will be determined, from time to time, by the
Registrant. The amount to be registered, proposed maximum offering price
per unit and proposed aggregate offering price for each series of Debt
Securities is not specified pursuant to General Instruction II.D to Form S-3
under the Securities Act of 1933, as amended.
(3) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457(o) under the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THE REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
===============================================================================
<PAGE>
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+ INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+ REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+ SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR +
+ MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+ BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+ THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+ SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+ UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS +
+ OF ANY SUCH STATE. +
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MAY 22, 1996
PROSPECTUS
$250,000,000
COLONIAL REALTY LIMITED PARTNERSHIP
DEBT SECURITIES
_______________
Colonial Realty Limited Partnership (the "Operating Partnership") may
from time to time offer in one or more series debt securities ("Debt
Securities") with an aggregate public offering price of up to $250,000,000 (or
its equivalent based on the exchange rate at the time of sale) in amounts, at
prices and on terms to be determined at the time of offering. The Debt
Securities may be offered in separate series in amounts, at prices and on terms
to be described in one or more supplements to this Prospectus (a "Prospectus
Supplement").
The specific terms of the Debt Securities in respect of which this
Prospectus is being delivered will be set forth in the applicable Prospectus
Supplement and will include, where applicable, the specific title, aggregate
principal amount, currency, form (which may be registered or bearer, or
certificated or global), authorized denominations, maturity, rate (or manner of
calculation thereof) and time of payment of interest, any terms for redemption
at the option of the Operating Partnership or repayment at the option of the
holder, any terms for any sinking fund payments, covenants and any initial
public offering price.
The applicable Prospectus Supplement also will contain information, where
applicable, about certain U.S. federal income tax considerations relating to,
and any listing on a securities exchange of, the Debt Securities covered by such
Prospectus Supplement.
The Debt Securities may be offered directly, through agents designated from
time to time by the Company, or to or through underwriters or dealers. If any
agents or underwriters are involved in the sale of any of the Debt Securities,
their names, and any applicable purchase price, fee, commission or discount
arrangement with, between or among them, will be set forth, or will be
calculable from the information set forth, in an accompanying Prospectus
Supplement. See "Plan of Distribution." No Debt Securities may be sold without
delivery of a Prospectus Supplement describing the method and terms of the
offering of such Debt Securities.
SEE "RISK FACTORS" BEGINNING ON PAGE 2 FOR CERTAIN FACTORS RELATING TO AN
INVESTMENT IN THE DEBT SECURITIES.
_________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_________________
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
_________________
THE DATE OF THIS PROSPECTUS IS JUNE __, 1996
<PAGE>
THE OPERATING PARTNERSHIP
The Debt Securities offered hereby are being issued by the Operating
Partnership, which is the "operating partnership" of Colonial Properties Trust,
an Alabama real estate investment trust (the "Company") whose common shares are
listed on the New York Stock Exchange ("NYSE"). The Operating Partnership is
managed by the Company, through its wholly owned subsidiary, Colonial Properties
Holding Company, Inc., an Alabama corporation ("CPHC"), which in turn owns
approximately 68.0% of the partnership interests in the Operating Partnership as
of May 15, 1996 and serves as the sole general partner of the Operating
Partnership. The Company is a self-administered and self-managed real estate
investment trust ("REIT"), which was formed to succeed to substantially all of
the interests of Colonial Properties, Inc., an Alabama corporation ("Colonial"),
its affiliates and certain others. The Company's activities as of May 15, 1996
include ownership of a diversified portfolio of 67 multifamily, retail and
office properties located in Alabama, Florida and Georgia, development of new
properties, acquisitions of existing properties, build-to-suit development and
the provision of management, leasing and brokerage services for commercial real
estate.
As of May 15, 1996, the Operating Partnership owned a diversified portfolio
of 39 garden-style multifamily apartment communities containing a total of
12,568 apartment units (the "Multifamily Properties"), 18 retail properties
(including four regional malls, two "power centers," 11 neighborhood shopping
centers, and one mini-warehouse storage facility) containing a total of
approximately 4.5 million square feet of retail space (the "Retail Properties"),
ten office properties containing a total of approximately 1.0 million square
feet of office space (the "Office Properties") and parcels of land adjacent to
certain of these properties (the "Land"). (The Multifamily Properties, the
Retail Properties, the Office Properties and the Land are referred to
collectively as the "Properties.")
The Company conducts all of its business through CPHC, the Operating
Partnership, Colonial Properties Services Limited Partnership (the "Management
Partnership"), which provides management services for the Properties, and
Colonial Properties Services, Inc. (the "Management Corporation"), which
provides management services for properties owned by third parties. The
Operating Partnership owns all of the Properties (or interests therein). The
Operating Partnership is the sole general partner of the Management Partnership
and owns 99% of the interests therein. The Management Corporation owns the
remaining 1% interest as a limited partner. The members of the Board of
Trustees of the Company and the members of the Board of Directors of CPHC are
identical, and all of the executive officers of the Company also are executive
officers of CPHC.
Since the Company's initial public offering in September 1993 (the "IPO")
through April 30, 1996, the Operating Partnership has acquired direct or
indirect interests in 23 Multifamily Properties, eight Retail Properties and
several parcels of Land, representing a total investment of $469.2 million, and
has initiated developments and expansions involving nine properties and
representing a total investment of approximately $78.1 million.
The Company's staff of approximately 530 employees at April 30, 1996,
provides a full range of real estate services from its headquarters in
Birmingham, Alabama and from five regional offices located in the Mobile,
Huntsville and Montgomery, Alabama and Orlando and Tampa, Florida metropolitan
areas.
The principal executive offices of the Operating Partnership are located at
2101 Sixth Avenue North, Suite 750, Birmingham, Alabama 35203, and its telephone
number is (205) 250-8700.
RISK FACTORS
Prospective investors should carefully consider, among other factors, the
matters described below.
REAL ESTATE INVESTMENT RISKS
General. Real property investments are subject to varying degrees of risk.
The Operating Partnership's ability to service debt will depend in large part on
the amount of income generated, expenses incurred and capital expenditures
required. The Operating Partnership's income from retail, multifamily or office
properties may be adversely affected by a number of factors, including the
general economic climate and local real estate conditions,
2
<PAGE>
such as an oversupply of, or a reduction in demand, for retail, apartment or
office space in the area and the attractiveness of the properties to shoppers,
residents and tenants. In addition, income from properties and real estate
values also are affected by such factors as the cost of compliance with
government regulation, including zoning and tax laws, the potential for
liability under applicable laws, interest rate levels and the availability of
financing. Certain significant expenditures associated with each equity
investment by the Operating Partnership in a property (such as mortgage
payments, if any, real estate taxes and maintenance costs) also are generally
not reduced when circumstances cause a reduction in income from the property.
Renewal of Leases and Reletting of Space. The Operating Partnership is
subject to the risks that upon expiration of leases for space located at the
Properties, the leases may not be renewed, the space may not be relet or the
terms of the renewal or reletting (including the cost of required renovations or
concessions to tenants) may be less favorable than current lease terms. Although
the Operating Partnership has established an annual budget for renovation and
reletting expenses that it believes are reasonable in light of each Property's
situation, no assurance can be given that this budget will be sufficient to
cover these expenses. If the Operating Partnership is unable to promptly relet
or renew leases for all or substantially all of the space at its Properties, if
the rental rates upon such renewal or reletting are significantly lower than
expected, or if the Operating Partnership's reserves for these purposes prove
inadequate, then the Operating Partnership's cash provided by operating
activities and ability to make debt service payments could be adversely
affected.
Dependence on Primary Markets. All of the Operating Partnership's
Properties are located in the Southeastern United States and 37 of the
Properties are located in Birmingham and Montgomery, Alabama, Orlando, Florida
and Macon, Georgia. The Operating Partnership's performance and its ability to
make debt service payments could be adversely affected by economic conditions in
the Southeast and in Birmingham, Montgomery, central Florida and Macon in
particular.
Possible Environmental Liabilities. Under various Federal, state and local
laws, ordinances and regulations, a current or previous owner or operator of
real estate may be required to investigate and clean up certain hazardous
substances released at the property, and may be held liable to a governmental
entity or to third parties for property damage and for investigation and cleanup
costs incurred by such parties in connection with the contamination. In
addition, some environmental laws create a lien on the contaminated site in
favor of the government for damages and costs it incurs in connection with the
contamination. The presence of contamination or the failure to remediate
contamination may adversely affect the owner's ability to sell or lease real
estate or to borrow using the real estate as collateral. The owner or operator
of a site may be liable under common law to third parties for damages and
injuries resulting from environmental contamination emanating from the site. The
Operating Partnership has not been notified by any governmental authority of any
material non-compliance, liability or other claim in connection with any of the
Properties and the Operating Partnership is not aware of any other environmental
condition with respect to any of the Properties that could be material. No
assurance, however, can be given that no prior owner created any material
environmental condition not known to the Operating Partnership, that no material
environmental condition with respect to any Property has occurred during the
Operating Partnership's ownership thereof, or that future uses or conditions
(including, without limitation, changes in applicable environmental laws and
regulations) will not result in imposition of environmental liability.
At one of the Operating Partnership's Properties, the Gadsden Mall in
Gadsden, Alabama, four underground storage tanks were removed in 1989. In
connection with the removal of these gasoline storage tanks, associated
petroleum contamination was discovered in the soil and groundwater. The
Operating Partnership is currently working with the state regulatory agency to
remediate the contamination in accordance with applicable requirements. Because
the tanks were registered with the Alabama Department of Environmental
Management and the facility was in compliance with regulations prior to the
incident, the Operating Partnership has been reimbursed under the Alabama
Underground Storage Tank Trust Fund for the costs incurred to date in connection
with the ongoing cleanup, and expects to be reimbursed for the remaining costs
as well. Currently, a free product recovery program is underway.
3
<PAGE>
DEBT FINANCING
The Operating Partnership is subject to the risks associated with debt
financing, including the risk that the Operating Partnership's cash provided by
operating activities will be insufficient to meet required payments of principal
and interest, the risks of rising interest rates on the Operating Partnership's
floating rate debt, the risk that the Operating Partnership will not be able to
prepay or refinance existing indebtedness on the Properties (which generally
will not have been fully amortized at maturity) or that the terms of such
refinancing will not be as favorable as the terms of existing indebtedness. In
the event the Operating Partnership is unable to secure refinancing of such
indebtedness on acceptable terms, the Operating Partnership might be forced to
dispose of properties upon disadvantageous terms, which might result in losses
to the Operating Partnership and might adversely affect the cash flow available
for debt service. In addition, if a property or properties are mortgaged to
secure payment of indebtedness and the Operating Partnership is unable to meet
mortgage payments, the mortgage securing the property could be foreclosed upon
by, or the property could be otherwise transferred to, the mortgagee with a
consequent loss of income and asset value to the Operating Partnership.
CONFLICTS OF INTEREST
The Lowder family (which includes Thomas, James, Robert and Catherine
Lowder and their affiliates) holds interests in certain companies that in the
past have performed construction management, insurance brokerage and other
services with respect to the Properties. These companies may perform similar
services for the Operating Partnership in the future. As a result of its
financial interest in these companies, the Lowder family may realize benefits
from transactions between such companies and the Operating Partnership that are
not realized by other holders of interests in the Operating Partnership. In
addition, Thomas Lowder and his brother, James Lowder, as directors of CPHC, may
be in a position to influence the Operating Partnership to do business with
companies in which the Lowder family has a financial interest. Although the
Operating Partnership is subject to certain policies designed to eliminate or
minimize potential conflicts of interest, including a policy which requires that
transactions in which a director or officer of CPHC has a conflict of interest
be approved by a majority of the disinterested directors, there can be no
assurance that these policies will be successful in eliminating the influence of
such conflicts, or that such transactions, if any, will be on terms as favorable
to the Operating Partnership as could be obtained in an arms-length transaction
with a third party.
DEVELOPMENT AND ACQUISITION RISKS
The Operating Partnership intends to continue development of new multifamily,
retail and office properties (including expansions of existing Properties on the
land adjacent to those Properties) and to consider acquisitions of multifamily,
retail and office properties where it believes that such development or
acquisition is consistent with the business strategies of the Operating
Partnership. New project development is subject to a number of risks, including
construction delays or cost overruns that may increase project costs, financing
risks as described above, the failure to meet anticipated occupancy or rent
levels, failure to receive required zoning, occupancy and other governmental
permits and authorizations and changes in applicable zoning and land use laws,
which may result in the incurrence of development costs in connection with
projects that are not pursued to completion. In addition, because the Company
must distribute 95% of its taxable income in order to maintain its qualification
as a REIT, the Operating Partnership anticipates that new developments and
acquisitions will be financed primarily through lines of credit or other forms
of secured or unsecured construction financing. If permanent debt or equity
financing is not available on acceptable terms to refinance such new
developments or acquisitions are undertaken without permanent financing, further
development activities or acquisitions may be curtailed or cash available for
distribution to shareholders or to meet debt service obligations may be
adversely affected. Acquisitions entail risks that investments will fail to
perform in accordance with expectations and that judgments with respect to the
costs of improvements to bring an acquired property up to standards established
for the market position intended for that property will prove inaccurate, as
well as general investment risks associated with any new real estate investment.
See "Real Estate Investment Risks" above.
4
<PAGE>
CHANGES IN POLICIES
The major policies of the Operating Partnership, including its policies
with respect to development, acquisitions, financing, growth, operations, debt
capitalization and distributions, are determined by the board of directors of
CPHC. Although it has no present intention to do so, the board may amend or
revise these and other policies from time to time. A change in these policies
could adversely affect the Operating Partnership's financial condition, results
of operations, or ability to make debt service payments.
USE OF PROCEEDS
Unless otherwise specified in the applicable Prospectus Supplement, the
Operating Partnership intends to use the net proceeds of any sale of Debt
Securities for general business purposes, including, without limitation, the
development and acquisition of additional properties as suitable opportunities
arise, the repayment of certain debt outstanding at such time, capital
expenditures, improvements to certain properties in the Operating Partnership's
portfolio, working capital and other general purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
The Operating Partnership's ratio of earnings to fixed charges for the
years ended December 31, 1994 and 1995 and the three months ended March 31, 1996
was 2.23, 1.92 and 2.43, respectively.
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. For this purpose, earnings consist of income (loss) before
gains from sales of property and extraordinary items plus fixed charges. Fixed
charges consist of interest expense (including interest costs capitalized) and
the amortization of debt issuance costs.
Prior to completion of the Company's IPO, certain of the predecessor
entities to the Operating Partnership operated in a highly leveraged manner. As
a result, although the Properties have historically generated positive net cash
flow, the consolidated and combined financial statements of the Operating
Partnership for the fiscal year ended December 31, 1993 (the year in which the
IPO occurred) and the combined financial statements of the predecessor entities
for the fiscal years ended December 31, 1992 and 1991 show net losses.
Consequently, the computation of the ratio of earnings to fixed charges for such
periods indicates that earnings were inadequate to cover fixed charges by
approximately $.8 million, $3.4 million and $3.9 million for the years
ended December 31, 1993, 1992 and 1991, respectively.
The reorganization and recapitalization of the Company effected in
connection with the IPO permitted the Operating Partnership to de-leverage the
Properties significantly, resulting in an improved ratio of earnings to fixed
charges for periods subsequent to the IPO.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which this Prospectus and any applicable Prospectus
Supplement may relate. The particular terms of the Debt Securities being offered
and the extent to which such general provisions may apply will be described in a
Prospectus Supplement relating to such Debt Securities.
The Debt Securities will be issued under an Indenture dated as of
__________ ___, 1996, as amended or supplemented from time to time (the
"Indenture"), between the Operating Partnership and ____________________
_______, as trustee (the "Trustee"). The Indenture has been filed as an exhibit
to the Registration Statement of which this Prospectus is a part and is
available for inspection at the corporate trust office of the Trustee at _______
_____________, New York, New York, or as described above under "Available
Information." The Indenture is subject to, and governed by, the Trust Indenture
Act of 1939, as amended (the "TIA"). The statements made hereunder relating to
the Indenture and the Debt Securities to be issued thereunder
5
<PAGE>
are summaries of certain provisions thereof and do not purport to be complete
and are subject to, and are qualified in their entirety by reference to, all
provisions of the Indenture and such Debt Securities. All section references
appearing herein are to sections of the Indenture, and capitalized terms used
but not defined herein shall have the respective meanings set forth in the
Indenture.
GENERAL
The Debt Securities will be direct, unsecured obligations of the Operating
Partnership and will rank equally with all other unsecured and unsubordinated
indebtedness of the Operating Partnership. Unless otherwise specified in the
applicable Prospectus Supplement, the Company has no obligation for payment of
principal or interest on the Debt Securities. Except as set forth in the
Indenture or in one or more indentures supplemental thereto and described in a
Prospectus Supplement relating thereto, the Debt Securities may be issued
without limit as to aggregate principal amount, in one or more series, in each
case as established from time to time in or pursuant to authority granted by a
resolution of the Board of Directors of CPHC, as general partner of the
Operating Partnership, or as established in the Indenture or in one or more
indentures supplemental to the Indenture. All Debt Securities of one series need
not be issued at the same time and, unless otherwise provided, a series may be
reopened, without the consent of the Holders of the Debt Securities of such
series, for issuances of additional Debt Securities of such series.
The Indenture provides that there may be more than one Trustee thereunder,
each with respect to one or more series of Debt Securities. Any Trustee under
the Indenture may resign or be removed with respect to one or more series of
Debt Securities, and a successor Trustee may be appointed to act with respect to
such series. In the event that two or more persons are acting as Trustee with
respect to different series of Debt Securities, each such Trustee shall be a
trustee of a trust under the Indenture separate and apart from the trust
administered by any other Trustee, and, except as otherwise indicated herein,
any action described herein to be taken by each Trustee may be taken by each
such Trustee with respect to, and only with respect to, the one or more series
of Debt Securities for which it is Trustee under the Indenture.
The Prospectus Supplement relating to any series of Debt Securities being
offered will contain the specific terms thereof, including, without limitation:
(1) The title of such Debt Securities;
(2) The aggregate principal amount of such Debt Securities and any limit on
such aggregate principal amount;
(3) The percentage of the principal amount at which such Debt Securities
will be issued and, if other than the principal amount thereof, the
portion of the principal amount thereof payable upon declaration of
acceleration of the maturity thereof;
(4) The date or dates, or the method for determining such date or dates, on
which the principal of such Debt Securities will be payable;
(5) The rate or rates (which may be fixed or variable), or the method by
which such rate or rates shall be determined, at which such Debt
Securities will bear interest, if any;
(6) The date or dates, or the method for determining such date or dates,
from which any such interest will accrue, the dates on which any such
interest will be payable, the regular record dates for such interest
payment dates, or the method by which such dates shall be determined,
the persons to whom such interest shall be payable, and the basis upon
which interest shall be calculated if other than that of a 360-day year
of twelve 30-day months;
(7) The place or places where the principal of (and premium, if any) and
interest, if any, on such Debt Securities will be payable, where such
Debt Securities may be surrendered for conversion or registration
6
<PAGE>
of transfer or exchange and where notices or demands to or upon the
Operating Partnership in respect of such Debt Securities and the
Indenture may be served;
(8) The period or periods within which, the price or prices at which and
the other terms and conditions upon which such Debt Securities may be
redeemed, in whole or in part, at the option of the Operating
Partnership, if the Operating Partnership is to have such an option;
(9) The obligation, if any, of the Operating Partnership to redeem, repay
or purchase such Debt Securities pursuant to any sinking fund or
analogous provision or at the option of a Holder thereof, and the
period or periods within which or the date and dates on which, the
price or prices at which and the other terms and conditions upon which
such Debt Securities will be redeemed, repaid or purchased, in whole
or in part, pursuant to such obligation;
(10) If other than U.S. dollars, the currency or currencies in which such
Debt Securities are denominated and payable, which may be a foreign
currency or units of two or more foreign currencies or a composite
currency or currencies, and the terms and conditions relating thereto;
(11) Whether the amount of payments of principal of (and premium, if any)
or interest, if any, on such Debt Securities may be determined with
reference to an index, formula or other method (which index, formula
or method may, but need not be, based on a currency, currencies,
currency unit or units or composite currency or currencies) and the
manner in which such amounts shall be determined;
(12) Any additions to, modifications of or deletions from the terms of such
Debt Securities with respect to Events of Default or covenants set
forth in the Indenture;
(13) Whether such Debt Securities will be issued in certificated or book-
entry form;
(14) Whether such Debt Securities will be in registered or bearer form and,
if in registered form, the denominations thereof if other than $1,000
and any integral multiple thereof and, if in bearer form, the
denominations thereof and the terms and conditions relating thereto;
(15) The applicability, if any, of the defeasance and covenant defeasance
provisions of Article Fourteen of the Indenture;
(16) Whether and under what circumstances the Operating Partnership will
pay any additional amounts on such Debt Securities in respect of any
tax, assessment or governmental charge and, if so, whether the
Operating Partnership will have the option to redeem such Debt
Securities in lieu of making such payment;
(17) The terms and conditions, if any, upon which such Debt Securities may
be subordinated to other indebtedness of the Operating Partnership;
and
(18) Any other terms of such Debt Securities not inconsistent with the
provisions of the Indenture (Section 301).
The Debt Securities may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the maturity thereof
("Original Issue Discount Securities"). Special federal income tax, accounting
and other considerations applicable to Original Issue Discount Securities will
be described in the applicable Prospectus Supplement.
Except as set forth below under "Certain Covenants--Limitations on
Incurrence of Debt," the Indenture does not contain any provisions that would
limit the ability of the Operating Partnership to incur indebtedness or that
would afford Holders of Debt Securities protection in the event of a highly
leveraged or similar transaction involving the Operating Partnership or in the
event of a change of control. Restrictions on ownership and transfers of the
Company's common shares of beneficial interest and preferred shares of
beneficial interest are designed to
7
<PAGE>
preserve its status as a REIT and, therefore, may act to prevent or hinder a
change of control. Reference is made to the applicable Prospectus Supplement for
information with respect to any deletions from, modifications of or additions to
the Events of Default or covenants of the Operating Partnership that are
described below, including any addition of a covenant or other provision
providing event risk or similar protection.
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof (Section 302).
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee, the
address of which will be stated in the applicable Prospectus Supplement;
provided that, at the option of the Operating Partnership, payment of interest
may be made by check mailed to the address of the person entitled thereto as it
appears in the register for such Debt Securities or by wire transfer of funds to
such person at an account maintained within the United States (Sections 301,
305, 306, 307 and 1002).
Any interest not punctually paid or duly provided for on any Interest
Payment Date with respect to a Debt Security ("Defaulted Interest") will
forthwith cease to be payable to the Holder on the applicable regular record
date and may either be paid to the person in whose name such Debt Security is
registered at the close of business on a special record date (the "Special
Record Date") for the payment of such Defaulted Interest to be fixed by the
Trustee, notice whereof shall be given to the Holder of such Debt Security not
less than ten days prior to such Special Record Date, or may be paid at any time
in any other lawful manner, all as more completely described in the Indenture
(Section 307).
Subject to certain limitations imposed upon Debt Securities issued in book-
entry form, the Debt Securities of any series will be exchangeable for other
Debt Securities of the same series and of a like aggregate principal amount and
tenor of different authorized denominations upon surrender of such Debt
Securities at the corporate trust office of the Trustee referred to above. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
conversion or registration of transfer or exchange thereof at the corporate
trust office of the Trustee. Every Debt Security surrendered for conversion,
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer. No service charge will be made for any
registration of transfer or exchange of any Debt Securities, but the Operating
Partnership may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. If the applicable
Prospectus Supplement refers to any transfer agent (in addition to the Trustee)
initially designated by the Operating Partnership with respect to any series of
Debt Securities, the Operating Partnership may at any time rescind the
designation of any such transfer agent or approve a change in the location
through which any such transfer agent acts, except that the Operating
Partnership will be required to maintain a transfer agent in each place of
payment for such series. The Operating Partnership may at any time designate
additional transfer agents with respect to any series of Debt Securities
(Section 1002).
Neither the Operating Partnership nor the Trustee shall be required to (i)
issue, register the transfer of or exchange Debt Securities of any series during
a period beginning at the opening of business 15 days before any selection of
Debt Securities of that series to be redeemed and ending at the close of
business on the day of mailing of the relevant notice of redemption; (ii)
register the transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt Security being
redeemed in part; or (iii) issue, register the transfer of or exchange any Debt
Security that has been surrendered for repayment at the option of the Holder,
except the portion, if any, of such Debt Security not to be so repaid (Section
305).
MERGER, CONSOLIDATION OR SALE
The Operating Partnership will be permitted to consolidate with, or sell,
lease or convey all or substantially all of its assets to, or merge with or
into, any other entity, provided that (a) either the Operating Partnership shall
be
8
<PAGE>
the continuing entity, or the successor entity (if other than the Operating
Partnership) formed by or resulting from any such consolidation or merger or
which shall have received the transfer of such assets shall expressly assume
payment of the principal of (and premium, if any) and interest on all of the
Debt Securities and the due and punctual performance and observance of all of
the covenants and conditions contained in the Indenture; (b) immediately after
giving effect to such transaction and treating any indebtedness that becomes an
obligation of the Operating Partnership or any Subsidiary as a result thereof as
having been incurred by the Operating Partnership or such Subsidiary at the time
of such transaction, no Event of Default under the Indenture, and no event
which, after notice or the lapse of time, or both, would become such an Event of
Default, shall have occurred and be continuing; and (c) an officer's certificate
and legal opinion covering such conditions shall be delivered to the Trustee
(Sections 801 and 803).
CERTAIN COVENANTS
Limitations on Incurrence of Debt. The Operating Partnership will not, and
will not permit any Subsidiary to, incur any Debt (as defined below), other than
intercompany Debt (representing Debt to which the only parties are the Company
and any of its subsidiaries (which shall include the Management Corporation),
the Operating Partnership and any of its Subsidiaries (but only so long as such
Debt is held solely by any of the Company and any of its subsidiaries, the
Operating Partnership and any Subsidiary) that is subordinate in right of
payment of the Debt Securities, if, immediately after giving effect to the
incurrence of such Debt and the application of the proceeds thereof, the
aggregate principal amount of alloutstanding Debt of the Operating Partnership
and its Subsidiaries on a consolidated basis determined in accordance with
generally accepted accounting principles is greater than 60% of the sum of (i)
the Operating Partnership's Adjusted Total Assets (as defined below) as of the
end of the most recent fiscal quarter prior to the incurrence of such additional
Debt, (ii) the purchase price of any real estate assets or mortgages receivable
(or interests therein) acquired by the Operating Partnership or any Subsidiary
since the end of such fiscal quarter, including those obtained in connection
with the incurrence of such additional Debt, and (iii) the amount of any
securities offering proceeds received by the Operating Partnership or any
Subsidiary since the end of such fiscal quarter (to the extent that such
proceeds were not used to acquire such real estate assets or mortgages
receivable or used to reduce Debt) (Section 1004(a)).
In addition to the foregoing limitation on the incurrence of Debt, the
Operating Partnership will not, and will not permit any Subsidiary to, incur any
Debt if the ratio of Consolidated Income Available for Debt Service to the
Maximum Annual Service Charge for any twelve consecutive calendar months within
the fifteen calendar months immediately preceding the date on which such
additional Debt is to be incurred shall have been less than 1.5 to 1, on a pro
forma basis after giving effect to the incurrence of such Debt and to the
application of the proceeds thereof (Section 1004(b)).
Further, the Operating Partnership will not, and will not permit any
Subsidiary to, incur any Debt secured by any mortgage, lien, charge, pledge,
encumbrance or security interest of any kind upon any of the property of the
Operating Partnership or any Subsidiary ("Secured Debt"), whether owned at the
date of the Indenture or thereafter acquired, if, immediately after giving
effect to the incurrence of such Secured Debt and the application of the
proceeds thereof, the aggregate principal amount of all outstanding Secured Debt
of the Operating Partnership and its Subsidiaries on a consolidated basis is
greater than 40% of the sum of (i) the Company's Adjusted Total Assets as of the
end of the most recent fiscal quarter prior to the incurrence of such additional
Debt, (ii) the purchase price of any real estate assets or mortgages receivable
(or interests therein) acquired by the Operating Partnership or any Subsidiary
since the end of such fiscal quarter, including those obtained in connection
with the incurrence of such additional Debt, and (iii) the amount of any
securities offering proceeds received by the Operating Partnership or any
Subsidiary since the end of such fiscal quarter (to the extent that such
proceeds were not used to acquire such real estate assets or mortgages
receivable or used to reduce Debt) (Section 1004(e)).
For purposes of the foregoing provisions regarding the limitation on the
incurrence of Debt, Debt shall be deemed to be "incurred" by the Operating
Partnership or a Subsidiary whenever the Operating Partnership or such
Subsidiary shall create, assume, guarantee or otherwise become liable in respect
thereof.
9
<PAGE>
Maintenance of Unencumbered Total Asset Value. The Operating Partnership
will at all times maintain an Unencumbered Total Asset Value in an amount not
less than 150% of the aggregate principal amount of all outstanding Debt of the
Operating Partnership and its Subsidiaries that is unsecured Debt
(Section 1005).
Existence. Except as described above under "Merger, Consolidation or
Sale," the Operating Partnership will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence, rights
(by partnership agreement and statute) and franchises; provided, however, that
the Operating Partnership shall not be required to preserve any right or
franchise if it determines that the preservation thereof is no longer desirable
in the conduct of its business and that the loss thereof is not disadvantageous
in any material respect to the Holders of the Debt Securities (Section 1006).
Maintenance of Properties. The Operating Partnership will cause all of its
material properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Operating Partnership may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that the Operating
Partnership and its Subsidiaries shall not be prevented from selling or
otherwise disposing of for value its properties in the ordinary course of
business (Section 1007).
Insurance. The Operating Partnership will, and will cause each of its
Subsidiaries to, keep all of its insurable properties insured against loss or
damage at least equal to their then full insurable value with insurers of
recognized responsibility and having an A.M. Best policy holder's rating of not
less than A-:V (Section 1008).
Payment of Taxes and Other Claims. The Operating Partnership will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon it or any Subsidiary or upon the income, profits or property of the
Operating Partnership or any Subsidiary, and (ii) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Operating Partnership or any Subsidiary; provided, however, that
the Operating Partnership shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings or for which the Operating Partnership has set apart and maintains
an adequate reserve (Section 1009).
Provision of Financial Information. Whether or not the Operating
Partnership is subject to Section 13 or 15(d) of the Exchange Act, the Operating
Partnership will, to the extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and other documents which the
Operating Partnership would have been required to file with the Commission
pursuant to such Sections 13 or 15(d) if the Operating Partnership were so
subject (the "Financial Information"), such documents to be filed with the
Commission on or prior to the respective dates (the "Required Filing Dates")
by which the Operating Partnership would have been required so to file such
documents if the Operating Partnership were so subject. The Operating
Partnership also will in any event (x) within 15 days of each Required Filing
Date (i) transmit by mail to all Holders of Debt Securities, as their names and
addresses appear in the Security Register, without cost to such Holders, copies
of the Financial Information and (ii) file with the Trustee copies of the
Financial Information, and (y) if filing such documents by the Operating
Partnership with the Commission is not permitted under the Exchange Act,
promptly upon written request and payment of the reasonable cost of duplication
and delivery, supply copies of such documents to any prospective Holder (Section
1010).
As used herein,
"Adjusted Total Assets" as of any date means the sum of (i) $328,177,823
(which represents the amount determined by multiplying the price at which the
Company's common stock was offered in the IPO by the sum of (A) the shares of
Common Stock of the Company issued in the IPO and (B) the Units of the Operating
Partnership not held by the Company that were issued in connection with the
IPO), (ii) $108,841,000 (which represents the principal amount of outstanding
Debt of the Operating Partnership immediately following the IPO) and (iii) the
purchase price or cost of any real estate assets or mortgages receivable (or
interests therein) acquired (including the value of any Units
10
<PAGE>
issued in connection therewith) or developed after the IPO and the amount of any
securities offering proceeds and other proceeds of Debt received after the IPO
(to the extent such proceeds were not used to acquire real estate assets or
mortgages receivable or used to reduce Debt), adjusted for the proceeds of any
real estate assets disposed of by the Operating Partnership.
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (as defined below) of the Operating Partnership and its
Subsidiaries plus amounts which have been deducted for (a) interest on Debt of
the Operating Partnership and its Subsidiaries, (b) provision for taxes of the
Operating Partnership and its Subsidiaries based on income, (c) amortization of
debt discount, (d) provisions for gains and losses on properties, (e)
depreciation and amortization, (f) the effect of any noncash charge resulting
from a change in accounting principles in determining Consolidated Net Income
for such period and (g) amortization of deferred charges.
"Consolidated Net Income" for any period means the amount of net income (or
loss) of the Operating Partnership and its Subsidiaries for such period
determined on a consolidated basis in accordance with generally accepted
accounting principles.
"Debt" of the Operating Partnership or any Subsidiary means any
indebtedness of the Operating Partnership or any Subsidiary, whether or not
contingent, in respect of (i) borrowed money evidenced by bonds, notes,
debentures or similar instruments, (ii) indebtedness secured by any mortgage,
pledge, lien, charge, encumbrance or any security interest existing on property
owned by the Operating Partnership or any Subsidiary, (iii) reimbursement
obligations in connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price of any
property except any such balance that constitutes an accrued expense or trade
payable or (iv) any lease of property by the Operating Partnership or any
Subsidiary as lessee which is reflected on the Operating Partnership's
consolidated balance sheet as a capitalized lease in accordance with generally
accepted accounting principles; in the case of items of indebtedness incurred
under (i) through (iii) above to the extent that any such items (other than
letters of credit) would appear as a liability on the Operating Partnership's
consolidated balance sheet in accordance with generally accepted accounting
principles, and also includes, to the extent not otherwise included, any
obligation of the Operating Partnership or any Subsidiary to be liable for, or
to pay, as obligor, guarantor otherwise (other than for purposes of collection
in the ordinary course of business), indebtedness of another person (other than
the Operating Partnership or any Subsidiary).
"Maximum Annual Service Charge" as of any date means the maximum amount
which may become payable in any period of twelve consecutive calendar months
from such date for interest on, and required amortization of, Debt (other than
balloon payments). The amount payable for amortization shall include the amount
of any sinking fund or other analogous fund for the retirement of Debt and the
amount payable on account of principal on any such Debt which matures serially
other than at the final maturity date of such Debt.
"Subsidiary" means a corporation, partnership or limited liability company,
a majority of the outstanding voting stock, partnership interests or membership
interests, as the case may be, of which is owned or controlled, directly or
indirectly, by the Operating Partnership or by one or more Subsidiaries of the
Operating Partnership. For the purposes of this definition, "voting stock"
means stock having the voting power for the election of directors, general
partners, managers or trustees, as the case may be, whether at all times or only
so long as no senior class of stock has such voting power by reason of any
contingency.
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of real estate assets of the Operating
Partnership and its Subsidiaries on such date, before depreciation and
amortization, determined on a consolidated basis in accordance with generally
accepted accounting principles.
"Unencumbered Total Asset Value" as of any date means the sum of (i)
Undepreciated Real Estate Assets and (ii) all other assets of the Operating
Partnership and its Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles (but excluding
intangibles and accounts receivable), in each case which are unencumbered by any
mortgage, lien, charge, pledge or security interest.
11
<PAGE>
ADDITIONAL COVENANTS AND/OR MODIFICATIONS TO THE COVENANTS DESCRIBED ABOVE
Any additional covenants of the Operating Partnership and/or modifications
to the covenants described above with respect to any Debt Securities or series
thereof, will be described in the Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
The Indenture provides that the following events are "Events of Default"
with respect to any series of Debt Securities issued thereunder: (i) default for
30 days in the payment of any installment of interest on any Debt Security of
such series; (ii) default in the payment of principal of (or premium, if any,
on) any Debt Security of such series at its maturity; (iii) default in making
any sinking fund payment as required for any Debt Security of such series; (iv)
default in the performance or breach of any other covenant or warranty of the
Operating Partnership contained in the Indenture (other than a covenant added to
the Indenture solely for the benefit of a series of Debt Securities issued
thereunder other than such series), continued for 60 days after written notice
as provided in the Indenture; (v) default in the payment of an aggregate
principal amount exceeding $10,000,000 of any indebtedness of the Operating
Partnership or any mortgage, indenture or other instrument under which such
indebtedness is issued or by which such indebtedness is secured, such default
having occurred after the expiration of any applicable grace period and having
resulted in the acceleration of the maturity of such indebtedness, but only if
such indebtedness is not discharged or such acceleration is not rescinded or
annulled; (vi) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee of the Operating
Partnership or any Significant Subsidiary or either of its property; and (vii)
any other Event of Default provided with respect to a particular series of Debt
Securities (Section 501). "Significant Subsidiary" means any Subsidiary that
is a "significant subsidiary" (within the meaning of Regulation S-X
promulgated under the Securities Act) of the Operating Partnership.
If an Event of Default under the Indenture with respect to Debt Securities
of any series at the time outstanding occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% of the principal
amount of the Outstanding Debt Securities of that series will have the right to
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Operating Partnership (and to the applicable Trustee if given by
the Holders). However, at any time after such a declaration of acceleration with
respect to Debt Securities of such series (or of all Debt Securities then
Outstanding under the Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of not less than a majority in principal amount of
Outstanding Debt Securities of such series (or of all Debt Securities then
Outstanding under the Indenture, as the case may be) may rescind and annul such
declaration and its consequences if (a) the Operating Partnership shall have
deposited with the Trustee all required payments of the principal of (and
premium, if any) and interest on the Debt Securities of such series (or of all
Debt Securities then Outstanding under the Indenture, as the case may be), plus
certain fees, expenses, disbursements and advances of the Trustee and (b) all
events of default, other than the non-payment of accelerated principal (or
specified portion thereof), with respect to Debt Securities of such series (or
of all Debt Securities then Outstanding under the Indenture, as the case may be)
have been cured or waived as provided in the Indenture (Section 502). The
Indenture also provides that the Holders of not less than a majority in
principal amount of the Outstanding Debt Securities of any series (or of all
Debt Securities then Outstanding under the Indenture, as the case may be) may
waive any past default with respect to such series and its consequences, except
a default (x) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series or (y) in respect of a covenant or
provision contained in the Indenture that cannot be modified or amended without
the consent of the Holder of each Outstanding Debt Security affected thereby
(Section 513).
The Trustee will be required to give notice to the Holders of Debt
Securities within 90 days of a default under the Indenture unless such default
shall have been cured or waived; provided, however, that the Trustee may
withhold notice to the Holders of any series of Debt Securities of any default
with respect to such series (except a
12
<PAGE>
default in the payment of the principal of (or premium, if any) or interest on
any Debt Security of such series or in the payment of any sinking fund
installment in respect of any Debt Security of such series) if specified
responsible officers of the Trustee consider such withholding to be in the
interest of such Holders (Section 601).
The Indenture provides that no Holders of Debt Securities of any series may
institute any proceedings, judicial or otherwise, with respect to the Indenture
or for any remedy thereunder, except in the cases of failure of the Trustee, for
60 days, to act after it has received a written request to institute proceedings
in respect of an Event of Default from the Holders of not less than 25% in
principal amount of the Outstanding Debt Securities of such series, as well as
an offer of indemnity reasonably satisfactory to it (Section 507). This
provision will not prevent, however, any Holder of Debt Securities from
instituting suit for the enforcement of payment of the principal of (and
premium, if any) and interest on such Debt Securities at the respective due
dates thereof (Section 508).
Subject to provisions in the Indenture relating to its duties in case of
default, the Trustee is under no obligation to exercise any of its rights or
powers under the Indenture at the request or direction of any Holders of any
series of Debt Securities then Outstanding under the Indenture, unless such
Holders shall have offered to the Trustee reasonable security or indemnity
(Section 602). The Holders of not less than a majority in principal amount of
the Outstanding Debt Securities of any series (or of all Debt Securities then
Outstanding under the Indenture, as the case may be) shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or of exercising any trust or power conferred upon
such Trustee. However, the Trustee may refuse to follow any direction which is
in conflict with any law or the Indenture, which may involve the Trustee in
personal liability or which may be unduly prejudicial to the Holders of Debt
Securities of such series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, the Operating
Partnership will be required to deliver to the Trustee a certificate, signed by
one of several specified officers of CPHC, stating whether or not such officer
has knowledge of any default under the Indenture and, if so, specifying each
such default and the nature and status thereof (Section 1011).
MODIFICATION OF THE INDENTURES
Modifications and amendments of the Indenture may be made only with the
consent of the Holders of not less than a majority in principal amount of all
Outstanding Debt Securities issued under the Indenture which are affected by
such modification or amendment; provided, however, that no such modification or
amendment may, without the consent of the Holder of each such Debt Security
affected thereby, (a) change the stated maturity of the principal of, or any
installment of interest (or premium, if any) on, any such Debt Security; (b)
reduce the principal amount of, or the rate or amount of interest on, or any
premium payable on redemption of, any such Debt Security, or reduce the amount
of principal of an Original Issue Discount Security that would be due and
payable upon declaration of acceleration of the maturity thereof or would be
provable in bankruptcy, or adversely affect any right of repayment of the Holder
of any such Debt Security; (c) change the place of payment, or the coin or
currency, for payment of principal or premium, if any, or interest on any such
Debt Security; (d) impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce the above-
stated percentage of Outstanding Debt Securities of any series necessary to
modify or amend the Indenture, to waive compliance with certain provisions
thereof or certain defaults and consequences thereunder or to reduce the quorum
or voting requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the waiver of certain
past defaults or certain covenants, except to increase the required percentage
to effect such action or to provide that certain other provisions may not be
modified or waived without the consent of the Holder of such Debt Security
(Section 902).
The Holders of not less than a majority in principal amount of Outstanding
Debt Securities of each series affected thereby have the right to waive
compliance by the Operating Partnership with certain covenants in the Indenture
(Section 1013).
Modifications and amendments of the Indenture may be permitted to be made
by the Operating Partnership and the Trustee without the consent of any Holder
of Debt Securities for any of the following purposes: (i) to
13
<PAGE>
evidence the succession of another person to the Operating Partnership as
obligor under the Indenture; (ii) to add to the covenants of the Operating
Partnership for the benefit of the Holders of all or any series of Debt
Securities or to surrender any right or power conferred upon the Operating
Partnership in the Indenture; (iii) to add Events of Default for the benefit of
the Holders of all or any series of Debt Securities; (iv) to add or change any
provisions of the Indenture to facilitate the issuance of, or to liberalize
certain terms of, Debt Securities in bearer form, or to permit or facilitate the
issuance of Debt Securities in uncertificated form, provided that such action
shall not adversely affect the interests of the Holders of the Debt Securities
of any series in any material respect; (v) to change or eliminate any provisions
of the Indenture, provided that any such change or elimination shall become
effective only when there are no Debt Securities Outstanding of any series
created prior thereto which are entitled to the benefit of such provision; (vi)
to secure the Debt Securities; (vii) to establish the form or terms of Debt
Securities of any series; (viii) to provide for the acceptance of appointment by
a successor Trustee or facilitate the administration of the trusts under the
Indenture by more than one Trustee; (ix) to cure any ambiguity, defect or
inconsistency in the Indenture, provided that such action shall not adversely
affect the interests of Holders of Debt Securities of any series issued under
the Indenture in any material respect; or (x) to supplement any of the
provisions of the Indenture to the extent necessary to permit or facilitate
defeasance and discharge of any series of such Debt Securities, provided that
such action shall not adversely affect the interests of the Holders of the Debt
Securities of any series in any material respect (Section 901).
The Indenture provides that in determining whether the Holders of the
requisite principal amount of Outstanding Debt Securities of a series have given
any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be Outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof, (ii) the principal amount
of any Debt Security denominated in a foreign currency that shall be deemed
Outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above), (iii) the
principal amount of an indexed security that shall be deemed Outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed security pursuant to the
Indenture, and (iv) Debt Securities owned by the Operating Partnership or any
other obligor upon the Debt Securities or any affiliate of the Operating
Partnership or of such other obligor shall be disregarded.
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 501). A meeting will be permitted to be
called at any time by the Trustee, and also, upon request, by the Operating
Partnership or the Holders of at least 10% in principal amount of the
Outstanding Debt Securities of such series, in any such case upon notice given
as provided in the Indenture. Except for any consent that must be given by the
Holder of each Debt Security affected by certain modifications and amendments of
the Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the Holders of a majority in principal amount of the Outstanding Debt
Securities of that series; provided, however, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in principal
amount of the Outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting or adjourned meeting duly reconvened at which a
quorum is present by the affirmative vote of the Holders of such specified
percentage in principal amount of the Outstanding Debt Securities of that
series. Any resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with the Indenture will be
binding on all Holders of Debt Securities of that series. The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will be
persons holding or representing a majority in principal amount of the
Outstanding Debt Securities of a series; provided, however, that if any action
is to be taken at such meeting with respect to a consent or waiver which may be
given by the Holders of not less than a specified percentage in principal amount
of the Outstanding Debt Securities of a series, the persons holding or
representing such specified percentage in principal amount of the Outstanding
Debt Securities of such series will constitute a quorum.
Notwithstanding the foregoing provisions, the Indenture provides that if
any action is to be taken at a meeting of Holders of Debt Securities of any
series with respect to any request, demand, authorization, direction, notice,
14
<PAGE>
consent, waiver and other action that the Indenture expressly provides may be
made, given or taken by the Holders of a specified percentage in principal
amount of all Outstanding Debt Securities affected thereby, or the Holders of
such series and one or more additional series: (i) there shall be no minimum
quorum requirement for such meeting, and (ii) the principal amount of the
Outstanding Debt Securities of such series that vote in favor of such request,
demand, authorization, direction, notice, consent, waiver or other action shall
be taken into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action has been made,
given or taken under the Indenture.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Operating Partnership may be permitted under the Indenture to discharge
certain obligations to Holders of any series of Debt Securities issued
thereunder that have not already been delivered to the Trustee for cancellation
and that either have become due and payable or will become due and payable
within one year (or scheduled for redemption within one year) by irrevocably
depositing with the Trustee, in trust, funds in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable in an amount sufficient to pay the entire indebtedness on
such Debt Securities in respect of principal (and premium, if any) and interest
to the date of such deposit (if such Debt Securities have become due and
payable) or to the stated maturity or redemption date, as the case may be.
The Indenture provides that, if the provisions of Article Fourteen are made
applicable to the Debt Securities of or within any series pursuant to Section
301 of the Indenture, the Operating Partnership may elect either (a) to defease
and be discharged from any and all obligations with respect to such Debt
Securities (except for the obligation to pay additional amounts, if any, upon
the occurrence of certain events of tax, assessment or governmental charge with
respect to payments on such Debt Securities, and the obligations to register the
transfer or exchange of such Debt Securities, to replace temporary or mutilated,
destroyed, lost or stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in trust)
("defeasance") (Section 1402) or (b) to be released from its obligations with
respect to such Debt Securities under certain specified sections of Article Ten
of the Indenture as specified in the applicable Prospectus Supplement and any
omission to comply with such obligations shall not constitute an Event of
Default with respect to such Debt Securities ("covenant defeasance") (Section
1403), in either case upon the irrevocable deposit by the Operating Partnership
with the Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as defined
below), or both, applicable to such Debt Securities which through the scheduled
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient without reinvestment to pay the principal of (and
premium, if any) and interest on such Debt Securities, and any mandatory sinking
fund or analogous payments thereon, on the scheduled due dates therefor.
Such a trust may only be established if, among other things, the Operating
Partnership has delivered to the Trustee an opinion of counsel (as specified in
the Indenture) to the effect that the Holders of such Debt Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such defeasance or covenant defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such defeasance or covenant defeasance had not occurred, and such
opinion of counsel, in the case of defeasance, will be required to refer to and
be based upon a ruling of the Internal Revenue Service or a change in applicable
U.S. federal income tax law occurring after the date of the Indenture (Section
1404).
"Government Obligations" means securities which are (i) direct obligations
of the United States of America or the government which issued the foreign
currency in which the Debt Securities of a particular series are payable, for
the payment of which its full faith and credit is pledged or (ii) obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of the United States of America or such government which issued the foreign
currency in which the Debt Securities of such series are payable, the timely
payment of which is unconditionally guaranteed as a full faith and credit
obligation of the United States of America or such government, which, in either
case, are not callable or redeemable at the option of the issuer thereof, and
shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government
15
<PAGE>
Obligation or a specific payment of interest on or principal of any such
Government Obligation held by such custodian for the account of the Holder of a
depository receipt, provided that (except as required by law) such custodian is
not authorized to make any deduction from the amount payable to the Holder of
such depository receipt from any amount received by the custodian in respect of
the Government Obligation or the specific payment of interest on or principal of
the Government Obligation evidenced by such depository receipt (Section 101).
Unless otherwise provided in the applicable Prospectus Supplement, if,
after the Operating Partnership has deposited funds and/or Government
Obligations to effect defeasance or covenant defeasance with respect to Debt
Securities of any series, (a) the Holder of a Debt Security of such series is
entitled to, and does, elect pursuant to the Indenture or the terms of such Debt
Security to receive payment in a currency, currency unit or composite currency
other than that in which such deposit has been made in respect of such Debt
Security, or (b) a Conversion Event (as defined below) occurs in respect of the
currency, currency unit or composite currency in which such deposit has been
made, the indebtedness represented by such Debt Security will be deemed to have
been, and will be, fully discharged and satisfied through the payment of the
principal of (and premium, if any) and interest on such Debt Security as they
become due out of the proceeds yielded by converting the amount so deposited in
respect of such Debt Security into the currency, currency unit or composite
currency in which such Debt Security becomes payable as a result of such
election or such cessation of usage based on the applicable market exchange
rate. "Conversion Event" means the cessation of use of (i) a currency,
currency unit or composite currency both by the government of the country which
issued such currency and for the settlement of transactions by a central bank or
other public institutions of or within the international banking community, (ii)
the ECU both within the European Monetary System and for the settlement of
transactions by public institutions of or within the European Communities or
(iii) any currency unit or composite currency other than the ECU for the
purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that is payable in a foreign currency
that ceases to be used by its government of issuance shall be made in U.S.
dollars.
In the event the Operating Partnership effects covenant defeasance with
respect to any Debt Securities and such Debt Securities are declared due and
payable because of the occurrence of any Event of Default other than the Event
of Default described in clause (iv) under "Events of Default, Notice and
Waiver" with respect to certain specified sections of Article Ten of the
Indenture (which sections would no longer be applicable to such Debt Securities
as a result of such covenant defeasance) or described in clause (vii) under
"Events of Default, Notice and Waiver" with respect to any other covenant as
to which there has been covenant defeasance, the amount in such currency,
currency unit or composite currency in which such Debt Securities are payable,
and Government Obligations on deposit with the Trustee, will be sufficient to
pay amounts due on such Debt Securities at the time of their stated maturity but
may not be sufficient to pay amounts due on such Debt Securities at the time of
the acceleration resulting from such Default. However, the Operating Partnership
would remain liable to make payment of such amounts due at the time of
acceleration.
The applicable Prospectus Supplement may further describe the provisions,
if any, permitting such defeasance or covenant defeasance, including any
modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
REDEMPTION OF SECURITIES
The Indenture provides that the Debt Securities may be redeemed at any time
at the option of the Operating Partnership, in whole or in part, at the
Redemption Price, except as may otherwise be provided in connection with any
Debt Securities or series thereof.
From and after notice has been given as provided in the Indenture, if funds
for the redemption of any Debt Securities called for redemption shall have been
made available on such redemption date, such Debt Securities will cease to bear
interest on the date fixed for such redemption specified in such notice, and the
only right of the Holders of the Debt Securities will be to receive payment of
the Redemption Price.
16
<PAGE>
Notice of any optional redemption of any Debt Securities will be given to
Holders at their addresses, as shown in the Security Register, not more than 60
nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, among other items, the Redemption Price and the
principal amount of the Debt Securities held by such Holder to be redeemed.
If the Operating Partnership elects to redeem Debt Securities, it will
notify the Trustee at least 45 days prior to the redemption date (or such
shorter period as is satisfactory to the Trustee) of the aggregate principal
amount of Debt Securities to be redeemed and the redemption date. If less than
all the Debt Securities are to be redeemed, the Trustee shall select the Debt
Securities to be redeemed pro rata, by lot or in such manner as it shall deem
fair and appropriate.
NO CONVERSION RIGHTS
The Debt Securities will not be convertible into or exchangeable for any
capital stock of the Company or equity interest in the Operating Partnership.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities (the "Global Securities") that will be
deposited with, or on behalf of, a depository identified in the applicable
Prospectus Supplement relating to such series. Global Securities may be issued
in either registered or bearer form and in either temporary or permanent form.
The specific terms of the depository arrangement with respect to a series of
Debt Securities will be described in the applicable Prospectus Supplement
relating to such series.
PLAN OF DISTRIBUTION
The Operating Partnership may sell the Debt Securities to or through
underwriters for public offer and sale by them, and also may sell the Debt
Securities offered hereby to investors directly or through agents. Any such
underwriter or agent involved in the offer and sale of the Debt Securities will
be named in the applicable Prospectus Supplement.
Underwriters may offer and sell the Debt Securities at a fixed price or
prices, which may be changed, at prices related to the prevailing market prices
at the time of sale or at negotiated prices. The Operating Partnership may also
offer and sell the Debt Securities in exchange for one or more of its then
outstanding issues of debt or convertible debt securities. The Operating
Partnership also may, from time to time, authorize underwriters acting as the
Operating Partnership's agents to offer and sell the Debt Securities upon terms
and conditions set forth in the applicable Prospectus Supplement. In connection
with the sale of the Debt Securities, underwriters may be deemed to have
received compensation from the Operating Partnership in the form of underwriting
discounts or commissions and may also receive commissions from purchasers of the
Debt Securities for whom they may act as agent. Underwriters may sell the Debt
Securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters and/or
commissions from the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Operating Partnership to
underwriters or agents in connection with the offering of the Debt Securities,
and any discounts, concessions or commissions allowed by underwriters to
participating dealers, will be set forth in the applicable Prospectus
Supplement. Underwriters, dealers and agents participating in the distribution
of the Debt Securities may be deemed to be underwriters, and any discounts and
commissions received by them and any profit realized by them on resale of the
Debt Securities may be deemed to be underwriting discounts and commissions under
the Securities Act. Underwriters, dealers and agents may be entitled, under
agreements to be entered into with the Operating Partnership, to indemnification
against and contribution toward certain civil liabilities, including liabilities
under the Securities Act.
17
<PAGE>
If so indicated in the applicable Prospectus Supplement, the Operating
Partnership will authorize underwriters or other persons acting as the Operating
Partnership's agents to solicit offers by certain institutions to purchase Debt
Securities from the Operating Partnership at the public offering price set forth
in such Prospectus Supplement pursuant to delayed delivery contracts
("Contracts") providing for payment and delivery on the date or dates stated
in such Prospectus Supplement. Each Contract will be for an amount not less
than, and the aggregate principal amount of Debt Securities sold pursuant to
Contracts shall be not less nor more than, the respective amounts stated in the
applicable Prospectus Supplement. Institutions with whom Contracts, when
authorized, may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions, and other institutions but will in all cases be subject to the
approval of the Operating Partnership. Contracts will not be subject to any
conditions except (i) the purchase by an institution of the Debt Securities
covered by its Contracts shall not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which such institution is
subject, and (ii) if the Debt Securities are being sold to underwriters, the
Operating Partnership shall have sold to such underwriters the total principal
amount of the Debt Securities less the principal amount thereof covered by
Contracts.
Certain of the underwriters and their affiliates may be customers of,
engage in transactions with and perform services for the Operating Partnership
and its Subsidiaries in the ordinary course of business.
AVAILABLE INFORMATION
Upon effectiveness of its Registration Statement on the General Form for
Registration of Securities on Form 10, as amended ("Form 10"), the Operating
Partnership will be subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, will file reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed by the Operating Partnership with the Commission in
accordance with the Exchange Act can be inspected at the Public Reference
Section maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and the following regional offices of the Commission: 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and Seven World
Trade Center, 13th Floor, New York, New York 10048. Copies of such material can
be obtained from the Public Reference Section of the Commission, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Operating Partnership has filed with the Commission a registration
statement on Form S-3 (the "Registration Statement"), of which this Prospectus
is a part, under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the Debt Securities offered hereby. This Prospectus does
not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. Statements contained in this Prospectus as to the
contents of any contract or other documents are not necessarily complete, and in
each instance, reference is made to the copy of such contract or documents filed
as an exhibit to the Registration Statement, each such statement being qualified
in all respects by such reference and the exhibits and schedules thereto. For
further information regarding the Operating Partnership and the Debt Securities,
reference is hereby made to the Registration Statement and such exhibits and
schedules which may be obtained from the Commission at its principal office in
Washington, D.C. upon payment of the fees prescribed by the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
A Form 10 has been filed by the Operating Partnership under the Exchange
Act with the Commission and is incorporated herein by reference.
All documents filed by the Operating Partnership subsequent to the date of
this Prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act and prior to termination of the offering of all Debt Securities to which
this Prospectus relates shall be deemed to be incorporated by reference in this
Prospectus and shall be part hereof from the date of filing of such document.
18
<PAGE>
Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained in this
Prospectus (in the case of a statement in a previously filed document
incorporated or deemed to be incorporated by reference herein), in any
accompanying Prospectus Supplement relating to a specific offering of Debt
Securities or in any other subsequently filed document that is also incorporated
or deemed to be incorporated by reference herein, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus or
any accompanying Prospectus Supplement. Subject to the foregoing, all
information appearing in this Prospectus and each accompanying Prospectus
Supplement is qualified in its entirety by the information appearing in the
documents incorporated by reference.
The Operating Partnership will provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon their written or oral request, a copy of the Form 10 and any or all other
documents incorporated herein by reference (other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference in
such documents). Written requests for such copies should be addressed to Douglas
B. Nunnelley, Colonial Properties Holding Company, Inc.'s Senior Vice President
and Chief Financial Officer, at 2101 Sixth Avenue North, Suite 750, Birmingham,
Alabama 35203, telephone number (205) 250-8700.
LEGAL MATTERS
The legality of the Debt Securities offered hereby will be passed upon for
the Operating Partnership by Hogan & Hartson L.L.P., Washington, D.C.
EXPERTS
The financial statements and the related financial statement schedules for
the periods ended December 31, 1995, 1994, and 1993 included in the Form 10
(incorporated herein by reference) with respect to the Operating Partnership to
the extent and for the periods indicated in their reports, have been audited by
Coopers & Lybrand L.L.P., independent certified public accountants, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
19
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the Debt Securities being
registered.
<TABLE>
<S> <C>
Registration Fee........................... $ 87,000
Fees of Rating Agencies.................... *
Printing and Duplicating Expenses.......... 150,000
Legal Fees and Expenses.................... 250,000
Accounting Fees and Expenses............... 15,000
Blue Sky Fees and expenses................. 20,000
Fees of Trustee (including counsel fees)... 5,000
Miscellaneous.............................. 33,000
--------
Total...................................... $ *
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Sections 10-2B-8.50 to 10-2B-8.58, inclusive, of the Code of
Alabama, 1975 (the "Alabama Corporate Code"), a corporation formed in Alabama is
permitted to eliminate the liability of directors and officers to the
corporation for money damages except a corporation may not indemnify a director
or officer where (a) in connection with a proceeding by or in the right of the
corporation, the director or officer was adjudged liable to the corporation, or
(2) in connection with any other proceeding charging improper personal benefit
to the director or officer, whether or not involving action in the director's or
officer's official capacity, the director or officer was adjudged liable on the
basis that personal benefit was improperly received by the director or officer.
CPHC's Articles of Incorporation and Bylaws provide for mandatory
indemnification of directors and officers to the maximum extent permitted by the
Alabama Corporate Code.
In accordance with the Alabama Corporate Code, CPHC's Articles of
Incorporation and Bylaws require indemnification of any director and officer,
whether serving CPHC or at its request any other entity, (a) who has been
successful, on the merits or otherwise, in the defense of a proceeding to which
he was made a party by reason of service in such capacity, against reasonable
expenses incurred by him in connection with the proceeding, (b) who is made a
party to a proceeding by reason of service in such capacity, against reasonable
expenses incurred by him in connection with the proceeding if (i) he conducted
himself in good faith, (ii) he reasonably believed (A) in the case of conduct in
his official capacity with CPHC, that the conduct was in CPHC's best interest
and (B) in all other cases, that the conduct was at least not opposed to its
best interests, and (iii) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful, provided, however, that
the indemnification provided for in clause (b) will not be available if it is
established that (1) in connection with a proceeding by or in the right of CPHC,
he was adjudged liable to CPHC, or (2) in connection with any other proceeding
charging improper personal benefit to him, whether or not involving action in
his official capacity, he was adjudged liable on the basis that personal benefit
was improperly received by him, and (c) against any claim or liability to which
he may become subject by reason of such status.
In addition, in accordance with the Alabama Corporate Code, CPHC's
Articles of Incorporation and Bylaws require CPHC to pay or reimburse, in
advance of final disposition of a proceeding, reasonable expenses incurred by a
director or officer made a party to a proceeding by reason of such status;
provided, that in the case of a director or officer, (i) CPHC shall have
received a written affirmation by the director or officer of his good faith
II-1
<PAGE>
belief that he has met the applicable standard of conduct necessary for
indemnification by CPHC as described in Section 8.51 of the Alabama Corporate
Code, (ii) CPHC shall have received a written undertaking by or on his behalf to
repay the amount paid or reimbursed by CPHC if it shall ultimately be determined
that the applicable standard of conduct was not met and (iii) a determination
shall have been made, in accordance with Section 8.55 of the Alabama Corporate
Code, that the facts then known to those making the determination would not
preclude indemnification under the provisions of the Articles of Incorporation
or Bylaws. CPHC may, with the approval of the directors, provide such
indemnification and payment or reimbursement of expenses to any employee or
agent of CPHC.
The Company has entered into indemnification agreements with each of
its trustees and certain of its executive officers. Under these agreements, the
Company has agreed to indemnify its trustees and certain of its executive
officers to the maximum extent permitted by the Alabama Corporate Code. The
Company also is obligated to pay expenses incurred by an indemnified trustee or
director in establishing a right to indemnification under the respective
indemnification agreement. Although the indemnification agreements offer
substantially the same scope of coverage afforded by the Articles of
Incorporation and the Bylaws, the agreements provide greater assurance to
trustees and executive officers that indemnification will be available, because,
as contracts, they cannot be modified unilaterally by the Board of Trustees or
by the stockholders to alter, limit or eliminate the rights they provide to the
trustees and executive officers.
Insofar as indemnification for liabilities arising under the Act may
be permitted to directors and officers of CPHC pursuant to the foregoing
provisions or otherwise, CPHC has been advised that, although the validity and
scope of the governing statute have not been tested in court, in the opinion of
the Commission, such indemnification is against public policy as expressed in
the Act and is, therefore, unenforceable. In addition, indemnification may be
limited by state securities laws. In the event that a claim for indemnification
against such liabilities (other than payment by the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the Debt Securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification is against public policy as expressed
in such Act and will be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Exhibit
- -------------- -------
<C> <S>
4 + Form of Indenture
5 + Opinion of Hogan & Hartson L.L.P. regarding the legality of the Debt Securities being
registered
12 Calculation of Ratio of Earnings to fixed charges
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 + Consent of Hogan & Hartson L.L.P. (included as part of Exhibit 5)
24 Power of Attorney (included on Page II-5 of this Registration Statement)
25 + Statement of Eligibility of Trustee on Form T-1
</TABLE>
_______
+ To be filed by amendment.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
II-2
<PAGE>
(i) To include any prospectus required by section 10(a)3 of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
registration statement or any material change to such
information in this registration statement; provided,
however, that subparagraphs (i) and (ii) do not apply if
the information required to be included in a post-
effective amendment by those paragraphs is contained in
the periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the Debt Securities offered herein, and
the offering of such Debt Securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the Debt Securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement shall be deemed to be a new registration statement
relating to the Debt Securities offered herein, and the offering of such Debt
Securities at that time shall be deemed to be the initial bona fide offering
thereof.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance under Rule 430A and contained in a
form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
The undersigned Registrant hereby undertakes that and insofar as
indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described under Item 15 above or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted against
the registrant by such director, officer or controlling person in connection
with the Debt Securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of
II-3
<PAGE>
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned registrant hereby undertakes to file an application
for purposes of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Birmingham, State of Alabama on May 22, 1996.
COLONIAL REALTY LIMITED PARTNERSHIP
By: Colonial Properties Holding Company, Inc.,
its general partner
By: /s/ Thomas H. Lowder
----------------------------------------
Thomas H. Lowder
President, Chief Executive Officer and
Chairman of the Board
POWER OF ATTORNEY
We, the undersigned directors and officers of Colonial Properties
Holding Company, Inc., the general partner of the registrant, do hereby
constitute and appoint Thomas H. Lowder and Douglas B. Nunnelley, and each and
either of them, our true and lawful attorneys-in-fact and agents, to do any and
all acts and things in our names and on our behalf in our capacities as
directors and officers and to execute any and all instruments for us and in our
name in the capacities indicated below, which said attorneys and agents, or
either of them, may deem necessary or advisable to enable said registrant to
comply with the Securities Act of 1933 and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with this
registration statement, or any registration statement for this offering that is
to be effective upon filing pursuant to Rule 462(b) under the Securities Act of
1933, including specifically, but without limitation, any and all amendments
(including post-effective amendments) hereto; and we hereby ratify and confirm
all that said attorneys and agents, or either of them, shall do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below as of May 22, 1996:
SIGNATURE TITLE
--------- -----
/s/ Thomas H. Lowder
- ------------------------ President, Chief Executive Officer
Thomas H. Lowder and Chairman of the Board
/s/ Douglas B. Nunnelley
- ------------------------ Senior Vice President and
Douglas B. Nunnelley Chief Financial Officer
(Principal Financial Officer)
II-5
<PAGE>
/s/ Kenneth E. Howell Vice President and Controller
- ----------------------------- (Principal Accounting Officer)
Kenneth E. Howell
/s/ James K. Lowder Director
- -----------------------------
James K. Lowder
/s/ Carl F. Bailey Director
- -----------------------------
Carl F. Bailey
/s/ M. Miller Gorrie Director
- -----------------------------
M. Miller Gorrie
/s/ Donald T. Senterfitt Director
- -----------------------------
Donald T. Senterfitt
/s/ Claude B. Nielsen Director
- -----------------------------
Claude B. Nielsen
/s/ Harold W. Ripps Director
- -----------------------------
Harold W. Ripps
/s/ Herbert A. Meisler Director
- -----------------------------
Herbert A. Meisler
II-6
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT NUMBER
- ------- ------- ------
<S> <C> <C>
4 + Form of Indenture............................................................
5 + Opinion of Hogan & Hartson L.L.P. regarding the legality
of the Debt Securities being registered......................................
12 Calculation of Ratio of Earnings to fixed charges............................
23.1 Consent of Coopers & Lybrand L.L.P...........................................
23.2 + Consent of Hogan & Hartson L.L.P. (included as part of Exhibit 5)............
24 Power of Attorney (included on Page II-5 of this Registration Statement).....
25 + Statement of Eligibility of Trustee on Form T-1..............................
</TABLE>
________________
+ To be filed by amendment.
<PAGE>
EXHIBIT 12
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED AND COMBINED INCLUDING
PREDECESSOR BUSINESS
EARNINGS TO FIXED CHARGES RATIO
<TABLE>
<CAPTION>
QUARTER ENDED YEAR ENDED DECEMBER 31
-------------- --------------------------------------------------------------
MARCH 31, 1996 1995 1994 1993 1992 1991
-------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Income before gains from
sales of property and
extraordinary items $ 8,814,414 $25,066,843 $16,527,968 $ 4,219,501 $ (780,119) $(3,365,952)
----------- ----------- ----------- ----------- ----------- -----------
Fixed charges:
Interest expense 5,090,472 23,972,107 10,819,643 12,771,645 14,508,800 14,654,142
Interest expense capitalized 561,124 868,093 333,197 -0- 131,890 799,553
Amortization of debts insurance
costs and interest rate caps 513,715 2,325,070 2,292,000 736,504 249,246 292,082
----------- ----------- ----------- ----------- ----------- -----------
Total Fixed Charges 6,165,311 27,165,270 13,444,840 13,508,149 14,889,936 15,745,777
----------- ----------- ----------- ----------- ----------- -----------
Earnings $14,979,725 $52,232,113 $29,972,808 $17,727,650 $14,109,817 $12,379,825
=========== =========== =========== =========== =========== ===========
Ratio of Earnings to Fixed Charges $ 2.43 $ 1.92 $ 2.23 $ 1.31 $ .95 $ .79
=========== =========== =========== =========== =========== ===========
Earnings deficiency to cover
fixed charges N/A N/A N/A N/A $ 780,119 $ 3,365,952
=========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
EXHIBIT 23.1
------------
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Colonial Realty Limited Partnership on Form S-3 of our reports dated January 25,
1996, on our audits of the consolidated and combined financial statements and
financial statement schedules of Colonial Realty Limited Partnership as of
December 31, 1995 and 1994, and for the years ended December 31, 1995, 1994, and
1993, which reports are included in a previously filed Form 10. We also consent
to the reference to our firm under the caption "Experts."
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Birmingham, Alabama
May 21, 1996
