<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 11, 1997
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.)
THOMAS H. LOWDER
2101 SIXTH AVENUE NORTH, SUITE 750 2101 SIXTH AVENUE NORTH, SUITE 750
BIRMINGHAM, ALABAMA 35202 BIRMINGHAM, ALABAMA 35202
(205) 250-8700 (205) 250-8700
(ADDRESS, INCLUDING ZIP CODE, AND (NAME, ADDRESS, INCLUDING ZIP CODE,
TELEPHONE NUMBER, INCLUDING AREA CODE, AND TELEPHONE NUMBER, INCLUDING AREA
OF REGISTRANT'S PRINCIPAL EXECUTIVE CODE,OF AGENT FOR SERVICE)
OFFICES)
----------------
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 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. [_]
CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM
TITLE OF SECURITIES TO TO BE AGGREGATE PRICE AGGREGATE AMOUNT OF
BE REGISTERED (1) REGISTERED (2)(3) PER UNIT OFFERING PRICE (2)(4) REGISTRATION FEE (4)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Debt Securities ........ $305,000,000 (2) $305,000,000 $92,424
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
PROSPECTUS WHICH CONSTITUTES PART OF THIS REGISTRATION STATEMENT ALSO RELATES
TO AND INCLUDES AN AGGREGATE PRINCIPAL AMOUNT OF $145,000,000 OF SECURITIES
REGISTERED ON FORM S-3, REGISTRATION NO. 333-14401.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Continue on following page)
<PAGE>
(Continued from previous page)
- --------
(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) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Prospectus included in this Registration Statement relates also to
$145,000,000 of Debt Securities registered on Form S-3 Registration No.
333-14401 and unissued as of the date hereof.
(4) 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>
PROSPECTUS
$450,000,000
COLONIAL REALTY LIMITED PARTNERSHIP
DEBT SECURITIES
----------------
Colonial Realty Limited Partnership (the "Company") may from time to time
offer in one or more series debt securities ("Debt Securities") with an
aggregate public offering price of up to $450,000,000 (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 Company or repayment at the option of the
holder, any terms for any sinking fund payments, additional 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 3 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 date of this Prospectus is December , 1997
<PAGE>
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this Prospectus and the documents incorporated by
reference herein and any accompanying Prospectus Supplement, including those
set forth in "Risk Factors" and "Use of Proceeds" herein, constitute "forward-
looking statements" within the meaning of the Private Securities Litigation
Reform Act of 1995 (the "Reform Act"). Such forwarding-looking statements
involve known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company or
industry results to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: general
economic and business conditions which will, among other things, affect demand
for multifamily properties, availability and creditworthiness of prospective
tenants, lease rents and the availability of financing, adverse changes in the
real estate markets including, among other things, competition with other
companies, risks of real estate acquisition, governmental actions and
initiatives, and environmental/safety requirements. See "Risk Factors."
THE COMPANY
The Debt Securities offered hereby are being issued by the Company, which is
the "operating partnership" of Colonial Properties Trust ("Colonial"), an
Alabama real estate investment trust ("REIT") whose common shares are listed
on the New York Stock Exchange ("NYSE") under the symbol "CLP." The Company is
managed by Colonial, through its wholly owned subsidiary, Colonial Properties
Holding Company, Inc., an Alabama corporation ("CPHC"), which in turn owns
approximately 67.8% of the common equity interests in the Company as of
December 10, 1997 and serves as the sole general partner of the Company. The
Company's activities as of December 10, 1997 include ownership of a
diversified portfolio of 92 multifamily, retail and office properties located
in Alabama, Florida, Georgia, Mississippi, South Carolina, North Carolina,
Virginia and Tennessee, development of new properties, acquisitions of
existing properties, and build-to-suit development.
As of December 10, 1997, the Company owned a portfolio of 43 garden-style
multifamily apartment communities containing a total of 13,631 apartment units
(the "Multifamily Properties"), 36 retail properties (including 12 regional
malls, two "power centers," and 22 neighborhood shopping centers) containing a
total of approximately 10.2 million square feet of retail space (the "Retail
Properties"), 13 office properties containing a total of approximately 1.9
million square feet of office space (the "Office Properties") and parcels of
land adjacent to or near 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.").
Colonial currently conducts all of its business through CPHC, the Company,
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
Company owns all of the Properties (or interests therein). The Company is the
sole general partner of the Management Partnership and owns 99% of the
interests therein.
The Company's experienced staff of approximately 660 employees provides a
full range of real estate services from its headquarters in Birmingham,
Alabama and from seven regional offices located in the Mobile, Huntsville and
Montgomery, Alabama, Orlando and Tampa, Florida, Atlanta, Georgia and
Burlington, North Carolina metropolitan areas.
The principal executive offices of the Company 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 Company's ability to service debt will depend in large part on the amount
of income generated, expenses incurred and capital expenditures required. The
Company's income from retail, multifamily or office properties may be
adversely
2
<PAGE>
affected by a number of factors, including the general economic climate and
local real estate conditions, 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 Company 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 Company 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 Company 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 Company is unable promptly to 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 Company's reserves for these purposes prove inadequate,
then the Company's cash provided by operating activities and ability to make
debt service payments could be adversely affected.
Dependence on Primary Markets. All of the Properties are located in the
southern United States, and 41 of the Properties are located in Birmingham and
Montgomery, Alabama, Orlando, Florida and Macon, Georgia. The Company'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 also may be liable under common law to third parties for damages and
injuries resulting from environmental contamination emanating from the site.
The Company 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 Company 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 Company, that no material
environmental condition with respect to any Property has occurred during the
Company'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 Company'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 Company 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 Company 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>
At the Bardmoor Village Shopping Center in Largo, Florida, which the Company
acquired in October 1996, soil and groundwater contamination was discovered in
May 1995. The contamination included dry cleaning solvents, primarily
perchloroethylene, and was determined to have been released from a dry
cleaning business operated by a tenant at the property. The Company and the
seller of the property, Reynolds Metals Development Company ("Reynolds"), have
entered into an indemnity agreement under which Reynolds is obligated to
indemnify the Company against any claims brought by any governmental
authorities or third parties as a result of the contamination, including costs
incurred in the investigation and remediation of the contamination, as well as
damages to persons, property or natural resources. In addition, the Florida
Department of Environmental Protection has determined that the property is
eligible for the State of Florida's Drycleaning Solvent Cleanup Program, which
means that remediation of the contamination will be funded by the State's
Hazardous Waste Management Trust Fund.
DEBT FINANCING
The Company is subject to the risks associated with debt financing,
including the risk that the Company'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 Company's floating rate debt, the risk
that the Company 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 Company is unable to
secure refinancing of such indebtedness on acceptable terms, the Company might
be forced to dispose of properties upon disadvantageous terms, which might
result in losses to the Company and might adversely affect the cash flow
available for debt service. In addition, If one or more properties are
mortgaged to secure payment of indebtedness and the Company 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 Company.
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 Company 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 Company that are not realized by other holders of
interests in the Company. In addition, Thomas Lowder and his brother, James
Lowder, as directors of CPHC, may be in a position to influence the Company to
do business with companies in which the Lowder family has a financial
interest. Although the Company 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 Company as could be obtained in an
arms-length transaction with a third party.
DEVELOPMENT AND ACQUISITION RISKS
The Company 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 Company. 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 Colonial must
distribute 95% of its taxable income in order to maintain its qualification as
a REIT, the Company 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
4
<PAGE>
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.
CHANGES IN POLICIES
The major policies of the Company, 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 Company'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
Company 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 Company's portfolio, working capital
and other general purposes.
RATIOS OF EARNINGS TO FIXED CHARGES
The Company's ratio of earnings to fixed charges for the years ended
December 31, 1993, 1994, 1995 and 1996 and the nine months ended September 30,
1997 was 1.26, 2.23, 1.91, 2.40 and 1.97, 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 Colonial's initial public offering ("IPO"), certain
of the predecessor entities to the Company operated in a highly leveraged
manner. As a result, although the Properties have historically generated
positive net cash flow, the combined financial statements of the predecessor
entities for the fiscal year ended December 31, 1992 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 $0.8 million for the year ended December 31, 1992.
The reorganization and recapitalization effected in connection with the IPO
permitted the Company 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.
5
<PAGE>
The Debt Securities will be issued under an Indenture, as amended or
supplemented from time to time (the "Indenture"), between the Company and
Bankers Trust Company, 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 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 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 recourse obligations of the
Company and will rank equally with all other unsecured and unsubordinated
indebtedness of the Company. Unless otherwise specified in the applicable
Prospectus Supplement, Colonial 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
Company, or as established in the Indenture (or in accordance with) 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 Debt Securities, while recourse to all of the assets of the
Company, will not be recourse to either CPHC, as general partner of the
Company, or to Colonial, as sole shareholder of CPHC.
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 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
6
<PAGE>
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 of transfer or
exchange and where notices or demands to or upon the Company 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 Company, if the Company
is to have such an option;
(9) The obligation, if any, of the Company 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/or 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 and/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 Company will pay any
additional amounts on such Debt Securities in respect of any tax,
assessment or governmental charge and, if so, whether the Company 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 Company; 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 Company to incur indebtedness or that would afford
Holders of Debt Securities protection in the event of a highly leveraged or
similar transaction involving the Company or in the event of a change of
control. Restrictions on ownership and transfers of Colonial's common shares
of beneficial interest and preferred shares of beneficial interest are
designed to preserve its status as a REIT and, therefore, may act to prevent
or hinder a change of control. Reference is made to the applicable
7
<PAGE>
Prospectus Supplement for information with respect to any deletions from,
modifications of or additions to the Events of Default or covenants of the
Company 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,
Four Albany Street, New York, New York 10006; provided that, at the option of
the Company, 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 Company
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 Company with respect to any series of Debt Securities, the
Company 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 Company will be required to maintain a transfer agent in each
place of payment for such series. The Company may at any time designate
additional transfer agents with respect to any series of Debt Securities
(Section 1002).
Neither the Company 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 Company 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 Company shall be the continuing entity,
or the successor entity (if other than the Company) 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
8
<PAGE>
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 Company or any Subsidiary as a result thereof as having been incurred by
the Company 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 Company 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 Colonial, any of its
subsidiaries, the Company and any Subsidiary, or Debt owed to the Management
Corporation arising from routine cash management practices, but only so long
as such Debt is held solely by any of Colonial, any of its subsidiaries, the
Company and any Subsidiary), that is subordinate in right of payment to 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 all outstanding Debt of the Company 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 Company'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 Company 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 net amount of any securities offering proceeds received by
the Company 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
Company will not, and will not permit any Subsidiary to, incur any Debt if the
ratio of Consolidated Income Available for Debt Service to the Annual Service
Charge for the four consecutive fiscal quarters most recently ended prior to
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 Company 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 Company 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 Company 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 Company 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 Company 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(c)).
For purposes of the foregoing provisions regarding the limitation on the
incurrence of Debt, Debt shall be deemed to be "incurred" by the Company or a
Subsidiary whenever the Company or such Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof.
Maintenance of Unencumbered Total Asset Value. The Company 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 unsecured Debt of the
Company and its Subsidiaries (Section 1004(d)).
9
<PAGE>
Existence. Except as described above under "Merger, Consolidation or Sale,"
the Company 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company 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 Company
or any Subsidiary; provided, however, that the Company 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 Company
has set apart and maintains an adequate reserve (Section 1009).
Provision of Financial Information. Whether or not the Company is subject to
Section 13 or 15(d) of the Exchange Act (as defined below), the Company will,
to the extent permitted under the Exchange Act, file with the Commission the
annual reports, quarterly reports and other documents which the Company would
have been required to file with the Commission pursuant to such Section 13 or
15(d) if the Company 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 Company would have been required so
to file such documents if the Company were so subject. The Company 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 Company 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
Colonial's common shares of beneficial interest were offered in the IPO by the
sum of (A) the common shares of beneficial interest of Colonial issued in the
IPO and (B) the Units of the Company not held by Colonial that were issued in
connection with the IPO), (ii) $108,841,000 (which represents the principal
amount of outstanding Debt of the Company 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
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 Company. This definition of
"Adjusted Total Assets" values the assets owned by the Company at the time of
the IPO at the market capitalization of the Company at that time,
10
<PAGE>
which the Company believes to be a more appropriate measure of the value of
those assets than undepreciated book value, which reflects their pre-IPO cost
before accumulated depreciation.
"Annual Service Charge" as of any date means the amount of any interest
expensed during the four consecutive fiscal quarters most recently ended prior
to such date.
"Consolidated Income Available for Debt Service" for any period means
Consolidated Net Income (as defined below) of the Company and its Subsidiaries
plus amounts which have been deducted for (a) interest on Debt of the Company
and its Subsidiaries, (b) provision for taxes of the Company 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 Company and its Subsidiaries for such period determined on a
consolidated basis in accordance with generally accepted accounting
principles.
"Debt" of the Company or any Subsidiary means any indebtedness of the
Company 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 Company 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
Company or any Subsidiary as lessee which is reflected on the Company'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 Company's consolidated
balance sheet in accordance with generally accepted accounting principles, and
also includes, to the extent not otherwise included, any obligation of the
Company or any Subsidiary to be liable for, or to pay, as obligor, guarantor
or otherwise (other than for purposes of collection in the ordinary course of
business), indebtedness of another person (other than the Company or any
Subsidiary).
"Disqualified Stock" means, with respect to any person, any capital stock or
partnership interest of such person which by the terms of such capital stock
or partnership interest (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable), upon the
occurrence of any event or otherwise: (i) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise; (ii) is
convertible into or exchangeable or exercisable for Debt or Disqualified
Stock; or (iii) is redeemable at the option of the holder thereof, in whole or
in part, in each case or prior to the maturity of the relevant series of Debt
Securities.
"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 Company or by one or more Subsidiaries of the
Company. 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. The Management Corporation would not be considered a Subsidiary
of the Company.
"Unencumbered Total Asset Value" as of any date means the sum of (i) the
portion of Adjusted Total Assets allocable to the Company's real estate assets
and (ii) the value of all other assets of the Company 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. For purposes of this definition, the portion of Adjusted
Total Assets allocable to each of the 36 properties owned by the Company at
the time of the IPO shall be determined by reference to each such property's
contribution to net operating income of the Company at the time of the IPO,
and the portion
11
<PAGE>
allocable to each property acquired or developed after the IPO shall be equal
to the purchase price or cost of such property.
ADDITIONAL COVENANTS AND/OR MODIFICATIONS TO THE COVENANTS DESCRIBED ABOVE
Any additional covenants of the Company 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 Company 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
Company 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 Company or any
Significant Subsidiary or the property of either; 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 (as defined below)) of the Company.
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 Company (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 Company 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
12
<PAGE>
may withhold notice to the Holders of any series of Debt Securities of any
default with respect to such series (except a 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 Company 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 Company with certain covenants in the Indenture (Section
1013).
13
<PAGE>
Modifications and amendments of the Indenture may be permitted to be made by
the Company and the Trustee without the consent of any Holder of Debt
Securities for any of the following purposes: (i) to evidence the succession
of another person to the Company as obligor under the Indenture; (ii) to add
to the covenants of the Company for the benefit of the Holders of all or any
series of Debt Securities or to surrender any right or power conferred upon
the Company 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
Company or any other obligor upon the Debt Securities or any affiliate of the
Company or of such other obligor shall be disregarded (Section 101).
The Indenture contains provisions for convening meetings of the Holders of
Debt Securities of a series (Section 1501). A meeting will be permitted to be
called at any time by the Trustee, and also, upon request, by the Company 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 (Section 1502). 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
14
<PAGE>
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 (Section 1504).
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,
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 (Section 1504).
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Company 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 Company 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 Company 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 Company 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
15
<PAGE>
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 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 Company 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 Conversion Event or such cessation of usage based on the
applicable market exchange rate (Section 1405). "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 (Section 101).
In the event the Company 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 Company 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 Company, in whole or in part, at the Redemption Price,
except as may otherwise be provided in connection with any Debt Securities or
series thereof.
16
<PAGE>
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 (Section 1106).
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
(Section 1104).
If the Company 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 (Section 1102). If less than
all the Debt Securities are to be redeemed, the Trustee shall select the Debt
Securities to be redeemed 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 Colonial or equity interest in the Company.
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 Company 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 Company also may, from
time to time, authorize underwriters acting as the Company'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
Company 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 Company 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 Company, 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 Company will
authorize underwriters or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt Securities from the
Company 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 Company.
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 Company 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 Company and its Subsidiaries
in the ordinary course of business.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information filed by the Company 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 Company 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 Company 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. The
Commission maintains a "web site' that contains reports, proxy and information
statements and other information regarding issuers that file electronically
with the Commission. The address of such site is "http://www.sec.gov".
18
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The documents listed below have been filed by the Company under the Exchange
Act with the Commission and are integrated herein by reference:
1. The Company's Form 10 filed with the Commission on May 13, 1996, File
No. 0-20707, and as amended on June 21, 1996, July 3, 1996 and July 5,
1996.
2. The Company's Annual Report on Form 10-K for the year ended December
31, 1996 (the "Form 10-K").
3. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997.
4. The Company's Current Reports on Form 8-K filed on July 21, 1997,
September 17, 1997 and December 10, 1997.
All documents filed by the Company 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.
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 Company 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, Senior Vice President and Secretary of Colonial Properties Holding
Company, Inc., 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 Company by Hogan & Hartson L.L.P., Washington, D.C.
EXPERTS
The consolidated balance sheets as of December 31, 1996 and 1995 and the
consolidated statements of operations, partners' capital, and cash flows for
each of the three years in the period ended December 31, 1996, which are
included in the Company's Form 10-K (incorporated herein by reference) and the
historical summaries of revenues and direct operating expenses of Acquired
Properties--Riverchase Center Building 2100, Beechwood Shopping Center,
Brookwood Mall, The Meadows at Trussville, and the Proposed Office and Retail
Merger, all of which are included in the Company's Form 8-K filed July 21,
1997 (incorporated herein by reference), and the historical summaries of
revenues and direct operating expenses of Acquired Properties--Georgia Malls,
Mark Trace Apartments and the Retail Portfolio, all of which are included in
the Company's Form 8-K filed December 10, 1997 (incorporated herein by
reference), have been incorporated herein in reliance on the report of Coopers
& Lybrand L.L.P., independent accountants, given on 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.................................................... $ 92,424
Fees of Rating Agencies............................................. 100,000
Printing and Duplicating Expenses................................... 120,000
Legal Fees and Expenses............................................. 80,000
Accounting Fees and Expenses........................................ 15,000
Blue Sky Fees and expenses.......................................... 15,000
Fees of Trustee (including counsel fees)............................ 5,000
Miscellaneous....................................................... 50,000
--------
Total............................................................. $477,424
========
</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
II-1
<PAGE>
director or officer, (i) CPHC shall have received a written affirmation by the
director or officer of his good faith 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.
Colonial has entered into indemnification agreements with each of its
trustees and certain of its executive officers. Under these agreements,
Colonial has agreed to indemnify its trustees and certain of its executive
officers to the maximum extent permitted by the Alabama Corporate Code.
Colonial 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
- ------- -------
<S> <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)
23.3 Coopers & Lybrand L.L.P. Awareness Letter
24 ** Power of Attorney
</TABLE>
- --------
* Incorporated by reference to the same-numbered exhibit to Registration
Statement No. 333-14401 filed on October 18, 1996.
** Filed as part of the signature page of this Registration Statement.
II-2
<PAGE>
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:
(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.
II-3
<PAGE>
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 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 December 11, 1997.
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 December 11, 1997:
SIGNATURES TITLE
/s/ Thomas H. Lowder President, Chief
- ------------------------------------- Executive Officer
THOMAS H. LOWDER and Chairman of the
Board
/s/ Howard B. Nelson, Jr. Chief Financial
- ------------------------------------- Officer (Principal
HOWARD B. NELSON, JR. Financial Officer)
II-5
<PAGE>
SIGNATURES TITLE
/s/ Kenneth E. Howell Vice President
- ------------------------------------- and Controller(Principal
KENNETH E. HOWELL Accounting Officer)
/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
/s/ William M. Johnson Director
- -------------------------------------
WILLIAM M. JOHNSON
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT PAGE
NUMBER EXHIBIT NUMBER
------- ------- ------
<C> <S> <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...........................
Consent of Hogan & Hartson L.L.P. (included as part of Ex-
23.2 hibit 5).....................................................
23.3 Coopers & Lybrand L.L.P. Awareness Letter....................
24 ** Power of Attorney............................................
</TABLE>
- --------
* Incorporated by reference to be same-numbered exhibit to Registration
Statement No. 333-14401 filed on October 18, 1996.
** Filed as part of the signature page of this Registration Statement.
<PAGE>
EXHIBIT 5
HOGAN & HARTSON, L.L.P.
Columbia Square
555 Thirteenth Street, NW
Washington, D.C. 20004-1109
(tel.) 202-637-5600
(202) 637-5910
December 11, 1997
Board of Directors
Colonial Properties Holding Company, Inc.
2101 Sixth Avenue North
Suite 750
Birmingham, Alabama 35203
Gentlemen:
We are acting as counsel to Colonial Realty Limited Partnership, a
Delaware limited partnership (the "Company"), of which Colonial Properties
Holding Company, Inc., an Alabama corporation ("CPHC"), is the sole general
partner, in connection with the Company's registration statement on Form S-3, as
amended (the "Registration Statement"), filed with the Securities and Exchange
Commission relating to the proposed public offering of up to $305,000,000 in
aggregate amount of one or more series of unsecured debt securities (the "Debt
Securities"), all of which Debt Securities may be offered and sold by the
Company from time to time as set forth in the prospectus which forms a part of
the Registration Statement (the "Prospectus"), and as to be set forth in one or
more supplements to the Prospectus (each, a "Prospectus Supplement"). This
opinion letter is furnished to you at your request to enable you to fulfill the
requirements of Item 601(b)(5) of Regulation S-K, 17 C.F.R. (S) 229.601(b)(5),
in connection with the Registration Statement.
For purposes of this opinion letter, we have examined copies of the
following documents:
1. An executed copy of the Registration Statement.
2. The Certificate of Limited Partnership of the Company, certified
by the Secretary of State of the State of Delaware on November 3,
1997, certified as of the date hereof by the Secretary of CPHC,
in its capacity as general partner of the Company, as then being
complete, accurate and in effect.
<PAGE>
Board of Directors
Colonial Properties Holding Company, Inc.
December 11, 1997
Page 2
3. The Partnership Agreement, dated as of October 27, 1994, as
amended through the Twenty-Fifth Amendment thereto, as certified
as of the date hereof by the Secretary of CPHC, in its capacity
as general partner of the Company, as then being complete,
accurate and in effect (the "Partnership Agreement").
4. The Articles of Incorporation of CPHC, as certified by the
Secretary of CPHC as of the date hereof as then being complete,
accurate and in effect (the "Articles").
5. The Bylaws of CPHC, as certified by the Secretary of the Company
as of the date hereof as then being complete, accurate and in
effect.
6. The form of indenture, incorporated by reference as Exhibit 4 to
the Registration Statement (the "Indenture").
7. Resolutions of the Board of Directors of CPHC adopted on October
23, 1997, as certified by the Secretary of CPHC as of the date
hereof as then being complete, accurate and in effect, relating
to the filing by the Company of the Registration Statement and
related matters.
In our examination of the aforesaid documents, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity, accuracy and completeness of all documents submitted to us, the
conformity with the original documents of all documents submitted to us as
certified, telecopied, photostatic, or reproduced copies, and the authenticity
of all such latter documents. This opinion letter is given, and all statements
herein are made, in the context of the foregoing.
For purposes of this opinion letter, we have assumed that (i) the
issuance, sale, amount and terms of the Debt Securities to be offered from time
to time will be duly authorized and established by proper action of the Board of
Directors of CPHC, as the general partner of the Company, consistent with the
procedures and terms described in the Registration Statement (each, a "Board
Action") and in accordance with the Partnership Agreement, the Articles, and
applicable Alabama and Delaware law and (ii) any Debt Securities will be issued
pursuant to an Indenture.
<PAGE>
Board of Directors
Colonial Properties Holding Company, Inc.
December 11, 1997
Page 4
This opinion letter is based as to matters of law solely on applicable
provisions of (i) the Delaware Revised Uniform Limited Partnership Act and (ii)
the laws of the State of New York relating to the creation and enforceability of
contracts (but not including any laws, statutes, ordinances, administrative
decisions, rules or regulations of any political subdivision of the State of New
York). We express no opinion herein as to any other laws, statutes, ordinances,
rules or regulations (such as federal or state securities or "blue sky" laws).
Based upon, subject to and limited by the foregoing, we are of the
opinion that, as of the date hereof, when (i) the Registration Statement has
become effective under the Securities Act of 1933, as amended (the "Act"), (ii)
an applicable Indenture has been duly executed and delivered by the Company and
the Trustee named therein, (iii) by applicable Board Action, the issuance of any
series of Debt Securities has been duly authorized and the terms thereof have
been duly established in accordance with the provisions of the Indenture, and
(iv) such Debt Securities have been duly authenticated by the Trustee and duly
executed and delivered on behalf of the Company against payment therefor in
accordance with the terms of such Board Action, any applicable underwriting
agreement or purchase agreement, the Indenture and any applicable supplemental
indenture, and as contemplated by the Registration Statement and/or the
applicable Prospectus Supplement, the Debt Securities will constitute binding
obligations of the Company, enforceable in accordance with their terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally (including, without limitation, the
effect of statutory and other law regarding fraudulent conveyances, fraudulent
transfers and preferential transfers) and as may be limited by the exercise of
judicial discretion and the application of principles of equity including,
without limitation, requirements of good faith, fair dealing, conscionability
and materiality (regardless of whether the Debt Securities are considered in a
proceeding in equity or at law).
To the extent that the obligations of the Company under an Indenture
may be dependent upon such matters, we assume for purposes of this opinion that
the Trustee is duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization; that the Trustee is duly qualified to
engage in the activities contemplated by the Indenture; that the Indenture has
been duly authorized, executed and delivered by the Trustee and constitutes the
valid and binding obligation of the Trustee enforceable against the Trustee in
accordance with its terms; that the Trustee is in compliance, with respect to
acting as a trustee
<PAGE>
Board of Directors
Colonial Properties Holding Company, Inc.
December 11, 1997
Page 4
under the Indenture, with all applicable laws and regulations; and that the
Trustee has the requisite organizational and legal power and authority to
perform its obligations under the Indenture.
The opinion expressed above shall be understood to mean only that if
there is a default in performance of an obligation, (i) if a failure to pay or
other damage can be shown and (ii) if the defaulting party can be brought into a
court which will hear the case and apply the governing law, then, subject to the
availability of defenses and to the exceptions set forth in such opinion, the
court will provide a money damage (or perhaps injunctive or specific
performance) remedy.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with the filing of the Registration
Statement on the date of this opinion letter and should not be quoted in whole
or in part or otherwise be referred to, nor filed with or furnished to any
governmental agency or other person or entity, without the prior written consent
of this firm.
We hereby consent to the filing of this opinion letter as Exhibit 5 to
the Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus constituting a part of the Registration
Statement. In giving this consent, we do not thereby admit that we are an
"expert" within the meaning of the Act.
Very truly yours,
/s/ Hogan & Hartson L.L.P.
HOGAN & HARTSON L.L.P.
<PAGE>
EXHIBIT 12
COLONIAL REALTY LIMITED PARTNERSHIP
RATIO OF EARNINGS TO FIXED CHARGES
(all amounts in thousands, except ratios)
<TABLE>
<CAPTION>
For the Nine For the Year Ended
Months Ended ----------------------------------------------------------------------
Description 09/30/97 12/31/96 12/31/95 12/31/94 12/31/93 12/31/92
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Fixed Charges:
- -------------
Interest expense $ 28,796 $ 24,584 $ 24,060 $ 10,877 $ 12,722 $ 14,509
Capitalized interest 2,973 3,745 868 333 0 132
Debt costs amortization 1,192 707 2,446 2,244 737 249
--------- --------- --------- --------- --------- ---------
Total Fixed Charges $ 32,961 $ 29,036 $ 27,374 $ 13,454 $ 13,509 $ 14,890
Earnings Plus Fixed Charges:
- ---------------------------
Income before property sales
and extraordinary items $ 32,296 $ 40,580 $ 25,067 $ 16,528 $ 3,509 $ (780)
Fixed Charges 32,961 29,036 27,374 13,454 13,509 14,890
--------- --------- --------- --------- --------- ---------
Total $ 65,707 $ 69,616 $ 52,441 $ 29,982 $ 17,018 $ 14,110
Ratio of Earnings to
Fixed Charges 1.97 2.40 1.91 2.23 1.26 0.95
========= ========= ========= ========= ========= =========
</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 as filed with the Securities and
Exchange Commission on December 11, 1997, of our report, dated January 24, 1997,
on our audits of the consolidated financial statements of Colonial Realty
Limited Partnership as of December 31, 1996 and 1995, and for the years ended
December 31, 1996, 1995, and 1994 which report is included in the Form 10-K. We
also consent to the incorporation by reference in this registration statement on
Form S-3 of our reports on the Historical Summaries of Revenues and Direct
Operating Expenses of Acquired Properties - Riverchase Center Building 2100,
Beechwood Shopping Center, Brookwood Mall, The Meadows at Trussville, and
Proposed Office and Retail Merger, which reports are included in Form 8-K filed
July 21, 1997, and the historical summaries of revenues and direct operating
expenses of Acquired Properties - Georgia Malls, Mark Trace Apartments and the
Retail Portfolio, all of which are included in the Company's Form 8-K filed
December 10, 1997, and incorporated by reference herein. 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
December 11, 1997
<PAGE>
Exhibit 23.3
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Colonial Realty Limited
Partnership
Registration on Form S-3
We are aware that our reports dated April 18, 1997, July 15, 1997, and November
13, 1997 on our reviews of interim financial information of Colonial Realty
Limited Partnership (the Company) for the periods ended March 31, 1997, June 30,
1997, and September 30, 1997, respectively, and included in the Company's
quarterly reports on Forms 10-Q for the quarters then ended, are incorporated by
reference in this registration statement on Form S-3 as filed with the
Securities and Exchange Commission on December 11, 1997. Pursuant to Rule 436(c)
under the Securities Act of 1933, this report should not be considered a part of
the registration statement prepared or certified by us within the meaning of
Sections 7 and 11 of that Act.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Birmingham, Alabama
December 11, 1997
