UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998 OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from __________________
to _______________
Commission File Number 0-20707
COLONIAL REALTY LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
Delaware 63-1098468
(State of organization) (I.R.S. employer
identification no.)
2101 Sixth Avenue North 35203
Suite 750 (Zip Code)
Birmingham, Alabama
(Address of principal executive
offices)
Registrant's telephone number, including area code: (205) 250-8700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
registered
Not applicable Not applicable
Securities registered pursuant to Section 12(g) of the Act: Class A Units of
Limited Partnership Interest
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filing
requirements for the past 90 days. YES NO
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. |_|
Documents Incorporated by Reference
None.
<PAGE>
PART I
Item 1. Business.
As used herein, the terms "CRLP" and "Operating Partnership" include
Colonial Realty Limited Partnership, a Delaware limited partnership, and its
subsidiaries and other affiliates (including, Colonial Properties Services
Limited Partnership and Colonial VRS L.L.C.) or, as the context may require,
Colonial Realty Limited Partnership only. As used herein, the term "Company"
includes Colonial Properties Trust, an Alabama real estate investment trust, and
one or more of its subsidiaries and other affiliates (including CRLP, Colonial
Properties Services Limited Partnership and Colonial Properties Services, Inc.)
or, as the context may require Colonial Properties Trust only. As used herein,
the terms "we", "us", and "our" refer to Colonial Realty Limited Partnership.
This annual report on Form 10-K contains certain "forward-looking
statements", including but not limited to anticipated timetables for
acquisitions, developments and expansions, expected economic growth in
geographic markets where CRLP owns or expects to own properties, and plans for
continuing CRLP's diversified strategy. These statements involve risks and
uncertainties that may cause actual results to be materially different from
those anticipated. Prospective investors should specifically consider, in
connection with these forward-looking statements, the various risk factors
identified herein and in CRLP's filings with the SEC which could cause actual
results to differ, including downturns in local or national economies,
competitive factors, the availability of suitable properties for acquisition at
favorable prices, and other risks inherent in the real estate business.
CRLP is the Operating Partnership of the Company, which is one of the
largest owners, developers and operators of multifamily, retail and office
properties in the Sunbelt region of the United States. It is a fully-integrated
real estate company, whose activities include ownership of a diversified
portfolio of 106 properties as of December 31, 1998, located in Alabama,
Florida, Georgia, Mississippi, North Carolina, South Carolina, Tennessee, Texas,
and Virginia, development of new properties, acquisition of existing properties,
build-to-suit development, and the provision of management, leasing, and
brokerage services for commercial real estate. As of December 31, 1998, CRLP
owned 49 multifamily apartment communities containing a total of 15,381
apartment units (the "Multifamily Properties"), 40 retail properties containing
a total of approximately 13.5 million square feet of retail space (the "Retail
Properties"), 17 office properties containing a total of approximately 2.7
million square feet of office space (the "Office Properties"), and certain
parcels of land adjacent to or near three of these properties (the "Land"). (The
Multifamily Properties, the Retail Properties, the Office Properties and the
Land are referred to collectively as the "Properties"). As of December 31, 1998,
the Multifamily Properties that had achieved stabilized occupancy, the Retail
Properties, and the Office Properties were 93.5%, 91.9% and 92.2% leased,
respectively.
CRLP's executive offices are located at 2101 Sixth Avenue North,
Suite 750, Birmingham, Alabama, 35203 and its telephone number is (205)
250-8700. CRLP was formed in Delaware on August 6, 1993.
Formation of the Company
The Operating Partnership were formed to succeed to substantially all
of the interests of Colonial Properties, Inc., an Alabama corporation
("Colonial"), its affiliates and certain others in a diversified portfolio of
multifamily, retail, and office properties located in Alabama, Florida, and
Georgia and to the development, acquisition, management, leasing, and brokerage
businesses of Colonial.
On September 29, 1993, (i) the Company consummated an initial public
offering (the "IPO") of 8,480,000 of its common shares of beneficial interest,
$.01 par value per share ("Common Shares"), (ii) the Operating Partnership
assumed ownership of 36 Properties (or interests therein) held by Thomas H.
Lowder, James K. Lowder, Robert E. Lowder, and their mother, Catherine Lowder
(the "Lowder family"), and third-party partners of the Lowder family, and the
operating businesses of Colonial, (iii) the Company transferred the net proceeds
from the IPO through Colonial Properties Holding Company, Inc. ("CPHC"), which
was dissolved in 1998, to the Operating Partnership, in exchange for 8,480,000
units of limited partnership interest in the Operating Partnership ("OP Units"),
(iv) the Operating Partnership repaid approximately $150.2 million of
indebtedness and prepayment penalties associated therewith secured by certain of
the Properties, and (v) the Operating Partnership established a $35.0 million
line of credit with SouthTrust Bank, which has since been increased to $250.0
million, to fund development activities and property acquisitions and for
general corporate purposes (collectively, the "Formation Transactions"). On
October 28, 1993, the underwriters of the IPO exercised an over-allotment option
to purchase an additional 686,200 shares.
Recent Developments
Since the Company's IPO, CRLP has significantly expanded its
portfolio of Properties and its operating businesses. Acquisitions by CRLP of
new properties represent a total investment of over $1.3 billion. CRLP has also
completed the expansion of eleven multifamily properties since the IPO, adding a
total of 2,348 units to its multifamily portfolio. CRLP currently has 12 active
expansion and development projects in progress for Multifamily Properties, one
Retail Property development, and two Office Property developments . CRLP has
also disposed of six Multifamily Properties representing 2,464 apartment units,
one Office Property representing 25,000 square feet of office space, and entered
into two joint ventures.
The following is a summary of CRLP's acquisition, disposition, joint
venture, and development activity in 1998.
Acquisition and Disposition Activity
CRLP acquired four Multifamily Properties, including one in Florida,
one in Georgia, one in Texas and one in South Carolina containing 1,026 units
for a total purchase price of $48.2 million.
CRLP added 2.9 million square feet of retail shopping space
(including 1.5 million square feet in two joint ventures) through the
acquisition of a community shopping center, an enclosed mall, and investment in
two joint ventures, at a net cost of $117.5 million.
CRLP also acquired five Office Properties, including three in
Alabama, one in Florida and one in Georgia, containing 827,000 square feet of
office space for a total purchase price of $87.9 million.
Joint Ventures
During the fourth quarter of 1998, CRLP entered into two joint
ventures. On December 9, 1998, CRLP and CBL & Associates Properties, Inc. formed
a joint venture to acquire Parkway City Mall in Huntsville, Alabama for $11.4
million. In addition to the purchase of the property, the joint venture will
redevelop the mall, with all related costs being shared equally by both venture
partners. At December 31, 1998, CRLP had invested approximately $5.7 million in
the joint venture and had an ending net investment balance of $5.9 million.
On December 29, 1998, CRLP and Prudential Real Estate Investors
("Prudential"), through its Property Investment Separate Account ("PRISA") fund,
entered into a joint venture to own Orlando Fashion Square. In connection with
the formation of the joint venture, Prudential acquired a 50% interest in
Orlando Fashion Square from CRLP for $52 million. Subsequent to formation, the
joint venture leveraged the property with a $65 million non-recourse note and
the proceeds from the issuance of the note were distributed equally to the joint
venture partners. CRLP's investment in the joint venture at December 31, 1998
was $20.2 million. CRLP used the proceeds from the Prudential joint venture to
fund acquisition and development activities.
Development Activity
During 1998 CRLP constructed 596 new apartment units in seven
multifamily communities and acquired land on which it intends to develop
additional multifamily communities during 1999. The aggregate cost of this
multifamily development activity was $90.4 million. As of December 31, 1998,
CRLP had 2,426 apartment units in 12 multifamily communities under development
or expansion. Management anticipates that the 12 multifamily projects will be
completed during 1999 through 2001. Management expects to invest an additional
$115 million over this period to complete these multifamily projects.
During 1998 CRLP began development of a community shopping center in
Birmingham, Alabama. The aggregate investment in the retail development during
1998 was $8.8 million. Management anticipates that it will invest an additional
$25.7 million to complete the retail development.
During 1998 CRLP began development of two office properties. The
aggregate investment in the office developments during 1998 was $5.3 million.
Management estimates that it will invest an additional $24.3 million to complete
these projects.
The table below provides an overview of CRLP's acquisition and
development activity during 1998:
<PAGE>
Summary of 1998
Acquisition and Development
Activity
<TABLE>
<CAPTION>
Completion or Type of Units (M) Cost or
Anticipated Name of Property GLA (R/O) Anticipated
Completion Date Property (1) Location (2) (3) Cost (4)
- ----------------- ---------------------------------- ----------------- --------- ----------- --------------
Acquisitions:
<S> <C> <C> <C> <C> <C> <C>
1st Qtr 98 Perimeter Corporate Park Huntsville, AL O 233,000 $ 19,500
1st Qtr 98 Independence Plaza Birmingham, AL O 106,000 7,500
2nd Qtr 98 CV at Ashley Plantation Bluffton, SC M 200 13,700
2nd Qtr 98 Orlando Fashion Square (6)Orlando, FL R 1,100,000 (5) 104,000
3rd Qtr 98 CV at River Hills I Tampa, FL M 248 8,500
3rd Qtr 98 CV at Haverhill San Antonio, TX M 322 17,200
3rd Qtr 98 Mansell Overlook 200 Atlanta, GA O 163,000 27,700
3rd Qtr 98 Shoppes at Mansell Atlanta, GA R 21,000 3,700
3rd Qtr 98 Shades Brook Building Birmingham, AL O 35,000 3,100
3rd Qtr 98 Concourse Center Tampa, FL O 290,000 30,100
3rd Qtr 98 CV at Walton Way Augusta, GA M 256 8,800
4th Qtr 98 Bel Air Mall Mobile, AL R 1,434,000 89,100
4th Qtr 98 Parkway City Mall (6)Huntsville, AL R 414,000 11,400
Developments:
1st Qtr 98 CV at River Hills III Tampa, FL M 276 14,186
1st Qtr 98 CV at Inverness Birmingham, AL M 84 6,631
2nd Qtr 98 CG at Hunter's Creek Orlando, FL M 496 33,426
2nd Qtr 98 CG at Bayshore II Bradenton, FL M 164 9,289
1st Qtr 98 CG at Wesleyan I Macon, GA M 240 13,503
1st Qtr 99 CG at Inverness Lakes II (expansion) Mobile, AL M 132 8,900
4th Qtr 99 CV at Ashley Plantation (expansion) Bluffton, SC M 214 13,800
2nd Qtr 99 CG at Edgewater II (expansion) Huntsville, AL M 192 12,600
3rd Qtr 99 CG at Wesleyan II (expansion) Macon, GA M 88 6,200
2nd Qtr 00 CG at Liberty Park Birmingham, AL M 300 26,218
2nd Qtr 00 CV at Heather Glen Orlando, FL M 448 31,234
2nd Qtr 99 CG at Citrus Park Tampa, FL M 176 12,300
2nd Qtr 99 CG at Lakewood Ranch Sarasota, FL M 288 20,300
1st Qtr 99 CG at Cypress Crossing Orlando, FL M 250 20,000
1st Qtr 00 CV at Madison Huntsville, AL M 336 23,000
3rd Qtr 00 CG at Promenade Montgomery, AL M 384 27,878
1st Qtr 00 CG at Ridgeland Jackson, MS M 170 12,400
1st Qtr 00 Colonial Promenade Trussville Birmingham, AL R 386,000 31,000
4th Qtr 99 1800 International Park Birmingham, AL O 149,457 16,600
4th Qtr 99 Colonial Center at Research Park Huntsville, AL O 133,368 13,000
==============
Total $ 696,765
==============
</TABLE>
(1)In the listing of Multifamily Property names, CG has been used as an
abbreviation for Colonial Grand and CV has been used as an abbreviation for
Colonial Village.
(2)M refers to Multifamily Properties, R refers to Retail Properties, and O
refers to Office Properties.
(3)Units (in this table only) refers to multifamily apartment units and GLA
refers to gross leasable area of retail and office space.
(4)Amounts in thousands.
(5)Includes 739,000 square feet of GLA and 361,000 square feet of tenant owned
space.
(6)Properties are 50% owned by CRLP at December 31, 1998.
<PAGE>
Multifamily Property Acquisitions
Colonial Village at Ashley Plantation--On May 1, 1998, CRLP acquired
Colonial Village at Ashley Plantation, a 200-unit apartment complex developed in
1997 on approximately 21 acres of land in Bluffton, South Carolina. The average
unit size is 1,026 square feet, and the average unit market rent is $768 per
month. The purchase price of $13.7 million was financed through an advance on
CRLP's unsecured line of credit.
Colonial Village at River Hills I--On July 1, 1998, CRLP acquired
Colonial Village at River Hills I, a 248-unit phase of the River Hills apartment
complex on approximately 30 acres of land in Tampa, Florida. The multifamily
community was developed in 1985 and was 90% leased at the time of acquisition.
The average unit size is 907 square feet with average unit market rent of $549
per month. The purchase price of $8.5 million was funded through an advance on
CRLP's unsecured line of credit.
Colonial Village at Haverhill--On July 1, 1998, CRLP acquired a 79.8%
interest in Colonial Village at Haverhill, a 322-unit apartment complex on
approximately 19 acres of land in San Antonio, Texas. The multifamily community
was developed in 1998 and was 90% leased at the time of acquisition. The average
unit size is 1,019 square feet with average unit market rent of $857 per month.
The purchase price of $17.2 million was funded through an advance on CRLP's
unsecured line of credit. The remaining 20.2% ownership in this property is
reflected as "minority interest in consolidated operating property" in CRLP's
statement of income, and is included in "minority interest" on CRLP's balance
sheet and statement of cash flows.
Colonial Village at Walton Way --On July 30, 1998, CRLP acquired
Colonial Village at Walton Way, a 256-unit multifamily apartment community on
approximately 22 acres of land in Augusta, Georgia. The community was developed
in 1970 and 1988, and was 98% leased at the time of acquisition. The average
unit size is 993 square feet with average unit market rent of $671 per month.
The purchase price of $8.8 million was funded through an advance on CRLP's
unsecured line of credit.
CRLP intends to continue to pursue acquisitions in the Sunbelt region
of the United States that meet CRLP's acquisition criteria for property quality,
market strength, and investment return.
Completed Multifamily Expansion and Development Activity
Colonial Village at River Hills III--CRLP completed construction on a
276-unit expansion of Colonial Village at River Hills located in Tampa, Florida.
The community amenities include a clubhouse, a swimming pool, an exercise
center, an air-conditioned racquetball court, tennis courts, and laundry
facilities. Project development costs, including land acquisition costs, totaled
$14.2 million and were funded through advances on CRLP's line of credit. CRLP
completed construction in the first quarter of 1998.
Colonial Village at Inverness--CRLP completed construction on an
84-unit expansion of Colonial Village at Inverness located in Birmingham,
Alabama. This expansion phase offers the same amenities as the existing
community. Project development costs, including land acquisition costs, totaled
$6.6 million and were funded through advances on CRLP's line of credit. CRLP
completed construction in the first quarter of 1998.
Colonial Grand at Bayshore II--CRLP completed construction on a
164-unit expansion to this development located in Bradenton, Florida. CRLP
acquired the land (12.5 acres) at a cost of $1.0 million pursuant to an option
acquired at the time CRLP purchased the land for the existing Colonial Grand at
Bayshore development in November 1995. This expansion phase offers the same
amenities as the existing community. Project development costs, including land
acquisition costs, totaled $9.3 million and were funded through advances on
CRLP's line of credit. CRLP completed construction in the second quarter of
1998.
Colonial Grand at Hunter's Creek--CRLP completed construction on a
496-unit development located in Orlando, Florida. CRLP acquired the land (36
acres) at a cost of $4.0 million. The new apartment community offers a variety
of amenities, including a swimming pool and spa, an exercise room, enclosed
garages, tennis courts, and a car wash. Project development costs, including
land acquisition costs, totaled $33.4 million and were funded through advances
on CRLP's line of credit. CRLP completed construction in the second quarter of
1998.
Colonial Grand at Wesleyan I--CRLP completed construction on a
240-unit development of Colonial Grand at Wesleyan located in Macon, Georgia
during 1998. Project development costs, including land acquisition costs,
totaled $13.5 million and were funded through advances on CRLP's line of credit.
CRLP completed construction in the first quarter of 1998.
Continuing Multifamily Expansion and Development Activity
Colonial Grand at Inverness Lakes II--CRLP continued construction on
a 132-unit expansion of Colonial Grand at Inverness Lakes located in Mobile,
Alabama during 1998. Project development costs, including land acquisition
costs, are expected to total $8.9 million and will be funded through advances on
CRLP's line of credit. CRLP expects to complete construction in the first
quarter of 1999.
Colonial Grand at Edgewater II--CRLP continued construction on a
192-unit expansion of Colonial Grand at Edgewater in Huntsville, Alabama during
1998. Project development costs, including land acquisition costs, are expected
to total $12.6 million and will be funded through advances on CRLP's line of
credit. CRLP expects to complete construction in the first quarter of 1999.
Colonial Grand at Wesleyan II--CRLP continued construction on an
88-unit expansion of Colonial Grand at Wesleyan located in Macon, Georgia during
1998. This expansion phase offers the same amenities as the existing community.
Project development costs, including land acquisition costs, are expected to
total $6.2 million and will be funded through advances on CRLP's line of credit.
CRLP expects to complete construction in the second quarter of 1999.
Colonial Village at Citrus Park--CRLP continued construction on a
176-unit development located in Tampa, Florida during 1998. The new apartment
community will offer a variety of amenities, including a swimming pool, fitness
center, resident business center, garages, covered parking and a gated entry.
Project development costs, including land acquisition costs, are expected to
total $12.3 million and will be funded through advances on CRLP's line of
credit. CRLP expects to complete construction in the second quarter of 1999.
Colonial Grand at Lakewood Ranch--CRLP continued construction on a
288-unit development located in Sarasota, Florida during 1998. The new
apartments will feature numerous luxuries that include crown molding, tiled
floors, chair railings, intrusion alarms, fireplaces and screened patios on all
first floor units. Amenities will include a swimming pool, fitness center,
tennis courts and a gated entry. Project development costs, including land
acquisition costs, are expected to total $20.3 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the second quarter of 1999.
<PAGE>
New Multifamily Expansion and Development Activity
Colonial Village at Ashley Plantation--CRLP began construction on a
214-unit expansion of Colonial Village at Ashley Plantation located in Bluffton,
South Carolina during the second quarter of 1998. Project development costs,
including land acquisition costs, are expected to total $13.8 million and will
be funded through advances on CRLP's line of credit. CRLP expects to complete
construction in the fourth quarter of 1999.
Colonial Grand at Liberty Park-- CRLP began construction on a
300-unit development located in Birmingham, Alabama during the third quarter of
1998. The new apartments will feature numerous luxuries that include crown
molding, tiled floors, chair railings, intrusion alarms, fireplaces and screened
patios on all first floor units. Amenities will include a swimming pool, fitness
center, tennis courts and a gated entry. Project development costs, including
land acquisition costs, are expected to total $26.2 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the second quarter of 2000.
Colonial Village at Heather Glen-- CRLP began construction on a
448-unit development located in Orlando, Florida during the third quarter of
1998. The new apartments will offer a variety of amenities, including a
clubhouse, car-care center, fitness center with a child play area, two swimming
pools, tennis courts, and a picnic area. Project development costs, including
land acquisition costs, are expected to total $31.2 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the second quarter of 2000.
Colonial Grand at Cypress Crossing-- CRLP began construction on a
250-unit development located in Orlando, Florida during the third quarter of
1998. The new apartments will feature numerous luxuries including a security
system, automated climate control, highest-speed Internet access, and home
theatre pre-wiring. Project development costs, including land acquisition costs,
are expected to total $20.0 million and will be funded through advances on
CRLP's line of credit. CRLP expects to complete construction in the first
quarter of 1999.
Colonial Grand at Madison-- CRLP began construction on a 336-unit
development located in Huntsville, Alabama. The new apartments will offer a
variety of amenities, including a swimming pool and spa, an exercise room,
tennis courts, and a car wash. Project development costs, including land
acquisition costs, are expected to total $23.0 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the first quarter of 2000.
Colonial Grand at Promenade-- CRLP began construction on a 384-unit
development located in Montgomery, Alabama. The new apartments will offer a
variety of amenities, including a swimming pool, an exercise room, a clubhouse,
tennis courts, and a gated entry. Project development costs, including land
acquisition costs, are expected to total $27.9 million and will be funded
through advances on CRLP's line of credit. CRLP expects to complete construction
in the second quarter of 2000.
Colonial Grand at Ridgeland-- CRLP began construction on a 170-unit
development located in Jackson, Mississippi. The new apartments will offer a
variety of amenities, including a fitness center, swimming pool, garages, and
tennis courts. Project development costs, including land acquisition costs, are
expected to total $12.4 million and will be funded through advances on CRLP's
line of credit. CRLP expects to complete construction in the first quarter of
2000.
<PAGE>
Retail Property Acquisitions and Mergers
Orlando Fashion Square--On May 29, 1998, CRLP acquired Orlando
Fashion Square, a 1.1 million square foot regional mall (including 361,000
square feet of tenant-owned space) in Orlando, Florida, for a total purchase
price of $104 million. The mall anchors include Burdine's, Sears, Gayfers, JC
Penney and General Cinemas. The entire purchase price was funded through an
advance on CRLP's unsecured line of credit.
Shoppes at Mansell--On July 1, 1998, CRLP completed the final phase of
its merger with certain affiliates of Johnson Development Company. The final
phase included the Shoppes at Mansell, a 21,000 square foot community shopping
center. The Shoppes at Mansell was developed in 1997 and was 95% occupied at the
time of the merger. The merger of Shoppes at Mansell, valued at $3.7 million,
was funded through the issuance of 76,809 limited partnership units valued at
$2.3 million, and an advance on CRLP's unsecured line of credit.
Bel Air Mall--On December 29, 1998, CRLP acquired Bel Air Mall, a 1.4
million square foot regional mall in Mobile, Alabama, for a total purchase price
of $89.1 million. The mall anchors include Parisian, Dillard's, Sears, JC
Penney, and Target. The purchase price was funded through the proceeds received
in connection with the formation of the Orlando Fashion Square Joint Venture and
an advance on CRLP's unsecured line of credit.
Retail Development Activity
Colonial Promenade Trussville--During the third quarter of 1998, CRLP
began the development of a 386,000 square foot retail shopping center in
Birmingham, Alabama. The shopping center development will be anchored by a
Wal-Mart Supercenter, Regal Cinemas, Marshall's Department Store, and Goody's
Family Clothing. Project expansion costs are expected to total $31.0 million and
will be funded through advances on CRLP's line of credit. CRLP expects to
complete the development during the first quarter of 2000.
Office Property Acquisitions
Perimeter Corporate Park--On January 1, 1998, CRLP acquired
Perimeter Corporate Park, an office park comprised of two multi-tenant
buildings in Huntsville, Alabama totaling 233,000 square feet of leasable area.
Major tenants include Mevatec, Schafer Corporation, Computer Systems
Technology, EER Systems Corporation, and Silicon Graphics. The purchase price
of $19.5 million was funded by the assumption of $5.7 million of debt and an
advance on CRLP's unsecured line of credit.
Independence Plaza--Also on January 1, 1998, CRLP acquired
Independence Plaza, a 106,000 square foot office building in Birmingham,
Alabama, for a purchase price of $7.5 million. Major tenants include AmSouth
Bank, the Cooney, Rikard & Curtin insurance firm and Wall Street Deli (executive
offices). The entire purchase price was funded through an advance on CRLP's
unsecured line of credit.
Mansell Overlook 200--On July 1, 1998, CRLP completed the final phase
of its merger with certain affiliates of Johnson Development Company. The final
phase included Mansell Overlook 200, a six-story office building containing
163,000 square feet of space. Mansell Overlook 200 was developed in 1997 and was
95% occupied at the time of the merger. This part of the merger, valued at $27.7
million, was funded through the issuance of 396,365 limited partnership units in
Colonial Realty Limited Partnership valued at $11.7 million, and an advance on
CRLP's unsecured line of credit.
Shades Brook Building--On July 13, 1998, CRLP acquired the Shades
Brook Building, a three-story office building containing 35,000 square feet of
space in Birmingham, Alabama. Shades Brook was acquired for a total purchase
price of $3.1 million, which was financed through the issuance of 28,492 limited
partnership units in Colonial Realty Limited Partnership valued at $871,000, and
an advance on CRLP's unsecured line of credit. Shades Brook was built in 1979
and was 93% occupied at the time of acquisition.
Concourse Center--On July 23, 1998, CRLP acquired Concourse Center,
an office park comprised of four multi-tenant buildings in Tampa, Florida
totaling 290,000 square feet of leasable area. The purchase price of $30.1
million was financed through an advance on CRLP's unsecured line of credit.
Concourse Center was built between 1981 and 1985 and was 99% occupied at the
time of acquisition.
Office Property Development Activity
1800 International Park--In August 1998, CRLP began development of a
six story multi-tenant office building in Birmingham, Alabama with a total of
149,457 square feet of leasable area. Project development costs are expected to
total $16.6 million and will be funded through advances on CRLP's unsecured
line of credit. CRLP expects to complete construction in the fourth quarter of
1999.
Colonial Center at Research Park--Also in August 1998, CRLP began
development of two office buildings in Huntsville, Alabama with a total of
133,368 square feet of leasable area. Colonial Center features Class A office
space with first-class amenities. Project development costs are expected to
total $13.0 million and will be funded through advances on CRLP's unsecured
line of credit. CRLP expects to complete construction in the fourth quarter of
1999.
Financing Activity
CRLP funded a large portion of its acquisitions and developments
through the issuance of debt securities and through cash contributions from the
Company through the issuance of its common shares. During 1998, the Company and
CRLP completed the following equity and debt transactions:
Common Share Offerings
(in thousands)
--------------------------------
Number of Price Per Gross Offering Net
Date ............... Common Share Proceeds Costs Proceeds
- -------------------- --------- ------- --------- --------- ---------
February ........... 375,540 $ 30.00 $ 11,266 $ 627 $ 10,639
March .............. 806,452 $ 31.00 $ 25,000 $ 1,389 $ 23,611
March .............. 381,046 $ 31.00 $ 11,182 $ 656 $ 11,156
April .............. 3,046,400 $ 30.12 $ 91,773 $ 4,973 $ 86,800
Debt Offering
Gross
Type of Proceeds
Date Note Maturity Rate (in thousands)
- -------------- -------- ---------- ---- --------
July Senior July, 2007 7.00% $175,000
On July 10, 1998, CRLP increased the borrowing capacity under its unsecured line
of credit from $200 million to $250 million. The credit facility, which is used
by CRLP primarily to finance additional property investments, bears interest at
a rate ranging between 80 and 135 basis points above LIBOR and is renewable in
July 2000. The line of credit agreement includes a competitive bid feature that
will allow CRLP to convert up to $125 million under the line of credit to a
fixed rate, for a fixed term not to exceed 90 days. As of December 31, 1998, the
balance outstanding on CRLP's line of credit was $174.5 million.
<PAGE>
Business Strategy
The general business strategy of the Company and CRLP is to generate
stable and increasing cash flow and portfolio value for its shareholders. The
Company and CRLP (and its predecessor) have implemented this strategy
principally by (i) realizing growth in income from its existing portfolio of
properties, (ii) developing, expanding, and selectively acquiring additional
multifamily, retail, and office properties in growth markets located in the
Sunbelt region of the United States, where CRLP has first-hand knowledge of
growth patterns and local economic conditions, (iii) managing its own
properties, which has enabled it to better control operating expenses and
establish long-term relationships with its retail and office tenants, (iv)
maintaining the Company's third-party property management business, which has
increased cash flow and established additional relationships with tenants, and
(v) employing a comprehensive capital maintenance program to maintain properties
in first-class condition. CRLP's business strategy and the implementation of
that strategy are determined by CRLP's partners and may be changed from time to
time.
Financing Strategy
CRLP's strategy is to maintain coverage ratios in order to sustain
its investment grade status. CRLP's total market capitalization as of December
31, 1998, was $2.0 billion, and its ratio of debt to total market capitalization
was 45.1%. At December 31, 1998, CRLP's total debt included fixed-rate debt of
$681.2 million, or 74.9% of total debt, and floating-rate debt of $228.1
million, or 25.1% of total debt. CRLP has obtained interest rate protection for
$50.0 million of the floating-rate debt.
CRLP may from time to time reevaluate its borrowing policies in light
of then current economic conditions, relative costs of debt and equity capital,
market values of properties, growth and acquisition opportunities, and other
factors. CRLP may modify its borrowing policy and may increase or decrease its
ratio of debt to total market capitalization. To the extent that the board of
trustees of CRLP determines to seek additional capital, CRLP may raise such
capital through additional equity offerings by the Company, debt financings, or
retention of cash flow (subject to provisions in the Code requiring the
distribution by a REIT of a certain percentage of taxable income and taking into
account taxes that would be imposed on undistributed taxable income) or a
combination of these methods.
Property Management
CRLP is experienced in the management and leasing of multifamily,
retail, and office properties and believes that the management and leasing of
its own portfolio has helped the Properties maintain consistent income growth
and has resulted in reduced operating expenses from the Properties. This also
allows CRLP to establish additional relationships with tenants who may require
additional retail or office space and to identify potential acquisitions.
Operational Structure
Multifamily Division--The multifamily division of CRLP is responsible
for all aspects of CRLP's multifamily operations, including day-to-day
management and leasing of the 49 Multifamily Properties, as well as the
provision of third-party management services for apartment communities in which
CRLP does not have an ownership interest. The multifamily division utilizes
centralized functions of accounting, information technology, due diligence and
administrative services. Decisions for investments in acquisitions and
developments and for dispositions are also centralized. The multifamily division
has regional offices in Birmingham, Mobile and Montgomery, Alabama, Orlando and
Tampa, Florida, and Stockbridge, Georgia.
Retail Division--CRLP's retail division is responsible for all
aspects of CRLP's retail operations, including the provision of management and
leasing services for the 40 Retail Properties, as well as the provision of
third-party management services for retail properties in which CRLP does not
have an ownership interest and for brokerage services in other retail property
transactions. The retail division utilizes centralized functions of accounting,
information technology, due diligence and administrative services. Decisions for
investments in acquisitions and developments and for dispositions are also
centralized. The retail division has regional offices in Birmingham, Alabama,
Orlando, Florida, Macon, Georgia and Burlington, North Carolina.
Office Division--CRLP's office division is responsible for all
aspects of CRLP's commercial office operations, including the provision of
management and leasing services for the 17 Office Properties, as well as the
provision of third-party management services for office properties in which CRLP
does not have an ownership interest and for brokerage services in other office
property transactions. The office division utilizes centralized functions of
accounting, information technology, due diligence and administrative services.
Decisions for investments in acquisitions and developments and for dispositions
are also centralized. The office division has regional offices in Birmingham,
Alabama and Atlanta, Georgia.
Employees
CRLP employs approximately 900 persons, including on-site property
employees who provide services for the Properties that CRLP owns and/or manages.
Tax Status
CRLP has no provision for income taxes since all taxable income or
loss or tax credits are passed through to the partners. The Company has made an
election to be taxed as a REIT under Sections 856 through 860 of the Internal
Revenue Code of 1986, as amended (the "Code"), commencing with its taxable year
ending December 31, 1993. If the Company qualifies for taxation as a REIT, the
Company generally will not be subject to Federal income tax to the extent it
distributes at least 95% of its REIT taxable income to its shareholders. Even if
the Company qualifies for taxation as a REIT, the Company may be subject to
certain state and local taxes on its income and property and to federal income
and excise taxes on its undistributed income.
Risk Factors
Set forth below are the risks that we believe are material to
investors who purchase or own our units of limited partnership interest. Our
units are redeemable for cash or, at the election of Colonial Properties Trust,
on a one-for-one basis for Colonial Properties Trust's shares of beneficial
interest.
Our performance and property value are subject to risks associated
with the real estate industry. If our assets do not generate income sufficient
to pay our expenses, service our debt and maintain our properties, we may not be
able to make expected distributions to our unitholders. Whether our properties
will generate sufficient revenue to pay our expenses and permit us to make
distributions to our unitholders will depend on whether we can attract tenants
at favorable rental rates and whether we can adequately control our costs.
Factors that may adversely affect our ability to attract tenants or to generate
sufficient revenue include:
o local conditions such as an oversupply of multifamily, retail
or office properties or a reduction in demand for
multifamily, retail or office properties;
o the attractiveness of our properties to residents, shoppers and
tenants; decreases in market rental rates; and
o our ability to collect rent from our tenants.
Factors that may adversely affect our operating costs include:
o the need to pay for adequate insurance and other operating costs,
including real estate taxes, which could increase over time; and
o the need to periodically repair, renovate and relet space.
Our expenses may remain constant even if our revenues drop. The
expenses of owning and operating a property are not necessarily reduced when
circumstances such as market factors and competition cause a reduction in income
from the property. As a result, if revenues drop, we may not be able to reduce
our expenses accordingly. Loan payments are an example of a cost that will not
be reduced simply because our revenues drop. If a property is mortgaged and we
are unable to meet the mortgage payments, the lender could foreclose on the
mortgage and take the property, resulting in a further reduction in revenues.
We may be unable to renew leases or relet space as leases expire.
When our tenants decide not to renew their leases upon their expiration, we may
not be able to relet the space. Even if the tenants do renew or we can relet the
space, the terms of renewal or reletting, including the cost of required
renovations, may be less favorable than current lease terms. If we are unable to
promptly renew the leases or relet the space, or if the rental rates upon such
renewal or reletting are significantly lower than expected rates, then our cash
flow and ability to service debt and make distributions to shareholders would be
adversely affected.
New acquisitions may fail to perform as expected. Assuming we are
able to obtain capital on commercially reasonable terms, we intend to
selectively acquire multifamily, retail or office properties where we perceive
strategic opportunities consistent with our strategy. Newly acquired properties
may fail to perform as expected. We may underestimate the costs necessary to
bring an acquired property up to the standards we have established for its
intended market position. In addition, we may not be in a position or have the
opportunity in the future to make suitable property acquisitions on favorable
terms. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources."
Competition for acquisitions could result in increased prices for
properties. We expect other major real estate investors with significant capital
to compete with us for attractive investment opportunities. These competitors
include publicly traded REITs, private REITs, investment banking firms and
private institutional investment funds. This competition could increase prices
for multifamily, retail or office properties.
Our development and expansion activities subject us to risks. We
intend to continue to develop new properties and expand existing properties
where we believe that development or expansion is consistent with our business
strategies. New projects subject us to a number of risks, including risks that:
o construction delays or cost overruns may increase project costs;
o permanent debt or equity financing may not be available on
acceptable terms to finance new development or expansion projects;
o we may fail to meet anticipated occupancy or rent levels;
o we may fail to secure required zoning, occupancy and other
governmental permits and authorizations; and
o changes in applicable zoning and land use laws may require us to
abandon projects prior to their completion, resulting in the loss of
development costs incurred prior to abandonment.
Because real estate investments are illiquid, we may not be able to
sell properties when appropriate. Real estate investments generally cannot be
sold quickly. We may not be able to vary our portfolio promptly in response to
economic or other conditions. This inability to respond to changes in the
performance of our investments could adversely affect our ability to service
debt and make distributions to our unitholders.
Scheduled debt payments could adversely affect our financial
condition. Our business is subject to risks normally associated with debt
financing. If principal payments due at maturity cannot be refinanced, extended
or paid with proceeds of other capital transactions, such as new equity capital,
our cash flow will not be sufficient in all years to repay all maturing debt. If
prevailing interest rates or other factors at the time of refinancing, such as
the possible reluctance of lenders to make commercial real estate loans, result
in higher interest rates, increased interest expense would adversely affect cash
flow and our ability to service our debt and make distributions to unitholders.
Our obligation to comply with financial covenants in our debt
agreements could restrict our range of operating activities. Our credit facility
contains customary restrictions, requirements and other limitations on our
ability to incur indebtedness, including:
o debt to assets ratios;
o secured debt to total assets ratios;
o debt service coverage ratios; and
o minimum ratios of unencumbered assets to unsecured debt.
The indenture under which our senior unsecured indebtedness is issued
contains financial and operating covenants including coverage ratios. Our
indenture also limits our ability to (1) incur secured and unsecured
indebtedness, (2) sell all or substantially all or our assets and (3) engage in
mergers, consolidations and acquisitions.
Our degree of leverage could limit our ability to obtain additional
financing. Our "debt to market capitalization" ratio, which we calculate as
total debt as a percentage of total debt plus the market value of our
outstanding units and the outstanding shares of beneficial interest of Colonial
Properties Trust, was approximately 45.1% as of December 31, 1998. Increases in
our leverage could adversely affect our ability to obtain additional financing
in the future for (1) working capital, (2) capital expenditures, (3)
acquisitions, (4) development or (4) other general corporate purposes, and may
make us more vulnerable to a downturn in business or the economy generally.
Rising interest rates could adversely affect our cash flow. Advances
under our credit facility bear interest at a variable rate ranging between 80
and 135 basis points above LIBOR. We may borrow additional money with variable
interest rates in the future, and may enter into other transactions to limit our
exposure to rising interest rates as appropriate and cost effective. Increases
in interest rates, or the loss of the benefits of hedging agreements, would
increase our interest expense, which would adversely affect cash flow and our
ability to service our debt and make distributions to unitholders.
Environmental problems are possible and can be costly. Federal, state
and local laws and regulations relating to the protection of the environment may
require a current or previous owner or operator of real property to investigate
and clean up hazardous or toxic substances or petroleum product releases at the
property, without regard to whether the owner or operator knew or caused the
presence of the contaminants. If unidentified environmental problems arise at
one of our properties, we may have to make substantial payments to a
governmental entity or third parties for property damage and for investigation
and clean-up costs. Even if more that one person may have been responsible for
the contamination, we may be held responsible for all of the clean-up costs
incurred. Our liability under environmental laws could adversely affect our cash
flow and our ability to make distributions to our unitholders.
At one of our 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. We are 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, we have been reimbursed under the Alabama Underground
Storage Tank Trust Fund for the costs incurred to date in connection with the
ongoing cleanup, and expect to be reimbursed for the remaining costs as well. We
have received a "no further action" letter from the Alabama Department of
Environmental Management.
On December 29, 1998, we acquired Bel Air Mall in Mobile, Alabama.
During the course of our environmental due diligence, we identified several
different areas of the property in which contamination is present. One of those
areas involves drycleaner solvent; the others involve petroleum contamination.
The Alabama Department of Environmental Management is overseeing the
investigation and cleanup of the drycleaner contamination. It is possible that a
claim could be asserted against us, as owner of the property, for the
investigation and remediation of the contamination. Pursuant to the purchase and
sale agreement, the former owner of the property purchased a $10 million
insurance policy and established escrow accounts totaling $1,275,000 to cover
the costs associated with investigating and remediating the contaminated areas.
In addition, subject to limitations, the seller will be performing all required
remediation of the drycleaner contamination.
Some of our general partner's trustees and officers have conflicts of
interest and could exercise influence in a manner inconsistent with unitholders'
best interests. As a result of their substantial ownership of Colonial
Properties Trust's common shares and our units, Messrs. Thomas Lowder, Colonial
Properties Trust's Chairman of the Board, Chief Executive Officer and President,
and James Lowder, Harold Ripps, Herbert Meisler and William Johnson, each of
whom is a trustee of Colonial Properties Trust, might seek to exert influence
over our decisions as to sales or refinancings of particular properties we own.
Any such exercise of influence might produce decisions which are not in the best
interest of all of our unitholders.
The Lowder family, which includes Thomas, James, Robert and Catherine
Lowder and their affiliates, holds interests in companies that have performed
construction management, insurance brokerage and other services with respect to
our properties. These companies may perform similar services for us in the
future. As a result, the Lowder family may realize benefits from transactions
between such companies and us that are not realized by other unitholders. In
addition, Thomas Lowder and his brother, James Lowder, as trustees of Colonial
Properties Trust, may be in a position to influence us to do business with
companies in which the Lowder family has a financial interest. Our policies may
not be successful in eliminating the influence of conflicts. Moreover,
transactions with companies controlled by the Lowder family, if any, may not be
on terms as favorable to us as we could obtain in an arms-length transaction
with a third party.
We do not control our management, leasing and brokerage businesses.
To facilitate maintenance of Colonial Properties Trust's REIT qualification, we
have a "non-controlled subsidiary" which conducts management, leasing and
brokerage business for properties we do not wholly own. While we own 99% of the
economic interest in the noncontrolled subsidiary, 99% of its voting stock is
owned by members of the Lowder family. We therefore do not control the timing or
amount of distributions or the management and operation of the noncontrolled
subsidiary. We also lack the ability to set the business policies and operations
of the noncontrolled subsidiary.
We are subject to risks associated with the property management,
leasing and brokerage businesses. In addition to the risks we face as a result
of our ownership of real estate, we face risks relating to the property
management, leasing and brokerage businesses of our "non-controlled subsidiary,"
including risks that:
o management contracts or service agreements with third-party owners will be
lost to competitors;
o contracts will not be renewed upon expiration or will not
be renewed on terms consistent with current terms; and
o leasing and brokerage activity generally may decline.
Each of these developments could adversely affect our ability to make
debt service payments or expected distributions to unitholders.
We are dependent on external sources of capital. To qualify as a
REIT, Colonial Properties Trust must distribute to its shareholders each year at
least 95% of its net taxable income, excluding any net capital gain. Our
partnership agreement generally requires us to distribute substantially all of
our net cash revenues each quarter and to make reasonable efforts to distribute
to Colonial Properties Trust enough cash for it to meet the 95% distribution
requirement. Because of these distribution requirements, it is not likely that
we will be able to fund all future capital needs from income from operations. We
therefore will have to rely on third-party sources of capital which may or may
not be available on favorable terms or at all. Our access to third-party sources
of capital depends on a number of things, including the market's perception of
our growth potential and our current and potential future earnings. Moreover,
additional equity offerings may result in substantial dilution, and additional
debt financing may substantially increase our leverage.
We intend to qualify as a partnership, but cannot guarantee that we
will qualify. We intend to qualify as a partnership for federal income tax
purposes. However, we will be treated as a corporation for federal income tax
purposes if we are a "publicly traded partnership," unless at least 90% of our
income it qualifying income as defined in the tax code. The income requirements
applicable to REITs and the definition of qualifying income for purposes of this
90% test are similar in most, but not all, respects. Qualifying income for the
90% test generally includes passive income, such as specified types of real
property rents, dividends and interest. We cannot guarantee that we will meet
this qualifying income test. If we were to be taxed as a corporation, we would
incur substantial tax liabilities, Colonial Properties Trust would fail to
qualify as a REIT for tax purposes and Colonial Properties Trust's and our
ability to raise additional capital could be impaired.
Colonial Properties Trust intends to qualify as a REIT, but we cannot
guarantee that it will qualify. We believe that Colonial Properties Trust has
qualified for taxation as a REIT for federal income tax purposes commencing with
its taxable year ended December 31, 1993. If Colonial Properties Trust qualifies
as a REIT, it generally will not be subject to federal income tax on its income
that it distributes to its shareholders. Colonial Properties Trust plans to
continue to meet the requirements for taxation as a REIT, but it may not qualify
as a REIT. Many of the REIT requirements are highly technical and complex. The
determination that Colonial Properties Trust is a REIT requires an analysis of
various factual matters and circumstances that may not be totally within its
control. For example, to qualify as a REIT, at least 95% of our gross income
must come from certain sources that are itemized in the REIT tax laws. Colonial
Properties Trust also is required to distribute to shareholders at least 95% of
its REIT taxable income, excluding capital gains. The fact that Colonial
Properties Trust holds its assets through Colonial Realty further complicates
the application of the REIT requirements. Even a technical or inadvertent
mistake could jeopardize Colonial Properties Trust's REIT status. Furthermore,
Congress and the IRS might make changes to the tax laws and regulations, and the
courts might issue new rulings that make it more difficult, or impossible, for
Colonial Properties Trust to remain qualified as a REIT. We do not believe,
however, that any pending or proposed tax law changes would jeopardize its REIT
status.
If Colonial Properties Trust failed to qualify as a REIT, Colonial
Properties Trust would be subject to federal income tax at regular corporate
rates. Also, unless the IRS granted us relief under certain statutory
provisions, Colonial Properties Trust would remain disqualified as a REIT for
the four years following the year Colonial Properties Trust first failed to
qualify. If Colonial Properties Trust failed to qualify as a REIT, it would have
to pay significant income taxes and would therefore have less money available
for investments or for distributions to shareholders. This would likely have a
significant adverse affect on the value of our securities. In addition, Colonial
Properties Trust would no longer be required to make any distributions to
shareholders, but we would still be required to distribute quarterly
substantially all of our net cash revenues to our unitholders.
Proposed legislation, if enacted, could require us to restructure our
ownership of Colonial Properties Services, Inc. The Clinton Administration's
fiscal year 2000 budget proposal could require us to restructure our ownership
of Colonial Properties Services, Inc. The budget proposal, announced February 1,
1999, includes a proposal that would prohibit a REIT from owning more than 10%
of the vote or value of the outstanding securities of any corporation, except
for a qualified REIT subsidiary or another REIT. Currently, a REIT cannot own
more than 10% of the outstanding securities of any one issuer. A REIT can,
however, own more than 10% of the value of the stock of a corporation, so long
as not more than 25% of the REIT's total assets are comprised stock of
corporations, except for qualified REIT subsidiaries or other REIT's, and the
stock of any single corporation does not account for more than 5% of the value
of the REIT's total assets. The proposal also contains an exception to the 5%
and 10% asset tests that would allow a REIT to have "taxable REIT subsidiaries,"
including both "qualified independent contractor subsidiaries," which could
perform noncustomary and other currently prohibited services for tenants and
other customers, and "qualified business subsidiaries," which could undertake
third-party management and development activities as well as other non-related
real estate activities. Under the proposal, no more than 15% of a REIT's total
assets could consist of taxable REIT subsidiaries and no more than 5% of a
REIT's total assets could consist of qualified independent contractor
subsidiaries. Under the budget proposal, a taxable REIT subsidiary would not be
entitled to deduct any interest on debt funded directly or indirectly by the
REIT. This proposal would be effective after the date of enactment and a REIT
would be allowed to combine and convert existing corporate subsidiaries into
taxable REIT subsidiaries tax-free prior to a certain date. A transition period
would allow for conversion of existing corporate subsidiaries before the 10%
vote or value test would become effective. For Colonial Properties Trust's
taxable years after the effective date of the proposal and after any applicable
transition period, the 10% vote or value test would apply to Colonial Properties
Trust's ownership in Colonial Properties Services, Inc. unless Colonial
Properties Services, Inc. is converted into a taxable REIT subsidiary. It is
presently uncertain whether any proposal regarding REIT subsidiaries, including
the budget proposal, will be enacted or, if enacted, what the terms, including
the effective date, of such proposal will be.
Our operations could be adversely affected by the year 2000 problem.
Our revenues may be adversely affected if the year 2000 problem poses
significant problems for any of our tenants which prevent them from paying us
rent as it comes due. The year 2000 problem could also adversely affect us
should any of our lenders, manufacturers, vendors or suppliers cease to conduct
business, as we would be forced to contract with alternate providers at rates
which might not be favorable to us. Moreover, our plans do not address a
"doomsday" scenario which would require a contingency process for restoration of
our existing systems and components in the event of a complete failure due to
the year 2000 problem.
Item 2. Properties.
General
CRLP acquired 36 properties in connection with the Formation
Transactions, and acquired or developed 19 additional properties and an
additional phase of an existing property in 1994, six additional properties in
1995, 11 additional properties in 1996, 25 additional properties in 1997, and 14
additional properties in 1998. Since the Company's initial public offering
("IPO"), CRLP has developed eleven additional Multifamily Properties and has
disposed of eight properties, all through tax-deferred, like-kind exchanges. The
106 Properties owned by CRLP at December 31, 1998, consisted of 49 Multifamily
Properties, 40 Retail Properties, and 17 Office Properties, as described in more
detail below.
Summary of Properties
<TABLE>
<CAPTION>
Total 1998 Percent of
Units/ Property Total 1998 Percentage
Number of GLA/ Revenue (2) Property Occupancy at
Type of Property Properties NRA (1) (in thousands) Revenue (2) Dec. 31, 1998 (3)
- ---------------- ---------- ----------- ----------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Multifamily 49 15,381 $ 104,462 40.7% 93.5%
Retail 40 13,478,000 117,572 45.9% 91.9%
Office 17 2,707,000 34,409 13.4% 92.2%
--- ----------- ----------
Total 106 $ 256,443 100.0%
=== =========== ==========
</TABLE>
(1)Units (in this table only) refers to multifamily apartment units, GLA refers
to gross leasable area of retail space and NRA refers to net rentable area of
office space. Information is presented as of December 31, 1998.
(2)Includes CRLP's proportionate share of revenue from those Office and
RetailProperties accounted for under the equity method, and the Company's
share of the properties disposed of in 1998.
(3)Excludes 1,842 units of expansion phases of seven Multifamily Properties that
had not achieved stabilized occupancy as of December 31, 1998.
Multifamily Properties
The 49 Multifamily Properties owned by CRLP at December 31, 1998,
contain a total of 15,381 garden-style apartments and range in size from 120 to
1,080 apartment units. Fourteen of the Multifamily Properties were acquired by
CRLP in connection with the Formation Transactions, 13 Properties and one
additional phase of an existing Property were acquired during 1994, seven
Properties were acquired during 1996, five Properties were acquired during 1997,
and four Properties were acquired in 1998. Also, since the IPO, CRLP has
developed eleven additional Multifamily Properties. Twenty Multifamily
Properties (containing a total of 7,293 apartment units) are located in Alabama,
16 Multifamily Properties (containing a total of 5,014 apartment units) are
located in Florida, nine Multifamily Properties (containing a total of 1,874
apartments units) are located in Georgia, one Multifamily Property (containing a
total of 328 apartment units) are located in Mississippi, two Multifamily
Properties (containing a total of 550 apartment units) sre located in South
Carolina, and one Multifamily Property (containing 322 apartment units) is
located in Texas. Each of the Multifamily Properties is established in its local
market and provides residents with numerous amenities, which may include a
swimming pool, exercise room, jacuzzi, clubhouse, laundry room, tennis court(s),
and/or a playground. All of the Multifamily Properties are managed by CRLP.
The following table sets forth certain additional information
relating to the Multifamily Properties as of and for the year ended December 31,
1998.
<PAGE>
Multifamily Properties
<TABLE>
<CAPTION>
Total
Average Multifamily Percent of
Year Number Approximate Rental Property Total 1998
Multifamily Completed of Rentable Area Percent Rate Revenue for Property
Property (1) Location (2) Units (3) (Square Feet) Occupied Per Unit 1998 Revenue (4)
- ----------------------- ------------ ---------- ---------- ------------ ------- ----------------------- ----------
Alabama:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CV at Ashford Place Mobile 1983 168 139,000 96.4% $ 514 $ 995,008 0.4%
CV at Rocky Ridge Birmingham 1984 226 259,000 92.9% 612 1,504,737 0.6%
Colony Park Mobile 1975 201 130,000 86.1% 414 882,172 0.3%
CG at Galleria Woods Birmingham 1994 244 261,000 97.0% 665 1,685,198 0.7%
CG at Mountain Brook Birmingham 1987/91 392 393,000 96.7% 688 2,805,188 1.1%
CV at Trussville Birmingham 1996/97 376 410,000 97.1% 685 2,662,530 1.0%
CV at Cahaba Heights Birmingham 1992 125 131,000 100.0% 695 957,168 0.4%
CG at Edgewater Huntsville 1990 500 423,000 (7) 693 2,542,056 1.0%
CV at Inverness Birmingham 1986/87/90 586 395,000 98.6% 595 3,545,719 1.4%
CV at Huntleigh Woods Mobile 1978 233 199,000 94.4% 457 1,222,101 0.5%
CG/CV at Inverness Lakes Mobile 1983/96 482 477,000 (7) 630 2,932,495 1.1%
CV at McGehee Place Montgomery 1986/95 468 404,000 90.1% 608 2,679,894 1.0%
CV at Monte D'Oro Birmingham 1977 200 296,000 98.5% 659 1,547,956 0.6%
Patio Auburn 1966/83/84 240 179,000 87.9% 424 1,057,375 0.4%
CV at Hillcrest Mobile 1981 104 114,000 97.0% 610 684,919 0.3%
CG at Galleria Birmingham 1986/96 1,080 1,195,000 93.9% 617 7,487,917 2.9%
CG at Research Park Huntsville 1987/94 736 809,000 75.3% 655 4,585,282 1.8%
CG at Riverchase Birmingham 1984/91 468 746,000 95.5% 721 3,794,680 1.5%
Ski Lodge Tuscaloosa Tuscaloosa 1976/92 304 273,000 94.4% 415 1,498,359 0.6%
CV at Hillwood Montgomery 1984 160 151,000 95.0% 534 1,035,246 0.4%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Alabama (20 Properties) 7,293 7,384,000 92.4% 613 46,106,000 18.0%
---------- ------------ ------- ------- ------------- ----------
Florida:
CG at Kirkman Orlando 1991 370 337,000 93.0% 771 3,363,400 1.3%
CG at Carrollwood Tampa 1966 244 286,000 95.5% 827 2,239,291 0.9%
CG at Bayshore Bradenton 1997 376 369,000 (7) 720 2,558,815 1.0%
CG at Heathrow Orlando 1997 312 370,000 100.0% 833 3,197,016 1.2%
CG at Hunter's Creek Orlando 1997 496 624,000 95.4% 868 5,010,829 2.0%
CG at Palma Sola Bradenton 1992 340 292,000 92.0% 699 2,409,968 0.9%
CG at Palm Aire Sarasota 1991 248 252,000 97.2% 806 2,363,955 0.9%
CG at Gainesville Gainesville 1989/93/94 560 489,000 98.8% 757 4,688,565 1.8%
CG at Ponte Vedra Jacksonville 1988 240 212,000 92.8% 680 1,717,797 0.7%
CV at Oakleigh Pensacola 1997 176 186,000 94.0% 738 1,512,500 0.6%
CV at River Hills Tampa 1991/97 776 465,000 92.3% 663 4,350,077 1.7%
CV at Lake Mary Orlando 1991/95 504 431,000 99.0% 645 3,873,508 1.5%
CV at Cordova Pensacola 1983 152 116,000 95.0% 492 874,374 0.3%
CG at Lakewood Ranch Sarasota 1999 64 64,000 (7) 937 27,955 (6) 0.0%
CG at Citrus Park Tampa 1999 16 48,000 (7) 851 5,074 (6) 0.0%
CG at Cypress Crossing Orlando 1999 140 183,000 (7) 1,138 314,498 (6) 0.1%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Florida (16 Properties) 5,014 4,724,000 95.5% 701 38,507,622 14.9%
---------- ------------ ------- ------- ------------- ----------
Georgia:
CG at Barrington Macon 1996 176 201,000 96.0% 655 1,204,779 0.5%
CG at Wesleyan Macon 1997 264 288,000 (7) 668 1,675,365 0.7%
CV at North Ingle Macon 1983 140 133,000 88.6% 562 750,802 0.3%
CV at White Bluff Savannah 1986 120 108,000 95.0% 668 857,625 0.3%
CV at Vernon Marsh Savannah 1986/87 178 151,000 92.7% 662 1,267,517 0.5%
CG at Spring Creek Macon 1992/94 296 328,000 96.3% 622 2,096,104 0.8%
CV at Stockbridge Stockbridge 1993/94 240 253,000 97.9% 686 1,881,614 0.7%
CV at Timothy Woods Athens 1996 204 211,000 97.6% 737 1,591,704 0.6%
CV at Walton Way Augusta 1984 256 254,000 91.5% 561 751,423 (6) 0.3%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Georgia (9 Properties) 1,874 1,927,000 90.1% 642 12,076,933 4.7%
---------- ------------ ------- ------- ------------- ----------
Mississippi:
CG at Natchez Trace Jackson 1995/97 328 343,000 93.0% 636 2,477,790 1.0%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Mississippi (1 Property) 328 343,000 93.0% 636 2,477,790 1.0%
---------- ------------ ------- ------- ------------- ----------
South Carolina:
CV at Ashley Plantation Bluffton 1998 200 205,000 99.0% 824 1,295,982 (6) 0.5%
CV at Caledon Wood Greenville 1995/96 350 367,000 82.9% 857 2,433,183 0.9%
---------- ------------ ------- ------- ------------- ----------
Subtotal - South Carolina (2 Properties) 550 572,000 88.8% 845 3,729,165 1.4%
---------- ------------ ------- ------- ------------- ----------
Texas:
CV at Haverhill San Antonio 1997 322 327,000 92.0% 923 1,564,509 (6) 0.6%
---------- ------------ ------- ------- ------------- ----------
Subtotal - Texas (1 Property) 322 327,000 92.0% 923 1,564,509 0.6%
---------- ------------ ------- ------- ------------- ----------
TOTAL (49 Properties) 15,381 15,277,000 93.5% $ 642 (5)$ 104,462,019 40.6%
========== ============ ======= ======= ============= ==========
</TABLE>
(footnotes on next page)
<PAGE>
(1) All Multifamily Properties are 100% owned by CRLP with the exception
of CV at Haverhill, which is 79.8% owned by CRLP. In the listing of
Multifamily Property names, CG has been used as an abbreviation for
Colonial Grand and CV as an abbreviation for Colonial Village.
(2) Year initially completed and, where applicable, year(s) in which
additional phases were completed at the Property.
(3) Units (in this table only) refers to multifamily apartment units.
Number of Units includes all apartment units occupied or available for
occupancy at December 31, 1998.
(4) Percent of Total 1998 Property Revenue represents the Multifamily
Property's proportionate share of all revenue from CRLP's 106
Properties.
(5) Represents weighted average rental rate per unit of the 49 Multifamily
Properties at December 31, 1998.
(6) Represents revenues from the date of CRLP's acquisition/expansion of
this Property in 1998 through December 31, 1998.
(7) Expanded or newly developed property currently undergoing lease-up.
The following table sets forth the total number of apartment units,
percent leased and average base rental rate per apartment unit as of the end of
each of the last five years for the Multifamily Properties:
<TABLE>
<CAPTION>
Average Base
Number Percent Rental Rate
Year-End of Units Leased (2) Per Unit
- -------------------- ------ ---------- ----------
<S> <C> <C> <C>
December 31, 1998 15,381 93.5% $ 642
December 31, 1997 13,759 93.8% $ 631
December 31, 1996 13,617 94.8% $ 579
December 31, 1995 11,239 95.7% $ 552
December 31, 1994 10,972 96.0% $ 531
</TABLE>
(1) Units (in this table only) refers to multifamily apartment units owned at
year end.
(2) Represents weighted average occupancy of the Multifamily Properties that had
achieved stabilized occupancy at the end of the respective period.
Retail Properties
The 40 Retail Properties owned by CRLP at December 31, 1998, contain
a total of approximately 13.5 million square feet (including space owned by
anchor tenants). Twelve of the Retail Properties are located in Alabama, twelve
are located in Florida, seven are located in Georgia, five are located in North
Carolina, one is located in South Carolina, one is located in Tennessee, and two
Retail Properties are located in Virginia. The Retail Properties consist of 15
enclosed regional malls, two power centers, and 23 neighborhood shopping
centers. Nine of the 40 Retail Properties were originally developed by CRLP, two
were acquired in 1994, six were acquired in 1995, four were acquired in 1996, 16
were acquired in 1997, and three were acquired in 1998. All of the Retail
Properties are managed by CRLP.
The following table sets forth certain information relating to the
Retail Properties as of and for the year ended December 31, 1998.
<PAGE>
Retail Properties
<TABLE>
Average
Base
Gross Rent
Leasable Per Total Retail % of
Year Area Number Total Leased Property Total1998
Retail Completed (Square Of Percent Annualized Square Revenue for Prop.
Property (1) Location (2) Feet) (3) Stores Leased (3) Base Rent Foot (4) 1998 Rev.(5)
- ------------------------------------------------------------------------------------------------------------------------------------
Alabama:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Colonial Mall Decatur Decatur 1979/89 494,000 55 88.1% $ 3,464,000 $ 17.48 $ 5,157,527 2.0%
81,000 (6)
Brookwood Village Birmingham 1973/91 463,000 64 88.2% 3,827,000 13.99 6,303,392 2.5%
231,000 (6)
Colonial Mall Gadsden Gadsden 1974/91 492,000 57 96.6% 2,623,000 17.09 4,881,547 1.9%
Colonial Mall Auburn/Opelika Auburn 1973/84/89 399,000 54 89.8% 2,409,000 16.53 4,215,395 1.6%
Colonial Promenade Montgomery Montgomery 1990/97 274,000 39 97.8% 2,242,000 12.70 3,080,774 1.2%
174,000 (6)
Colonial Shoppes McGehee Montgomery 1986 55,000 14 100.0% 581,000 12.23 741,873 0.3%
50,000 (6)
Colonial Shoppes Bellwood Montgomery 1988 37,000 15 94.5% 462,000 11.43 538,858 0.2%
50,000 (6)
Old Springville Shopping Center Birmingham 1982 64,000 9 94.0% 170,000 7.75 537,756 0.2%
Colonial Shoppes Inverness Birmingham 1984 28,000 5 100.0% 400,000 12.58 509,360 0.2%
Olde Town Shopping Village Montgomery 1978/90 39,000 15 89.6% 324,000 9.37 395,500 0.2%
Bel Air Mall Mobile 1966/90/97 1,434,000 92 87.8% 7,394,000 15.11 63,889 (7) 0.0%
Parkway City Mall Huntsville 1975 414,000 44 86.0% 1,423,000 11.35 62,267 (7) 0.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Alabama (12 Properties) 4,779,000 463 90.2% 25,319,000 14.39 26,488,138 10.3%
- ------------------------------------------------------------------------------------------------------------------------------------
Florida:
Colonial Promenade University Park Orlando 1986/89 399,000 41 96.2% 2,961,000 12.56 4,237,886 1.7%
Colonial Promenade Tuskawilla Orlando 1990 217,000 28 100.0% 1,084,000 10.27 1,847,793 0.7%
Colonial Promenade Burnt Store Punta Gorda 1990 199,000 21 91.6% 1,199,000 10.69 1,529,212 0.6%
Colonial Promenade Winter Haven Orlando 1986 197,000 26 92.0% 1,329,000 9.03 1,626,772 0.6%
Northdale Court Tampa 1988 193,000 19 75.1% 1,107,000 10.38 1,941,326 0.8%
55,000 (6)
Colonial Promenade Bear Lake Orlando 1990 125,000 18 70.7% 627,000 8.18 1,737,043 0.7%
Colonial Shoppes Paddock Park Ocala 1988 87,000 20 91.6% 658,000 12.82 847,439 0.3%
Colonial Promenade Bardmoor St. Petersbu1981 158,000 25 74.0% 1,108,000 15.53 1,810,622 0.7%
Colonial Promenade Hunter's Creek Orlando 1993/95 222,000 24 100.0% 1,944,000 15.65 2,622,659 1.0%
Colonial Promenade Wekiva Orlando 1990 209,000 21 80.3% 1,824,000 17.82 2,459,186 1.0%
Colonial Promenade Lakewood Jacksonville1995 195,000 45 93.2% 1,078,000 12.56 2,391,810 0.9%
Orlando Fashion Square Orlando 1973/89/93 711,000 227 94.6% 9,722,000 16.49 10,212,704 (7) 4.0%
361,000 (6)
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Florida (12 Properties) 3,328,000 515 90.6% 24,641,000 13.76 33,264,452 13.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia:
Macon Mall Macon 1975/88/97 757,000 150 92.4% 10,047,000 23.95 17,000,938 6.6%
682,000 (6)
Beechwood Center Athens 1963/92 336,000 41 98.5% 2,411,000 10.56 3,028,040 1.2%
Britt David Shopping Center Columbus 1990 110,000 9 100.0% 711,000 12.85 947,982 0.4%
Lakeshore Mall Gainesville 1984-97 518,000 66 92.8% 3,375,000 17.44 5,636,174 2.2%
Valdosta Mall Valdosta 1982-85 325,000 51 95.1% 2,884,000 16.99 5,625,802 2.2%
74,000 (6)
Glynn Place Mall Brunswick 1986 285,000 47 84.0% 2,443,000 16.32 3,868,983 1.5%
226,000 (6)
Shoppes at Mansell (8) Atlanta 1996/97 - 8 92.9% 366,000 18.78 190,369 (7) 0.1%
Village at Roswell Summit Atlanta 1988 25,000 9 80.4% 371,000 14.56 399,001 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Georgia (7 Properties) 3,338,000 381 92.9% 22,608,000 18.69 36,697,289 14.4%
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina:
Holly Hill Mall Burlington 1969/86/94 422,000 51 95.7% 2,549,000 15.50 5,168,367 2.0%
Mayberry Mall Mount Airy 1968/86 150,000 17 94.6% 713,000 10.64 1,040,238 0.4%
55,000 (6)
Quaker Village Greensboro 1968/88/97 114,000 33 100.0% 1,078,000 12.38 1,480,977 0.6%
Yadkin Town Center Yadkinville 1971/97 94,000 12 100.0% 636,000 7.71 726,603 0.3%
Stanly Plaza Locust 1987/96 47,000 7 100.0% 250,000 7.33 303,020 0.1%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-North Carolina (5 Properties) 882,000 120 96.8% 5,226,000 12.59 8,719,205 3.4%
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina:
Briarcliffe Mall Myrtle Beach1986 488,000 64 94.5% 2,999,000 19.68 7,603,861 3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-South Carolina (1 Property) 488,000 64 94.5% 2,999,000 19.68 7,603,861 3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee:
Rivermont Shopping Center Chattanooga 1986/97 75,000 9 97.1% 210,000 6.72 491,315 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Tennessee (1 Property) 75,000 9 97.1% 210,000 6.72 491,315 0.2%
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia:
Staunton Mall Staunton 1969/86/97 422,000 46 93.5% 1,808,000 8.62 3,116,642 1.2%
Abingdon Towne Centre Abingdon 1987/96 166,000 19 100.0% 1,024,000 10.03 1,191,174 0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Subtotal-Virginia (2 Properties) 588,000 65 95.3% 2,832,000 8.92 4,307,816 1.7%
- -----------------------------------------------------------===========---====================================================-======
Total (40 Properties) 13,478,000 1,617 91.9% $ 83,835,000 $ 14.48 $ 117,572,076 46.0%
- -----------------------------------------------------------===========---===========================================================
</TABLE>
<PAGE>
(footnotes on next page)
(1) All Retail Properties are 100% owned by CRLP, with the exception of
Orlando Fashion Square and Parkway City mall, which are owned 50% by CRLP.
(2) Year initially completed and, where applicable, year(s) in which the
Property was substantially renovated or an additional phase of the
Property was completed.
(3) Total GLA includes space owned by anchor tenants, but Percent Leased
excludes such space.
(4) Includes specialty store space only.
(5) Percent of Total 1998 Property Revenue represents the Retail Property's
proportionate share of all revenue from the 106 Properties.
(6) Represents space owned by anchor tenants.
(7) Represents revenues from the date of CRLP's acquisitions of the Property
in 1998 through December 31, 1998.
(8) This Property is located within the Mansell Business Park and is included
in property total with the Mansell Business Park.
The following table sets forth the total gross leasable area, percent
leased and average base rent per leased square foot as of the end of each of the
last five years for the Retail Properties:
<TABLE>
<CAPTION>
Gross Average
Leasable Area Percent Base Rent Per
Year-End (Square Feet) Leased Leased Square Foot (2)
- -------------------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
December 31, 1998 11,105,000 91.9% $ 14.48
December 31, 1997 8,880,000 93.3% $ 14.38
December 31, 1996 4,856,000 93.8% $ 14.66
December 31, 1995 3,758,000 93.1% $ 13.23
December 31, 1994 2,467,000 95.8% $ 12.61
</TABLE>
(1) Excludes 2,373,000 square feet of space owned by anchor tenants. (2) Average
base rent per leased square foot is calculated using specialty
store year-end base rent figures.
The following table sets out a schedule of the lease expirations for
leases in place as of December 31, 1998, for the Retail Properties:
<TABLE>
<CAPTION>
Net Rentable Annualized Percent of Total
Year of Number of Area Of Base Rent of Annual Base Rent
Lease Tenants with Expiring Leases Expiring Represented by
Expiration Expiring Leases (Square Feet) (1) Leases (1)(2) Expiring Leases (1)
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 242 632,000 7,196,000 8.0%
2000 276 1,352,000 11,308,000 12.5%
2001 198 689,000 8,054,000 8.9%
2002 216 745,000 9,587,000 10.6%
2003 154 639,000 6,874,000 7.6%
2004 91 1,065,000 6,135,000 6.8%
2005 102 316,000 6,120,000 6.8%
2006 93 689,000 7,590,000 8.4%
2007 115 706,000 8,407,000 9.3%
2008 65 611,000 5,325,000 5.9%
Thereafter 66 2,357,000 13,884,000 15.3%
=============== ================ ============== ===========
1,618 9,801,000 $ 90,480,000 100.0%
=============== ================ ============== ===========
<FN>
(1) Excludes 2,373,000 square feet of space owned by anchor tenants and
1,304,000 square feet of space not leased as of December 31, 1998.
(2) Annualized base rent is calculated using base rents as of December 31, 1998.
</FN>
</TABLE>
Office Properties
The 17 Office Properties owned by CRLP at December 31, 1998, contain
a total of approximately 2.7 million rentable square feet. Fourteen of the
Office Properties are located in Alabama (representing 67% of the office
portfolio's net rentable square feet) , one is located in Atlanta, Georgia and
two are located in Florida. The Office Properties range in size from
approximately 30,000 square feet to 536,000 square feet. Four of the Office
Properties were developed by Colonial, five of the Properties were acquired at
various times between 1980 and 1990, four of the Properties were acquired in
1997, and four of the Properties were acquired in 1998. All of the Office
Properties are managed by CRLP.
The following table sets forth certain additional information
relating to the Office Properties as of and for the year ended December 31,
1998.
Office Properties
<TABLE>
<CAPTION>
Average
Base
Rent
Rentable Per Total Office Percent of
Year Area Total Leased Property Total 1998
Office Completed Square Percent Annualized Square Revenue for Property
Property (1) Location (2) Feet Leased Base Rent Foot2) 1998 (3) Revenue (4)
- -------------------- ---------- --------- ----------- -------- ----------- -------- ---------- --------
Alabama:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interstate Park Montgomery 1982-85/89 227,000 92.5% $ 2,816,000 $ 13.71 $ 3,104,381 1.1%
Riverchase Center Birmingham 1984-88 306,000 92.7% 2,727,000 10.05 3,150,860 1.1%
International Park Birmingham 1987/89 93,000 100.0% 2,588,000 14.24 1,432,125 0.6%
Colonial Plaza Birmingham 1982 168,000 34.0% 1,010,000 14.73 2,913,954 1.1%
Progress Center Huntsville 1983-91 225,000 91.0% 1,681,000 9.08 2,093,690 0.8%
Lakeside Office Park Huntsville 1989/90 121,000 100.0% 1,370,000 12.72 1,624,128 0.6%
AmSouth Center Huntsville 1990 157,000 94.2% 2,516,000 17.74 2,973,182 1.2%
P&S Building Gadsden 1946/76/91 40,000 100.0% 178,000 4.50 178,020 0.1%
250 Commerce St Montgomery 1904/81 35,000 100.0% 366,000 10.50 419,008 0.2%
Anderson Block Bldg(5)Montgomery 1981/83 34,000 97.8% 334,000 10.39 121,413 0.0%
Land Title Bldg. Birmingham 1975 30,000 100.0% 393,000 13.19 148,880 0.1%
Independence Plaza Birmingham 1979 106,000 97.0% 1,294,000 13.07 1,460,438 (6) 0.6%
Shades Brook Building Birmingham 1979 35,000 92.5% 151,000 13.82 225,724 (6) 0.1%
Perimeter Corporate
Park Huntsville 1986/89 233,000 99.7% 2,834,000 13.96 3,200,829 (6) 1.2%
----------- -------- ----------- -------- ---------- --------
Subtotal-Alabama (14 Properties) 1,810,000 89.7% 20,258,000 12.58 23,046,632 8.8%
----------- -------- ----------- -------- ---------- --------
Florida:
Concourse Center Tampa 1981/85 290,000 97.7% 2,580,000 14.95 2,344,572 (6) 0.9%
University Park Orlando 1985 71,000 99.4% 769,000 13.47 913,686 0.4%
----------- -------- ----------- -------- ---------- --------
Subtotal-Florida (2 Properties) 361,000 98.0% 3,349,000 14.65 3,258,258 1.3%
----------- -------- ----------- -------- ---------- --------
Georgia:
Mansell Business Park Atlanta 1987/96/97 536,000 96.6% 7,277,000 20.53 8,104,019 3.2%
----------- -------- ----------- -------- ---------- --------
Subtotal-Georgia (1 Property) 536,000 96.6% 7,277,000 20.53 8,104,019 3.2%
=========== ======== =========== ======== ========== ========
TOTAL (17 Properties) 2,707,000 92.2% $ 30,884,000 $ 14.58 $34,408,909 13.3%
=========== ======== =========== ======== ========== ========
<FN>
(1) All Office Properties are 100% owned by CRLP with the exceptions of Anderson
Block and Land Title Building, which are each 33.33% owned by CRLP.
(2) Year initially completed and, where applicable, most recent year in which
the Property was substantially renovated or in which an additional phase of
the Property was completed.
(3) Total 1998 Office Property revenue is CRLP's share (based on its percentage
ownership of the property) of total Office Property revenue, unless
otherwise noted.
(4) Percent of Total 1998 Property Revenue represents the Office Property's
proportionate share of all revenue from CRLP's 106 Properties.
(5) CRLP has a leasehold interest in this Property.
(6) Represents revenues from the date of CRLP's acquisition of this Property
in 1998 through December 31, 1998.
</FN>
</TABLE>
The following table sets out a schedule of the lease expirations for
leases in place as of December 31, 1998, for the Office Properties (including
all lease expirations for partially-owned Properties).
<TABLE>
<CAPTION>
Net Rentable Annualized Percent of Total
Year of Number of Area Of Base Rent of Annual Base Rent
Lease Tenants with Expiring Leases Expiring Represented by
Expiration Expiring Leases(Square Feet) (1) Leases (1)(2) Expiring Leases (1)
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1999 84 455,000 5,900,000 19.1%
2000 107 487,000 6,348,000 20.6%
2001 62 332,000 3,638,000 11.8%
2002 44 294,000 3,814,000 12.3%
2003 43 347,000 4,867,000 15.8%
2004 14 126,000 1,784,000 5.8%
2005 5 148,000 2,131,000 6.9%
2006 4 110,000 1,253,000 4.1%
2007 2 39,000 636,000 2.1%
2008 2 26,000 494,000 1.6%
Thereafter 3 2,000 19,000 0.1%
========== ============= =============== ============
370 2,366,000 $ 30,884,000 100.0%
========== ============= =============== ============
<FN>
(1) Excludes 341,000 square feet of space not leased as of December 31, 1998.
(2) Annualized base rent is calculated using base rents as of December 31, 1998.
</FN>
</TABLE>
The following sets forth the net rentable area, total percent leased
and average base rent per leased square foot for each of the last five years for
the Office Properties:
<TABLE>
<CAPTION>
Total Average Base
Rentable Area Percent Rent Per Leased
Year-end (Square Feet) Leased Square Foot (1)
- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1998 2,707,000 92.2% $ 14.58
December 31, 1997 1,859,000 95.5% $ 12.18
December 31, 1996 1,009,000 97.4% $ 13.80
December 31, 1995 1,009,000 94.0% $ 13.52
December 31, 1994 1,009,000 95.0% $ 12.99
</TABLE>
(1) Average base rent per leased square foot is calculated using base rents as
of December 31 for each respective year.
Undeveloped Land
CRLP owns five undeveloped land parcels consisting of approximately
144.7 acres (collectively, the "Land"). These parcels are adjacent to three of
the Properties and are suitable for potential expansion at those Properties. The
Land suitable for expansion is located adjacent to a Multifamily Property and
two Retail Properties. Land adjacent to Multifamily Properties typically will be
considered for potential development of another phase of an existing Multifamily
Property if CRLP determines that the particular market can absorb additional
apartment units. CRLP currently owns one such parcel. For expansions at Retail
Properties, CRLP owns parcels both contiguous to the boundaries of Retail
Properties, which would accommodate expansion of the mall or shopping center,
and outparcels which are suitable for restaurants, financial institutions or
free standing retailers. CRLP owns three such parcels.
Property Markets
The table below sets forth certain information with respect to the
geographic concentration of the Properties as of December 31, 1998.
Geographic Concentration of Properties
<TABLE>
<CAPTION>
Percent
Units Total Of Total
(Multifamily) GLA NRA 1998 Property 1998 Property
State (1) (Retail) (2) (Office)(3) Revenue Revenue
- -------------------- ---------- ------------ ----------- ------------ --------
<S> <C> <C> <C> <C> <C>
Alabama 7,293 4,779,000 1,810,000 $ 95,640,770 37.4%
Florida 5,014 3,328,000 361,000 75,030,332 29.5%
Georgia 1,874 3,338,000 536,000 56,878,241 22.3%
Mississippi 328 -0- -0- 2,477,790 1.0%
North Carolina -0- 882,000 -0- 8,719,205 3.4%
South Carolina 550 488,000 -0- 11,333,026 3.9%
Tennessee -0- 75,000 -0- 491,315 0.2%
Texas 322 -0- -0- 1,564,509 0.6%
Virginia -0- 588,000 -0- 4,307,816 1.7%
---------- ------------ ----------- ------------ --------
Total 15,381 13,478,000 2,707,000 $256,443,004 100.0%
========== ============ =========== ============ ========
<FN>
(1) Units (in this table only) refer to multifamily apartment units. (2) GLA
refers to gross leaseable area of retail space. (3) NRA refers to net rentable
area of office space.
</FN>
</TABLE>
CRLP believes that the demographic and economic trends and
conditions in the markets where the Properties are located indicate a potential
for continued growth in property net operating income. The Properties are
located in a variety of distinct submarkets within Alabama, Florida, Georgia,
Mississippi, North Carolina, South Carolina, Tennessee, Texas and Virginia;
however, Birmingham, Huntsville and Montgomery, Alabama, Orlando, Tampa and
Sarasota/Bradenton, Florida, and Macon and Atlanta, Georgia, are CRLP's primary
markets. CRLP believes that its markets in these nine states, which are
characterized by stable and increasing population and employment growth, should
continue to provide a steady demand for multifamily, retail, and office
properties.
<PAGE>
Mortgage Financing
Certain of the Properties are subject to mortgage indebtedness. The
Properties whose financial results are consolidated in the financial statements
of CRLP are subject to existing mortgage indebtedness and other notes payable in
an aggregate amount as of December 31, 1998, of approximately $909.3 million
carrying a weighted average interest rate of 7.07% and a weighted average
maturity of 6.6 years. The mortgage indebtedness on the Properties as of
December 31, 1998, is set forth in the table below:
Mortgage Debt and Notes Payable
<TABLE>
<CAPTION>
Anticipated
Annual Debt
Principal Service Estimated
Interest Balance (as of (1/1/99- Maturity Balance Due
Property (1) Rate 12/31/98) 12/31/99) Date (2) on Maturity
- ------------------------------------ ----------- ---------------- --------------- ------------ ----------------
Multifamily Properties:
<S> <C> <C> <C> <C> <C> <C>
CG at Carrollwood 8.870% 6,230,000 $ 552,601 03/05/05 $ 6,230,000
CG at Natchez Trace 7.950% 6,830,143 574,150 09/01/35 47,813
CG at Natchez Trace 8.000% 4,066,699 339,941 02/01/37 29,071
CV at Rocky Ridge 5.900% 6,000,000 354,000 08/01/02 (5) 6,000,000
CV at Rocky Ridge 7.625% 1,245,000 190,137 08/01/02 (3) 841,667
CG at Galleria Woods 6.875% 7,101,608 7,345,726 06/15/99 7,035,235
CG at Mountain Brook 8.000% 11,929,545 1,141,187 01/10/00 11,742,632
CV at Cahaba Heights 8.060% 3,607,835 374,615 05/10/00 3,502,055
CV at Inverness 4.520% 9,900,000 447,480 06/15/26 (4) 9,685,749
CV at Inverness Lakes 5.900% 4,000,000 236,000 08/01/02 (5) 4,000,000
CV at Inverness Lakes 7.625% 1,583,333 206,257 08/01/02 (6) 1,234,167
CG at Galleria 4.440% 22,400,000 994,560 06/15/26 (4) 22,400,000
CG at Research Park 4.490% 12,775,000 573,598 06/15/26 (4) 12,775,000
CV at White Bluff 4.520% 4,500,000 203,400 07/01/26 (4) 4,500,000
CV at Vernon Marsh 4.570% 3,400,000 155,380 07/01/26 (4) 3,400,000
CV at Hillwood 5.900% 3,330,000 196,470 08/01/02 (5) 3,300,000
CV at Hillwood 7.625% 1,515,000 197,820 08/01/02 (6) 1,179,167
Retail Properties:
Colonial Promenade Hunter's Creek 8.800% 10,089,395 1,061,620 10/01/01 9,578,044
Mayberry Mall 9.220% 3,350,078 363,445 10/01/01 3,237,064
Colonial Promenade Montgomery 9.250% 10,810,000 999,925 07/01/00 10,810,000
Rivermont Shopping Center 10.125% 1,693,400 273,553 09/01/08 52,091
Colonial Promenade University Park 8.870% 14,445,000 1,281,272 03/05/05 14,445,000
Village at Roswell Summit 8.930% 1,628,831 170,306 09/01/05 1,401,860
Office Properties:
2100 International Park 8.650% 1,967,410 2,095,046 10/01/99 1,931,425
1800 International Park 6.500% 1,793,554 1,880,990 10/01/99 1,793,554
Interstate Park 8.500% 4,208,107 642,311 08/01/03 2,648,144
Riverchase Center 7.880% 8,238,096 902,959 12/01/00 7,766,043
Mansell Overlook 100 8.250% 17,419,860 1,589,386 01/10/08 15,285,811
Mansell One Story Bldg. 10 8.625% 13,876,373 1,331,115 06/01/00 13,682,324
Perimeter Corporate Park 8.680% 5,536,731 609,507 12/01/03 4,858,772
Other debt:
Land Loan 7.020% 642,641 45,113 09/30/00 649,897
Line of Credit, incl. Comp. Bid 6.492% (7) 174,489,000 11,327,826 07/10/00 (8) 174,489,000
Unsecured Senior Notes 7.500% 64,916,320 4,868,724 07/15/01 65,000,000
Unsecured Senior Notes 8.050% 64,770,044 5,213,989 07/15/06 65,000,000
Medium Term Notes 7.050% 50,000,000 3,525,000 12/15/03 50,000,000
Medium Term Notes 7.160% 50,000,000 3,580,000 01/17/03 50,000,000
Medium Term Notes 6.960% 75,000,000 5,220,000 07/26/04 75,000,000
Medium Term Notes 6.960% 25,000,000 1,740,000 08/01/05 25,000,000
Medium Term Notes 6.980% 25,000,000 1,745,000 09/26/05 25,000,000
Senior Notes 7.000% 174,033,125 12,182,319 07/14/07 175,000,000
================ =============== ================
TOTAL $ 909,322,129 $ 76,732,725 $ 890,531,585
================ =============== ================
</TABLE>
(footnotes presented on the next page)
<PAGE>
- ----------------
(1) As noted in the table, certain Properties were developed in phases and
separate mortgage indebtedness may encumber each of the various phases. In
the listing of property names, CG has been used as an abbreviation for
Colonial Grand and CV as an abbreviation for Colonial Village.
(2) All of the mortgages can be prepaid at any time, subject to prepayment
penalties calculated typically on a percentage basis, except for the
mortgages encumbering CV at Rocky Ridge, CV at Inverness Lakes, and CV at
Hillwood, which are closed to prepayment for varying lengths of time.
(3) The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the
loans is August 1, 2007.
(4) These loans are financed through tax-exempt bonds which are credit
enhanced by Fannie Mae. The loans, which bear interest at a weekly
variable interest rate, require monthly interest payments through June
2006 and principal and interest payments from July 2006 through June 2026.
The weighted average interest rate of these three was 4.51% at December
31, 1998. On February 15, 1999, CRLP entered into an interest rate swap
for these bonds at a rate of 3.23%
(5) The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the
loans is August 1, 2022.
(6) The maturity date noted represents the date on which credit enhancement
expires for the tax-exempt municipal bonds put in place as part of the
original financing for the Property. The stated maturity date for the
loans is August 1, 2010.
(7) This line of credit facility bears interest at a variable rate, based on
LIBOR plus a spread that ranges from 80 to 135 basis points. At December
31, 1998, line of credit facility bore interest at a rate of 95 basis
points above LIBOR. The facility also includes a competitive bid feature
that allows CRLP to convert up to $125 million under the line of credit to
a fixed rate, for a fixed term not to exceed 90 days. At December 31,
1998, $65 million was outstanding under a competitive bid loan which bore
interest at a weighted average rate of 6.29%.
(8) This credit facility has a term of two years beginning in July 1998 and
provides for a two-year amortization in the event of non-renewal.
In addition to the foregoing mortgage debt, the two Office Properties
and one Retail Property in which CRLP owns partial interests (and which
therefore are not consolidated in the financial statements of CRLP) also are
subject to existing mortgage indebtedness. CRLP's pro-rata share of such
indebtedness as of December 31, 1998, was $33,512,000 which carried a weighted
average interest rate of 6.9%. The maturity dates of these loans range from May
31, 1999 to January 15, 2006 and as of December 31, 1998, the loans had a
weighted average maturity of 6.6 years.
Item 3. Legal Proceedings.
Neither CRLP nor the Properties are presently subject to any material
litigation nor, to CRLP's knowledge, is any material litigation threatened
against CRLP or the Properties, other than routine litigation arising in the
ordinary course of business which is expected to be covered by liability
insurance.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to CRLP's unit holders during the fourth
quarter of 1998.
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters.
There is no established public trading market for the Units. As of
March 10, 1999, there were 76 holders of record of Units.
CRLP has made consecutive quarterly distributions since its formation
in the third quarter of 1993. CRLP's ability to make distributions depends on a
number of factors, including its net cash provided by operating activities,
capital commitments and debt repayment schedules. Holders of Units are entitled
to receive distributions when, as and if declared by the Board of Trustees of
the Company, its general partner, out of any funds legally available for that
purpose.
The following table sets forth the distributions per Unit paid by
CRLP during the periods noted:
Calendar Period Distribution
--------------------------------------
1998:
First Quarter...... $.55
Second Quarter..... $.55
Third Quarter...... $.55
Fourth Quarter..... $.55
1997:
First Quarter...... $.52
Second Quarter..... $.52
Third Quarter...... $.52
Fourth Quarter..... $.52
Item 6. Selected Financial Data.
The following table sets forth selected financial and operating
information on a historical basis for CRLP for each of the five years ended
December 31, 1998.
<TABLE>
<CAPTION>
Dollar amounts in thousands, except unit data 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------
OPERATING DATA
<S> <C> <C> <C> <C> <C>
Total revenue $ 257,367 $ 184,126 $ 134,881 $ 111,437 $ 63,958
Expenses:
Depreciation and amortization 48,647 33,278 23,533 20,615 13,060
Other operating expenses 87,972 63,581 46,819 42,282 24,011
Income from operations 120,748 87,267 64,529 48,540 26,887
Interest expense 52,063 40,496 24,584 23,972 10,820
Other income (expense), net (62) 3,069 1,104 674 582
Income before extraordinary items 68,623 49,840 41,049 25,242 16,650
Dividends to preferred unitholders 10,938 1,671 -- -- --
Net income available to common unitholders 57,284 44,519 40,538 25,242 16,650
Per unit - basic and diluted:
Net income 1.64 1.55 1.58 1.28 1.17
Distributions 2.20 2.08 2.00 1.90 1.73
- ----------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA
Land, buildings, and equipment, net $ 1,566,840 $ 1,268,430 $ 801,798 $ 624,514 $ 555,577
Total assets 1,756,548 1,396,660 947,947 681,297 603,135
Total debt 909,322 702,044 506,435 354,100 344,234
- ----------------------------------------------------------------------------------------------------------------------
OTHER DATA
Total properties (at end of period) 106 93 73 61 55
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.
GENERAL
Colonial Realty Limited Partnership, a Delaware limited partnership is the
operating partnership of Colonial Properties Trust, an Alabama real estate
investment trust (the "Company") whose shares are listed on the New York Stock
Exchange. The Company is engaged in the ownership, development, management, and
leasing of multifamily communities, retail malls and shopping centers, and
office buildings. The Company owns and operates properties in nine states in the
Sunbelt region of the United States. As of December 31, 1998, CRLP's real estate
portfolio consisted of 49 multifamily communities, 40 retail properties, and 17
office properties.
CRLP manages its business with three separate and distinct operating divisions:
Multifamily, Retail, and Office. Each division has an Executive Vice President
that oversees growth and operations and has a separate management team that is
responsible for acquiring, developing, and leasing properties within each
division. This structure allows CRLP to utilize specialized management personnel
for each operating division. Constant communication among the Executive Vice
Presidents and centralized functions of accounting, information technology, due
diligence and administrative services provide CRLP with unique synergy allowing
CRLP to take advantage of a variety of investment opportunities. Decisions for
investments in acquisitions and developments and for dispositions are also
centralized.
The following discussion should be read in conjunction with the Consolidated
Financial Statements and Notes to Consolidated Financial Statements appearing
elsewhere in this report.
Any statement contained in this report which is not a historical fact, or which
might be otherwise considered an opinion or projection concerning CRLP or its
business, whether express or implied, is meant as, and should be considered, a
forward-looking statement as that term is defined in the Private Securities
Litigation Reform Act of 1996. Forward-looking statements are based upon
assumptions and opinions concerning a variety of known and unknown risks,
including but not limited to changes in market conditions, the supply and demand
for leasable real estate, interest rates, increased competition, changes in
governmental regulations, and national and local economic conditions generally,
as well as other risks more completely described in CRLP's filings with the
Securities and Exchange Commission. If any of these assumptions or opinions
prove incorrect, any forward-looking statements made on the basis of such
assumptions or opinions may also prove materially incorrect in one or more
respects.
Results of Operations - 1998 vs. 1997
In 1998, CRLP experienced growth in revenues, operating expenses, and net income
which primarily resulted from the acquisition and development of 40 properties
and the expansion of 13 properties during 1998 and 1997. As a result of the
acquisitions, developments, and expansions CRLP's net income before dividends to
preferred unitholders increased by $22.0 million, or 47.7%, for 1998 when
compared to 1997. On a per unit basis, net income was $1.64 for 1998, a 5.2%
increase, compared to $1.55 for 1997.
Revenues - Total revenues increased by $73.2 million, or 39.8%, during 1998 when
compared to 1997. Of this increase, $61.7 million relates to revenues generated
by properties that were acquired or developed during 1998 and 1997, net of
revenues of properties disposed of in 1997. The retail division accounted for
the majority of the overall revenue increase, approximately $46.4 million, while
the office and multifamily divisions accounted for $18.2 million and $9.0
million, respectively. The divisional revenue growth was primarily attributable
to the acquisition, development, and expansion of 21 retail properties, 22
multifamily properties, and 10 office properties during 1998 and 1997. The
remaining increase relates to increases in rental rates at existing properties
and lease buyouts during 1998.
Operating Expenses - Total operating expenses increased by $39.8 million, or
41.1%, during 1998 when compared to 1997. The majority of this increase relates
to additional property operating expenses of $20.3 million and additional
depreciation of $13.4 million associated with properties that were acquired,
developed, or expanded during 1998 and 1997, net of operating expenses of
properties disposed of during 1997. Depreciation expense on existing properties
increased by $1.5 million during 1998 when compared to 1997. Divisional property
operating expenses increased by $14.8 million, $2.8 million, and $5.5 million
for retail, multifamily, and office divisions, respectively, during 1998 when
compared to 1997. The increase in divisional property operating expenses was
primarily attributable to the acquisition, development, and expansion of 21
retail properties, 22 multifamily properties, and 10 office properties during
1998 and 1997. The remaining increase primarily relates to increases in
operating expenses at existing properties, and overall increases in corporate
overhead and personnel costs associated with CRLP's continued growth.
Other Income and Expenses - Interest expense increased by $14.7 million, or
39.3%, during 1998 when compared to 1997. The increase in interest expense is
primarily attributable to the assumption of $5.7 million of debt, the issuance
of $175 million in Senior Unsecured Notes, and the net increased usage of CRLP's
Line of Credit in conjunction with the financing of acquisitions and
developments.
Results of Operations - 1997 vs. 1996
In 1997, CRLP experienced growth in revenues, operating expenses, and net income
which resulted from the acquisition and development of 38 properties and the
expansion of 7 properties during 1997 and 1996. As a result of the acquisitions
and developments, CRLP's net income before dividends to preferred unitholders
increased by $5.0 million, or 18.0%, for 1997 when compared to 1996. On a per
unit basis, net income was $1.55 for 1997, a 1.9% decrease, compared to $1.58
for 1996. The decrease in net income available to common shareholders, on a per
share basis, is directly attributable to the extraordinary loss from early
extinguishment of debt and the dividends paid to the preferred shareholders in
1997.
Revenues - Total revenues increased by $49.2 million, or 36.5%, during 1997 when
compared to 1996. Of this increase, $43.4 million relates to revenues generated
by properties that were acquired or developed during 1997 and 1996. The
remaining increase primarily relates to increases in rental rates at existing
properties. The retail division accounted for the majority of the overall
revenue increase, approximately $25.4 million, while the multifamily and office
divisions accounted for $14.6 million and $8.9 million, respectively. The
divisional revenue growth was primarily attributable to the acquisition,
development, and expansion of 20 retail properties, 19 multifamily properties,
and 6 office properties during 1997 and 1996.
Operating Expenses - Total operating expenses increased by $26.5 million, or
37.7%, during 1997 when compared to 1996. The majority of this increase relates
to additional property operating expenses of $13.3 million and additional
depreciation of $8.2 million associated with properties that were acquired or
developed during 1997 and 1996. Depreciation expense on existing properties
increased by $1.8 million during 1997 when compared to 1996. Divisional property
operating expenses increased by $7.4 million, $2.1 million, and $4.9 million for
retail, multifamily, and office divisions, respectively, during 1997 when
compared to 1996. The increase in divisional property operating expenses was
primarily attributable to the acquisition, development, and expansion of 20
retail properties, 19 multifamily properties, and 6 office properties during
1997 and 1996. The remaining change primarily relates to the resolution of prior
year reserves for certain tax contingencies, increases in operating expenses at
existing properties, and overall increases in corporate overhead and personnel
costs associated with CRLP's continued growth.
Other Income and Expenses - Interest expense increased by $15.9 million, or
64.7%, during 1997 when compared to 1996. The increase in interest expense is
primarily attributable to the assumption of $75 million of debt, the issuance of
$175 million in Medium-Term Notes, and the increased usage of CRLP's Line of
Credit in conjunction with the financing of acquisitions and developments.
LIQUIDITY AND CAPITAL RESOURCES
During 1998, CRLP invested $358.1 million, net of disposition, in the
acquisition and development of properties. This acquisition and development
activity increased CRLP's multifamily, retail, and office property holdings.
CRLP financed the growth through proceeds from public offerings of equity and
debt totaling $315 million during 1998, advances on its bank line of credit, the
issuance of limited partnership units in CRLP, the proceeds from joint ventures,
and cash from operations. CRLP also used these sources of funds to repay $29.5
million on five mortgage loans.
Acquisition and Development Activities
Multifamily Properties - During 1998, CRLP added 1,026 apartment units through
the acquisition of four multifamily communities at an aggregate cost of $48.2
million. CRLP also completed development of 596 apartment units in seven
multifamily communities during 1998 and acquired land on which it intends to
develop additional multifamily communities during 1999. The aggregate investment
in the multifamily developments during 1998 was $90.4 million.
As of December 31, 1998, CRLP has 2,426 apartment units in 12 multifamily
communities under development or expansion. Management anticipates that the 12
multifamily projects will be completed during 1999 through 2001. Management
estimates that it will invest an additional $115 million to complete these
multifamily communities.
Retail Properties - During 1998, CRLP added 2.9 million square feet of retail
shopping space (including 1.5 million square feet in two joint ventures) through
the acquisition of a community shopping center, an enclosed mall and investment
in two joint ventures at a net cost of $117.5 million. In addition, CRLP began
the development of a community shopping center in Birmingham, Alabama. The
aggregate investment in the retail development during 1998 was $8.8 million.
Management anticipates that it will invest an additional $25.7 million to
complete the retail development.
Office Properties - During 1998, CRLP increased its office portfolio by 827,000
square feet with the acquisition of five office properties at an aggregate cost
of $87.9 million. In addition, CRLP began development on two office properties.
The aggregate investment in the office developments during 1998 was $5.3
million. Management estimates that it will invest an additional $24.3 million to
complete these properties.
Joint Ventures
During the fourth quarter of 1998, CRLP entered into two joint ventures. On
December 9, 1998, CRLP and CBL & Associates Properties, Inc. formed a joint
venture to acquire Parkway City Mall in Huntsville, Alabama for $11.4 million.
In addition to the purchase of the property, the joint venture will redevelop
the mall, with all related costs being shared equally by both venture partners.
At December 31, 1998, CRLP had invested approximately $5.7 million in the joint
venture and had an ending net investment balance of $5.9 million. On December
29, 1998, CRLP and Prudential Real Estate Investors, through its Property
Investment Separate Account Fund (Prudential), entered into a joint venture to
own Orlando Fashion Square. In connection with the formation of the joint
venture, Prudential acquired a 50% interest in Orlando Fashion Square from CRLP
for $52 million which approximated both book value and fair value of the
recently acquired property. Subsequent to formation, the joint venture leveraged
the property with a $65 million nonrecourse note and the proceeds from the
issuance of the note were distributed equally to the joint venture partners.
CRLP's investment in the joint venture at December 31, 1998 was $20.2 million.
CRLP used the proceeds from the Prudential joint venture to fund acquisition and
development activities. Both joint ventures have been accounted for using the
equity method.
Financing Activities
CRLP funded a large portion of its acquisitions and developments through the
issuance of debt securities and through cash contributions from the Company
through the issuance of its common and preferred shares. During 1998, the
Company and CRLP completed the following equity and debt transactions:
Common Share Offerings
(in thousands)
--------------------------------
Number of Price Per Gross Offering Net
Date ............... Common Share Proceeds Costs Proceeds
- -------------------- --------- ------- --------- --------- ---------
February ........... 375,540 $ 30.00 $ 11,266 $ 627 $ 10,639
March .............. 806,452 $ 31.00 $ 25,000 $ 1,389 $ 23,611
March .............. 381,046 $ 31.00 $ 11,182 $ 656 $ 11,156
April .............. 3,046,400 $ 30.12 $ 91,773 $ 4,973 $ 86,800
Debt Offering
Gross
Type of Proceeds
Date Note Maturity Rate (in thousands)
- -------------- -------- ---------- ---- ------------
July Senior July, 2007 7.00% $ 175,000
On July 10, 1998, CRLP increased the borrowing capacity under its unsecured line
of credit from $200 million to $250 million. The credit facility, which is used
by CRLP primarily to finance additional property investments, bears interest at
a rate ranging between 80 and 135 basis points above LIBOR and is renewable in
July 2000. The line of credit agreement includes a competitive bid feature that
will allow CRLP to convert up to $125 million under the line of credit to a
fixed rate, for a fixed term not to exceed 90 days. As of December 31, 1998, the
balance outstanding on CRLP's line of credit was $174.5 million.
At December 31, 1998, CRLP's total outstanding debt balance was $909.3 million.
The outstanding balance includes fixed-rate debt of $681.2 million, or 74.9%,
and floating-rate debt of $228.1 million, or 25.1%. CRLP has obtained interest
rate protection for $50.0 million of the floating-rate debt. The cap agreement
limits the debt to an interest rate of 8.00% through May 2, 2000. CRLP's total
market capitalization as of December 31, 1998 was $2.0 billion and its ratio of
debt to total market capitalization was 45.1%. Certain loan agreements of CRLP
contain restrictive covenants which, among other things, require maintenance of
various financial ratios. At December 31, 1998, CRLP was in compliance with
these covenants.
CRLP has only limited involvement with derivative financial instruments and does
not use them for trading purposes. Interest rate cap agreements and interest
rate swaps are used to reduce the potential impact of increases in interest
rates on variable-rate debt. Treasury lock agreements are used by CRLP to lock
in interest rates in connection with public debt offerings. CRLP has entered
into an interest rate cap agreement which limits debt of $50 million to an
interest rate of 8.00% through May 2, 2000. Subsequent to year-end, CRLP entered
into two interest rate swap agreements. On January 4, 1999, CRLP entered into an
interest rate swap for $50 million of its line of credit at 4.97% plus 80 to 135
basis points and on January 15, 1999, CRLP entered into an interest rate swap
for $52 million of tax exempt bonds at a rate of 3.23%. Both of these interest
rate swap agreements have one-year terms and any payments made or received under
the agreements are recognized as adjustments to interest expense as incurred.
CRLP is exposed to credit losses in the event of nonperformance by the
counterparties to its interest rate cap and nonderivative financial assets but
has no off-balance-sheet credit risk of accounting loss. CRLP anticipates,
however, that counterparties will be able to fully satisfy their obligations
under the contracts. CRLP does not obtain collateral or other security to
support financial instruments subject to credit risk but monitors the credit
standing of counterparties.
OUTLOOK
Management intends to maintain CRLP's strength through continued
diversification, while pursuing acquisitions and developments that meet the
Company's criteria for property quality, market strength, and investment return.
Management will continue to use its line of credit to provide short-term
financing for acquisition and development activities and plans to continue to
replace significant borrowings under the bank line of credit with funds
generated from the sale of additional equity securities and permanent financing,
as market conditions permit. Management believes that these potential sources of
funds, along with the possibility of issuing limited partnership units of CRLP
in exchange for properties, will provide CRLP with the means to finance
additional acquisitions and development.
In addition to the issuance of equity and debt, management is investigating
alternate financing methods and sources to raise future capital. Private
placements, joint ventures, and non-traditional equity and debt offerings are
some of the alternatives CRLP is contemplating. The Company continues to work
diligently to improve its credit rating, in order to reduce its cost of raising
future capital. Management anticipates that its net cash provided by operations
and its existing cash balances will provide the necessary funds on a short- and
long-term basis to cover its operating expenses, interest expense on outstanding
indebtedness, recurring capital expenditures, and dividends to shareholders in
accordance with Internal Revenue Code requirements applicable to real estate
investment trusts.
YEAR 2000 ISSUE
Overview of Y2K Problem
The Year 2000 or "Y2K" problem refers to the inability of many existing computer
programs having time-sensitive software to recognize a date using "00" as the
year 2000. Instead, the computer programs interpret such data as the year 1900.
This failure to accurately recognize the year 2000 and other key dates could
result in a variety of problems ranging from data miscalculations to the failure
of entire systems. In an attempt to eliminate or minimize this potential risk,
CRLP has initiated an effort to identify, understand, and address the myriad of
issues associated with the Y2K problem. CRLP has identified two main areas where
potential Y2K problems exist: (a) Property Management Systems and; (b)
Information Systems.
Phase One - Assessing CRLP's Y2K Readiness
As a result of potential risks posed by Y2K problems on CRLP's operations, in
the early months of 1998, CRLP formed a Year 2000 Committee to oversee, manage,
and implement a Year 2000 Compliance Program (the "Program"). The Committee is
comprised of representatives from senior management and various departments and
advisors at the home and regional offices, including the telecommunications,
information systems, and office services departments. Because of the
wide-ranging implications of the Y2K problem, management decided to carry out
the Program in multiple phases over the remainder of 1998 and 1999. Many of the
phases of the Program are being carried out simultaneously.
The initial step in assessing CRLP's Y2K readiness consisted of identifying
systems that are date sensitive and, accordingly, could pose potential Y2K
problems. The process included an examination of information technology and
non-information technology systems at CRLP's home and regional offices and at
CRLP's properties. The initial step of identifying systems has been completed by
CRLP's information services department and building services department through
a combination of physical inspections and informational interviews with Company
employees.
Having identified systems that could have a potential Y2K problem, CRLP is
attempting to determine which of the systems actually have a Y2K problem. Much
of the required information is within the exclusive control of CRLP's vendors
and manufacturers, who are being contacted through standard form letters and
telephone calls requesting such information. In the case of property management
systems, a database was compiled for the types of equipment, names of
manufacturers and model numbers. The following is a summary of the Phase One
results obtained to date.
Property Management Systems
CRLP has identified six categories of property management systems in which it
has the most exposure to potential Y2K problems. These categories include:
o Building automation (e.g., energy management, HVAC) o Security card access o
Fire and life safety o Elevator o Garage revenue control o Office equipment
In April 1998, CRLP began gathering data from vendors to catalog the equipment
in all of its buildings. To date, approximately 75% of the information requested
has been received. CRLP does not expect to receive 100% of the information
requested due to a number of nonresponsive vendors or unavailable information.
All of the responses have confirmed that their systems would not be affected in
an adverse way due to the Y2K date change. The Y2K steering committee is in the
process of evaluating if any of these property management systems are mission
critical in nature and would have a negative impact on CRLP's ability to conduct
business if a failure occurs. At this time CRLP does not believe these systems
are mission critical. Regardless, efforts continue to obtain additional evidence
from vendors concerning these systems such as processes followed, test scripts,
and actual findings. Once received, CRLP will further evaluate these systems and
will determine if it will be necessary to confirm the information received from
the vendors. Due to the positive responses received CRLP does not feel that this
will be necessary.
Information Systems
Information systems fall into four general categories: Accounting and property
management; network operating systems; desktop software; and secondary systems.
Accounting and Property Management - The general ledger and property management
software systems are not currently compliant. However, new versions have been
written and are stated to be Y2K compliant by the supplying vendor. CRLP is
currently in the process of testing the new versions and the expected schedule
for confirming compliance is as follows:
o System testing - First Quarter 1999 o Test software upgrades - First and
Second Quarter 1999 o Begin installation of upgrades - Second Quarter 1999 o
Full Y2K Compliance - Second and Third Quarter 1999
New versions of the general ledger software system were written and delivered to
CRLP during the first quarter of 1999. CRLP found the new versions would not run
in the current environment. The vendor continues to develop the software systems
and has represented to CRLP that it expects to deliver Y2K compliant systems
during the early part of the third quarter. Upon receipt, CRLP will test the
systems and the software upgrades and, assuming that the systems and upgrades
are operational, will install the systems in the third and fourth quarters with
a goal of becoming fully compliant during the early part of the fourth quarter.
While the vendor is revising the systems, CRLP intends to pursue test
alternative software systems offered by other vendors. If CRLP finds an
acceptable alternative software system that is Y2K compliant, it may implement
that system instead of the system being revised by CRLP's current vendor. If
CRLP were to implement an alternative system, CRLP may be able to achieve full
Y2K compliance as early as the third quarter.
Network Operating Systems - Management believes that the network operating
servers are currently Y2K compliant subject to certain possible exceptions.
Microsoft Corporation recently announced that Windows NT 4.0, which CRLP uses,
is not Y2K compliant with service pak level III. However, Microsoft has stated
that service pak level IV will need to be loaded to become completely Y2K
compliant. Upgrades of Company network operating systems are expected to be
installed in the first and second quarters of 1999, bringing the network
operating servers into full compliance. Management believes that testing of this
new software will not be necessary, as it has already been proven in the
industry to be Y2K compliant.
Desktop Software - Management has reviewed all desktop systems and software
applications, identified those that are not in compliance and compiled a list of
necessary upgrades. Those upgrades have been completed for 95% of the current
systems and are now Y2K compliant. The remaining upgrades for 5% of the systems
are anticipated to be completed by the end of the first quarter. As part of the
continuing efforts to be Y2K compliant, every new system is tested upon
installation.
The status of desktop compliance is as follows:
o Systems (hardware and software) testing - Complete
o Installation of updated software that also provides Y2K compliance - November
1998 o Complete installation/full compliance - First Quarter 1999
Secondary Information Systems - "Secondary" information systems include, but are
not limited to: payroll; fixed-asset system; and forecasting modeling software,
which provide projections on property returns and other items. Letters have been
received confirming Y2K compliance from the vendors of CRLP's secondary systems.
The number of computers related to these secondary systems are nominal and
testing is expected to be completed by the end of the second quarter of 1999.
Telecommunications Systems - In general, management believes that the internal
telephone systems are not date sensitive and should not be materially affected
by Y2K problems. A letter has been received from the telephone system vendor
confirming Y2K readiness of the voice mail system, telephone system and
telephone hardware. Testing will be completed by the end of the second quarter
of 1999.
Phase Two - Determining the Cost of Achieving Y2K Readiness and Implementing the
Y2K Action Plan
During the last two years, costs for new technology to ensure Y2K readiness,
including computers, telephone systems, and software, has been approximately $1
million and an additional $400,000 is estimated to be spent on property
management software upgrades and testing from a third-party consultant on
current secondary systems. However, the costs of the project and the completion
date are based on management's best estimates, which are based on numerous
assumptions of future events.
Phase Three - Assessing the Risks to CRLP of Noncompliance
Management does not believe that the impact of Y2K will have a material adverse
effect on CRLP's financial condition, results of operations and cash flows. Such
belief is based on management's analysis of the risks to CRLP related to CRLP's
own potential Y2K problems discussed above and the assessment of the Y2K
problems of vendors, suppliers, and customers.
Property Management Systems - Management believes that the Y2K risks to CRLP's
financial condition and operations associated with a failure of building
management systems is immaterial due to the fact that each of CRLP's properties
have, for the most part, separate building management systems. In addition,
based upon the investigation results received to date, management believes there
is sufficient time to correct those system problems within CRLP's control before
the Year 2000.
In the event a failure of essential property management systems occurs at one or
more of CRLP's buildings, whether due to a failure of a Company system or an
interruption of utilities, management believes that the individual tenant leases
will protect CRLP from claims of constructive eviction or other remedies that
could result in a termination of lease rights. It is also management's belief
that most of the leases eliminate, limit or qualify the rights of a tenant to
receive an abatement under such circumstances. Although there is always a risk
of claims being brought on a noncontractual basis (e.g., in tort), it is
management's belief that CRLP's efforts to identify and solve Y2K problems will
minimize such risk. CRLP has also attempted to allocate the risk of
noncompliance to the vendors and manufacturers of the property management and
information systems by establishing standard riders and addenda to be attached
to new contracts for systems using time sensitive data.
Information Systems - Because CRLP's major source of income is rental payments
under long-term leases, the failure of key information systems is not expected
to have a material adverse effect on CRLP's financial condition, results of
operations, or cash flows for its existing properties. Even if problems with the
information systems are experienced, the payment of rent under leases would not
be excused. However, the ability of CRLP to produce complete and accurate
financial information in a timely fashion could be impaired. This situation
would affect CRLP's anticipated development projects or acquisitions of new
properties. Management expects to correct any information system problems within
CRLP's control before the Year 2000, thereby minimizing or avoiding the
increased cost of correcting problems after the fact.
Our Vendors - The success of CRLP's business is not closely tied to the
operations of any one manufacturer, vendor or supplier. Accordingly, if any
manufacturers, vendors or suppliers cease to conduct business due to Y2K related
problems, management expects to be able to contract with alternate providers
without experiencing any material adverse effect on CRLP's financial condition,
results of operations, or cash flows.
Our Customers - Because of a broad customer/tenant base, CRLP's success is not
closely tied to the success of any particular tenant. Accordingly, management
believes that there should not be a material adverse effect on CRLP's financial
condition, results of operations, or cash flows if any tenant ceases to conduct
business due to Y2K related problems. CRLP has requested that major tenants
provide periodic updates as to their Y2K readiness.
Phase Four - Developing Contingency Plans
CRLP currently does not have contingency plans in place; however, management
expects to develop and implement contingency plans by the end of the second
quarter of 1999. CRLP's contingency plans will be structured to address both
restoration of systems and their components and overall business operating risk.
These plans are intended to mitigate both internal risks, as well as potential
risks in the supply chain of CRLP's suppliers and customers.
RECENTLY ISSUED ACCOUNTING STANDARD
Statement of Financial Accounting Standards No. 133 (SFAS 133), Accounting for
Derivative Instruments and Hedging Activities, addresses the accounting for
derivative instruments, including certain derivative instruments embedded in
other contracts, and hedging activities. Under SFAS 133, CRLP will be required
to account for derivative financial instruments, if any, at their fair market
value, and make certain required disclosures. CRLP is required to adopt SFAS 133
for periods beginning January 1, 2000.
INFLATION
Substantially all of the leases at the retail properties provide for the
pass-through to tenants of certain operating costs, including real estate taxes,
common area maintenance expenses, and insurance. Leases at the multifamily
properties generally provide for an initial term of six months to one year and
allow for rent adjustments at the time of renewal. Leases at the office
properties typically provide for rent adjustments and the pass-through of
certain operating expenses during the term of the lease. All of these provisions
permit CRLP to increase rental rates or other charges to tenants in response to
rising prices and, therefore serve to minimize CRLP's exposure to the adverse
effects of inflation.
Item 8. Financial Statements and Supplementary Data.
The following are filed as a part of this report:
Report of Independent Accountants
Financial Statements:
Consolidated Balance Sheets as of December 31, 1998 and 1997
Consolidated Statements of Income for the years ended December 31,
1998, 1997, and 1996
Consolidated Statements of Partner's Capital for the years ended
December 31, 1998, 1997, and 1996
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997, and 1996
Notes to Consolidated Financial Statements
<PAGE>
Report of Independent Accountants
To the Partners
of Colonial Realty Limited Partnership
In our opinion, the consolidated financial statements listed in the accompanying
index present fairly, in all material respects, the financial position of
Colonial Realty Limited Partnership at December 31, 1998 and 1997, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1998, in conformity with generally accepted
accounting principles. In addition, in our opinion, the financial statement
schedules listed in the accompanying index present fairly, in all material
respects, the information set forth therein when read in conjunction with the
related consolidated financial statements. These financial statements and
financial statement schedules are the responsibility of the Company's
management; our responsibility is to express an opinion on these financial
statements and financial statement schedules based on our audits. We conducted
our audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ PricewaterhouseCoopers L.L.P.
PricewaterhouseCoopers L.L.P.
Birmingham, Alabama
January 13, 1999, except for Note 13, as
to which the date is February 10, 1999
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
(Amounts in Thousands)
<TABLE>
<CAPTION>
December 31, 1998 and 1997
- --------------------------------------------------------------------------------
1998 1997
- --------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Land, buildings, & equipment, net $ 1,566,840 $ 1,268,430
Undeveloped land and construction in progress 128,336 98,555
Cash and equivalents 4,582 4,534
Restricted cash 2,897 2,665
Accounts receivable, net 9,151 7,174
Prepaid expenses 3,116 3,038
Notes receivable 696 575
Deferred debt and lease costs 9,644 7,031
Investment in partnerships 26,079 (28)
Other assets 5,207 4,686
- --------------------------------------------------------------------------------
$ 1,756,548 $ 1,396,660
- --------------------------------------------------------------------------------
LIABILITIES AND PARTNERS' CAPITAL
Notes and mortgages payable $ 909,322 $ 702,044
Accounts payable 8,150 11,913
Accounts payable to affiliates 4,670 2,320
Accrued interest 12,051 6,526
Accrued expenses 3,559 2,700
Tenant deposits 4,272 3,715
Unearned rent 2,800 2,253
- --------------------------------------------------------------------------------
Total liabilities 944,824 731,471
- --------------------------------------------------------------------------------
Redeemable units, at redemption value 282,597 299,492
- --------------------------------------------------------------------------------
Partners' capital excluding redeemable units 529,127 365,697
- --------------------------------------------------------------------------------
$ 1,756,548 $ 1,396,660
- --------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
For the Years Ended December 31, 1998, 1997, 1996
- -------------------------------------------------------------------------------------------------
1998 1997 1996
- -------------------------------------------------------------------------------------------------
Revenue:
<S> <C> <C> <C>
Base rent $ 206,234 $ 154,063 $ 115,174
Base rent from affiliates 1,027 879 758
Percentage rent 4,002 2,161 1,841
Tenant recoveries 31,573 17,349 10,717
Other 14,531 9,674 6,391
- -------------------------------------------------------------------------------------------------
Total revenue 257,367 184,126 134,881
- -------------------------------------------------------------------------------------------------
Property operating expenses:
General operating expenses 20,590 12,603 9,530
Salaries and benefits 12,600 10,283 8,606
Repairs and maintenance 24,795 18,669 13,073
Taxes, licenses, and insurance 22,312 15,578 11,538
General and administrative 7,675 6,448 4,071
Depreciation 46,841 31,956 22,025
Amortization 1,806 1,322 1,509
- -------------------------------------------------------------------------------------------------
Total operating expenses 136,619 96,859 70,352
- -------------------------------------------------------------------------------------------------
Income from operations 120,748 87,267 64,529
- -------------------------------------------------------------------------------------------------
Other income (expense):
Interest expense (52,063) (40,496) (24,584)
Income (loss) from partially owned entities (43) 502 635
Gains (losses) from sales of property (19) 2,567 469
- -------------------------------------------------------------------------------------------------
Total other expense (52,125) (37,427) (23,480)
- -------------------------------------------------------------------------------------------------
Income before extraordinary items 68,623 49,840 41,049
Extraordinary loss from early extinguishment of debt (401) (3,650) (511)
- -------------------------------------------------------------------------------------------------
Net income 68,222 46,190 40,538
Dividends to preferred unitholders (10,938) (1,671) -0-
- -------------------------------------------------------------------------------------------------
Net income available to common unitholders 57,284 44,519 40,538
- -------------------------------------------------------------------------------------------------
Basic and Diluted net income per unit:
- -------------------------------------------------------------------------------------------------
Income before extraordinary item $ 1.65 $ 1.64 $ 1.60
Extraordinary loss from early extinguishment of debt (0.01) (0.09) (0.02)
- -------------------------------------------------------------------------------------------------
Net income per common unit $ 1.64 $ 1.55 $ 1.58
- -------------------------------------------------------------------------------------------------
Weighted average common units outstanding 34,944 28,719 25,703
- -------------------------------------------------------------------------------------------------
<FN>
The accompanying notes are an integral part of these financial statments.
</FN>
</TABLE>
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF PARTNERS' CAPITAL
(Amounts in Thousands)
<TABLE>
<CAPTION>
For the Years Ended December 31, 1998, 1997, 1996
- --------------------------------------------------------------
Total
Partners'
Capital
- --------------------------------------------------------------
<S> <C>
Balance, December 31, 1995 $ 102,999
Cash Contributions 106,847
Distributions (51,819)
Net income 40,538
Issuance of limited partnership units 7,027
Allocations to redeemable units (48,502)
- --------------------------------------------------------------
Balance, December 31, 1996 157,090
Cash Contributions 221,873
Distributions (59,471)
Net income 44,519
Issuance of limited partnership units 45,079
Allocations to redeemable units (43,393)
- --------------------------------------------------------------
Balance, December 31, 1997 365,697
Cash Contributions 142,243
Distributions (76,545)
Net income 57,284
Earnings in minority interest property 153
Issuance of limited partnership units 23,400
Allocations to redeemable units 16,895
- --------------------------------------------------------------
Balance, December 31, 1998 529,127
- --------------------------------------------------------------
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Thousands)
<TABLE>
<CAPTION>
For the Years Ended December 31, 1998, 1997, 1996
- ------------------------------------------------------------------------------
1998 1997 1996
- ------------------------------------------------------------------------------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income $ 57,284 $ 44,519 $ 40,538
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 48,647 33,278 23,533
Income from partnerships (110) (502) (635)
Gains from sales of property 19 (2,567) 468
Other, net 336 4,204 90
Decrease (increase) in:
Restricted cash (232) (215) (371)
Accounts receivable (4,287) (2,620) (3,246)
Prepaid expenses (75) 879 (248)
Other assets 729 424 (1,187)
Increase (decrease) in:
Accounts payable (1,413) (3,191) 10
Accrued interest 5,525 1,061 3,570
Accrued expenses and other (2,967) (5,421) 404
- ------------------------------------------------------------------------------
Net cash provided by
operating activities 103,456 69,849 62,926
- ------------------------------------------------------------------------------
Cash flows from investing activities:
Acquisition of properties (312,585) (301,931) (125,926)
Development expenditures (62,075) (37,589) (22,168)
Development expenditures paid to
an affiliate (40,347) (46,481) (70,414)
Tenant improvements (4,140) (2,792) (1,029)
Capital expenditures (24,982) (12,325) (6,825)
Proceeds from sales of property,
net of selling costs 52,238 54,092 1,254
Distributions from partnerships 32,314 719 984
Capital contributions to partnerships (5,850) (320) (14)
- ------------------------------------------------------------------------------
Net cash used in investing
activities (365,427) (346,627) (224,138)
- ------------------------------------------------------------------------------
Cash flows from financing activities:
Principal reductions of debt (31,725) (122,880) (45,798)
Proceeds from additional borrowings 173,976 175,246 179,540
Net change in revolving credit balance 57,403 68,271 (21,877)
Cash contributions 142,243 221,873 106,847
Cash distributions (76,545) (59,471) (51,819)
Payment of mortgage financing cost (3,734) (1,417) (3,416)
Other, net 401 (3,650) (510)
- ------------------------------------------------------------------------------
Net cash provided by financing
activities 262,019 277,972 162,967
- ------------------------------------------------------------------------------
Increase in cash and equivalents 48 1,194 1,755
Cash and equivalents, beginning of period 4,534 3,340 1,585
- ------------------------------------------------------------------------------
Cash and equivalents, end of period $ 4,582 $ 4,534 $ 3,340
- ------------------------------------------------------------------------------
Supplemental disclosures of cash flow information:
Cash paid during the year for interest$ 46,538 $ 39,435 $ 20,077
- ------------------------------------------------------------------------------
<FN>
The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>
<PAGE>
1. Organization and Basis of Presentation
Organization - Colonial Realty Limited Partnership (the "Operating
Partnership"or "CRLP"), a Delaware limited partnership, was formed on August 6,
1993, to succeed as owner of substantially all of the predecessor interest of
Colonial Properties, Inc. (CPI), Equity Partners Joint Venture, and Colonial
Properties Management Association, and certain real estate interest of Thomas H.
Lowder, Robert E. Lowder, James K. Lowder, Catherine K. Lowder, and the Bellwood
Trust (collectively referred to as the Colonial Group for purposes of these
financial statements). CRLP is the operating partnership of Colonial Properties
Trust, an Alabama real estate investment trust (the "Company") whose shares are
listed on the New York Stock Exchange ("NYSE"). CRLP is engaged in the
ownership, development, management, and leasing of multifamily housing
communities, retail malls and centers, and office buildings. Certain parcels of
land are also included.
Federal Income Tax Status -No provision for income taxes is provided
since all taxable income or loss or tax credits are passed through to the
partners. The Company, which is considered a corporation for federal income tax
purposes, qualifies as a real estate investment trust ("REIT") for federal
income tax purposes and generally will not be subject to federal income tax to
the extent it distributes its REIT taxable income to its shareholders. REITs are
subject to a number of organizational and operational requirements. If the
Company fails to qualify as a REIT in any taxable year, the Company will be
subject to federal income tax on its taxable income at regular corporate rates.
Principles of Consolidation - The consolidated financial statements
include the Operating Partnership and Colonial Properties Services Limited
Partnership (in which CRLP holds 99% general and limited partner interests).
Investments in Partially Owned Entities - Partnerships and corporations
in which CRLP owns a 50% or less interest and does not control are reflected in
the consolidated financial statements as investments accounted for under the
equity method. Under this method the investment is carried at cost plus or minus
equity in undistributed earnings or losses since the date of acquisition.
2. Summary of Significant Accounting Policies
Land, Buildings, and Equipment - Land, buildings, and equipment is
stated at the lower of cost, less accumulated depreciation, or net realizable
value. Where an impairment of a property's value is determined to be other than
temporary, an allowance for the estimated potential loss is established to
record the property at its net realizable value. Depreciation is computed using
the straight-line method over the estimated useful lives of the assets, which
range from seven to 40 years. Repairs and maintenance are charged to expense as
incurred. Replacements and improvements are capitalized and depreciated over the
estimated remaining useful lives of the assets. When items of land, buildings,
or equipment are sold or retired, the related cost and accumulated depreciation
are removed from the accounts and any gain or loss is included in the results of
operations.
Undeveloped Land and Construction in Progress - Undeveloped land and
construction in progress is stated at the lower of cost or net realizable value.
CRLP capitalizes all costs associated with land development including
construction period interest and property taxes.
Capitalization of Interest - CRLP capitalizes interest during periods
in which property is undergoing development activities necessary to prepare the
asset for its intended use.
Cash and Equivalents - CRLP includes highly liquid marketable
securities and debt instruments purchased with a maturity of three months or
less in cash equivalents.
Restricted Cash - Cash which is legally restricted as to use consists
primarily of tenant deposits.
Deferred Debt and Lease Costs - Amortization of debt costs is recorded
using the straight-line method, which approximates the effective interest
method, over the terms of the related debt. Leasing commissions and fees are
amortized using the straight-line method over the terms of the related leases.
Derivatives - CRLP has only limited involvement with derivative
financial instruments and does not use them for trading purposes. Interest rate
cap agreements and interest rate swaps are used to reduce the potential impact
of increases in interest rates on variable-rate debt. Premiums paid for
purchased interest rate cap agreements are amortized to expense over the terms
of the caps. Unamortized premiums are included in other assets in the balance
sheets. Amounts receivable under cap agreements are accrued as a reduction of
interest expense. Payments under interest rate swap agreements are recognized as
adjustments to interest expense as incurred. Treasury lock agreements are used
by CRLP to set interest rates in anticipation of public debt offerings. Any
gains or losses related to treasury locks are included in deferred debt and
lease cost on the balance sheet and amortized over the life of the related debt
to the extent that such treasury locks are utilized. All unutilized treasury
locks are expensed when their future utility expires. All treasury locks were
utilized during 1998 and 1997.
Revenue Recognition - Rental income and management fees are recognized
as earned. Anticipated losses, if any, are recognized when such amounts become
known.
Net Income Per Unit - Basic net income per unit is calculated by
dividing the net income available to common unitholders by the weighted average
numbers of common units outstanding during the periods. Diluted net income per
unit is calculated by dividing the net income available to common unitholders by
the weighted average numbers of common units outstanding during the periods,
adjusted for the assumed conversion of all potentially dilutive securities.
Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and the reported amounts of revenues and expenses. Actual results
could differ from those estimates.
Recently Issued Accounting Standard - Statement of Financial Accounting
Standards No. 133 (SFAS 133), Accounting for Derivative Instruments and Hedging
Activities, addresses the accounting for derivative instruments, including
certain derivative instruments embedded in other contracts, and hedging
activity. Under SFAS 133, CRLP will be required to account for derivative
financial instruments, if any, at their fair market value, and make certain
required disclosures. CRLP is required to adopt SFAS 133 for periods beginning
January 1, 2000.
Segment Reporting - In 1998, CRLP adopted Statement of Financial
Accounting Standards No. 131 (SFAS 131), Disclosure about Segments of an
Enterprise and Related Information. Reportable segments are identified based
upon management's approach for making operating decisions and assessing
performance of CRLP. The adoption of SFAS 131 did not affect results of
operations or financial position but did require the disclosure of segment
information (see Note 7).
Software Development - CRLP capitalizes certain internally developed
software costs. Costs capitalized in connection with internal software
development are amortized using the straight-line method over the estimated
useful life of the software.
Reclassifications - Certain immaterial reclassifications have been made
to the 1996 and 1997 financial statements in order to conform them to the 1998
financial statement presentation. <PAGE>
3. Property Acquisitions and Dispositions
CRLP acquired 12 properties and invested in an additional joint
venture during 1998, 25 properties during 1997, and 11 properties during 1996 at
aggregate costs of $348.6 million, $430.6 million, and $173.7 million,
respectively. CRLP funded these acquisitions with cash proceeds from its public
offerings of equity (see Note 9) and debt (see Note 8), advances on bank lines
of credit, the issuance of limited partnership units in CRLP, the proceeds
received from the formation of joint ventures (see Note 6), and cash from
operations.
Effective
Acquisition
Location Date
- --------------------------------------------------------------------------------
Retail Properties:
Briarcliffe Mall .................. Myrtle Beach, SC July 1, 1996
Colonial Promenade Wekiva ......... Orlando, FL October 1, 1996
Colonial Promenade Bardmoor ....... St. Petersburg, FL October 1, 1996
Colonial Promenade
Hunter's Creek .............. Orlando, FL October 1, 1996
Colonial Shoppes Inverness ........ Birmingham, AL March 24, 1997
Beechwood Shopping Center ......... Athens, GA March 27, 1997
Brookwood Village ................. Birmingham, AL May 13, 1997
Lakewood Plaza .................... Jacksonville, FL October 1, 1997
Glynn Place Mall .................. Brunswick, GA November 1, 1997
Lakeshore Mall .................... Gainesville, GA November 1, 1997
Valdosta Mall ..................... Valdosta, GA November 1, 1997
Holly Hill Mall ................... Burlington, NC November 1, 1997
Yadkin Town Center ................ Yadkinville, NC November 1, 1997
Mayberry Mall ..................... Mount Airy, NC November 1, 1997
Quaker Village .................... Greensboro, NC November 1, 1997
Stanly Plaza ...................... Locust, NC November 1, 1997
Rivermont Plaza ................... Chattanooga, TN November 1, 1997
Staunton Mall ..................... Staunton, VA November 1, 1997
Abingdon Village .................. Abingdon, VA November 1, 1997
Village at Roswell Summit ......... Atlanta, GA December 31, 1997
Orlando Fashion Square ............ Orlando, FL May 29, 1998
Shoppes at Mansell ................ Atlanta, GA July 1, 1998
Parkway City Mall ................. Huntsville, AL December 9, 1998
Bel Air Village ................... Mobile, AL December 29, 1998
Multifamily Properties:
Colonial Village at Ashford Place . Mobile, AL April 1, 1996
Colonial Village at Hillcrest ..... Mobile, AL April 1, 1996
Colonial Grand at Spring Creek .... Macon, GA April 1, 1996
Colonial Grand at Galleria Woods .. Birmingham, AL April 15, 1996
Colonial Grand at Mountain Brook .. Birmingham, AL May 10, 1996
Colonial Village at Cahaba Heights Birmingham, AL May 10, 1996
Colonial Grand at Barrington ...... Macon, GA September 13, 1996
Colonial Village at Trussville .... Birmingham, AL April 1, 1997
Colonial Village at Timothy Woods . Athens, GA July 1, 1997
Colonial Grand at Oakleigh ........ Pensacola, FL July 1, 1997
Colonial Grand at Natchez Trace ... Jackson, MS August 1, 1997
Colonial Village at Caledon Wood .. Greenville, SC October 1, 1997
Colonial Village at Ashley Plantation Bluffton, SC May 1, 1998
Colonial Village at Haverhill ..... San Antonio, TX July 1, 1998
Colonial Village at Walton Way .... Augusta, GA July 1, 1998
Colonial Village at River Hills I . Tampa, FL July 1, 1998
Office Properties:
Riverchase Center ................. Birmingham, AL January 1, 1997
Lakeside Office Park .............. Huntsville, AL May 23, 1997
Progress Center ................... Huntsville, AL June 24, 1997
Mansell Business Park ............. Atlanta, GA July 31, 1997
Perimeter Corporate Park .......... Huntsville, AL January 1, 1998
Independence Plaza ................ Birmingham, AL January 1, 1998
Shades Brook Building ............. Birmingham, AL July 1, 1998
Mansell Overlook 200 .............. Atlanta, GA July 1, 1998
Concourse Center .................. Tampa, FL July 1, 1998
<PAGE>
Results of operations of these properties, subsequent to their
respective acquisition dates, are included in the consolidated financial
statements of CRLP. The cash paid to acquire these properties is included in the
statements of cash flows. The acquisitions during 1998, 1997, and 1996 are
comprised of the following:
<TABLE>
<CAPTION>
(in thousands) 1998 1997 1996
- -------------- ---- ---- ----
Assets purchased:
<S> <C> <C> <C>
Land, buildings, and equipment .... $ 348,564 $ 430,614 $ 173,277
Other assets ...................... -- 4 455
- --------------------------------------------------------------------------------
348,564 430,618 173,732
Notes and mortgages assumed ........... (7,509) (74,910) (40,444)
Other liabilities assumed ............. (5,070) (8,716) (1,774)
Issuance of limited partnership units of
Colonial Realty Limited
Partnership (23,400) (45,061) (5,587)
- --------------------------------------------------------------------------------
Cash paid .............................. $ 312,585 $ 301,931 $ 125,927
- --------------------------------------------------------------------------------
</TABLE>
During 1998, CRLP contributed Orlando Fashion Square into a joint
venture equally owned by CRLP and an unrelated party. Proceeds received from
this contribution were used to fund additional acquisitions and developments.
CRLP accounts for its 50% interest in the joint venture as an equity investment
(see Note 6).
CRLP's unaudited pro forma results of operations, assuming these
acquisitions and disposition had been effected by CRLP prior to January 1, 1997,
are as follows:
<TABLE>
<CAPTION>
For the Year Ended For the Year Ended
December 31, 1997 December 31, 1998
(in thousands) (unaudited) (unaudited)
- --------------------------------------------------------------------------------
<S> <C> <C>
Revenues $ 265,903 $ 250,713
- --------------------------------------------------------------------------------
Net Income available to
common unitholders $ 61,481 $ 65,980
- --------------------------------------------------------------------------------
Net Income per unit-basic and diluted 1.65 1.60
- --------------------------------------------------------------------------------
</TABLE>
4. Land, Buildings, and Equipment
Land, buildings, and equipment consists of the following at December 31, 1998
and 1997:
<TABLE>
<CAPTION>
(in thousands) ......... 1998 1997
- -----------------------------------------------------
<S> <C> <C>
Buildings .............. $ 1,416,937 $ 1,140,504
Furniture and fixtures . 43,074 30,147
Equipment .............. 12,027 3,087
Land improvements ...... 35,580 27,343
Tenant improvements .... 18,733 15,273
- -----------------------------------------------------
1,526,351 1,216,354
Accumulated depreciation (169,522) (124,254)
- -----------------------------------------------------
1,356,829 1,092,100
Land ................... 210,011 176,330
- -----------------------------------------------------
$ 1,566,840 $ 1,268,430
=====================================================
</TABLE>
5. Undeveloped Land and Construction in Progress
During 1998, CRLP completed the construction of five multifamily
development projects at a combined total cost of $77.0 million. The multifamily
development projects produced 1,260 new apartment units that were completed
during 1998 and 1997. The completed multifamily developments are as follows:
<TABLE>
<CAPTION>
Total Total
Units Cost
Completed Developments:
<S> <C> <C>
Colonial Village at River Hills II Tampa, FL 276 $14,186
Colonial Village at Inverness Birmingham, AL 84 6,631
Colonial Grand at Hunter's Creek Orlando, FL 496 33,426
Colonial Grand at Bayshore II Bradenton, FL 164 9,289
Colonial Grand at Wesleyan Macon, GA 240 13,503
- --------------------------------------------------------------------------------
1,260 $77,035
================================================================================
</TABLE>
CRLP currently has 15 active expansion and development projects in
progress and various parcels of land available for expansion, construction, or
sale. During 1998, CRLP completed construction on 596 apartment units (including
the remaining units completed in the projects mentioned above), and CRLP has an
additional 2,978 apartment units in progress at December 31, 1998. Undeveloped
land and construction in progress is comprised of the following at December 31,
1998:
<TABLE>
<CAPTION>
Costs
Estimated Total Costs Capitalized
to Date
Completion(in thousands)(in thousands)
- -----------------------------------------------------------------------------------------------------
Multifamily Projects:
<S> <C> <C> <C> <C>
Colonial Grand at Inverness Lakes II (expansion) 132 1999 $ 8,900 $ 8,838
Colonial Village at Ashley Plantation (expansion) 214 1999 13,800 2,949
Colonial Grand at Edgewater II (expansion) 192 1999 12,600 12,487
Colonial Grand at Wesleyan II (expansion) 88 1999 6,200 5,945
Colonial Grand at Liberty Park 300 2000 26,218 2,924
Colonial Grand at Heather Glen 448 2000 31,234 9,800
Colonial Grand at Citrus Park 176 1999 12,300 9,482
Colonial Grand at Lakewood Ranch 288 1999 20,300 17,839
Colonial Grand at Cypress Crossing 250 1999 20,000 19,176
Colonial Grand at Madison 336 2000 23,000 4,690
Colonial Grand at Promenade 384 2000 27,878 4,320
Colonial Grand at Ridgeland 170 2000 12,400 1,454
- ----------------------------------------------------------------------------------------------
Total Multifamily Projects 2,978 214,830 99,904
- ----------------------------------------------------------------------------------------------
Retail Projects:
Colonial Promenade Trussville 386,000 2001 31,000 5,321
- ----------------------------------------------------------------------------------------------
Total Retail Projects 386,000 31,000 5,321
- ----------------------------------------------------------------------------------------------
Office Projects:
1800 International Park 149,457 1999 16,600 3,950
Colonial Center at Research Park 133,368 1999 13,000 1,373
- ----------------------------------------------------------------------------------------------
Total Office Projects 282,825 29,600 5,323
- ----------------------------------------------------------------------------------------------
Other Projects and Undeveloped Land 17,788
- ----------------------------------------------------------------------------------------------
$275,430 $128,336
==============================================================================================
</TABLE>
Interest capitalized on construction in progress during 1998, 1997, and
1996 was $3.7 million, $4.1 million, and $3.7 million, respectively.
6. Investment in Partnerships
Investment in partnerships at December 31, 1998 and 1997 consists of
the following:
<TABLE>
<CAPTION>
Percent
(in thousands) Owned 1998 1997
- -----------------------------------------------------------------------------
Office:
<S> <C> <C> <C>
600 Building Partnership, Birmingham, AL 33.34% $ (30) $ (8)
Anderson Block Properties Partnership,
Montgomery, AL 33.33% (24) (38)
- -----------------------------------------------------------------------------
(54) (46)
Retail:
Orlando Fashion Square, Orlando, FL 50.00% 20,241 --
Parkway Place LP, Huntsville, AL 50.00% 5,859 --
- -----------------------------------------------------------------------------
26,100 --
Other:
Colonial/Polar-BEK Management Company,
Birmingham, AL 50.00% 33 18
- -----------------------------------------------------------------------------
33 18
- -----------------------------------------------------------------------------
$ 26,079 $ (28)
=============================================================================
</TABLE>
During December 1998, CRLP entered into two joint ventures. The Parkway
Place Limited Partnership owns and operates the Parkway City Mall in Huntsville,
Alabama. At December 31, 1998, CRLP had invested approximately $5.7 million in
the joint venture and had an ending net investment balance of $5.9 million. The
Orlando Fashion Square Joint Venture owns and operates the Orlando Fashion
Square in Orlando, Florida. CRLP's net investment in the joint venture at
December 31, 1998 was $20.2 million. Both joint ventures have been accounted for
using the equity method.
<PAGE>
The summarized financial information related to the significant
partially owned entities is as follows:
December 31, 1998 (in thousands)
Balance Sheet
Assets
Land, building, and equipment, net ............. $ 113,799
Construction in progress ....................... 3,369
Other assets ................................... 1,175
------------------------------------------------------------
Total assets .......................... $ 118,343
------------------------------------------------------------
Liabilities and Partners' Equity
Notes payable .................................. $ 65,000
Other liabilities .............................. 392
Partners' Equity ............................... 52,951
------------------------------------------------------------
Total liabilities and partners' capital $ 118,343
------------------------------------------------------------
Statement of Operations
Revenues ......................................... $ 246
Operating expenses ............................... (76)
Depreciation and amortization .................... (14)
- --------------------------------------------------------------
Net income .............................. $ 156
-------------------------------------------------------------
7. Segment Information
CRLP is organized into, and manages its business based on the
performance of, three separate and distinct operating divisions: Multifamily,
Retail, and Office. Each division has a separate management team that is
responsible for acquiring, developing, managing, and leasing properties within
each division. The applicable accounting policies of the segments are the same
as those described in the "Summary of Significant Accounting Policies."
Management evaluates the performance of its segments and allocates resources to
them based on net operating income (NOI). NOI consists of revenues in excess of
general operating expenses, salaries and wages, repairs and maintenance, taxes,
licenses, and insurance. Segment information for the years ended December 31,
1998, 1997, and 1996 is as follows:
(in thousands)
1998 Retail Office Multifamily Total
- -----------------------------------------------------------------
Divisional revenues $117,572 $ 34,409 $104,462 $ 256,443
NOI 83,059 24,307 68,789 176,155
Divisional assets 683,042 240,161 783,097 1,706,300
1997
- -----------------------------------------------------------------
Divisional revenues $ 71,179 $ 16,224 $ 95,503 $ 182,906
NOI 51,500 11,615 62,658 125,773
Divisional assets 577,954 147,974 652,923 1,378,851
1996
- -----------------------------------------------------------------
Divisional revenues $ 45,775 $ 7,337 $ 80,914 $ 134,026
NOI 33,455 4,813 53,011 91,279
Divisional assets 306,771 32,457 595,397 934,625
<PAGE>
A reconciliation of total segment revenues to total revenues, total
segment NOI to income from operations, and total divisional assets to total
assets, for the years ended December 31, 1998, 1997, and 1996, is presented
below:
<TABLE>
<CAPTION>
(in thousands)
Revenues 1998 1997 1996
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Total divisional revenues $ 256,443 $ 182,906 $ 134,026
Unallocated corporate revenues 924 1,220 855
- ----------------------------------------------------------------------------------
Total revenues $ 257,367 $ 184,126 $ 134,881
- ----------------------------------------------------------------------------------
NOI 1998 1997 1996
- ----------------------------------------------------------------------------------
Total divisional NOI $ 176,155 $ 125,773 $ 91,279
Unallocated corporate revenues 924 1,220 855
General and administrative expenses (7,675) (6,448) (4,071)
Depreciation (46,841) (31,956) (22,025)
Amortization (1,806) (1,322) (1,509)
Other (9) -- --
- ----------------------------------------------------------------------------------
Income from operations $ 120,748 $ 87,267 $ 64,529
- ----------------------------------------------------------------------------------
Assets 1998 1997 1996
- ----------------------------------------------------------------------------------
Total divisional assets $ 1,706,300 $ 1,378,851 $ 934,625
Unallocated corporate assets 50,248(1) 17,809 13,322
- ----------------------------------------------------------------------------------
Total assets $ 1,756,548 $ 1,396,660 $ 947,947
- ----------------------------------------------------------------------------------
</TABLE>
(1) Includes the Company's investment in partially owned entities of $25,181
(see Note 6).
8. Notes and Mortgages Payable
Notes and mortgages payable at December 31, 1998 and 1997 consist of the
following:
(in thousands) 1998 1997
- --------------------------------------------------
Revolving credit agreement $174,489 $117,086
Mortgages and other notes:
4.50% to 6.00% 66,305 66,305
6.01% to 7.50% 471,694 316,701
7.51% to 9.00% 179,187 175,207
9.01% to 10.25% 17,647 26,745
- --------------------------------------------------
$909,322 $702,044
--------------------------------------------------
As of December 31, 1998, CRLP has an unsecured bank line of credit
providing for total borrowings of up to $250 million. This line of credit
agreement bears interest at LIBOR plus 80 to 135 basis points, is renewable in
July 2000 and provides for a two-year amortization in the case of nonrenewal.
The line of credit agreement includes a competitive bid feature that will allow
CRLP to convert up to $125 million under the line of credit to a fixed rate, for
a fixed term not to exceed 90 days. The credit facility is primarily used by
CRLP to finance property acquisitions and development and has an outstanding
balance at December 31, 1998, of $174.5 million. The weighted average interest
rate of this short-term borrowing facility, including the competitive bid
balance, was 6.42% and 6.70% at December 31, 1998 and 1997, respectively.
During 1998 and 1997, CRLP completed five public offerings of unsecured
debt securities totaling $350 million. The proceeds of the offerings were used
to fund acquisitions, development expenditures, repay balances outstanding on
CRLP's revolving credit facility, repay certain notes and mortgages payable, and
for general corporate purposes. Details relating to these debt offerings are as
follows:
<TABLE>
<CAPTION>
Gross Proceeds
Date Type of Note Maturity Rate (in thousands)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
January 1997 Medium-term January 2003 7.16% $ 50,000
July 1997 Medium-term July 2004 6.96% $ 75,000
August 1997 Medium-term August 2005 6.96 $ 25,000
September 1997 Medium-term September 2005 6.98% $ 25,000
July 1998 Senior July 2007 7.00 $175,000
</TABLE>
CRLP has entered into an interest rate cap agreement which limits debt
of $50 million to an interest rate of 8.00% through May 2, 2000. CRLP paid
$227,500 for the interest rate cap, which is being amortized over the life of
the agreement. Subsequent to year-end, CRLP entered into two interest rate swap
agreements. On January 4, 1999, Colonial entered into an interest rate swap for
$50 million of its line of credit at 4.97% plus 80 to 135 basis points and on
January 15, 1999, CRLP entered into an interest rate swap for $52 million of tax
exempt bonds at a rate of 3.23%. Both of these interest rate swap agreements
have one-year terms and any payments made or received under the agreements are
recognized as adjustments to interest expense as incurred. Treasury lock
agreements are used by CRLP, to set interest rates in anticipation of public
debt offerings. CRLP is exposed to credit losses in the event of nonperformance
by the counterparties to its interest rate cap and nonderivative financial
assets but has no off-balance-sheet credit risk of accounting loss. CRLP
anticipates, however, that counterparties will be able to fully satisfy their
obligations under the contracts. CRLP does not obtain collateral or other
security to support financial instruments subject to credit risk but monitors
the credit standing of counterparties.
At December 31, 1998, CRLP had $704.5 million in unsecured indebtedness
including balances outstanding on its bank line of credit and certain other
notes payable. The remainder of CRLP's notes and mortgages payable are
collateralized by the assignment of rents and leases of certain properties and
assets with an aggregate net book value of $320.8 million at December 31, 1998.
The aggregate maturities of notes and mortgages payable at December 31,
1998, are as follows:
(in thousands)
- ---------------------------------------------
1999 $ 12,809
2000 224,308
2001 79,128
2002 1,404
2003 108,652
Thereafter 483,021
- ---------------------------------------------
$909,322
- ---------------------------------------------
Based on borrowing rates available to CRLP for notes and mortgages
payable with similar terms, the estimated fair value of CRLP's notes and
mortgages payable at December 31, 1998 and 1997 was approximately $912.6 million
and $711.0 million, respectively.
Certain loan agreements of CRLP contain restrictive covenants which,
among other things, require maintenance of various financial ratios. At December
31, 1998, CRLP was in compliance with these covenants.
Certain partners of CRLP have guaranteed indebtedness of CRLP totaling
$33.5 million at December 31, 1998. These individuals have not been indemnified
by CRLP.
<PAGE>
9. Cash Contributions
During 1998, 1997 and 1996, the Company completed eight public offerings of
common stock totaling 12,575,070 common shares of beneficial interest (Common
Shares) and one public offering of preferred stock (Preferred Shares) totaling
5,000,000. The proceeds of the offerings were contributed to CRLP and used to
fund acquisition and development expenditures, repay balances outstanding on
CRLP's revolving credit agreement, repay certain notes and mortgages payable,
and for general corporate purposes. Details relating to these equity offerings
are as follows:
<TABLE>
<CAPTION>
(in thousands)
-------------------------------
Number of Price Per Gross Offering Net
Offering Shares Share Proceeds Costs Proceeds
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
January 1996 Common 4,600,000 $ 24.63 $ 113,275 $ 6,632 $ 106,643
January 1997 Common 1,500,000 $ 29.88 $ 44,812 $ 1,457 $ 43,355
July 1997 Common 1,700,000 $ 30.94 $ 52,594 $ 2,945 $ 49,649
November 1997 Preferred 5,000,000 $ 25.00 $ 125,000 $ 4,451 $ 120,549
December 1997 Common 165,632 $ 30.19 $ 5,000 $ 330 $ 4,670
February 1998 Common 375,540 $ 30.00 $ 11,266 $ 627 $ 10,639
March 1998 Common 806,452 $ 31.00 $ 25,000 $ 1,389 $ 23,611
March 1998 Common 381,046 $ 31.00 $ 11,812 $ 656 $ 11,156
April 1998 Common 3,046,400 $ 30.13 $ 91,773 $ 4,973 $ 86,800
</TABLE>
10. Employee Benefits
Employees of CRLP and Colonial Properties Services, Inc. ("CPSI")
participate in a noncontributory defined benefit pension plan designed to cover
substantially all employees. Pension expense includes service and interest costs
adjusted by actual earnings on plan assets and amortization of prior service
cost and the transition amount. The benefits provided by this plan are based on
years of service and the employee's final average compensation. CRLP's policy is
to fund the minimum required contribution under ERISA and the Internal Revenue
Code.
The table below presents a summary of pension plan status as of
December 31, 1998 and 1997, as it relates to the employees of CRLP and CPSI.
(amounts in thousands) 1998 1997
- ------------------------------------------------------------ ------ ------
Actuarial present value of accumulated benefit obligation
including vested benefits of $1,193 and $828
at December 31, 1998 and 1997, respectively $1,368 $ 961
Actuarial present value of projected benefit obligations
at year end $2,593 $1,957
Fair value of assets at year end $ 981 $ 861
Accrued pension cost $ 868 $ 536
Net pension cost for the year $ 393 $ 310
<PAGE>
Actuarial assumptions used in determining the actuarial present value
of accumulated benefit obligations at January 1, 1998, are as follows:
1998 1997
---- ----
Weighted-average interest rate 6.75% 7.25%
- --------------------------------------------------------------------------------
Increase in future compensation levels 4.00% 4.25%
CRLP and CPSI participate in a salary reduction profit sharing plan
covering substantially all employees. This plan provides, with certain
restrictions, that employees may contribute a portion of their earnings with
CRLP and CPSI matching one-half of such contributions, solely at CRLP and CPSI's
discretion. Contributions by CRLP and CPSI were $178,000, $159,000 and $164,000
for the years ended December 31, 1998, 1997 and 1996, respectively.
11. Leasing Operations
CRLP is in the business of leasing and managing office, retail, and
multifamily property. For properties owned by CRLP, minimum rentals due in
future periods under noncancelable operating leases extending beyond one year at
December 31, 1998, are as follows:
(in thousands)
-----------------
1999 $ 107,651
2000 90,435
2001 77,498
2002 67,999
2003 55,640
Thereafter 228,509
-----------------
$ 627,732
=================
The noncancelable leases are with tenants engaged in retail and office
operations in Alabama, Georgia, Florida, North Carolina, South Carolina,
Tennessee, and Virginia. Performance in accordance with the lease terms is in
part dependent upon the economic conditions of the respective areas. No
additional credit risk exposure relating to the leasing arrangements exists
beyond the accounts receivable amounts shown in the December 31, 1998 balance
sheet. Leases with tenants in multifamily properties are generally for one year
or less and are thus excluded from the above table. Substantially all of CRLP's
land, buildings, and equipment represent property leased under the above and
other short-term leasing arrangements.
Rental income for 1998, 1997, and 1996 includes percentage rent of $4.0
million, $2.2 million, and $1.8 million, respectively. This rental income was
earned when certain retail tenants attained sales volumes specified in their
respective lease agreements.
12. Related Party Transactions
CRLP has generally used affiliated construction companies to manage and
oversee its development projects. CRLP paid $40.0 million, $41.3 million, and
$42.6 million ($37.3 million, $39,8 million, and $41.2 million of which was
subsequently then paid to unaffiliated subcontractors, respectively) for
property development costs to Lowder Construction Company, Inc., a construction
company owned by The Colonial Company ("TCC") (an affiliate of certain
shareholders and minority interest holders), during the years ended December 31,
1998, 1997, and 1996, respectively. CRLP had outstanding construction invoices
and retainage payable to Lowder Construction Company, Inc. totaling $4.3 million
and $2.3 million at December 31, 1998 and 1997, respectively. CRLP also paid
$0.4 million, $5.2 million, and $27.9 million for property development costs to
two construction companies owned by three trustees during the years ended
December 31, 1998, 1997, and 1996, respectively. CRLP had outstanding
construction invoices and retainage payable to these construction companies
totaling $1.2 million at December 31, 1998. There were no outstanding
construction invoices and retainage payable to these construction companies at
December 31, 1997.
Colonial Commercial Investments, Inc. ("CCI"), which is owned by
trustees James K. Lowder and Thomas H. Lowder has guaranteed indebtedness
totaling $1.3 million at December 31, 1998 for Anderson Block Properties, which
is a partnership accounted for by CRLP under the equity method (listed in Note
6). CRLP has indemnified CCI from its guarantees of this indebtedness.
On July 1, 1998, CRLP acquired a 79.8% interest in Colonial Village at
Haverhill (formerly Haverhill Apartments). The remaining 20.2% interest in this
property was acquired by entities that are owned by a trustee of CRLP.
In connection with the Riverchase Center acquisition, CRLP initially
acquired a 73% interest in a portion of the office complex. Effective November
1, 1997, CRLP purchased the remaining 27% interest in the property by issuing
114,798 limited partnership units to the seller. The seller is a trustee of
CRLP.
In November 1997, CRLP purchased Polar BEK's 50% interest in Polar
BEK/Colonial Partnership I (a partnership previously accounted for under the
equity method of accounting), a partnership which owned a 168,000 square foot
office building in Birmingham for $7.4 million. This purchase increased CRLP's
ownership from 50% to 100%.
Following is a summary of property acquisitions from entities for which
directors of the Company are involved as a partner or shareholder:
<TABLE>
<CAPTION>
Date Property and Land Acquired Purchase Price Units Issued
- ----------------------- --------------------------------------- --------------------- ----------------------------
<S> <C> <C> <C>
November 1998 Colonial Center at Research Park $1.0 million 36,647 CRLP Units
September 1998 1800 International Park $1.8 million(1)
October 1998 Colonial Grand at Promenade $1.5 million 34,700 CRLP Units
July 1998 Mansell Overlook 200 $27.7 million 396,365 CRLP Units
July 1998 Shoppes at Mansell $3.7 million 76,809 CRLP Units
March 1997 Colonial Shoppes Inverness $3.0 million 16,303 CRLP Units
April 1997 Colonial Village at Trussville $20.5 million 57,072 CRLP Units
July 1997 Colonial Village at Timothy Woods $12.8 million 27,275 CRLP Units
August 1997 Colonial Grand at Inverness Lakes II $0.5 million 10,822 CRLP Units
December 1997 Village at Roswell Summit $3.0 million 34,777 CRLP Units
</TABLE>
(1) In connection with purchase, the Company issued a $1.8 million note payable
to a related entity.
During 1997 CRLP, through CPSI, exercised options to purchase land from
a related party in the amount of $366,000. As of December 31, 1998, all options
to purchase land from a related party had expired. In December 1997, CPSI
acquired a parcel of land from CCI and sold the land, along with an adjoining
parcel of land, to an unaffiliated third party for a net gain of $60,000. Also
in December 1997, CPSI sold a separate parcel of land to CCI, which resulted in
a net gain of $120,000.
CRLP and its subsidiaries provided certain services to and received
certain services from related entities which resulted in the following income
(expense) included in the accompanying statements of income:
(Amounts in thousands)
1998 1997 1996
----------------------------------
Rental income $1,027 $879 $758
Management/leasing fee income 289 368 356
Insurance brokerage expense (131) (182) (187)
Rental expense 0 (156) (211)
<PAGE>
13. Subsequent Event
On January 23, 1999, the Board of Trustees of the Company declared a
cash distribution to partners of CRLP in the amount of $.58 per share and per
partnership unit, totaling $21.3 million. The distribution was made to partners
of record as of February 3, 1999, and was paid on February 10, 1999.
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.
None.
<PAGE>
PART III
Item 10. Directors and Executive Officers of the Registrant.
CRLP is managed by the Company, the general partner of CRLP. The
directors and officers of the Company are as follows:
Thomas H. Lowder, 49, has been a trustee of the Company since its
formation in July 1993. He is the chairman of the board, president and chief
executive officer of the Company. Mr. Lowder became President of Colonial
Properties, Inc., the Company's predecessor, in 1976, and since that time has
been actively engaged in the acquisition, development, management, leasing and
sale of multifamily, retail and office properties for the Company. Mr. Lowder is
a member and past president of the Alabama Chapter of the Commercial Investment
Real Estate Institute. Mr. Lowder is a former state Chairman of the Young
Presidents' Organization and is a member of the Birmingham Area Board of
Realtors, the National Association of Industrial Office Parks, the International
Council of Shopping Centers and the National Association of Real Estate
Investment Trusts (NAREIT). He serves on the Board of Directors of, among other
companies, the Children's Hospital of Alabama, American Red Cross - Birmingham
Area Chapter and the United Way of Central Alabama. Mr. Lowder is a member of
the Executive Committee of the Board of Trustees and a member of the board of
directors of the Management Corporation.
Carl F. Bailey, 68, has been a trustee of the Company and a director
of Colonial Properties Services, Inc., which conducts the Company's third-party
management, leasing and brokerage operations (the "Management Corporation")
since September 1993. Mr. Bailey is a former co-chairman of BellSouth
Telecommunications, Inc. and former chairman and chief executive officer of
South Central Bell Telephone Company, positions from which he retired in 1991.
He worked for South Central Bell in a number of capacities over the past three
and a half decades and was elected president and a member of the board of
directors in 1982. Mr. Bailey is president of BDI, vice chairman of Polymers,
Inc., and a member of the board of directors of SouthTrust Corporation. Mr.
Bailey serves on the board of trustees of Birmingham Southern College. Mr.
Bailey is a member of the Executive Committee and is chairman of the Audit
Committee of the Board of Trustees.
M. Miller Gorrie, 63, is a trustee of the Company. Mr. Gorrie is
chairman of the board and chief executive officer of Brasfield & Gorrie, L.L.C.,
a general contracting firm located in Birmingham, Alabama that is ranked
consistently among ENR's "Top 100 Contractors." He serves on the board of
directors of Winsloew Furniture Co. and is a past director of AmSouth Bank of
Alabama, the Southern Research Institute, the Alabama Chamber of Commerce, the
Associated General Contractors, the Building Science Advisory Board of Auburn
University, the Business Council of Alabama and the United Way of Alabama. Mr.
Gorrie is chairman of the Executive Committee and is a member of the Executive
Compensation Committee of the Board of Trustees. He also is a member of the
executive compensation committee of the board of directors of the Management
Corporation.
William M. Johnson, 52, has been a trustee of the Company since July
1997, following the first stage of the Company's acquisition from Mr. Johnson,
by merger, of six office buildings in Mansell 400 Business Center, the largest
Class-A multi-tenant office park in the North Fulton (Atlanta, Georgia) area,
and additional office and retail space totaling 560,600 square feet. Mr. Johnson
is president and chief executive officer of Johnson Development Company, a real
estate development, construction and management firm which he founded in 1978.
As chief executive officer, he directed the development of 1.2 million square
feet of office, warehouse, retail and hotel space having a value in excess of
$117 million. Mr. Johnson has been an active member of the Roswell United
Methodist Church and the North Fulton Chamber of Commerce, was the founding
chairman of the board of the Coalition for Drug-Free North Fulton, is a member
of the board of directors and the executive committee of the American Tract
Society Ministry, and is a member of the board of directors of Reach Out
Ministries. Mr. Johnson serves as an advisor in strategic planning for
not-for-profit agencies in Colorado, Montana, Texas and Kentucky. Mr. Johnson is
a member of the Executive Compensation Committee of the Board of Trustees of the
Company.
James K. Lowder, 49, has been a trustee of the Company since its
formation in July 1993. Mr. Lowder is also chairman of the board and chief
executive officer of The Colonial Company, chairman of the board of Lowder
Construction Company, Inc., chairman of the board of Lowder New Homes, Inc.,
chairman of the board of Lowder Realty Company, Inc., chairman of the board of
Colonial Commercial Realty, Inc., chairman of the board of Colonial Homes, Inc.,
chairman of the board of American Colonial Insurance Company, chairman of the
board and president of Colonial Commercial Investments, Inc. and treasurer of
Colonial Insurance Agency. He also is a member of the Alabama Association of
Realtors, the Montgomery Board of Realtors, the Home Builders Association of
Alabama, and the Greater Montgomery Home Builders Association, and is a member
of the board of directors of Alabama Power Company. Mr. Lowder is a member of
the Executive Compensation Committee of the Board of Trustees. Mr. Lowder is the
brother of Thomas H. Lowder.
Herbert A. Meisler, 71, is a trustee of the Company. Together with Mr.
Ripps, he formed The Rime Companies, a real estate development, construction and
management firm specializing in the development of multifamily properties. In
December 1994, the Company purchased ten multifamily properties from partners
associated with The Rime Companies. While with The Rime Companies, Mr. Meisler
oversaw the development and construction of approximately 15,000 multifamily
apartment units in the southeastern United States. He currently serves on the
board of directors of the Community Foundation of South Alabama and the Mobile
Airport Authority. He is a past director of the Alabama Eye and Tissue Bank and
past president of the Mobile Jewish Welfare Fund. Mr. Meisler is a member of the
Executive Compensation Committee (and its Option Plan Subcommittee) and the
Audit Committee of the Board of Trustees.
Claude B. Nielsen, 48, has been a trustee of the Company since
September 1993. Since 1990, Mr. Nielsen has been president of Coca-Cola Bottling
Company United, Inc., headquartered in Birmingham, Alabama, serving also as
chief operating officer from 1990 to 1991 and as chief executive officer since
1991. Prior to 1990, Mr. Nielsen served as president of Birmingham Coca-Cola
Bottling Company. Mr. Nielsen is on the board of directors of AmSouth
Bancorporation. He also currently serves as a board member of the Birmingham
Civil Rights Institute and the Birmingham Airport Authority. Mr. Nielsen is
chairman of the Executive Compensation Committee of the Board of Trustees and is
chairman of its Option Plan Subcommittee.
Harold W. Ripps, 60, is a trustee of the Company. Together with Mr.
Meisler, they formed The Rime Companies, a real estate development, construction
and management firm specializing in the development of multifamily properties.
In December 1994, the Company purchased ten multifamily properties from partners
associated with The Rime Companies. While with The Rime Companies, Mr. Ripps
oversaw the development and construction of approximately 15,000 multifamily
apartment units in the southeastern United States. He is a member of the
executive committee of the Birmingham Council of Boy Scouts of America, the
President's Advisory Committee of Birmingham Southern College and the
President's Council of the University of Alabama in Birmingham. Mr. Ripps is a
member of the Executive Committee of the Board of Trustees and is a member of
the board of directors and the executive compensation committee of the
Management Corporation.
Donald T. Senterfitt, 79, has been a trustee of the Company since
September 1993. Mr. Senterfitt is a former director and vice chairman of
SunTrust Banks, Inc., a bank holding company. He is past president of the
American Bankers Association and former general counsel of the Florida Bankers
Association, and served both organizations in a variety of other capacities. Mr.
Senterfitt is president and chief executive officer of The Pilot Group, L.C., a
financial institutions consulting firm headquartered in Orlando, Florida. He is
a member of the board of directors and currently serves as president of CITE,
Inc., the Center for Independence, Technology and Education, a non-profit
organization which serves the needs of blind, visually handicapped and
multi-handicapped children and adults.
<PAGE>
Executive Officers of the Company
Thomas H. Lowder, 49, has been a trustee of the Company since its
formation in July 1993. He is the chairman of the board, president and chief
executive officer of the Company. Mr. Lowder became President of Colonial
Properties, Inc., the Company's predecessor, in 1976, and since that time has
been actively engaged in the acquisition, development, management, leasing and
sale of multifamily, retail and office properties for the Company. Mr. Lowder is
a member and past president of the Alabama Chapter of the Commercial Investment
Real Estate Institute. Mr. Lowder is a former state Chairman of the Young
Presidents' Organization and is a member of the Birmingham Area Board of
Realtors, the National Association of Industrial Office Parks, the International
Council of Shopping Centers and the National Association of Real Estate
Investment Trusts (NAREIT). He serves on the Board of Directors of, among other
companies, the Children's Hospital of Alabama, American Red Cross - Birmingham
Area Chapter and the United Way of Central Alabama. Mr. Lowder is a member of
the Executive Committee of the Board of Trustees and a member of the board of
directors of the Management Corporation.
Howard B. Nelson, Jr., 51, has been Chief Financial Officer of the
Company, with general responsibility for financing matters since May 1997. Mr.
Nelson was Senior Vice President and Chief Operating Officer of the Company,
with responsibility for the day-to-day management of the Company, from September
1993 to May 1997. He joined Colonial in 1984 as a vice president and became
Senior Vice President-Finance in 1987. Mr. Nelson has served as treasurer, vice
president, president, and board member of the Birmingham Chapter of the National
Association of Industrial and Office Parks as well as vice president and board
member of the Building Owners and Managers Association of Metropolitan
Birmingham. He also serves on the Board of Directors of the Children's Harbor
Family Center and the College of Business Advisory Council of Auburn University.
He holds a Bachelor of Science Degree from Auburn University.
C. Reynolds Thompson, III, 36, has been Chief Investment Officer of
the Company, with the responsibility for the Company's investment strategy,
since May 1998. Mr. Thompson was Executive Vice President--Office Division, with
responsibility for management of all office properties owned and/or managed by
the Company, from May 1997 to May 1998. Mr. Thompson joined the Company in
February 1997 as Senior Vice President--Office Acquisitions, with responsibility
for all acquisitions of office properties. Prior to joining Colonial, Mr.
Thompson worked for CarrAmerica Realty Corporation in office building
acquisitions and due diligence. Mr. Thompson's twelve year real estate
background includes acquisitions, development, leasing, and management of office
properties in the south. He is an active member of the National Association of
Industrial and Office Parks, serves on the Board of Trustees for the Alabama
Real Estate Research and Education Center, and holds a Bachelor of Science
Degree from Washington and Lee University.
Paul F. Earle, 41, has been Executive Vice-President-Multifamily
Division of the Company, with responsibility for management of all multifamily
properties owned and/or managed by the Company, since May 1997. He joined
Colonial in 1991 and has served as Vice President-Acquisitions, as well as
Senior Vice President--Multifamily Division. Mr. Earle serves as Chairman of the
Alabama Multifamily Council and is an active member of the National Apartment
Association. He also serves on the Board of Directors of Big Brother/Big Sisters
and is a Board member of the National Multifamily Housing Council. Before
joining Colonial, Mr. Earle was the President and Chief Operating Officer of
American Residential Management, Inc., Executive Vice President of Great
Atlantic Management, Inc., and Senior Vice President of Balcor Property
Management, Inc.
John N. Hughey, 39, has been Executive Vice President-Retail Division
of the Company, with responsibility for all retail properties owned and/or
managed by the Company, since May 1997. He joined Colonial in 1982 and assumed
responsibility for an increasing number of shopping centers until being named to
Senior Vice President-Retail Division of Colonial in 1991. Mr. Hughey served as
the Alabama/Mississippi State Operations Chairman for the International Council
of Shopping Centers from 1993-1995. He holds a Bachelor of Science Degree from
Auburn University.
Charles A. McGehee, 53, has been Executive Vice President-Land
Acquisitions, Brokerage and Dispositions of the Company, with responsibility for
the Company's acquisitions and dispositions and the sales brokerage departments,
since May 1997. Mr. McGehee was Senior Vice President--Multifamily
Acquisitions/Development from September 1993 to May 1997 and Senior Vice
President--Office Division from January 1990 to September 1993. He joined
Colonial in 1976 as vice president of retail leasing and was responsible for
leasing all retail space owned and/or managed by Colonial. Mr. McGehee has
served as president and a board member of the National Association of Industrial
and Office Parks as well as a member of the Board of Directors of the Birmingham
Area Board of Realtors. He holds a Bachelor of Science Degree from Auburn
University.
Robert A. "Bo" Jackson, 44, has been Executive Vice President-Office
Division of the Company, with general responsibility for management of all
office properties owned and/or managed by the Company since May 1998. Prior to
joining the Company, Mr. Jackson worked for Beacon Properties as a vice
president responsible for leasing performance, new office development and
acquisitions. He has received professional accolades from The Atlanta Board of
Realtors, The Downtown Developers Group and NAIOP. He holds a Bachelor of
Science Degree in Business Administration from the University of Delaware.
Kenneth E. Howell, 49, has been Senior Vice President-Chief
Accounting Officer of the Company, with general responsibility for the
supervision of accounting for all of the properties owned and/or managed by the
Company, since August 1998. He joined the Company in 1981 and was Vice
President, Controller from 1981 to 1998. Mr. Howell holds a Bachelor of Science
Degree in Business Administration from Auburn University.
<PAGE>
Item 11. Executive Compensation.
The following table sets forth certain information concerning the
annual and long-term compensation for the chief executive officer and the four
other most highly compensated executive officers of the Company (the "Named
Executive Officers"):
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------------------------- -----------------------------------
Restricted Securities All
Share Underlying Other
Name and Principal Position Year Salary ($) Bonus($)(1) Compensation Awards($)(1) Options (#)Compensation(2)
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Thomas H. Lowder 1998 $310,000 $ -- -- $ 94,640 -- $ 2,721
Chairman of the Board, 1997 295,000 225,000 -- 89,250 16,000 3,453
President and Chief Executive 1996 285,000 30,000 -- 68,950 16,000 4,500
Officer
Howard B. Nelson, Jr 1998 208,000 -- -- 53,200 -- 2,721
Chief Financial Officer and 1997 198,000 120,000 -- 51,000 10,000 3,453
Secretary 1996 171,726 23,000 -- 34,475 8,500 4,500
C. Reynolds Thompson, III 1998 149,500 22,500 -- 38,500 -- 2,906
Chief Investment Officer (3) 1997 103,242 75,000 -- 14,438 2,500 --
John N. Hughey 1998 145,000 41,405 -- 60,333 -- 2,721
Executive Vice President- 1997 120,000 75,000 -- 19,125 3,500 3,453
Retail Division 1996 104,998 50,000 -- 14,775 3,500 3,145
Robert A. Jackson 1998 130,000 64,400 -- 33,437 10,000 --
Executive Vice President -
Office Division (4)
</TABLE>
(1) The Company's incentive compensation plan permits officers to elect to
receive all or part of their annual bonus in the form of restricted
shares instead of cash. Officers who elect to receive up to 50% of
their bonus in restricted shares receive shares having a market value
on the issue date equal to 125% of the deferred amount. Officers who
elect to receive more than 50% of their annual bonus in restricted
shares receive shares having a market value on the issue date equal to
140% of the deferred amount. Messrs. Lowder, Nelson, Thompson, Hughey
and Jackson elected to receive 100%, 100%, 55%, 51% and 20%,
respectively, of their bonuses in restricted shares. The restricted
shares issued to Messrs. Lowder, Nelson, Thompson and Hughey vest over
three years, with 50% vesting on the first anniversary of the issue
date and the remaining 50% vesting in equal installments on the second
and third anniversaries of the issue date. The restricted shares
issued to Mr. Jackson vest over two years, with 60% vesting on the
first anniversary of the issue date and the remaining 40% vesting on
the second anniversary. The restricted shares issued under the
incentive compensation plan were issued in February 1999. The number
and value of restricted shares held by the Named Executive Officers as
of December 31, 1998 were as follows: Mr. Lowder - 7,378 shares
($196,439); Mr. Nelson - 4,024 shares ($107,139); Mr. Thompson - 1,907
shares ($50,773); Mr. Hughey - 3,044 shares ($81,046); and Mr.
Jackson- 1,236 shares ($32,908). Dividends are paid on restricted
shares at the same rate paid to all other holders of Common Shares.
(2) All Other Compensation consists solely of employer contributions to
the Company's 401(k) Plan.
(3) Mr. Thompson became an executive officer of the Company in 1997.
(4) Mr. Jackson became an executive officer of the Company in 1998. When
Mr. Jackson joined the Company he received 500 restricted shares which
had a market value as of December 31, 1998 of $13,312. These
restricted shares vest ratably in five annual installments beginning
on the third anniversary of the date of issuance, unless accelerated
by achievement of certain performance targets.
<TABLE>
<CAPTION>
Number of Value of Unexercised
Shares Securities Underlying In-the-Money
Acquired Value Unexercised Options Options
Name on Exercise(#) Realized($) at December 31, 1998 at December 31, 1998(1)
- --------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable Exercisable Unexercisable
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Thomas H. Lowder -- $ -- 47,836 15,999 $ 112,828 7,666
Howard B. Nelson, Jr. -- -- 18,911 9,499 38,495 4,072
C. Reynolds Thompson, III -- -- 834 1,666 -- --
John N. Hughey -- -- 9,535 3,500 21,835 1,677
Robert A. Jackson -- -- -- 10,000 -- --
</TABLE>
(1) Based on the closing price of $26.625 per Common Share on December 31,
1998, as reported by the New York Stock Exchange.
The following table sets forth certain information relating to
options to purchase Common Shares granted to the Named Executive Officers during
1998:
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Individual Grants
- ------------------------------------------------------------------------------------------------------------
Percent Potential Realizable
Number of of Total Value at Assumed
Securities Options Annual Rates of Share
Underlying Granted to Exercise Price Appreciation for
Options Employees in Price Expiration Option Term
----------------------
Name Granted (#) Fiscal Year ($/Sh) Date 5% 10%
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Thomas H. Lowder -- -- -- -- $ -- $ --
Howard B. Nelson, Jr. -- -- -- -- -- --
C. Reynolds Thompson, III -- -- -- -- -- --
John N. Hughey -- -- -- -- -- --
Robert A. Jackson 10,000 67% $30.69 2/20/2008 $183,830 $474,490
</TABLE>
All options granted in 1998 become exercisable in three equal annual
installments beginning on the first anniversary of the date of grant and have a
term of ten years.
Defined Benefit Plan
The Company maintains a Retirement Plan (the "Plan") for all of the
employees of the Company and its subsidiaries. An employee becomes eligible to
participate in the Plan on January 1 or July 1 following the first anniversary
of the person's employment by the Company or one of its consolidated or
unconsolidated subsidiaries or age 21 if later. Benefits are based upon the
number of years of service (maximum 25 years), and the average of the
participant's earnings during the five highest years of compensation during the
final 10 years of employment. Each participant accrues a benefit at a specified
percentage of compensation up to the Social Security wage base, and at a higher
percentage of compensation above the Social Security wage base. Employment by
Colonial, the Company's predecessor, or certain of its affiliated entities is
treated as covered service for purposes of the Plan. A participant receives
credit for a year of service for every year in which 1,000 hours are completed
in the employment of the Company or its subsidiaries.
The following table reflects estimated annual benefits payable upon
retirement under the Plan as a single life annuity commencing at age 65. These
benefits ignore the lower benefit rate applicable to earnings below the Social
Security covered compensation level.
Pension Plan Table
<TABLE>
<CAPTION>
Years of Service
-----------------------------------------------------------------------------------
Remuneration 5 10 15 20 25
- ----------------------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 7,600 $15,200 $22,800 $30,400 $38,000
125,000 $ 9,500 $19,000 $28,500 $38,000 $47,500
150,000 $11,400 $22,800 $34,200 $45,600 $57,000
$ 160,000 or over $12,160 $24,320 $36,480 $48,640 $60,800
</TABLE>
The benefits shown are limited by the current statutory limitations
which restrict the amount of benefits which can be paid from a qualified
retirement plan. The statutory limit on compensation which may be recognized in
calculating benefits is $160,000 in 1999. This limit is scheduled to increase
periodically with the cost of living.
Covered compensation under the Plan includes the employees' base
salary and other earnings received from the Company. Thomas H. Lowder has 24
years of covered service under the Plan, Howard B. Nelson, Jr. has 14 years of
service, C. Reynolds Thompson, III has two years of service, John N. Hughey has
16 years of service, and Robert A. Jackson has one year of service.
Employment Agreement
Thomas H. Lowder, the chief executive officer of the Company, entered
into an employment agreement with the Company in September 1993. This agreement
provides for an initial term of three years, with automatic renewals for
successive one year terms if neither party delivers notice of non-renewal at
least six months prior to the next scheduled expiration date. The agreement
provides for annual compensation of at least $275,000 and incentive compensation
on substantially the same terms as set forth in the description of the Annual
Incentive Plan. See "Report on Executive Compensation -- Annual Incentive Plan."
The agreement includes provisions restricting Mr. Lowder from competing with the
Company during employment and, except in certain circumstances, for two years
after termination of employment. The employment agreement provides for certain
severance payments in the event of disability or termination by the Company
without cause or by the employee with cause.
<PAGE>
EXECUTIVE COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
None of the five members of the Executive Compensation Committee is an
employee of the Company. As described below, M. Miller Gorrie, William M.
Johnson and James K. Lowder, who are members of the Committee, own interests in
certain entities that, during 1997, were parties to certain transactions
involving the Company
On July 1, 1998, the Company acquired the Shoppes at Mansell, a retail
shopping center containing 20,900 square feet of gross leasable area, from Mr.
Johnson and a partnership controlled by Mr. Johnson, for approximately $3.7
million. The Company paid the purchase price with 76,809 units of limited
partnership interest in the Operating Partnership ("Units").
Also on July 1, 1998, the Company acquired Mansell Overlook 200, a
Class-A office building with 162,693 square feet of net rentable area and a
500-car parking facility, from a partnership controlled by Mr. Johnson for
approximately $27.7 million. The Company paid the purchase price with 396,365
Units. By these two acquisitions, the Company completed the transactions by
which it acquired Mr. Johnson's real estate portfolio, as contemplated by the
1997 merger between the Company and Mr. Johnson.
On July 1, 1998, the Company acquired a 79.8% interest in Colonial
Village at Haverhill, a multifamily property located in San Antonio, Texas, for
a purchase price of $17.2 million. The remaining 20.2% interest was purchased by
certain entities controlled by Mr. Gorrie for a purchase price of $4.3 million.
On August 31, 1998, the Company acquired land known as 1800
International Park, from Polar BEK/Colonial Partnership II, a general
partnership of which one of the two general partners is Equity Partners Joint
Venture, a general partnership in which Messrs. J. Lowder, T. Lowder and their
brother, Robert E. Lowder, are the sole general partners ("EPJV"), for $1.8
million. The Company paid the purchase price by issuing a promissory note
payable to Polar BEK/Colonial Partnership II for the full amount of the purchase
price.
On October 7, 1998, the Company acquired land known as Colonial Grand
at Promenade from Colonial Commercial Investments, Inc. ("CCI"), a corporation
owned by Messrs. J. Lowder and T. Lowder for approximately $1.5 million. The
Company paid the purchase price with 34,700 Units.
On November 18, 1998, the Company acquired land known as Colonial
Center at Research Park from CCI for approximately $1.0 million. The Company
paid the purchase price with 36,647 Units.
Brasfield & Gorrie General Contractors, Inc. ("B&G"), a corporation of
which Mr. Gorrie is a shareholder and chairman of the board, was engaged during
1995 to construct the expansion of the Company's Macon Mall. The Company paid
B&G a total of $0.4 million ($384,000 of which was then paid to unaffiliated
subcontractors) during 1998 pursuant to this engagement. The Company had
outstanding construction invoices and retainage payable to this company totaling
$1.2 million at December 31, 1998.
CCI has guaranteed indebtedness of a partnership accounted for by the
Company under the equity method in the aggregate amount of $1.3 million as of
December 31, 1998. The Company has indemnified CCI against any liability it may
incur under this guarantee.
The Management Corporation provided management and leasing services
during 1998 to certain entities in which Messrs. J. Lowder, T. Lowder and R.
Lowder have an interest. The aggregate amount of fees paid to the Management
Corporation by such entities during 1998 was approximately $289,000. The Company
owns a 99% economic interest in the Management Corporation but, due to
limitations imposed by the IRS's REIT rules, owns only 1% of the voting stock.
The remainder of the voting stock is held by members of the Lowder family.
Colonial Insurance Company, a corporation indirectly owned by the
Lowder family, provided insurance brokerage services for the Company during
1998. The aggregate amount paid by the Company to Colonial Insurance Company for
these services for the year ended December 31, 1998, was approximately $131,000.
The Company leased space to certain entities in which the Lowder
family has an interest and received rent from these entities totaling
approximately $1.0 million during 1998.
The Company engaged Lowder Construction Company, Inc., of which Mr. J.
Lowder serves as chairman of the board and which is indirectly owned by Mr. J.
Lowder and T. Lowder, to serve as construction manager for ten multifamily
development and expansion projects during 1998. The Company paid a total of
$40.0 million ($37.3 million of which was then paid to unaffiliated
subcontractors) for the construction of these development and expansion projects
during 1998. The Company had outstanding construction invoices and retainage
payable to Lowder Construction Company, Inc. totaling $4.3 million at December
31, 1998.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information regarding the beneficial
ownership of Common Shares as of March 10, 1999 for (1) each person known by the
Company to be the beneficial owner of more than five percent of the Company's
outstanding Common Shares, (2) each trustee of the Company and each Named
Executive Officer and (3) the trustees and executive officers of the Company as
a group. Each person named in the table has sole voting and investment power
with respect to all shares shown as beneficially owned by such person, except as
otherwise set forth in the notes to the table. References in the table to
"Units" are to units of limited partnership interest in the Operating
Partnership. Units owned by a person named in the table are included in the
"Number of Common Shares" column because such Units are redeemable, at the
option of the holder, for cash equal to the value of an equal number of Common
Shares or, at the election of the Company, for an equal number of Common Shares.
Because of limitations on ownership of Common Shares imposed by the Company's
Declaration of Trust, none of the Lowder brothers nor Mr. Ripps could in fact
redeem all of his Units for Common Shares without divesting a substantial number
of Common Shares in connection with the redemption. The extent to which a person
holds Units as opposed to Common Shares is set forth in the footnotes.
<TABLE>
<CAPTION>
Percent of
Number of Percent of Common
Name and Business Address Common Common Shares
of Beneficial Owner Shares Shares (1) and Units(2)
- -------------------- ------- ---------- ------------
<S> <C> <C> <C> <C>
Thomas H. Lowder 3,285,819 (3) 11.20% 8.90%
Colonial Plaza, Suite 750
2101 Sixth Avenue North
Birmingham, Alabama 35203
James K. Lowder 3,250,950 (4) 11.10% 8.80%
2000 Interstate Parkway
Suite 400
Montgomery, Alabama 36104
Robert E. Lowder 1,848,161 (5) 6.60% 5.00%
One Commerce Street
Montgomery, Alabama 36104
Ohio PERS 1,435,000 (6) 5.50% 3.90%
277 East Town Street
Columbus, OH 43215
Carl F. Bailey 36,442 (7) * *
M. Miller Gorrie 289,346 (8) 1.10% *
William M. Johnson 1,049,853 (9) 3.80% 2.80%
Herbert A. Meisler 541,934 (10) 1.90% 1.50%
Claude B. Nielsen 21,000 (11) * *
Harold W. Ripps 1,925,896 (12) 6.80% 5.20%
1094 Greystone Crest
Birmingham, AL 35242
Donald T. Senterfitt 21,000 (11) * *
Howard B. Nelson, Jr 41,550 * *
C. Reynolds Thompson III 3,791 (14) * *
John N. Hughey 18,494 (14) * *
Robert A. Jackson 4,570 (14) * *
All executive officers and
trustees as a group
(16 persons) 8,705,867 (15) 25.40%(16) 23.40%(17)
<FN>
* Less than 1%
(1) For purposes of this calculation, the number of Common Shares deemed
outstanding includes 26,314,504 Common Shares currently outstanding
and the number of Common Shares issuable to the named person(s) upon
redemption of Units or upon the exercise of options exercisable within
60 days.
(2) For purposes of this calculation, the number of Common Shares and
Units deemed outstanding includes 26,314,504 Common Shares currently
outstanding, 10,610,321 Units currently outstanding (excluding Units
held by the Company), and the number of Common Shares issuable to the
named person(s) upon the exercise of options exercisable within 60
days.
(3) The total includes 68,689 shares owned by Thomas Lowder, 175,296
shares owned by Colonial Commercial Investments, Inc. ("CCI"), a
corporation owned equally by Thomas and James Lowder, 61,574 shares
owned by Equity Partners Joint Venture ("EPJV"), a general partnership
of which Thomas, James and Robert Lowder are the sole general
partners, 9,457 shares owned pursuant to the Company's 401(k) plan,
4,000 shares held in trust for the benefit of Thomas Lowder's children
and 58,502 shares subject to options exercisable within 60 days. In
addition, the total includes 538,211 Units owned by Thomas Lowder,
1,356,919 Units owned by CCI, 1,012,976 Units owned by EPJV and 195
Units held in trust for the benefit of Thomas Lowder's children.
Shares and Units owned by CCI are reported twice in this table, once
as beneficially owned by Thomas Lowder and again as beneficially owned
by James Lowder. Shares and Units owned by EPJV are reported three
times in this table, as beneficially owned by each of the Lowder
brothers.
(4) The total includes 54,020 shares owned by James Lowder, 175,296 shares
owned by CCI, 61,574 shares owned by EPJV, 19,200 shares owned by
James K. Lowder as custodian for his children, 11,252 shares owned
pursuant to the Company's 401(k) plan and 20,000 shares subject to
options exercisable within 60 days and 1,307 shares owned pursuant to
the Company's Non-Employee Trustee Share Plan. In addition, the total
includes 538,211 Units owned by James Lowder, 1,356,919 Units owned by
CCI, 1,012,976 Units owned by EPJV and 195 Units held in trust for the
benefit of James Lowder's children.
(5) The total includes 61,574 shares owned by EPJV and 5,000 shares
subject to options exercisable within 60 days. In addition, the total
includes 737,201 Units owned by Robert Lowder, 1,012,976 Units owned
by EPJV and 195 Units held in trust for the benefit of Robert Lowder's
children.
(6) Based on a Schedule 13G filed with the SEC, reflecting beneficial
ownership as of December 31, 1998.
(7) Includes 1,000 shares owned by Mr. Bailey's spouse and 20,000 shares
subject to options exercisable within 60 days.
(8) Includes 60,422 shares owned by Brasfield & Gorrie, Inc., a
corporation controlled by Mr. Gorrie, 52,961 shares owned by Brasfield
& Gorrie General Contractor, Inc., a corporation controlled by Mr.
Gorrie, 26,000 shares held in an account for Mr. Gorrie's aunt and
over which Mr. Gorrie shares voting and investment power, 2,300 shares
held in trust for Mr. Gorrie's brother, 10,000 shares subject to
options exercisable within 60 days and 115,167 units owned by B&G
Properties.
(9) Includes 564,262 Units owned by Mr. Johnson, 396,365 Units owned by
William M. Johnson Investments II, LLLP, en entity controlled by Mr.
Johnson, 74,505 Units owned by William M. Johnson Investments I, LLLP,
an entity controlled by Mr. Johnson, 12,706 Units owned by Mr.
Johnson's spouse and 348 Units owned by VRS Corp. I, an entity
controlled by Mr. Johnson. Also includes 1,667 shares subject to
options exercisable within 60 days.
(10) Includes 10,000 shares subject to options exercisable within 60 days
and 526,934 Units owned by Meisler Enterprises L.P., a limited
partnership of which Mr. Meisler and his wife are the sole partners.
(11) Includes 20,000 shares subject to options exercisable within 60 days.
(12) Includes 6,667 shares subject to options exercisable within 60 days
and 1,908,380 Units.
(13) Includes 369 Units. Mr. Nelson also owns 400 shares of the Company's
Series A Cumulative Redeemable Preferred Shares, representing less
than 1.0% of the series outstanding.
(14) Includes, for Messrs. Nelson, Thompson, Hughey and Jackson,
respectively, 4,634, 99, 442, and 0 shares held pursuant to the
Company's 401(k) plan and 25,077, 1,667, 11,868 and 3,334 shares
subject to options exercisable within 60 days.
(15) Includes 684,927 Common Shares, 7,783,139 Units and 237,801 Common
Shares subject to options exercisable within 60 days. Shares and Units
held by CCI and EPJV have been counted only once for this purpose.
(16) For purposes of this calculation, the number of Common Shares deemed
outstanding includes 26,314,504 Common Shares outstanding as of March
10, 1999, 7,783,139 Units reported as beneficially owned by Thomas H.
Lowder, James K. Lowder, Mr. Ripps, Mr. Meisler, Mr. Johnson, Mr.
Gorrie and Mr. Nelson, and 237,801 Common Shares subject to options
exercisable within 60 days.
(17) For purposes of this calculation, the number of Common Shares and
Units deemed outstanding is described in note 2 to this table and
includes 237,801 Common Shares subject to options exercisable within
60 days.
</FN>
</TABLE>
Item 13. Certain Relationships and Related Transactions.
The information required by this item is hereby incorporated by
reference to the material appearing in the Proxy Statement under the captions
"Executive Compensation Committee Interlocks and Insider Participation" and
"Certain Transactions."
<PAGE>
Part IV
Item 14. Exhibits, Financial Schedules, and Reports on Form 8-K.
14(a)(1) and (2) Financial Statements and Schedules
Index to Financial Statements and Financial Statement Schedules
Financial Statements:
The following financial statements of CRLP are included in Part II,
Item 8 of this report:
Report of Independent Accountants
Consolidated Balance Sheets as of December 31, 1998 and 1997
Consolidated Statements of Income for the years ended
December 31, 1998, 1997, and 1996
Consolidated Statements of Partner's Capital for the years ended
December 31, 1998, 1997, and 1996
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997, and 1996
Notes to Consolidated Financial Statements
Financial Statement Schedules:
Schedule III Real Estate and Accumulated Depreciation
Report of Independent Accountants
All other schedules have been omitted because the required
information of such other schedules is not present in amounts sufficient to
require submission of the schedule or because the required information is
included in the consolidated financial statements.
14(a)(3) Exhibits
* 3.1 Declaration of Trust of Company.
* 3.2 Bylaws of the Company.
** 10.1 Second Amended and Restated Agreement of Limited
Partnership of the Operating Partnership,as amended.
+ 10.2.1 Registration Rights and Lock-Up Agreement
dated September 29, 1993, among the Company and the
persons named therein.
(PSI) 10.2.2 Registration Rights and Lock-Up Agreement dated
March 25, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.3 Registration Rights and Lock-Up Agreement dated
November 4, 1994, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.4 Registration Rights and Lock-Up Agreement dated
August 20, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.5 Registration Rights and Lock-Up Agreement dated
November 1, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.6 Registration Rights and Lock-Up Agreement dated
July 1, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
(PSI) 10.2.7 Registration Rights and Lock-Up Agreement dated
July 1, 1996, among the Company and the persons
named therein. (EDGAR Version Only)
10.2.8 Registration Rights and Lock-Up Agreement dated
February 23, 1999, among the Company Belcrest
Realty Corporation, and Belair Real Estate
Corporation. (EDGAR Version Only)
10.2.9 Registration Rights and Lock-Up Agreement dated
July 1, 1998, among the Company and the persons
named therein. (EDGAR Version Only)
10.2.10 Registration Rights and Lock-Up Agreement dated
July 31, 1997, among the Company and the persons
named therein. (EDGAR Version Only)
10.2.11 Registration Rights and Lock-Up Agreement dated
November 18, 1998, among the Company and the persons
named therein. (EDGAR Version Only)
10.2.12 Registration Rights and Lock-Up Agreement dated
December 24, 1994, among the Company and the persons
named therein. (EDGAR Version Only)
+ 10.6++ Employment Agreement between the Company and
Thomas H. Lowder.
+ 10.7++ Officers and Trustees Indemnification Agreement.
+ 10.8 Partnership Agreement of the Management Partnership.
** 10.9 Articles of Incorporation of the Management
Corporation, as amended.
+ 10.10 Bylaws of the Management Corporation.
++ 10.11 Credit Agreement between the Colonial Realty Limited
Partnership and SouthTrust Bank,National
Association, AmSouth Bank, N.A., Wells Fargo Bank,
National Association, Wachovia Bank, N.A., First
National Bank of Commerce, N.A., and PNC Bank, Ohio,
National Association dated July 10, 1997 and related
promissory notes.
10.11.1 Amendment to Credit Agreement dated July 10, 1998.
10.11.2 Second Amendment to Credit Agreement dated
August 21,1998.
+ 10.12 ++ Annual Incentive Plan.
++++10.13 Indenture dated as of July 22, 1996, by and between
Colonial Realty Limited Partnership and Bankers
Trust Company, as amended.
10.13.1 First Supplemental Indenture dated as of
December 31, 1998 by and between Colonial Realty
Limited Partnership and Bankers Trust Company,
as amended.
21.1 List of Subsidiaries
23.1 Consent of PricewaterhouseCoopers L.L.P.
27 Financial Data Schedules (EDGAR Version Only)
- --------------------
* Incorporated by reference to the Annexes to Colonial's Proxy
Statement dated September 1, 1995.
** Incorporated by reference to the same titled and number exhibit in
Colonial's Annual Report on Form 10-K dated December 31, 1994.
+ Incorporated by reference to the same titled and numbered
exhibit in Colonial's Registration Statement on Form S-11,
No. 33-65954.
++ Management contract or compensatory plan required to be filed
pursuant to Item 14(c) of Form 10-K.
++ Incorporated by reference to the same titled and number exhibit in
CRLP's Quarterly Report on Form 10-Q dated June 30, 1997.
++++ Incorporated by reference to (i) Exhibit D to the Form 8-K dated July
19, 1996, filed by Colonial Realty Limited Partnership, and (ii)
Exhibit B to the Form 8-K dated December 6, 1996, filed by Colonial
Realty Limited Partnership.
(PSI) Incorporated by reference to the same titled and number exhibit in the
Company's Annual Report on Form 10-K dated December 31, 1997.
(PI) Incorporated by reference to Exhibit 99.1 to Colonial's Registration
Statement on Form S-8, No. 333-60333.
+/- Incorporated by reference to Colonial's Registration Statement on
Form S-8, No. 333-27203.
+/-+/- Incorporated by reference to Colonial's Registration Statement on
Form S-8, No. 333-27205.
(OMEGA) Incorporated by reference to Colonial's Registration Statement on
Form S-8, No. 333-27201.
14(b) Reports on Form 8-K
Reports on Form 8-K filed during the last quarter of 1998: Form 8-K
dated October 26, 1998 reported the authorization of the Form of Rights
Agreement between the Company and BankBoston N.A. under Item 5, "Other
Events".
14(c) Exhibits
The list of Exhibits filed with this report is set forth in
response to Item 14(a)(3).
14(d) Financial Statements
None.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized, on March
30, 1999.
COLONIAL REALTY LIMITED PARTNERSHIP
a Delaware limited partnership
By: /s/ Howard B. Nelson Jr.
------------------------
Howard B. Nelson, Jr.
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this report has been signed below by the following persons on behalf
of the registrant and the capacities indicated on March 30, 1999.
Signature
/s/ Thomas H. Lowder Chairman of the Board, President,
- -------------------------- and Chief Executive Officer
Thomas H. Lowder
/s/ Howard B. Nelson, Jr. Chief Financial Officer
- --------------------------
Howard B. Nelson, Jr.
/s/ Kenneth E. Howell Senior Vice President-Chief
- -------------------------- Accounting Officer
Kenneth E. Howell
/s/ Carl F. Bailey Trustee
- --------------------------
Carl F. Bailey
/s/ M. Miller Gorrie Trustee
- --------------------------
M. Miller Gorrie
/s/ William M. Johnson Trustee
- --------------------------
William M. Johnson
/s/ James K. Lowder Trustee
- --------------------------
James K. Lowder
/s/ Herbert A. Meisler Trustee
- --------------------------
Herbert A. Meisler
/s/ Claude B. Nielsen Trustee
- --------------------------
Claude B. Nielsen
/s/ Harold W. Ripps Trustee
- --------------------------
Harold W. Ripps
/s/ Donald T. Senterfitt Trustee
- --------------------------
Donald T. Senterfitt
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE III
COLONIAL REALTY LIMITED PARTNERSHIP
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
December 31, 1998
Initial Cost to Cost Gross Amount at Which
Company Capitalized Carried at Close of Period
Buildings and Subsequent to Buildings and
Description Encumbrances Land Improvements Acquisition Land Improvements
- ------------------------------ ------------- -------------- -------------- -------------- -------------- ---------------
S-1
Multifamily:
<S> <C> <C> <C> <C> <C> <C> <C>
CG at Barrington $ -0- $ 880,000 $ 8,605,143 $ 168,569 $ 880,000 $ 8,773,712 $ 9,653,712
CG at Bayshore -0- 2,044,100 -0- 18,885,484 1,265,561 19,664,023 20,929,584
CG at Carrollwood 6,230,000 1,464,000 10,657,840 887,864 1,464,000 11,545,704 13,009,704
CG at Edgewater -0- 1,540,000 12,671,606 560,342 1,540,000 13,231,948 14,771,948
CG at Gainesville -0- 3,360,000 24,173,649 3,304,425 3,361,850 27,476,224 30,838,074
CG at Galleria 22,400,000 4,600,000 39,078,925 2,318,735 4,600,000 41,397,660 45,997,660
CG at Galleria II -0- 758,439 7,902,382 26,890 758,439 7,929,272 8,687,711
CG at Galleria Woods 7,101,608 1,220,000 12,480,949 347,858 1,220,000 12,828,807 14,048,807
CG at Heathrow -0- 2,560,661 17,612,990 379,575 2,560,661 17,992,565 20,553,226
CG at Hunter's Creek -0- 3,949,850 -0- 29,885,576 4,725,936 29,109,490 33,835,426
CG at Inverness Lakes -0- 641,334 8,873,906 2,683,421 641,334 7,684,466 8,325,800
CG at Kirkman -0- 2,220,000 21,747,240 885,192 2,220,000 22,632,432 24,852,432
CG at Mountain Brook 11,929,545 1,960,000 21,181,118 1,125,328 1,960,000 22,306,446 24,266,446
CG at Natchez Trace 10,896,842 1,312,000 16,568,050 176,568 1,312,000 16,744,618 18,056,618
CG at Palm Aire -0- 1,488,000 13,515,075 292,594 1,489,500 13,806,169 15,295,669
CG at Palma Sola -0- 1,479,352 -0- 12,571,483 1,479,352 12,571,483 14,050,835
CG at Ponte Vedra -0- 1,440,000 10,038,593 948,276 1,440,000 10,986,869 12,426,869
CG at Research Park 12,775,000 3,680,000 29,322,067 1,054,756 3,680,000 30,376,823 34,056,823
CG at Riverchase -0- 2,340,000 25,248,548 1,105,212 2,340,000 26,353,760 28,693,760
CG at Spring Creek -0- 1,184,000 13,243,975 319,662 1,184,000 13,563,637 14,747,637
CG at Wesleyan -0- 720,000 12,760,587 40,537 720,000 12,801,124 13,521,124
Colony Park -0- 409,401 4,345,599 404,085 409,406 4,749,680 5,159,085
CV at Ashford Place -0- 537,600 5,839,838 142,174 537,600 5,982,012 6,519,612
CV at Ashley Plantation -0- 1,160,000 12,540,387 115,604 1,160,000 12,655,991 13,815,991
CV at Cahaba Heights 3,607,835 625,000 6,548,683 177,084 625,000 6,725,767 7,350,767
CV at Caledon Wood -0- 2,100,000 19,482,210 251,926 2,100,000 19,734,136 21,834,136
CV at Cordova -0- 134,000 3,986,304 393,665 134,000 4,379,969 4,513,969
CV at Haverhill -0- 1,771,000 19,749,176 18,546 1,771,000 19,767,722 21,538,722
CV at Hillcrest -0- 332,800 4,310,671 227,385 332,800 4,538,056 4,870,856
CV at Hillwood 4,845,000 511,700 5,508,300 381,894 511,700 5,890,194 6,401,894
CV at Huntleigh Woods -0- 745,600 4,908,990 750,730 745,600 5,659,720 6,405,320
CV at Inverness 9,900,000 1,713,668 10,352,151 132,842 1,713,668 10,484,993 12,198,661
CV at Inverness II/III -0- 635,819 5,927,265 8,381,975 635,819 14,309,240 14,945,059
CV at Inverness Lakes 5,583,333 735,080 7,254,920 1,807,530 735,080 9,062,450 9,797,530
CV at Lake Mary -0- 2,145,480 -0- 19,409,367 3,634,094 17,920,753 21,554,847
CV at McGehee Place -0- 795,627 -0- 17,163,015 842,321 17,116,321 17,958,642
CV at Monte D'Oro -0- 1,000,000 6,994,227 1,326,469 1,000,000 8,320,696 9,320,696
CV at North Ingle -0- 497,574 4,122,426 406,424 497,574 4,528,850 5,026,424
CV at Oakleigh -0- 880,000 9,685,518 200,802 1,024,334 9,741,986 10,766,320
CV at River Hills -0- 15,319,754 7,474,784 11,171,763 2,551,154 31,415,147 33,966,301
CV at Rocky Ridge 7,245,000 644,943 8,325,057 499,329 644,943 8,824,386 9,469,329
CV at Stockbridge -0- 960,000 11,975,947 382,176 960,000 12,358,123 13,318,123
CV at Timothy Woods -0- 1,020,000 11,910,546 82,777 1,020,000 11,993,323 13,013,323
CV at Trussville -0- 1,504,000 18,800,253 871,867 1,504,000 19,672,120 21,176,120
CV at Vernon Marsh 3,400,000 960,984 3,511,596 3,149,558 960,984 6,661,154 7,622,138
CV at Walton Way -0- 1,024,000 7,877,766 104,791 1,024,000 7,982,557 9,006,557
CV at White Bluff 4,500,000 699,128 4,920,872 330,315 699,128 5,251,187 5,950,315
Patio I, II & III -0- 249,876 3,305,124 1,945,935 366,717 5,134,218 5,500,935
Ski Lodge - Tuscaloosa -0- 1,064,000 6,636,685 880,414 1,064,000 7,517,099 8,581,099
<PAGE>
S-2
Retail:
Abingdon Town Centre -0- 2,051,250 6,687,616 66,883 2,051,250 6,754,499 8,805,749
Colonial Mall Auburn-Opelika -0- 103,480 -0- 15,553,538 723,715 14,933,303 15,657,018
Colonial Shoppes Bardmoor -0- 1,989,019 9,047,663 105,743 2,143,152 8,999,273 11,142,425
Colonial Promenade Bear Lake -0- 2,134,440 6,551,683 94,660 2,134,440 6,646,343 8,780,783
Beechwood Shopping Center -0- 2,565,550 19,647,875 786,371 2,565,550 20,434,246 22,999,796
Bel Air Mall -0- 7,517,000 81,585,057 -0- 7,517,000 81,585,057 89,102,057
Colonial Shoppes Bellwood -0- 330,000 -0- 3,209,650 330,000 3,209,650 3,539,650
Briarcliffe Mall -0- 9,099,972 33,663,654 12,953 9,099,972 33,676,607 42,776,579
Britt David Shopping Center -0- 1,755,000 4,951,852 1,194 1,755,000 4,953,046 6,708,046
Brookwood Village -0- 8,136,700 24,435,002 1,673,055 8,136,700 26,108,057 34,244,757
Colonial Promenade Burnt Store -0- 3,750,000 8,198,677 83,847 3,750,000 8,282,524 12,032,524
Colonial Promenade Tuskawilla -0- 3,659,040 6,783,697 113,066 3,659,040 6,896,763 10,555,803
Colonial Mall Decatur -0- 3,262,800 23,636,229 1,566,670 3,262,800 25,202,899 28,465,699
Colonial Mall Gadsden -0- 639,577 -0- 19,561,774 639,577 19,561,774 20,201,351
Glynn Place Mall -0- 3,588,178 22,514,121 1,054,761 3,588,178 23,568,882 27,157,060
Holly Hill Mall -0- 4,120,000 25,632,587 393,711 4,120,000 26,026,298 30,146,298
Colonial Promenade Hunter's Creek 10,089,395 4,181,760 13,023,401 151,399 4,181,760 13,174,800 17,356,560
Lakeshore Mall -0- 4,646,300 30,973,239 2,076,687 4,646,300 33,049,926 37,696,226
Lakewood Plaza -0- 2,984,522 11,482,512 1,900,323 2,984,522 13,382,835 16,367,357
Macon Mall -0- 1,684,875 -0- 91,501,975 5,591,743 87,595,107 93,186,850
Mayberry Mall 3,350,078 862,500 3,778,590 133,806 862,500 3,912,396 4,774,896
Colonial Shoppes McGehee -0- 197,152 -0- 3,954,077 197,152 3,954,077 4,151,229
Colonial Promenade Montgomery 10,810,000 3,788,913 11,346,754 1,200,517 4,332,432 12,003,752 16,336,184
Colonial Promenade Montgomery Nor -0- 2,400,000 5,664,858 560,392 2,400,000 6,225,250 8,625,250
Northdale Court -0- 3,059,760 8,054,090 850,077 3,059,760 8,904,167 11,963,927
Old Springville Shopping Center -0- 272,594 -0- 3,364,134 277,975 3,358,753 3,636,728
Olde Town Shopping Village -0- 343,325 -0- 2,470,994 343,325 2,470,994 2,814,319
Colonial Shoppes Paddock Park -0- 1,532,520 3,754,879 110,214 1,532,520 3,865,093 5,397,613
Quaker Village -0- 931,000 7,901,874 163,198 931,000 8,065,072 8,996,072
Rivermont Shopping Center 1,693,400 515,250 2,332,486 128,741 515,250 2,461,227 2,976,477
Colonial Shoppes Inverness -0- 1,680,000 1,387,055 93,216 1,680,000 1,480,271 3,160,271
Shoppes at Mansell -0- 600,000 3,089,565 21,041 600,000 3,110,606 3,710,606
Stanly Plaza -0- 450,000 1,657,870 58,196 450,000 1,716,066 2,166,066
Staunton Mall -0- 2,895,000 15,083,542 254,735 2,895,000 15,338,277 18,233,277
Colonial Promenade University Par 14,445,000 6,946,785 20,104,517 414,563 6,946,785 20,519,080 27,465,865
Valdosta Mall -0- 5,377,000 30,239,796 857,786 5,377,000 31,097,582 36,474,582
Village at Roswell Summit 1,628,831 450,000 2,563,642 126,073 450,000 2,689,715 3,139,715
Colonial Promenade Wekiva -0- 2,817,788 15,302,375 127,375 2,817,788 15,429,750 18,247,538
Colonial Promenade Winter Haven -0- 1,768,586 3,928,903 4,574,790 4,045,045 6,227,234 10,272,279
Yadkin Town Center -0- 1,080,000 1,224,136 3,211,391 1,080,000 4,435,527 5,515,527
<PAGE>
S-3
Office:
250 Commerce Street -0- 25,000 200,200 2,280,668 25,000 2,480,868 2,505,868
AmSouth Center -0- 764,961 -0- 18,150,464 764,961 18,150,464 18,915,425
Colonial Plaza -0- 1,001,375 12,381,023 228,170 1,001,375 12,609,193 13,610,568
Concourse Center -0- 4,875,000 25,702,552 42,002 4,875,000 25,744,554 30,619,554
Independence Plaza -0- 1,505,000 6,018,476 180,678 1,505,000 6,199,154 7,704,154
International Park 1,967,410 1,279,355 5,668,186 150,575 1,279,355 5,818,761 7,098,116
Interstate Park 4,208,107 1,125,990 7,113,558 8,924,443 1,125,988 16,038,003 17,163,991
Lakeside Office Park -0- 423,451 8,313,291 235,247 423,451 8,548,538 8,971,989
Mansell Office Park 31,296,233 4,540,000 71,712,971 954,671 4,540,000 72,667,642 77,207,642
P&S Building -0- 104,089 558,646 214,930 104,089 773,576 877,665
Perimeter Corporate Park 5,536,731 1,422,169 18,377,648 261,614 1,422,169 18,639,262 20,061,431
Progress Center -0- 521,037 14,710,851 683,654 521,037 15,394,505 15,915,542
Riverchase Center 8,238,096 1,916,727 22,091,651 1,074,586 1,916,727 23,166,237 25,082,964
Shades Brook Building -0- 873,000 2,240,472 -0- 873,000 2,240,472 3,113,472
University Park -0- 396,960 2,971,049 1,644,998 396,960 4,616,047 5,013,007
Active Development Projects:
CG at Citrus Park -0- 1,223,652 -0- 8,258,914 1,223,652 8,258,914 9,482,566
CG at Cypress Crossing -0- 1,942,202 -0- 17,233,557 1,942,202 17,233,557 19,175,759
CG at Edgewater II -0- 999,221 -0- 11,487,365 999,221 11,487,365 12,486,586
CG at Heather Glen -0- 3,836,003 -0- 5,964,285 3,836,003 5,964,285 9,800,288
CG at Inverness Lakes II -0- 477,259 -0- 8,360,459 477,259 8,360,459 8,837,718
CG at Lakewood Ranch -0- 1,831,987 -0- 16,007,271 1,831,987 16,007,271 17,839,258
CG at Liberty Park -0- 2,115,340 -0- 808,388 2,115,340 808,388 2,923,728
CG at Promenade -0- 1,536,313 -0- 2,783,611 1,536,313 2,783,611 4,319,924
CG at Research Park II -0- 3,538 -0- 51,299 3,538 51,299 54,837
CG at Ridgeland -0- 1,025,720 -0- 428,564 1,025,720 428,564 1,454,284
CG at Wesleyan II -0- 550,991 -0- 5,393,690 550,991 5,393,690 5,944,681
CV at Ashley Plantation II -0- 1,383,770 -0- 1,565,180 1,383,770 1,565,180 2,948,950
CV at Madison -0- 1,695,369 -0- 2,995,140 1,695,369 2,995,140 4,690,509
CV at McGehee Place -0- 60,438 -0- 53,018 60,438 53,018 113,456
Colonial Promenade Trussville -0- 4,199,186 -0- 1,121,816 4,285,842 1,035,160 5,321,002
1800 International Park -0- 1,793,000 -0- 2,156,857 3,949,857 -0- 3,949,857
Colonial Center at Research Park -0- 1,000,000 -0- 373,238 1,373,238 -0- 1,373,238
Other Miscellaneous Projects -0- -0- -0- 1,470,351 -0- 1,470,351 1,470,351
Unimproved Land:
Briarcliffe Mall -0- 1,433,596 -0- -0- 1,433,596 -0- 1,433,596
Valdosta Mall -0- 975,506 -0- -0- 975,506 -0- 975,506
McGehee Place Land 668,364 436,471 -0- -0- 436,471 -0- 436,471
North Heathrow Land -0- 9,553,734 -0- 2,167,333 9,553,734 2,167,333 11,721,067
============= =========== =========== =========== =========== =========== ===========
$ 204,345,808 $246,033,816$1,186,268,309 $435,369,401 $245,185,945$1,618,612,721$1,863,798,665
============= =========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
(INFORMATION CONTINUED FROM PREVIOUS TABLE)
SCHEDULE III, CONTINUED
COLONIAL REALTY LIMITED PARTNERSHIP
REAL ESTATE INVESTMENTS AND ACCUMULATED DEPRECIATION
DECEMBER 31, 1998
Date
Acquired/
Accumulated Date Placed In Depreciable
Description Depreciation Completed Service Lives-Year
- -------------------------------------------------------------------------------------
S-1
Multifamily:
<S> <C> <C> <C> <C>
CG at Barrington $ 790,514 1996 1996 7-40 Years
CG at Bayshore 1,196,831 1997 1985/97/98 7-40 Years
CG at Carrollwood 2,062,188 1966 1994 7-40 Years
CG at Edgewater 2,289,403 1990 1994 7-40 Years
CG at Gainesville 4,318,899 1989/93/94 1994 7-40 Years
CG at Galleria 4,278,059 1986 1994 7-40 Years
CG at Galleria II 679,141 1996 1996 7-40 Years
CG at Galleria Woods 1,206,846 1994 1996 7-40 Years
CG at Heathrow 1,586,655 1997 1994/97 7-40 Years
CG at Hunter's Creek 1,632,756 1996 1996 7-40 Years
CG at Inverness Lakes 994,984 1996 1996 7-40 Years
CG at Kirkman 3,272,298 1991 1994 7-40 Years
CG at Mountain Brook 1,549,053 1987/91 1996 7-40 Years
CG at Natchez Trace 830,133 1995/97 1997 7-40 Years
CG at Palm Aire 2,229,216 1991 1994 7-40 Years
CG at Palma Sola 4,054,758 1992 1992 7-40 Years
CG at Ponte Vedra 1,388,793 1988 1994 7-40 Years
CG at Research Park 3,760,816 1987/94 1994 7-40 Years
CG at Riverchase 3,067,215 1984/91 1994 7-40 Years
CG at Spring Creek 1,267,969 1992/94 1996 7-40 Years
CG at Wesleyan 668,831 1997 1996/97 7-40 Years
Colony Park 665,854 1975 1993 7-40 Years
CV at Ashford Place 414,703 1983 1996 7-40 Years
CV at Ashley Plantation 297,331 1997 1998 7-40 Years
CV at Cahaba Heights 559,259 1992 1996 7-40 Years
CV at Caledon Wood 844,822 1995/96 1997 7-40 Years
CV at Cordova 2,337,725 1983 1983 7-40 Years
CV at Haverhill 227,776 1998 1998 7-40 Years
CV at Hillcrest 319,714 1981 1996 7-40 Years
CV at Hillwood 797,130 1984 1993 7-40 Years
CV at Huntleigh Woods 655,991 1978 1994 7-40 Years
CV at Inverness 1,503,594 1986/87/90 1986/87/90 7-40 Years
CV at Inverness II/III 3,049,894 1997 1997 7-40 Years
CV at Inverness Lakes 1,045,135 1983/96 1993 7-40 Years
CV at Lake Mary 4,252,705 1991/95 1991/95 7-40 Years
CV at McGehee Place 4,266,205 1986/95 1986/95 7-40 Years
CV at Monte D'Oro 913,566 1977 1994 7-40 Years
CV at North Ingle 630,407 1983 1983 7-40 Years
CV at Oakleigh 532,147 1997 1997 7-40 Years
CV at River Hills 3,860,203 1985 1998 7-40 Years
CV at Rocky Ridge 1,134,717 1984 1993 7-40 Years
CV at Stockbridge 1,835,157 1993/94 1994 7-40 Years
CV at Timothy Woods 637,961 1996 1997 7-40 Years
CV at Trussville 1,200,635 1996/97 1997 7-40 Years
CV at Vernon Marsh 1,685,612 1986/87 1986/93 7-40 Years
CV at Walton Way 83,691 1970/88 1998 7-40 Years
CV at White Bluff 713,076 1986 1993 7-40 Years
Patio I, II & III 699,322 1966/83/84 1994/93/93 7-40 Years
Ski Lodge - Tuscaloosa 866,439 1976/92 1994 7-40 Years
<PAGE>
S-2
Retail:
Abingdon Town Centre 202,618 1987/96 1997 7-40 Years
Colonial Mall Auburn-Opelika 8,286,927 1973/84/89 1973/84/89 7-40 Years
Colonial Shoppes Bardmoor 545,346 1981 1996 7-40 Years
Colonial Promenade Bear Lake 607,055 1990 1995 7-40 Years
Beechwood Shopping Center 923,225 1963/92 1997 7-40 Years
Bel Air Mall 12,114 1966/90/97 1998 7-40 Years
Colonial Shoppes Bellwood 1,039,508 1988 1988 7-40 Years
Briarcliffe Mall 2,017,547 1986 1996 7-40 Years
Britt David Shopping Center 515,845 1990 1994 7-40 Years
Brookwood Village 1,164,788 1973/91 1997 7-40 Years
Colonial Promenade Burnt Store 935,279 1990 1994 7-40 Years
Colonial Promenade Tuskawilla 610,478 1990 1995 7-40 Years
Colonial Mall Decatur 2,262,361 1979/89 1993 7-40 Years
Colonial Mall Gadsden 9,004,107 1974/91 1974 7-40 Years
Glynn Place Mall 784,516 1986 1997 7-40 Years
Holly Hill Mall 791,409 1969/86/94 1997 7-40 Years
Colonial Promenade Hunter's Creek 811,823 1993/95 1996 7-40 Years
Lakeshore Mall 1,148,848 1984-87 1997 7-40 Years
Lakewood Plaza 375,609 1995 1997 7-40 Years
Macon Mall 18,411,197 1975/88/97 1975/88 7-40 Years
Mayberry Mall 115,584 1968/86 1997 7-40 Years
Colonial Shoppes McGehee 1,265,015 1986 1986 7-40 Years
Colonial Promenade Montgomery 2,431,972 1990 1993 7-40 Years
Colonial Promenade Montgomery Nor 148,361 1997 1995 7-40 Years
Northdale Court 642,677 1988 1995 7-40 Years
Old Springville Shopping Center 2,700,536 1982 1982 7-40 Years
Olde Town Shopping Village 699,057 1978/90 1978/90 7-40 Years
Colonial Shoppes Paddock Park 312,079 1988 1995 7-40 Years
Quaker Village 265,428 1968/88/97 1997 7-40 Years
Rivermont Shopping Center 69,521 1986/97 1997 7-40 Years
Colonial Shoppes Inverness 69,468 1984 1997 7-40 Years
Shoppes at Mansell 32,183 1996/97 1998 7-40 Years
Stanly Plaza 52,617 1987/96 1997 7-40 Years
Staunton Mall 452,286 1969/86/97 1997 7-40 Years
Colonial Promenade University Par 6,331,114 1986/89 1993 7-40 Years
Valdosta Mall 1,054,291 1982-85 1997 7-40 Years
Village at Roswell Summit 66,061 1988 1997 7-40 Years
Colonial Promenade Wekiva 913,009 1990 1996 7-40 Years
Colonial Promenade Winter Haven 485,229 1986 1995 7-40 Years
Yadkin Town Center 102,084 1971/97 1997 7-40 Years
<PAGE>
S-3
Office:
250 Commerce Street 2,326,569 1904/81 1980 7-40 Years
AmSouth Center 6,108,744 1990 1990 7-40 Years
Colonial Plaza 339,665 1982 1997 7-40 Years
Concourse Center 270,075 1981/85 1998 7-40 Years
Independence Plaza 143,234 1979 1998 7-40 Years
International Park 246,545 1987/89 1997 7-40 Years
Interstate Park 4,822,534 1982-85/89 1982-85/89 7-40 Years
Lakeside Office Park 342,092 1989/90 1997 7-40 Years
Mansell Office Park 1,844,656 1987/96/97 1997 7-40 Years
P&S Building 442,562 1946/76/91 1974 7-40 Years
Perimeter Corporate Park 422,730 1986/89 1998 7-40 Years
Progress Center 584,073 1983/91 1997 7-40 Years
Riverchase Center 1,097,429 1984-88 1997 7-40 Years
Shades Brook Building 23,338 1979 1998 7-40 Years
University Park 1,811,232 1985 1985 7-40 Years
Active Development Projects:
CG at Citrus Park -0- N/A 1997 N/A
CG at Cypress Crossing 123,830 N/A 1998 N/A
CG at Edgewater II 318,451 N/A 1997 N/A
CG at Heather Glen -0- N/A 1998 N/A
CG at Inverness Lakes II 349,674 N/A 1994 N/A
CG at Lakewood Ranch 17,320 N/A 1997 N/A
CG at Liberty Park -0- N/A 1998 N/A
CG at Promenade -0- N/A 1998 N/A
CG at Research Park II -0- N/A 1985 N/A
CG at Ridgeland -0- N/A 1998 N/A
CG at Wesleyan II 1,744 N/A 1996 N/A
CV at Ashley Plantation II -0- N/A 1998 N/A
CV at Madison -0- N/A 1998 N/A
CV at McGehee Place -0- N/A 1987 N/A
Colonial Promenade Trussville -0- N/A 1998 N/A
1800 International Park -0- N/A 1998 N/A
Colonial Center at Research Park -0- N/A 1998 N/A
Other Miscellaneous Projects -0- N/A 1993 N/A
Unimproved Land:
Briarcliffe Mall -0- N/A 1981 N/A
Valdosta Mall -0- N/A 1982/85 N/A
McGehee Place Land -0- N/A 1981 N/A
North Heathrow Land -0- N/A 1997 N/A
- ---------------------------------------------------------------------------------------
$ 169,451,798
=======================================================================================
</TABLE>
<PAGE>
NOTES TO SCHEDULE III
COLONIAL REALTY LIMITED PARTNERSHIP
December 31, 1998
(1) The aggregate cost for Federal Income Tax purposes was approximately
$1,464,775,000 at December 31, 1998.
(2) See description of mortgage notes payable in Note 8 of Notes to
Consolidated Financial Statements.
(3) The following is a reconciliation of real estate to balances reported
at the beginning of the year:
<TABLE>
<CAPTION>
Reconciliation of Real Estate
1998 1997 1996
--------------- --------------- ---------------
Real estate investments:
<S> <C> <C> <C>
Balance at beginning of year $ 1,489,114,015 $ 1,017,009,315 $ 736,937,703
Acquisitions of new property 346,267,522 451,256,964 173,276,789
Improvements and development 134,804,450 97,564,705 107,834,251
Dispositions of property (106,387,322) (76,716,969) (1,039,428)
--------------- --------------- ---------------
Balance at end of year $ 1,863,798,665 $ 1,489,114,015 $ 1,017,009,315
=============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
Reconciliation of Accumulated Depreciation
1998 1997 1996
------------- ------------- -------------
Accumulated depreciation:
<S> <C> <C> <C>
Balance at beginning of year $ 124,236,057 $ 101,541,658 $ 79,780,292
Depreciation 46,787,982 31,945,960 22,015,054
Depreciation of disposition of property (1,572,241) (9,251,561) (253,688)
------------- ------------- -------------
Balance at end of year $ 169,451,798 $ 124,236,057 $ 101,541,658
============= ============= =============
S-4
</TABLE>
<PAGE>
Exhibit 10.2.8
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made
and entered into as of February 23, 1999, between COLONIAL PROPERTIES TRUST, an
Alabama real estate investment trust (the "Company"), BELCREST REALTY
CORPORATION, a Delaware corporation ("Belcrest") and BELAIR REAL ESTATE
CORPORATION, a Delaware corporation ("Belair"; Belcrest and Belair are
collectively referred to herein as the "Contributors").
This Agreement is made in connection with the private sale of
8.875% Series B Cumulative Redeemable Perpetual Preferred Units (the "Series B
Preferred Units") of partnership interest in COLONIAL REALTY LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Operating Partnership")
pursuant to (i) that certain Contribution Agreement, dated as of February 23,
1999, between Belcrest, the Company and the Operating Partnership, in which the
Company holds the sole general partnership interest, and (ii) that certain
Contribution Agreement, dated as of February 23, 1999, between Belair, the
Company and the Operating Partnership. The foregoing contribution agreements are
collectively referred to herein as the "Contribution Agreements." The Series B
Preferred Units may be exchanged for shares of 8.875% Series B Cumulative
Redeemable Perpetual Preferred Shares of Beneficial Interest (the "Preferred
Shares"), par value $.01 per share, of the Company, pursuant to the terms of the
Series B Preferred Units (any such exchange, an "Exchange"). To induce each of
the Contributors to enter into the Contribution Agreements, the Company has
agreed to register for sale by the Contributors and the Holders the Registrable
Securities and to provide the Contributors with certain registration rights set
forth herein. The execution of this Agreement is a condition to the closing
under each of the Contribution Agreements.
In consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Affiliate" shall mean, when used with respect to a specified
Person, another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with the
Person specified.
"Belair" shall have the meaning set forth in the preamble.
"Belcrest" shall have the meaning set forth in the preamble.
"Closing Date" shall mean the date of closing of the Company's
sale of Series B Preferred Units to the Contributors.
"Company" shall have the meaning set forth in the preamble and
shall also include the Company's successors or other parties who succeed to the
Company's obligations hereunder.
"Contribution Agreements" shall have the meaning set forth in
the preamble.
"Contributors" shall have the meaning sets forth in the
preamble and shall include their successors and permitted assigns.
"Exchange" shall have the meaning set forth in the preamble.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and any successor statute thereto, and the rules and regulations of
the SEC thereunder, all as the same shall be in effect at the relevant time.
"Holder" shall mean (i) either of the Contributors or (ii) any
Person holding Registrable Securities as a result of a transfer or assignment of
Registrable Securities to that Person other than pursuant to an effective
registration statement or Rule 144 under the Securities Act, in each case where
securities sold in such transaction may be resold in a public distribution
without subsequent registration under the Securities Act, and together the
entities described in clauses (i) and (ii) hereof shall be "Holders".
"Indemnified Party" shall have the meaning set forth in
Section 7(c) hereof.
"Indemnifying Parance, if the Company so desires; and (vii)
fees and expenses of other Persons reasonably necessary in connection with the
Registration retained by the Company, including any experts, transfer agent or
registrar.
"Registration Request" shall have the meaning set forth in
Section 2(b) hereof.
"Registration Statement" shall mean a registration statement
of the Company and any other person required to be a registrant with respect to
such registration statement pursuant to the requirements of the Securities Act,
which covers the resale of all of the Registrable Securities on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Prospectus contained therein, all exhibits thereto and all material incorporated
by reference therein.
"SEC" shall mean the Securities and Exchange Commission or
any successor federal agency.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and any successor statute thereto, and the rules and regulations of the
SEC thereunder, all as the same shall be in effect at the relevant time.
"Series B Preferred Units" shall have the meaning therefor set
forth in the preamble hereof.
"Underwriter" means a securities dealer who purchases any
Registrable Securities as principal and not as part of such dealer's
market-making activities.
"Underwritten Offering" shall mean a sale of securities of the
Company to an underwriter or underwriters for reoffering to the public.
2. Registration Under the Securities Act.
(a) Demand Registration. Upon receipt of a written request (a "Registration
Request"), which shall include a description of such Holders' proposed method of
distribution (which method may also include an Underwritten Offering by a
nationally recognized Underwriter selected by the Company and reasonably
acceptable to the Registering Holders) from Holders holding Registrable
Securities having an aggregate expected offering price of at least $15,000,000
(or all remaining Registrable Securities if all such remaining Registrable
Securities shall have an aggregate expected offering price of less than
$15,000,000), the Company shall (i) promptly give notice of the Registration
Request to all non-requesting Holders and (ii) prepare and file with the SEC,
within sixty (60) days after receipt of such Registration Request, a
Registration Statement for the sale of all Registrable Securities held by the
requesting Holders and any other Holder who makes a written request of the
Company to have her or his Registrable Securities included in such Registration
Statement, which written request must be received by the Company within ten (10)
days after such Holder receives the Registration Request (all of such Holders,
collectively, the "Registering Holders"). Upon receipt of such written request,
the Company shall use its best efforts to cause such Registration Statement to
be declared effective within one hundred twenty (120) days after receipt of a
Registration Request. The Company shall keep such Registration Statement
continuously effective until the date on which all Registrable Securities have
been sold pursuant to such Registration Statement or are eligible for resale
under Rule 144 without regard to holding periods or volume limitations.
(b) Expenses. The Company shall pay all Registration Expenses in
connection with any registration undertaken pursuant to Section 2(a) hereof. If
the Company at any time agrees (an "Other Agreement") to pay for or reimburse
the legal fees and expenses of any holder(s) of any equity securities of the
Company incurred in connection with one or more registrations of such securities
pursuant to such Other Agreement (including, without limitation, in connection
with compliance with federal or state securities or blue sky laws), then (i) the
Company shall pay or reimburse to the Contributors their reasonable legal fees
and expenses in connection with an equal number of registrations under this
Agreement, up to the amount agreed to be paid or reimbursed by the Company
pursuant to such Other Agreement (it being agreed that, if the Company enters
into more than one Other Agreement, the Contributors' rights under this Section
2(b)(i) shall be determined by reference to the Other Agreement that is most
favorable to the Contributors) and (ii) Registration Expenses shall include such
expenses. The Holder shall pay all underwriting discounts and commissions and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Registration Statement.
3. Hold-Back Agreement.
Each Holder of Registrable Securities shall agree not to
effect any public sale or distribution of securities of the Company of the same
or similar class or classes of the securities included in the Registration
Statement or any securities convertible into or exchangeable or exercisable for
such securities, including a sale pursuant to Rule 144 or Rule 144A under the
Securities Act, during such periods as reasonably requested by the Underwriter
in an underwritten public offering by the Company; provided that no Holder shall
be so obligated under this Section 3 in the event that any such period requested
by the Underwriter is longer than ninety (90) days and or occurs more than once
in any twelve (12) month period.
4. Registration Procedures.
In connection with the obligations of the Company with respect
to a Registration Statement pursuant to Section 2(a) hereof, the Company shall
use all commercially reasonable efforts to effect or cause to be effected the
registration of the Registrable Securities under the Securities Act to permit
the sale of such Registrable Securities by the Holder in accordance with its
intended method or methods of distribution, and the Company shall:
(a) prepare and file with the SEC, as specified in Section 2 hereof, a
Registration Statement, which Registration Statement shall comply as to form in
all material respects with the requirements of the applicable form and include
all financial statements required by the SEC to be filed therewith, and use its
best efforts to cause such Registration Statement to become effective and remain
effective in accordance with Section 2 hereof;
(b) subject to Section 4(j) hereof, prepare and file with the SEC
such amendments and post-effective amendments to each such Registration
Statement as may be necessary to keep such Registration Statement effective for
the applicable period; cause each such Prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed pursuant to
Rule 424 or any similar rule that may be adopted under the Securities Act; and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by each Registration Statement during the applicable
period in accordance with the intended method or methods of distribution by the
selling Holder thereof;
(c) furnish to the Holder of Registrable Securities without
charge, as many copies of each Prospectus, including each or summary prospectus
preliminary Prospectus, and any amendment or supplement thereto and such other
documents as such Holder may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Securities; the Company
consents to the use of any such Prospectus, including each preliminary
Prospectus, by the Holder of Registrable Securities, if any, in connection with
the offering and sale of the Registrable Securities covered by any such
Prospectus;
(d) use its best efforts to register or qualify, or obtain exemption from
registration or qualification for, all Registrable Securities by the time the
applicable Registration Statement is declared effective by the SEC under all
applicable state securities or "blue sky" laws of such jurisdictions as the
Holder of Registrable Securities covered by a Registration Statement shall
reasonably request in writing, keep each such registration or qualification or
exemption effective during the period such Registration Statement is required to
be kept effective and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; provided, however, that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction or to register as a broker
or dealer in such jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d), (ii) subject itself to taxation in any such
jurisdiction, or (iii) submit to the general service of process in any such
jurisdiction;
(e) notify the Holder of Registrable Securities promptly and,
if requested by such Holder, confirm such advice in writing (i) when a
Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of the issuance by the
SEC or any state securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any proceedings
for that purpose, and (iii) of the happening of any event during the period a
Registration Statement is effective as a result of which such Registration
Statement or the related Prospectus contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iv) of the
Company's receipt of any notification of the suspension of the qualification of
any Registrable Securities covered by a Registration Statement for sale in any
jurisdiction; in the event the Company shall give notice as to the occurrence of
any event described Sections 4(e)(ii), 4(e)(iii) or 4(e)(iv) hereof, the Company
shall extend the period during which such Registration Statement shall be
maintained effective by the number of days during the period from and including
the date of the giving of such notice to the date the Company delivers notice
that disposition may be made;
(f) furnish to the Holder of Registrable Securities copies of any request
by the SEC or any state securities authority of amendments of supplements to a
Registration Statement and Prospectus or for additional information;
(g) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
(h) provide to the Holders, at no cost to such Holders, a copy of the
Registration Statement and any amendment thereto with respect to Registrable
Securities, each Prospectus contained in such Registration Statement or
post-effective amendment and any amendment or supplement thereto and such other
documents as such Holders may reasonably request in order to facilitate the
disposition of their Registrable Securities covered by such Registration
Statement; the Company consents to the use of each such Prospectus and any
supplement thereto by such Holders in connection with the offering and sale of
their Registrable Securities covered by such Registration Statement or any
amendment thereto;
(i) upon the occurrence of any event contemplated by Section
4(e)(iii) hereof, immediately notify all Holders of the Registrable Securities
affected by such event of such event and prepare and provide to such Holders a
supplement or post-effective amendment to a Registration Statement or the
related Prospectus or any document incorporated therein by reference and file
any required document so that, as thereafter delivered to the purchasers of the
Registrable Securities, such Prospectus will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(j) make available for inspection by representatives of the Holder of the
Registrable Securities and any Underwriters participating in any disposition
pursuant to a Registration Statement and any special counsel or accountant
retained by such Holders or Underwriters, all financial and other records,
pertinent corporate documents and properties of the Company and cause the
respective officers, trustees and employees of the Company to supply all
information reasonably requested by any such representative, Underwriter,
special counsel or accountant in connection with a Registration Statement;
provided, however, that such records, documents or information which the Company
determines, in good faith, to be confidential and notifies such representatives,
Underwriters ' special counsel or accountants are confidential shall not be
disclosed by the representatives, underwriters special counsel or accountants
unless (i) the disclosure of such records, documents or information is necessary
to avoid or correct a misstatement or omission in a Registration Statement, (ii)
the release of such records, documents or information is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, or (iii) such
records, documents or information have been generally made available to the
public;
(k) use all commercially reasonable efforts (including, without limitation,
seeking to cure any deficiencies (within the Company's control) cited by such
exchange or market in the Company's listing application) to list all Registrable
Securities on The New York Stock Exchange (unless the Company qualifies and
chooses to list all Registrable Securities on the American Stock Exchange or The
NASDAQ National Market, in which event the Company shall use its best efforts to
list all Registrable Securities on the American Stock Exchange or The NASDAQ
National Market);
(l) provide a CUSIP number for all Registrable Securities, not
later than the effective date of the Registration Statement;
(m) comply with the Securities Act and the Exchange Act in
connection with the offer and sale of the Registrable Securities to be sold
pursuant to a Registration Statement, and shall use all commercially reasonable
efforts to make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least twelve (12) months which
shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder;
(n) provide and cause to be maintained a transfer agent for all
Registrable Securities covered by such Registration Statement from and after a
date not later than the effective date of such Registration Statement;
(o) cooperate with the Holders to facilitate the timely preparation and
delivery of certificates representing their Registrable Securities to be sold
pursuant to a Registration Statement and not bearing any Securities Act legend;
and enable certificates for such Registrable Securities be issued for such
numbers of shares and registered in such names as such Holders may reasonably
request at least two (2) business days prior to any sale of their Registrable
Securities;
(p) enter into customary agreements (including an underwriting
agreement or securities sales agreement, if any, in customary form) containing
such representations and warranties to the Holders of such Registrable
Securities and the Underwriters, if any, in form, substance and scope as are
customarily made by issuers to underwriters in similar underwritten offerings as
may be reasonably requested by them and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities; and
(q) furnish to each Registering Holder and to each Underwriter,
if any, a signed counterpart, addressed to such Registering Holder or
Underwriter, of (i) an opinion or opinions of counsel to the Company and (ii) a
comfort letter or comfort letters from the Company's independent public
accountants (to the extent permitted by the standards of the American Institute
of Certified Public Accountants), each in customary form and covering such
matters of the type customarily covered by opinions or comfort letters, as the
case may be, as the Holders of a majority of the Registrable Securities included
in such offering or the managing Underwriter or Underwriters therefor reasonably
request.
The Company may require the Holder of Registrable Securities
to furnish to the Company in writing such information regarding the proposed
distribution by such Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing.
The Holders agree that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 4(e)(iii)
hereof, such Holder will immediately discontinue disposition of Registrable
Securities pursuant to a Registration Statement until such Holders' receipt of
the copies of the supplemented or amended Prospectus, if so directed by the
Company, such Holders will deliver to the Company (at the expense of the
Company) all copies in its possession, other than permanent file copies then in
such Holders' possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.
5. Black-Out Period.
(a) Following the effectiveness of a Registration Statement (and the
filings with any state securities commissions), the Company may direct the
Holder to suspend sales of the Registrable Securities for such times as the
Company reasonably may determine is necessary and advisable, including the
following events (each, a "Suspension Event"): (i) an underwritten primary
offering by the Company where the Company is advised by the underwriters for
such offering that sale of Registrable Shares under the Registration Statement
would have a material adverse effect on the primary offering, or (ii) pending
negotiations relating to, or consummation of, a transaction or the occurrence of
an event (x) that would require additional disclosure of material information by
the Company in the Registration Statement (or such filings), (y) as to which the
Company has a bona fide business purpose for preserving confidentiality or (z)
which renders the Company unable to comply with SEC requirements, in each case
under circumstances that would make it impractical or inadvisable to cause the
Registration Statement (or such filings) to become effective or to promptly
amend or supplement the Registration Statement on a post-effective basis, as
applicable.
(b) In the event of a Suspension Event, the Company may give notice (a
"Suspension Notice") to the Holder to suspend sales of the Registrable Shares so
that the Company may correct or update the Registration Statement (or such
filings); provided, however, that such suspension shall continue only for so
long as the Suspension Event or its effect is continuing. The Holder agrees that
it will not effect any sales of the Registrable Shares pursuant to such
Registration Statement (or such filings) at any time after it has received a
Suspension Notice from the Company. If so directed by the Company, Holder will
deliver to the Company all copies of the Prospectus covering the Registrable
Shares held by them at the time of receipt of the Suspension Notice. The Holder
may recommence effecting sales of the Registrable Shares pursuant to the
Registration Statement (or such filings) following further notice to such effect
(an "End of Suspension Notice") from the Company, which End of Suspension Notice
shall be given by the Company promptly following the conclusion of any
Suspension Event and the effectiveness of any required amendment or supplement
to be the Registration Statement.
(c) Notwithstanding the provisions of Sections 5(a) and 5(b) to the
contrary: (i) no Holder shall be subject to the provisions of Sections 5(a) and
5(b) hereof for a period of time in excess of sixty (60) days; and (ii) no
Suspension Notice may be given more than twice in any twelve (12) month period.
Moreover, notwithstanding Section 2(a) hereof, if the Company shall give a
Suspension Notice pursuant to this Section 5, the Company agrees it shall extend
the period during which the Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from the date
of the giving of the Suspension Notice to and including the date when the
Holders shall have received the End of Suspension Notice and copies of the
supplemented or amended Prospectus necessary to resume sales.
6. Rule 144 and Rule 144A.
For so long as the Company is subject to the reporting
requirements of Section 13 or 15 of the Exchange Act, the Company covenants that
it will timely file the reports required to be filed by it under the Securities
Act and Section 13(a) or 15(d) of the Exchange Act and the rules and regulations
adopted by the SEC thereunder and, if at any time the Company is not required to
file such reports, it will, upon the request of any Holder of Registrable
Securities, make publicly available other information so long as necessary to
permit sales pursuant to Rule 144 under the Securities Act. The Company also
covenants that it will provide the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any Holder of
Registrable Securities and it will take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time, to enable such Holder to sell its Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, (b) Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or (c) any similar rule or regulation hereafter
adopted by the SEC. Upon the request of any Holder of Registrable Securities,
the Company will deliver to such Holder a written statement as to whether it has
complied with such requirements.
7. Indemnification.
(a) The Company will indemnify each Registering Holder, each such Holder's
officers and directors, and each person controlling such Holder within the
meaning of Section 15 of the Securities Act, against all claims, losses,
damages, liabilities and expenses (including reasonable legal expenses), arising
out of or based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement or prospectus relating to
such Holders' Registrable Securities, or any amendment or supplement thereto, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading; provided, however, that the Company will not indemnify and will not
be liable to any Registered Holder in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
conformity with and in reliance upon information furnished in writing to the
Company by such Holder or by an underwriter for inclusion therein or such
Holder's failure to deliver any Prospectus or amendment or supplement thereto.
(b) Each Registering Holder will indemnify the Company, each of its
trustees and each of its officers who signs the registration statement, each
underwriter, if any, of the Company's securities covered by such registration
statement, and each person who controls the Company or such underwriter within
the meaning of Section 15 of the Securities Act, against all claims, losses,
damages, liabilities and expenses (including reasonable legal fees and expenses)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such registration statement or prospectus, or
any amendment or supplement thereto, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement (or alleged untrue
statement) or omission (or alleged omission) is made in such registration
statement or prospectus, in reliance upon and in conformity with information
furnished in writing to the Company by such Holder for inclusion therein.
(c) Each party entitled to indemnification under this Section 7 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought. However,
the failure to so notify the Indemnifying Party shall not relieve the
Indemnifying Party from any liability which it may have to the Indemnified Party
pursuant to the provisions of this Section 7, except to the extent of the actual
damages suffered by such delay in notification. The Indemnifying Party shall
assume the defense of such action. including the employment of counsel, which
shall be chosen by the Indemnifying Party and shall be reasonably satisfactory
to the Indemnified Party, and payment of expenses in connection with such
defense. The Indemnified Party shall have the right to employ its own counsel in
any such case, but the legal fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless (i) the employment of such counsel shall
have been authorized in writing by the Indemnifying Party, (ii) the Indemnifying
Party shall not have assumed the defense of such action within a reasonable
period of time, or (iii) the Indemnified Party shall have been reasonably
advised by its counsel that there may be defenses available to it or them which
are different from or additional to those available to Indemnifying Party (in
which case the Indemnifying Party shall not have the right to direct the defense
of such action on behalf of the Indemnified Party), in any of which events such
fees and expenses shall be borne by the Indemnifying Party. No Indemnifying
Party in the defense of any such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to the entry of any judgment or enter
into any settlement that does not include as an unconditional term thereof the
giving by the claimant or plaintiff to each such Indemnified Party of a release
from all liability in respect to such claim or litigation.
(d) If the indemnification provided for in this Section 7 is unavailable to
a party that would have been an Indemnified Party under this Section 7, then
each party that would have been an Indemnifying Party hereunder shall, in lieu
of indemnifying such Indemnified Party, contribute to the amount paid or payable
by such Indemnified Party as a result of such claims, losses, damages,
liabilities and expenses in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party on the one hand and such Indemnified
Party on the other in connection with the statement or omission which resulted
in such claims, losses, damages, liabilities and expenses, as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
related to information supplied by the Indemnifying Party or the Indemnified
Party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
each Registering Holder agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
or by any other method of allocation that fails to take account of the equitable
considerations referred to above in this Section 7(d).
(e) No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
(f) In no event shall any Registering Holder be liable for any claims,
losses, damages, liabilities or expenses pursuant to this Section 7 in excess of
the proceeds to such Holder for the sale of such Holder's Registrable Securities
pursuant to a Registration.
8. Miscellaneous.
(a) No Inconsistent Agreement. The Company has not entered into nor will
the Company on or after the date of this Agreement enter into any agreement
which is inconsistent with the rights granted to the Holder of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holder do not in any way conflict with and are not
inconsistent with the rights granted to the holder of the Company's other issued
and outstanding securities under any such agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the written consent of the Company and the Holder(s) of a majority of
the Registrable Securities (including outstanding Series B Preferred Units).
(c) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if
to the Contributors, c/o Eaton Vance Management, One Federal Plaza Street,
Boston, Massachusetts 02110, Attention: Alan Dynner, telecopier number (617)
338-8054, and thereafter at such other address or telecopier number, notice of
which is given in accordance with the provisions of this Section 8(c), with a
copy to Shearman & Sterling, 599 Lexington Avenue, New York, New York 10022,
Attention: Peter H. Blessing, Esq., telecopier number (212) 848-7179, (ii) if to
an assignee or transferee of the Contributors, to such address or telecopier
number such assignee or transferee shall have provided to the Company, and
thereafter at such other address or telecopier number, notice of which is given
in accordance with the provisions of this Section 8(c) and (iii) if to the
Company, at 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama 35203,
Attention: President, telecopier number (205) 250-8890, and thereafter at such
other address or telecopier number, notice of which is given in accordance with
the provisions of this Section 8(c), with a copy to Hogan & Hartson, L.L.P.,
Columbia Square, 555 13th Street, N.W., Washington, D.C. 20004, Attention: Alan
Dye, Esq., telecopier number (202) 637-5910. All such notices and communications
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; five (5) business days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and on the next business day if timely delivered to
an air courier guaranteeing overnight delivery.
(d) Successors. The rights and obligations of any Holder hereunder may be
assigned to any other Holder. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of the Company and the Holder.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ALABAMA, WITHOUT GIVING EFFECT
TO THE CONFLICTS OF LAW PROVISIONS THEREOF. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF ALABAMA IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(h) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(i) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to complete specific performance of the obligations of any other party under
this Agreement to accordance with the terms and conditions of this Agreement in
any court of the United States or any State thereof having jurisdiction.
(j) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to the subject
matter hereof. (k) Attorneys' Fees. If the Company or any Holder brings an
action to enforce its rights under this Agreement, the prevailing party in the
action shall be entitled to recover its costs and expenses, including without
limitation, reasonable attorneys' fees, incurred in connection with such action,
including any appeal of such action.
(1) Authority; Binding Effect. Each party hereto represents and warrants
that it has the fall legal right, power and authority to execute this Agreement,
that this Agreement has been duly authorized, executed and delivered on behalf
of such party and constitutes a valid and binding agreement of such party
enforceable in accordance with its terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
COLONIAL PROPERTIES TRUST
By:
Name:
Title:
BELCREST REALTY CORPORATION
By:
Name:
Title:
BELAIR REAL ESTATE CORPORATION
By:
Name:
Title:
Exhibit 10.2.9
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this "Agreement") is
made and entered into as of July 1, 1998, by and among Colonial Properties
Trust, an Alabama real estate investment trust (the "Company"), Colonial Realty
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"), and William M. Johnson Investments I, LLLP, William M. Johnson
Investments II, LLLP, and William M. Johnson (the "Holders").
WHEREAS, on the date hereof the Operating Partnership is acquiring
certain real property known as "Mansell Overlook 200" pursuant to a Contribution
and Merger Agreement dated as of July 31, 1997, by and between Colonial
Properties Holding Company, Inc. ("CPHC"), and the Operating Partnership and
Mansell Overlook 200, LLC, William M. Johnson and Phyllis Johnson and certain
real property known as "The Shoppes at Mansell" pursuant to a Contribution and
Merger Agreement dated as of July 31, 1997, by and between CPHC and the
Operating Partnership and the Shoppes at Mansell, L.P., William M. Johnson and
Phyllis Johnson (together, the "Contribution Agreements") and in connection
therewith the Holders will receive Class B Units of limited partnership interest
in the Operating Partnership (such Class B Units and the Class A Units of
limited partnership interest into which such Class B Units will be converted
being referred to hereinafter as the "Units");
WHEREAS, in order to induce the Holders to consummate the closing
contemplated under the Contribution Agreements, the Company has agreed to grant
the Holders the registration rights set forth in Section 3 hereof;
WHEREAS, in order to induce the Operating Partnership to consummate the
closing contemplated under the Contribution Agreements, the Holders have agreed
to the Lock-up (as defined in Section 2(a) hereof);
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Common Shares" shall mean common
shares of beneficial interest, par value $ .01 per share, in the
Company.
"Company"shall have the meaning set forth in the Preamble and also shall include
the Company's successors.
"Dispose of" shall have the meaning set forth in Section 2(a) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Holders" shall have the meaning set forth in the Preamble and also shall
include the Holders' successors and permitted assigns.
"Lock-up" shall have the meaning set forth in Section 2(a) hereof.
"Lock-up Period" shall have the meaning set forth in Section 2(a)
hereof.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Operating Partnership" shall have the meaning set forth in the Preamble and
also shall include the Operating Partnership's successors.
"Person" shall mean an individual, partnership, corporation, trust, estate, or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Prospectus" shall mean the prospectus included in a Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by a Shelf
Registration Statement, and by all other amendments and supplements to such
prospectus, including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Registrable Securities" shall mean the Shares, excluding (i) Shares for which a
Registration Statement relating to the sale thereof shall have become effective
under the Securities Act and which have been disposed of under such Registration
Statement and (ii) Shares sold pursuant to Rule 144 under the Securities Act or
Shares which, when combined with all other Shares then owned by the Holders, are
eligible for sale pursuant to Rule 144 in a single transaction in accordance
with the volume limitations contained in Rule 144(e) (or any successor rule
under the Securities Act).
"Registration Expenses" shall mean any and all expenses incident to performance
of or compliance with this Agreement, including, without limitation: (i) all
SEC, stock exchange or NASD registration and filing fees; (ii) all fees and
expenses incurred in connection with compliance with state securities or "blue
sky" laws (including reasonable fees and disbursements of counsel in connection
with "blue sky" qualification of any of the Registrable Securities and the
preparation of a Blue Sky Memorandum) and compliance with the rules of the NASD;
(iii) all expenses of any Persons in preparing or assisting in preparing, word
processing, printing and distributing any Registration Statement, any
Prospectus, certificates and other documents relating to the performance of and
compliance with this Agreement; (iv) all fees and expenses incurred in
connection with the listing, if any, of any of the Registrable Securities on any
securities exchange or exchanges pursuant to Section 4(1) hereof; and (v) the
fees and disbursements of counsel for the Company and of the independent public
accountants of the Company, including the expenses of any special audits or
"cold comfort" letters required by or incident to such performance and
compliance. Registration Expenses shall specifically exclude underwriting
discounts and commissions, the fees and disbursements of counsel representing
the Holders, and transfer taxes, if any, relating to the sale or disposition of
Registrable Securities by the Holders, all of which shall be borne by the
Holders in all cases.
"Registration Notice" shall have the meaning set forth in Section 4(b) hereof.
"Registration Statement" or "Shelf Registration Statement" shall mean a "shelf"
registration statement of the Company and any other Person required to be a
registrant with respect to such shelf registration statement pursuant to the
requirements of the Securities Act which covers the issuance or resale of the
Registrable Securities on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from time to
time.
"Shares"shall mean any Common Shares issued or to be issued to the Holders upon
redemption of their Units. "Shelf Registration" shall mean a
registration required to be effected pursuant to Section 3 hereof.
"Units" shall have the meaning set forth in the Preamble.
2. Lock-up Agreement.
2(a) Each Holder hereby agrees that, except as set forth in
Sections 2(b) and 2(c) below, for a period of three years from July 31, 1997
(the "Lock-up Period"), without the prior written consent of the Company, it
will not offer, pledge, sell, contract to sell, grant any options for the sale
of or otherwise dispose of, directly or indirectly (collectively, "Dispose of"),
any Units (the "Lock-up"); provided, however, that if William M. Johnson ceases
to be a Trustee of the Company at any time prior to July 31, 2000, the Lock-up
Period shall expire on the later of (i) July 31, 1998, or (ii) the date William
M. Johnson ceases to be a Trustee.
2(b) The following transfers of Units shall not be subject to the Lock-up
set forth in Section 2(a): (i) a Holder may Dispose of Units as a gift or other
transfer without consideration; (ii) a Holder who is a natural person may
Dispose of Units to his or her spouse, siblings, parents or any natural or
adopted children or other descendants or to any personal trust in which such
family members or such Holder retains the entire beneficial interest; (iii) a
Holder may Dispose of Units to one or more corporations, partnerships or other
business entities that are wholly owned and controlled, legally and
beneficially, by such Holder or by a Person or Persons that directly or
indirectly wholly own and control such Holder; (iv) a Holder that is a
corporation, partnership or other business entity (other than a Holder in which
any Person other than William M. Johnson or Phyllis Johnson owns an equity
interest) may Dispose of Units by distributing such Units in a liquidation,
winding up or otherwise without consideration to the equity owners of such
corporation, partnership or business entity or to any other corporation,
partnership or business entity that is wholly owned by such equity owners; and
(v) a Holder may Dispose of Units pursuant to a pledge, grant of security
interest or other encumbrance effected in a bona fide transaction with an
unrelated and unaffiliated pledgee. In the event that a Holder Disposes of Units
as permitted by this Section 2(b), such Units shall remain subject to this
Agreement and, as a condition of the validity of such disposition, the
transferee shall be required to execute and deliver a counterpart of this
Agreement (except that a pledgee shall not be required to execute and deliver a
counterpart of this Agreement until it forecloses upon such Units). Thereafter,
such transferee shall be deemed to be a Holder for purposes of this Agreement.
2(c) William M. Johnson may Dispose of Units for the purpose of exercising such
rights as are accorded to him under Section 8.12(b) of each of the Contribution
Agreements. 3. Shelf Registration Under the Securities Act.
3(a) Filing of Shelf Registration Statement.
At any time beginning on the sixtieth day prior to the expiration of the
Lock-up Period (or after the expiration of the Lock-up Period), any Holder, or
one or more Holders, may deliver to the Company a written notice requesting that
the Company cause to be filed with the SEC a Registration Statement registering
the resale by such Holders of a specified number of Registrable Securities
(which number shall not be less than 50,000 minus the number of any Common
Shares that William M. Johnson and/or Phyllis Johnson simultaneously request by
written notice to be registered for resale pursuant to Section 3(a) of the
Registration Rights and Lock-Up Agreement dated as of July 31, 1997, by and
among the Company, the Operating Partnership and William M. Johnson and Phyllis
Johnson) held by or issuable to such Holder(s). Within 60 days of its receipt of
such a notice the Company shall cause to be filed with the SEC a Shelf
Registration Statement providing for the resale by such Holder(s) of the
Registrable Securities specified in the notice (and, if the Company so elects,
any other securities of the Company held by the Holders or any other Person,
including any other Registrable Securities held by the requesting Holder(s) or
other Holders) in accordance with the terms hereof and will use its reasonable
efforts to cause such Shelf Registration Statement to be declared effective by
the SEC as soon as practicable thereafter. The Company also may, at any time and
without receipt of a notice or request from any Holder(s), file a Shelf
Registration Statement registering the resale of all Registrable Securities not
previously covered by a Shelf Registration Statement, which Shelf Registration
Statement also may register for sale Common Shares held by any other Person and
which shall satisfy the Company's obligation to file a Shelf Registration
Statement under this Section 3(a). The Company agrees to use its reasonable
efforts to keep any Shelf Registration Statement filed pursuant to this Section
3(a) continuously effective for a period expiring on the date on which all of
the Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or have become eligible for
sale pursuant to Rule 144 in a single transaction in accordance with the volume
limitations contained in Rule 144(e) (or any successor rule under the Securities
Act) and, subject to Section 4(b) and Section 4(i), further agrees to supplement
or amend the Shelf Registration Statement, if and as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or by any
other rules and regulations thereunder for shelf registration; provided,
however, that the Company shall not be deemed to have used its reasonable
efforts to keep a Registration Statement effective during the applicable period
if it voluntarily takes any action that would result in the selling Holders
covered thereby not being able to sell such Registrable Securities during that
period, unless such action is required under applicable law or the Company has
filed a post-effective amendment to the Registration Statement and the SEC has
not declared it effective. Notwithstanding the foregoing, the Company shall not
be required to file a Registration Statement or to keep a Registration Statement
effective if the negotiation or consummation of a transaction is pending or an
event has occurred, which negotiation, consummation or event would require
additional disclosure by the Company in the Registration Statement of material
information which the Company has a bona fide business purpose for keeping
confidential and the nondisclosure of which in the Registration Statement might
cause the Registration Statement to fail to comply with applicable disclosure
requirements, and the Company so advises the affected Holder(s) in a writing
signed by the chief executive officer or chief financial officer of the Company;
provided, however, that the Company may not delay, suspend or withdraw a
Registration Statement for such reason for more than 60 days or more often than
twice during any period of 12 consecutive months. 3(b) Expenses. The Company
shall pay all Registration Expenses in connection with any registration pursuant
to Section 3(a). Each Holder shall pay all underwriting discounts, if any, sales
commissions, fees and disbursements of counsel representing such Holder, and
transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement or Rule 144
under the Securities Act. 3(c) Inclusion in Shelf Registration Statement. Any
Holder who does not timely provide the information reasonably requested by the
Company in connection with any Shelf Registration Statement shall not be
entitled to have such Holder's Registrable Securities included in the Shelf
Registration Statement. 3(d) Repurchase Option. If a Holder redeems Units
pursuant to the Amended and Restated Agreement of Limited Partnership of the
Operating Partnership prior to such Holder's request for or the Company's
voluntary filing of a Shelf Registration Statement pursuant to Section 3(a)
covering the Shares issuable upon such redemption, the Company may, in the event
that such Holder subsequently delivers to the Company a notice pursuant to
Section 3(a) requesting registration of the resale of any such Shares, elect to
repurchase such Shares for cash in lieu of filing a Shelf Registration
Statement. The Company shall make any such election by delivering written notice
to the Holder within 30 days after receipt of such request. If the Company so
elects, the purchase price per Share so repurchased shall be equal to the
average of the closing prices of the Common Shares on the New York Stock
Exchange (or on such other exchange or in such other market as the Common Shares
are then listed or traded) on the ten trading days preceding the Company's
receipt of such request (or, if the Common Shares have not traded on all ten of
such trading days, in an amount equal to the fair value of such Registrable
Securities as determined in good faith by the Board of Trustees of the Company).
4. Registration Procedures.
In connection with the obligations of the Company
with respect to the Registration Statement pursuant to Section 3 hereof, the
Company shall:
4(a) prepare and file with the SEC, within the time period set forth in
Section 3 hereof, a Shelf Registration Statement, which Shelf Registration
Statement (i) shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution by the Holder(s)
thereof and (ii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith;
4(b) subject to the last three sentences of this Section 4(b) and Section
4(i) hereof, (i) prepare and file with the SEC such amendments and
post-effective amendments to each such Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable
period; (ii) cause each such Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
or any similar rule that may be adopted under the Securities Act; (iii) respond
as promptly as practicable to any comments received from the SEC with respect to
the Shelf Registration Statement, or any amendment, post-effective amendment or
supplement relating thereto; and (iv) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the Holder(s) thereof.
Notwithstanding anything to the contrary contained herein, the Company shall not
be required to take any of the actions described in subsections (i), (ii) or
(iii) above with respect to a Holder unless and until the Company has received a
notice (a "Registration Notice") from such Holder that such Holder intends to
make offers or sales under the Registration Statement as specified in such
Registration Notice; provided, however, that the Company shall have ten business
days to prepare and file any such amendment or supplement after receipt of such
Registration Notice. Once a Holder has delivered a Registration Notice to the
Company, such Holder shall promptly provide to the Company such information as
the Company reasonably requests in order to identify such Holder and the method
of distribution in a Registration Statement or post-effective amendment to the
Registration Statement or a supplement to the Prospectus. Such Holder also shall
notify the Company in writing upon completion of such offer or sale or at such
time as such Holder no longer intends to make offers or sales under the
Registration Statement;
4(c) furnish to each Holder of Registrable Securities that has delivered a
Registration Notice to the Company, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder may reasonably
request, in order to facilitate the public sale or other disposition of the
Registrable Securities; the Company consents to the use of the Prospectus,
including each preliminary Prospectus, by each such Holder of Registrable
Securities in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or the preliminary Prospectus;
4(d) use its reasonable efforts to register or qualify the Registrable
Securities by the time the applicable Registration Statement is declared
effective by the SEC under all applicable state securities or "blue sky" laws of
such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement shall reasonably request in writing, keep each such
registration or qualification effective during the period such Registration
Statement is required to be kept effective or during the period offers or sales
are being made by any such Holder, whichever is shorter, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
each such Holder to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction or to register as a broker or dealer in such jurisdiction where it
would not otherwise be required to qualify but for this Section 4(d), (ii)
subject itself to taxation in any such jurisdiction, or (iii) submit to the
general service of process in any such jurisdiction;
4(e) notify each Holder of Registrable Securities that has delivered a
Registration Notice to the Company promptly and, if requested by any such
Holder, confirm such advice in writing (i) when a Registration Statement has
become effective and when any post-effective amendments and supplements thereto
become effective, (ii) of the issuance by the SEC or any state securities
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation of any proceedings for that purpose, (iii) if the
Company receives any notification with respect to the suspension of the
qualification of the Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and (iv) of the happening of any
event during the period a Registration Statement is effective which is of a type
specified in the last sentence of Section 3(a) hereof or as a result of which
such Registration Statement or the related Prospectus contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made (in the case of the Prospectus), not
misleading;
4(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
4(g) furnish to each Holder of Registrable Securities that has delivered a
Registration Notice to the Company, without charge, at least one conformed copy
of each Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
4(h) cooperate with the selling Holder(s) of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any Securities Act legend; and
enable certificates for such Registrable Securities to be issued for such
numbers of Shares and registered in such names as the selling Holder(s) may
reasonably request at least two business days prior to any sale of Registrable
Securities;
4(i) subject to the last sentence of Section 3(a) hereof and the last three
sentences of Section 4(b) hereof, upon the occurrence of any event contemplated
by Section 4(e)(iv) hereof, use its reasonable efforts promptly to prepare and
file a supplement or prepare, file and obtain effectiveness of a post-effective
amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
4(j) make available for inspection by representatives of the Holder(s) of
Registrable Securities and any counsel or accountant retained by such Holder(s),
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the respective officers, directors and employees of the
Company to supply all information reasonably requested by any such
representative, counsel or accountant in connection with a Registration
Statement; provided, however, that such records, documents or information which
the Company determines, in good faith, to be confidential and notifies such
representatives, counsel or accountants in writing that such records, documents
or information are confidential shall not be disclosed by the representatives,
counsel or accountants unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a material misstatement or omission
in a Registration Statement, (ii) the release of such records, documents or
information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (iii) such records, documents or information have
been generally made available to the public;
4(k) a reasonable time prior to the filing of any Registration Statement,
any Prospectus, any amendment to a Registration Statement or amendment or
supplement to a Prospectus, provide copies of such document (not including any
documents incorporated by reference therein unless requested) to the Holders of
Registrable Securities that have provided a Registration Notice to the Company;
4(l) use its reasonable efforts to cause all Registrable Securities covered
by a Registration Statement to be listed on any securities exchange on which
similar securities issued by the Company are then listed;
4(m) provide a CUSIP number for all Registrable Securities, not later than
the effective date of a Registration Statement;
4(n) otherwise use its
reasonable efforts to comply with all applicable rules and regulations of the
SEC and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering at least 12 months which shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder; and
4(o) use its reasonable efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable the selling Holders to
consummate the disposition of such Registrable Securities. The Company may
require each Holder of Registrable Securities to furnish to the Company in
writing such information regarding the proposed distribution by such Holder of
such Registrable Securities as the Company may from time to time reasonably
request in writing. In connection with and as a condition to the Company's
obligations with respect to the Registration Statement pursuant to Section 3
hereof and this Section 4, each Holder agrees that (i) such Holder will not
offer or sell such Holder's Registrable Securities under the Registration
Statement until such Holder has provided a Registration Notice pursuant to
Section 4(b) hereof and has received copies of the supplemental or amended
Prospectus contemplated by Section 4(b) hereof and received notice that any
post-effective amendment has become effective, (ii) upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
4(e)(iv) hereof, such Holder will forthwith discontinue disposition of
Registrable Securities pursuant to a Registration Statement until such Holder
receives copies of the supplemented or amended Prospectus contemplated by
Section 4(i) hereof and receives notice that any post-effective amendment has
become effective, and, if so directed by the Company, such Holder will deliver
to the Company (at the expense of the Company) all copies in their possession,
other than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of receipt
of such notice, (iii) all offers and sales under the Registration Statement
shall be completed within sixty (60) days after the first date on which offers
or sales can be made pursuant to clause (i) of this paragraph, and upon
expiration of such sixty (60) day period such Holder will not offer or sell such
Holder's Registrable Securities under the Registration Statement until such
Holder has again complied with the provisions of clause (i) of this paragraph
and (iv) such Holder will deliver or cause delivery of the Prospectus to any
purchaser of Registrable Securities from such Holder in accordance with
applicable requirements of the Securities Act and the rules and regulations
thereunder.
5. Indemnification; Contribution.
5(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder, the beneficial owners, officers and directors of each
Holder, if any, each underwriter (as defined in the Securities Act) who
participates in the offering of such Registrable Securities, and each person, if
any, who controls such Holder or participating person within the meaning of the
Securities Act, as follows: (i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Registrable Securities
were registered under the Securities Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the statements
therein not misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in any Prospectus (or any amendment or
supplement thereto), including all documents incorporated therein by reference,
or the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; (ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or investigation or
proceeding by any governmental agency or body, commenced or threatened, or of
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and (iii) against any and all expense
whatsoever, as incurred (including reasonable fees and disbursements of
counsel), reasonably incurred in investigating, preparing or defending against
any litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, in each case whether or not a party, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not paid
under subparagraph (i) or (ii) above; provided, however, that the indemnity
provided pursuant to this Section 5(a) does not apply to any Holder with respect
to any loss, liability, claim, damage or expense to the extent arising out of
(x) any untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with written information furnished to
the Company by such Holder expressly for use in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) or
(y) such Holder's failure to deliver an amended or supplemental Prospectus if
such loss, liability, claim, damage or expense would not have arisen had such
delivery occurred.
5(b) Indemnification by Holders. Each Holder severally, not jointly, agrees
to indemnify and hold harmless the Company and its trustees and officers
(including each trustee and officer of the Company who signed the Registration
Statement), and each Person, if any, who controls the Company within the meaning
of Section 15 of the Securities Act, to the same extent as the indemnity
contained in Section 5(a) hereof (except that any settlement described in
Section 5(a)(ii) shall be effected with the written consent of such Holder), but
only insofar as such loss, liability, claim, damage or expense arises out of or
is based upon any untrue statement or omission, or alleged untrue statements or
omissions, made in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company by such Holder
expressly for use in such Registration Statement (or any amendment thereto) or
such Prospectus (or any amendment or supplement thereto).
5(c) Conduct of Indemnification Proceedings. Each indemnified party shall
give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided
in Section 5(a) or 5(b) above, unless and to the extent it did not otherwise
learn of such action and the lack of notice by the indemnified party results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) shall not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided under Section 5(a) or 5(b) above. If the indemnifying party so elects
within a reasonable time after receipt of such notice, the indemnifying party
may assume the defense of such action or proceeding at such indemnifying party's
own expense with counsel chosen by the indemnifying party and approved by the
indemnified parties defendant in such action or proceeding, which approval shall
not be unreasonably withheld; provided, however, that, if such indemnified party
or parties reasonably determine that a conflict of interest exists where it is
advisable for such indemnified party or parties to be represented by separate
counsel or that, upon advice of counsel, there may be legal defenses available
to them which are different from or in addition to those available to the
indemnifying party, then the indemnifying party shall not be entitled to assume
such defense and the indemnified party or parties shall be entitled to one
separate counsel at the indemnifying party's or parties' expense. If an
indemnifying party is not entitled to assume the defense of such action or
proceeding as a result of the proviso to the preceding sentence, such
indemnifying party's counsel shall be entitled to conduct such indemnifying
party's defense and counsel for the indemnified party or parties shall be
entitled to conduct the defense of such indemnified party or parties, it being
understood that both such counsel will cooperate with each other to conduct the
defense of such action or proceeding as efficiently as possible. If an
indemnifying party is not so entitled to assume the defense of such action or
does not assume such defense, after having received the notice referred to in
the first sentence of this paragraph, the indemnifying party or parties will pay
the reasonable fees and expenses of counsel for the indemnified party or
parties. In such event, however, no indemnifying party will be liable for any
settlement effected without the written consent of such indemnifying party. If
an indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, such indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action or proceeding.
5(d)Contribution.
In order to provide for just and equitable contribution in circumstances in
which the indemnity agreement provided for in this Section 5 is for any reason
held to be unenforceable although applicable in accordance with its terms, the
Company and the selling Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company and such Holders, in such proportion
as is appropriate to reflect the relative fault of the Company on the one hand
and such Holder on the other (in such proportions that the Holders are
severally, not jointly, responsible for the balance), in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and indemnified parties shall be
determined by reference to, among other things, whether the action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or the indemnified parties, and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such action. The parties hereto agree that it would not be
just or equitable if contribution pursuant to this Section 5(d) were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no selling
Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities of such Holder were
offered to the public exceeds the amount of any damages which such Holder would
otherwise have been required to pay by reason of such untrue statement or
omission. The liability of any Holder selling Registrable Securities for
contribution shall not exceed an amount equal to the offering price per share of
the Registrable Securities, multiplied by the number of Registrable Securities
sold by such Holder. Notwithstanding the foregoing, no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 5(d),
each trustee of the Company, each officer of the Company who signed the
Registration Statement and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.
6. Rule 144 Sales.
6(a) The Company covenants that it will file the reports required to be
filed by the Company under the Securities Act and the Exchange Act so as to
enable the Holders to sell Shares pursuant to Rule 144 under the Securities Act.
6(b) In connection with any sale, transfer or other disposition by a Holder
of any Shares pursuant to Rule 144 under the Securities Act, the Company shall
cooperate with such Holder to facilitate the timely preparation and delivery of
certificates representing Shares to be sold and not bearing any Securities Act
legend, and enable certificates for such Shares to be for such number of shares
and registered in such names as such Holder may reasonably request at least two
business days prior to any sale of Shares.
7. Miscellaneous.
7(a) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given without the written consent of the Company and the Holder(s) of a majority
in amount of the outstanding Registrable Securities. Notice of any amendment,
modification or supplement to this Agreement adopted in accordance with this
Section 7(a) shall be provided by the Company to the Holder(s) at least thirty
(30) days prior to the effective date of such amendment, modification or
supplement.
7(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery, to the parties at their respective addresses set forth opposite their
signatures below or at such other address as a party may indicate by written
notice to the other party or parties.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three (3)
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; or
at the time delivered, if delivered by courier guaranteeing overnight delivery.
7(c) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders. If any successor, assignee or transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be entitled to receive the benefits hereof and
shall be conclusively deemed to have agreed to be bound by all of the terms and
provisions hereof.
7(d) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
7(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
7(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
7(g) Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.
7(h) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of the
date first written above.
Address:
2101 6th Avenue North, COLONIAL PROPERTIES TRUST
Suite 750
Birmingham, Alabama 35202
By:/s/ Thomas H. Lowder
Thomas H. Lowder
Chairman of the Board, President
and Chief Executive Officer
2101 6th Avenue North, COLONIAL REALTY LIMITED
Suite 750 PARTNERSHIP
Birmingham, Alabama 35202
By: COLONIAL PROPERTIES
HOLDING COMPANY, INC., General Partner
By: /s/ Thomas H. Lowder
Thomas H. Lowder
President
2010 Brassfield Way WILLIAM M. JOHNSON
Roswell, GA 30075 INVESTMENTS I, LLLP
By:/s/ William M. Johnson
Name:
Title:
2010 Brassfield Way WILLIAM M. JOHNSON
Roswell, GA 30075 INVESTMENTS II, LLLP
By:/s/ William M. Johnson
Name:
Title:
2010 Brassfield Way
Roswell, GA 30075
/s/ William M. Johnson
William M. Johnson
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
Dated as of July 1, 1998
by and among
COLONIAL PROPERTIES TRUST,
COLONIAL REALTY LIMITED PARTNERSHIP
and
WILLIAM M. JOHNSON INVESTMENTS I, LLLP,
WILLIAM M. JOHNSON INVESTMENTS II, LLLP
and
WILLIAM M. JOHNSON
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF CODE
SECTION 10-5-9 OF THE 'GEORGIA SECURITIES ACT OF 1973,' AND MAY NOT BE SOLD OR
TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT
Exhibit 10.2.10
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this "Agreement") is
made and entered into as of July 31, 1997 by and among Colonial Properties
Trust, an Alabama real estate investment trust (the "Company"), Colonial Realty
Limited Partnership, a Delaware limited partnership (the "Operating
Partnership"), and William M. Johnson and Phyllis Johnson (the "Holders").
WHEREAS, on the date hereof the Operating Partnership is acquiring
certain real property in and around Mansell 400 Business Center, located in
North Fulton County, Georgia, and certain personal property in connection
therewith pursuant to the Contribution and Merger Agreement dated as of July 31,
1997, by and between the Operating Partnership and Mansell 400 Associates, L.P.;
the Contribution and Merger Agreement dated as of July 31, 1997, by and between
the Operating Partnership and Mansell Overlook 100, LLC; and the limited warrant
deed conveying Mansell Court East to the Operating Partnership (collectively,
the "Agreements"), and in connection therewith the Holders will receive Class B
Units of limited partnership interest in the Operating Partnership (such Class B
Units and the Class A Units of limited partnership interest into which such
Class B Units will be converted being referred to hereinafter as the "Units");
WHEREAS, in order to induce the Holders to consummate the closing
contemplated under the Agreements, the Company has agreed to grant the Holders
the registration rights set forth in Section 3 hereof;
WHEREAS, in order to induce the Operating Partnership to consummate the
closing contemplated under the Agreements, the Holders have agreed to the
Lock-up (as defined in Section 2(a) hereof);
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"Common Shares" shall mean common shares of beneficial interest, par
value $ .01 per share, in the Company.
"Company" shall have the meaning set forth in the Preamble and also
shall include the Company's successors.
"Dispose of" shall have the meaning set forth in Section 2(a) hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"Holders" shall have the meaning set forth in the Preamble and also
shall include the Holders' successorsand permitted assigns.
"Lock-up" shall have the meaning set forth in Section 2(a) hereof.
"Lock-up Period" shall have the meaning set forth in Section 2(a)
hereof.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"Operating Partnership" shall have the meaning set forth in the
Preamble and also shall include the Operating Partnership's successors.
"Person" shall mean an individual, partnership, corporation, trust,
estate, or unincorporated organization, or a government or agency or political
subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by a Shelf
Registration Statement, and by all other amendments and supplements to such
prospectus, including post-effective amendments, and in each case including all
material incorporated by reference therein.
"Registrable Securities" shall mean the Shares, excluding (i) Shares
for which a Registration Statement relating to the sale thereof shall have
become effective under the Securities Act and which have been disposed of under
such Registration Statement and (ii) Shares sold pursuant to Rule 144 under the
Securities Act or Shares which, when combined with all other Shares then owned
by the Holders, are eligible for sale pursuant to Rule 144 in a single
transaction in accordance with the volume limitations contained in Rule 144(e)
(or any successor rule under the Securities Act).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or NASD registration and filing fees; (ii) all fees
and expenses incurred in connection with compliance with state securities or
"blue sky" laws (including reasonable fees and disbursements of counsel in
connection with "blue sky" qualification of any of the Registrable Securities
and the preparation of a Blue Sky Memorandum) and compliance with the rules of
the NASD; (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, certificates and other documents relating to the
performance of and compliance with this Agreement; (iv) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Securities on any securities exchange or exchanges pursuant to Section 4(1)
hereof; and (v) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance. Registration Expenses shall specifically exclude
underwriting discounts and commissions, the fees and disbursements of counsel
representing the Holders, and transfer taxes, if any, relating to the sale or
disposition of Registrable Securities by the Holders, all of which shall be
borne by the Holders in all cases.
"Registration Notice" shall have the meaning set forth in Section 4(b)
hereof.
"Registration Statement" or "Shelf Registration Statement" shall mean a
"shelf" registration statement of the Company and any other Person required to
be a registrant with respect to such shelf registration statement pursuant to
the requirements of the Securities Act which covers the issuance or resale of
the Registrable Securities on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shares" shall mean any Common Shares issued or to be issued to the
Holders upon redemption of their Units.
"Shelf Registration" shall mean a registration required to be effected
pursuant to Section 3 hereof.
"Units" shall have the meaning set forth in the Preamble.
2. Lock-up Agreement.
2(a) Each Holder hereby agrees that, except as set forth in
Sections 2(b) and 2(c) below, for three years following the date hereof (the
"Lock-up Period"), such Holder will not, without the prior written consent of
the Company, offer, pledge, sell, contract to sell, grant any options for the
sale of or otherwise dispose of, directly or indirectly (collectively, "Dispose
of"), any Units (the "Lock-up"); provided, however, that if William M. Johnson
has not been elected to the Board of Trustees of the Company prior to the
adjournment of the next regularly scheduled meeting of the Board of Trustees
following the date hereof or ceases to be a Trustee of the Company at any time
after his election and prior to the date which is three years from the date
hereof, the Lock-up Period shall expire on the later to occur of (i) the date
that is one year from the date hereof or (ii) the date William M. Johnson ceases
to be a Trustee.
2(b) The following transfers of Units shall not be subject to the Lock-up
set forth in Section 2(a):
(i) a Holder may Dispose of Units as a gift or other transfer without
consideration;
(ii) a Holder who is a natural person may Dispose of Units to his or her
spouse,siblings, parents or any natural or adopted children or other descendants
or to any personal trust in which such family members or such Holder retains the
entire beneficial interest;
(iii) a Holder may Dispose of Units to one or more corporations,
partnerships or other business entities that are wholly owned and controlled,
legally and beneficially, by such Holder or by a Person or Persons that directly
or indirectly wholly own and control such Holder;
(iv) a Holder that is a corporation, partnership or other business entity
(other than a Holder in which any Person other than William M. Johnson or
Phyllis Johnson owns an equity interest) may Dispose of Units by distributing
such Units in a liquidation, winding up or otherwise without consideration to
the equity owners of such corporation, partnership or business entity or to any
other corporation, partnership or business entity that is wholly owned by such
equity owners; and
(v) a Holder may Dispose of Units pursuant to a pledge, grant of security
interest or other encumbrance effected in a bona fide transaction with an
unrelated and unaffiliated pledgee. In the event that a Holder Disposes of Units
as permitted by this Section 2(b), such Units shall remain subject to this
Agreement and, as a condition of the validity of such disposition, the
transferee shall be required to execute and deliver a counterpart of this
Agreement (except that a pledgee shall not be required to execute and deliver a
counterpart of this Agreement until it forecloses upon such Units). Thereafter,
such transferee shall be deemed to be a Holder for purposes of this Agreement.
2(c) William M. Johnson may Dispose of Units for the purpose
of exercising such rights as are accorded to him under Section 8.12(b) of the
Contribution and Merger Agreement between the Operating Partnership and Mansell
Overlook 200, LLC.
3. Shelf Registration Under the Securities Act.
3(a) Filing of Shelf Registration Statement. At any time
beginning on the sixtieth day prior to the expiration of the Lock-up Period (or,
if the Lock-up Period is less than three years, at any time after the expiration
of the Lock-up Period), any Holder, or one or more Holders, may deliver to the
Company a written notice requesting that the Company cause to be filed with the
SEC a Registration Statement registering the resale by such Holders of a
specified number of Registrable Securities (which number shall not be less than
50,000) held by or issuable to such Holder(s). Within 60 days of its receipt of
such a notice the Company shall cause to be filed with the SEC a Shelf
Registration Statement providing for the resale by such Holder(s) of the
Registrable Securities specified in the notice (and, if the Company so elects,
any other securities of the Company held by the Holders or any other Person,
including any other Registrable Securities held by the requesting Holder(s) or
other Holders) in accordance with the terms hereof and will use its reasonable
efforts to cause such Shelf Registration Statement to be declared effective by
the SEC as soon as practicable thereafter. The Company also may, at any time and
without receipt of a notice or request from any Holder(s), file a Shelf
Registration Statement registering the resale of all Registrable Securities not
previously covered by a Shelf Registration Statement, which Shelf Registration
Statement also may register for sale Common Shares held by any other Person and
which shall satisfy the Company's obligation to file a Shelf Registration
Statement under this Section 3(a). The Company agrees to use its reasonable
efforts to keep any Shelf Registration Statement filed pursuant to this Section
3(a) continuously effective for a period expiring on the date on which all of
the Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or have become eligible for
sale pursuant to Rule 144 in a single transaction in accordance with the volume
limitations contained in Rule 144(e) (or any successor rule under the Securities
Act) and, subject to Section 4(b) and Section 4(i), further agrees to supplement
or amend the Shelf Registration Statement, if and as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such Shelf Registration Statement or by the Securities Act or by any
other rules and regulations thereunder for shelf registration; provided,
however, that the Company shall not be deemed to have used its reasonable
efforts to keep a Registration Statement effective during the applicable period
if it voluntarily takes any action that would result in the selling Holders
covered thereby not being able to sell such Registrable Securities during that
period, unless such action is required under applicable law or the Company has
filed a post-effective amendment to the Registration Statement and the SEC has
not declared it effective. Notwithstanding the foregoing, the Company shall not
be required to file a Registration Statement or to keep a Registration Statement
effective if the negotiation or consummation of a transaction is pending or an
event has occurred, which negotiation, consummation or event would require
additional disclosure by the Company in the Registration Statement of material
information which the Company has a bona fide business purpose for keeping
confidential and the nondisclosure of which in the Registration Statement might
cause the Registration Statement to fail to comply with applicable disclosure
requirements, and the Company so advises the affected Holder(s) in a writing
signed by the chief executive officer or chief financial officer of the Company;
provided, however, that the Company may not delay, suspend or withdraw a
Registration Statement for such reason for more than 60 days or more often than
twice during any period of 12 consecutive months.
3(b) Expenses. The Company shall pay all Registration Expenses
in connection with any registration pursuant to Section 3(a). Each Holder shall
pay all underwriting discounts, if any, sales commissions, fees and
disbursements of counsel representing such Holder, and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement or Rule 144 under the Securities
Act.
3(c) Inclusion in Shelf Registration Statement. Any Holder who
does not timely provide the information reasonably requested by the Company in
connection with any Shelf Registration Statement shall not be entitled to have
such Holder's Registrable Securities included in the Shelf Registration
Statement.
3(d) Repurchase Option. If a Holder redeems Units pursuant to
the Amended and Restated Agreement of Limited Partnership of the Operating
Partnership prior to such Holder's request for or the Company's voluntary filing
of a Shelf Registration Statement pursuant to Section 3(a) covering the Shares
issuable upon such redemption, the Company may, in the event that such Holder
subsequently delivers to the Company a notice pursuant to Section 3(a)
requesting registration of the resale of any such Shares, elect to repurchase
such Shares for cash in lieu of filing a Shelf Registration Statement. The
Company shall make any such election by delivering written notice to the Holder
within 30 days after receipt of such request. If the Company so elects, the
purchase price per Share so repurchased shall be equal to the average of the
closing prices of the Common Shares on the New York Stock Exchange (or on such
other exchange or in such other market as the Common Shares are then listed or
traded) on the ten trading days preceding the Company's receipt of such request
(or, if the Common Shares have not traded on all ten of such trading days, in an
amount equal to the fair value of such Registrable Securities as determined in
good faith by the Board of Trustees of the Company).
4. Registration Procedures.
In connection with the obligations of the Company with respect to the
Registration Statement pursuant to Section 3 hereof, the Company shall:
4(a) prepare and file with the SEC, within the time period set
forth in Section 3 hereof, a Shelf Registration Statement, which Shelf
Registration Statement (i) shall be available for the sale of the Registrable
Securities in accordance with the intended method or methods of distribution by
the Holder(s) thereof and (ii) shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith;
4(b) subject to the last three sentences of this Section 4(b)
and Section 4(i) hereof, (i) prepare and file with the SEC such amendments and
post-effective amendments to each such Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable
period; (ii) cause each such Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
or any similar rule that may be adopted under the Securities Act; (iii) respond
as promptly as practicable to any comments received from the SEC with respect to
the Shelf Registration Statement, or any amendment, post-effective amendment or
supplement relating thereto; and (iv) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the Holder(s) thereof.
Notwithstanding anything to the contrary contained herein, the Company shall not
be required to take any of the actions described in subsections (i), (ii) or
(iii) above with respect to a Holder unless and until the Company has received a
notice (a "Registration Notice") from such Holder that such Holder intends to
make offers or sales under the Registration Statement as specified in such
Registration Notice; provided, however, that the Company shall have ten business
days to prepare and file any such amendment or supplement after receipt of such
Registration Notice. Once a Holder has delivered a Registration Notice to the
Company, such Holder shall promptly provide to the Company such information as
the Company reasonably requests in order to identify such Holder and the method
of distribution in a Registration Statement or post-effective amendment to the
Registration Statement or a supplement to the Prospectus. Such Holder also shall
notify the Company in writing upon completion of such offer or sale or at such
time as such Holder no longer intends to make offers or sales under the
Registration Statement;
4(c) furnish to each Holder of Registrable Securities that has
delivered a Registration Notice to the Company, without charge, as many copies
of each Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder may reasonably
request, in order to facilitate the public sale or other disposition of the
Registrable Securities; the Company consents to the use of the Prospectus,
including each preliminary Prospectus, by each such Holder of Registrable
Securities in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or the preliminary Prospectus;
4(d) use its reasonable efforts to register or qualify the
Registrable Securities by the time the applicable Registration Statement is
declared effective by the SEC under all applicable state securities or "blue
sky" laws of such jurisdictions as any Holder of Registrable Securities covered
by a Registration Statement shall reasonably request in writing, keep each such
registration or qualification effective during the period such Registration
Statement is required to be kept effective or during the period offers or sales
are being made by any such Holder, whichever is shorter, and do any and all
other acts and things which may be reasonably necessary or advisable to enable
each such Holder to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that the Company
shall not be required to (i) qualify generally to do business in any
jurisdiction or to register as a broker or dealer in such jurisdiction where it
would not otherwise be required to qualify but for this Section 4(d), (ii)
subject itself to taxation in any such jurisdiction, or (iii) submit to the
general service of process in any such jurisdiction;
4(e) notify each Holder of Registrable Securities that has
delivered a Registration Notice to the Company promptly and, if requested by any
such Holder, confirm such advice in writing (i) when a Registration Statement
has become effective and when any post-effective amendments and supplements
thereto become effective, (ii) of the issuance by the SEC or any state
securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iii) if the Company receives any notification with respect to the suspension of
the qualification of the Registrable Securities for sale in any jurisdiction or
the initiation of any proceeding for such purpose, and (iv) of the happening of
any event during the period a Registration Statement is effective which is of a
type specified in the last sentence of Section 3(a) hereof or as a result of
which such Registration Statement or the related Prospectus contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made (in the case of the Prospectus), not
misleading;
4(f) make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at the
earliest possible moment;
4(g) furnish to each Holder of Registrable Securities that has
delivered a Registration Notice to the Company, without charge, at least one
conformed copy of each Registration Statement and any post-effective amendment
thereto (without documents incorporated therein by reference or exhibits
thereto, unless requested);
4(h) cooperate with the selling Holder(s) of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any Securities
Act legend; and enable certificates for such Registrable Securities to be issued
for such numbers of Shares and registered in such names as the selling Holder(s)
may reasonably request at least two business days prior to any sale of
Registrable Securities;
4(i) subject to the last sentence of Section 3(a) hereof and
the last three sentences of Section 4(b) hereof, upon the occurrence of any
event contemplated by Section 4(e)(iv) hereof, use its reasonable efforts
promptly to prepare and file a supplement or prepare, file and obtain
effectiveness of a post-effective amendment to a Registration Statement or the
related Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
4(j) make available for inspection by representatives of the
Holder(s) of Registrable Securities and any counsel or accountant retained by
such Holder(s), all financial and other records, pertinent corporate documents
and properties of the Company, and cause the respective officers, directors and
employees of the Company to supply all information reasonably requested by any
such representative, counsel or accountant in connection with a Registration
Statement; provided, however, that such records, documents or information which
the Company determines, in good faith, to be confidential and notifies such
representatives, counsel or accountants in writing that such records, documents
or information are confidential shall not be disclosed by the representatives,
counsel or accountants unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a material misstatement or omission
in a Registration Statement, (ii) the release of such records, documents or
information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (iii) such records, documents or information have
been generally made available to the public;
4(k) a reasonable time prior to the filing of any Registration
Statement, any Prospectus, any amendment to a Registration Statement or
amendment or supplement to a Prospectus, provide copies of such document (not
including any documents incorporated by reference therein unless requested) to
the Holders of Registrable Securities that have provided a Registration Notice
to the Company;
4(l) use its reasonable efforts to cause all Registrable
Securities covered by a Registration Statement to be listed on any securities
exchange on which similar securities issued by the Company are then listed;
4(m) provide a CUSIP number for all Registrable
Securities, not later than the effective date
of a Registration Statement;
4(n) otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering at
least 12 months which shall satisfy the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder; and
4(o) use its reasonable efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary by virtue
of the business and operations of the Company to enable the selling Holders to
consummate the disposition of such Registrable Securities.
The Company may require each Holder of Registrable Securities to
furnish to the Company in writing such information regarding the proposed
distribution by such Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing.
In connection with and as a condition to the Company's obligations with
respect to the Registration Statement pursuant to Section 3 hereof and this
Section 4, each Holder agrees that (i) such Holder will not offer or sell such
Holder's Registrable Securities under the Registration Statement until such
Holder has provided a Registration Notice pursuant to Section 4(b) hereof and
has received copies of the supplemental or amended Prospectus contemplated by
Section 4(b) hereof and received notice that any post-effective amendment has
become effective, (ii) upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(e)(iv) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities pursuant
to a Registration Statement until such Holder receives copies of the
supplemented or amended Prospectus contemplated by Section 4(i) hereof and
receives notice that any post-effective amendment has become effective, and, if
so directed by the Company, such Holder will deliver to the Company (at the
expense of the Company) all copies in their possession, other than permanent
file copies then in such Holder's possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice, (iii) all
offers and sales under the Registration Statement shall be completed within
sixty (60) days after the first date on which offers or sales can be made
pursuant to clause (i) of this paragraph, and upon expiration of such sixty (60)
day period such Holder will not offer or sell such Holder's Registrable
Securities under the Registration Statement until such Holder has again complied
with the provisions of clause (i) of this paragraph and (iv) such Holder will
deliver or cause delivery of the Prospectus to any purchaser of Registrable
Securities from such Holder in accordance with applicable requirements of the
Securities Act and the rules and regulations thereunder.
5. Indemnification; Contribution.
5(a) Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder, the beneficial owners, officers and
directors of each Holder, if any, each underwriter (as defined in the Securities
Act) who participates in the offering of such Registrable Securities, and each
person, if any, who controls such Holder or participating person within the
meaning of the Securities Act, as follows: (i) against any and all loss,
liability, claim, damage and expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement (or any amendment thereto) pursuant to which Registrable
Securities were registered under the Securities Act, including all documents
incorporated therein by reference, or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Prospectus (or any
amendment or supplement thereto), including all documents incorporated therein
by reference, or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; (ii) against any and
all loss, liability, claim, damage and expense whatsoever, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such settlement
is effected with the written consent of the Company; and (iii) against any and
all expense whatsoever, as incurred (including reasonable fees and disbursements
of counsel), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, in each case whether or not a party, or
any claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such expense
is not paid under subparagraph (i) or (ii) above; provided, however, that the
indemnity provided pursuant to this Section 5(a) does not apply to any Holder
with respect to any loss, liability, claim, damage or expense to the extent
arising out of (x) any untrue statement or omission or alleged untrue statement
or omission made in reliance upon and in conformity with written information
furnished to the Company by such Holder expressly for use in a Registration
Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto) or (y) such Holder's failure to deliver an amended or
supplemental Prospectus if such loss, liability, claim, damage or expense would
not have arisen had such delivery occurred.
5(b) Indemnification by Holders.
Each Holder severally, not
jointly, agrees to indemnify and hold harmless the Company and its trustees and
officers (including each trustee and officer of the Company who signed the
Registration Statement), and each Person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, to the same extent as
the indemnity contained in Section 5(a) hereof (except that any settlement
described in Section 5(a)(ii) shall be effected with the written consent of such
Holder), but only insofar as such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or omission, or alleged
untrue statements or omissions, made in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such Holder expressly for use in such Registration Statement (or any
amendment thereto) or such Prospectus (or any amendment or supplement thereto).
5(c) Conduct of Indemnification Proceedings. Each indemnified
party shall give reasonably prompt notice to each indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party (i) shall not
relieve it from any liability which it may have under the indemnity agreement
provided in Section 5(a) or 5(b) above, unless and to the extent it did not
otherwise learn of such action and the lack of notice by the indemnified party
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) shall not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided under Section 5(a) or 5(b) above. If the indemnifying party
so elects within a reasonable time after receipt of such notice, the
indemnifying party may assume the defense of such action or proceeding at such
indemnifying party's own expense with counsel chosen by the indemnifying party
and approved by the indemnified parties defendant in such action or proceeding,
which approval shall not be unreasonably withheld; provided, however, that, if
such indemnified party or parties reasonably determine that a conflict of
interest exists where it is advisable for such indemnified party or parties to
be represented by separate counsel or that, upon advice of counsel, there may be
legal defenses available to them which are different from or in addition to
those available to the indemnifying party, then the indemnifying party shall not
be entitled to assume such defense and the indemnified party or parties shall be
entitled to one separate counsel at the indemnifying party's or parties'
expense. If an indemnifying party is not entitled to assume the defense of such
action or proceeding as a result of the proviso to the preceding sentence, such
indemnifying party's counsel shall be entitled to conduct such indemnifying
party's defense and counsel for the indemnified party or parties shall be
entitled to conduct the defense of such indemnified party or parties, it being
understood that both such counsel will cooperate with each other to conduct the
defense of such action or proceeding as efficiently as possible. If an
indemnifying party is not so entitled to assume the defense of such action or
does not assume such defense, after having received the notice referred to in
the first sentence of this paragraph, the indemnifying party or parties will pay
the reasonable fees and expenses of counsel for the indemnified party or
parties. In such event, however, no indemnifying party will be liable for any
settlement effected without the written consent of such indemnifying party. If
an indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, such indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action or proceeding.
5(d) Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
this Section 5 is for any reason held to be unenforceable although applicable in
accordance with its terms, the Company and the selling Holders shall contribute
to the aggregate losses, liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement incurred by the Company and such
Holders, in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and such Holder on the other (in such proportions
that the Holders are severally, not jointly, responsible for the balance), in
connection with the statements or omissions which resulted in such losses,
claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
the indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no selling Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such Holder were offered to the
public exceeds the amount of any damages which such Holder would otherwise have
been required to pay by reason of such untrue statement or omission. The
liability of any Holder selling Registrable Securities for contribution shall
not exceed an amount equal to the offering price per share of the Registrable
Securities, multiplied by the number of Registrable Securities sold by such
Holder.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5(d), each trustee of
the Company, each officer of the Company who signed the Registration Statement
and each Person, if any, who controls the Company within the meaning of Section
15 of the Securities Act shall have the same rights to contribution as the
Company.
6. Rule 144 Sales.
6(a) The Company covenants that it will file the reports
required to be filed by the Company under the Securities Act and the Exchange
Act so as to enable the Holders to sell Shares pursuant to Rule 144 under the
Securities Act.
6(b) In connection with any sale, transfer or other
disposition by a Holder of any Shares pursuant to Rule 144 under the Securities
Act, the Company shall cooperate with such Holder to facilitate the timely
preparation and delivery of certificates representing Shares to be sold and not
bearing any Securities Act legend, and enable certificates for such Shares to be
for such number of shares and registered in such names as such Holder may
reasonably request at least two business days prior to any sale of Shares.
7. Miscellaneous.
7(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company and the Holder(s) of
a majority in amount of the outstanding Registrable Securities. Notice of any
amendment, modification or supplement to this Agreement adopted in accordance
with this Section 7(a) shall be provided by the Company to the Holder(s) at
least thirty (30) days prior to the effective date of such amendment,
modification or supplement.
7(b) Notices. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery, to the parties at their respective addresses set forth opposite their
signatures below or at such other address as a party may indicate by written
notice to the other party or parties.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three (3)
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied; or
at the time delivered, if delivered by courier guaranteeing overnight delivery.
7(c) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties, including, without limitation and without the need for an
express assignment, subsequent Holders. If any successor, assignee or transferee
of any Holder shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such
Registrable Securities such Person shall be entitled to receive the benefits
hereof and shall be conclusively deemed to have agreed to be bound by all of the
terms and provisions hereof.
7(d) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
7(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
7(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
7(g) Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition to
any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.
7(h) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of the
date first written above.
Address:
2101 6th Avenue North, COLONIAL PROPERTIES TRUST
Suite 750
Birmingham, Alabama 35202
By:/s/ Thomas H. Lowder
Thomas H. Lowder
Chairman of the Board,
President and Chief Executive Officer
2101 6th Avenue North, COLONIAL REALTY LIMITED
Suite 750 PARTNERSHIP
Birmingham, Alabama 35202
By: COLONIAL PROPERTIES HOLDING COMPANY, INC.,
General Partner
By: /s/ Thomas H. Lowder
Thomas H. Lowder
President
Address:
/s/ William M. Johnson
William M. Johnson
/s/ Phyllis Johnson
Phyllis Johnson
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
Dated as of July 31, 1997
by and among
COLONIAL PROPERTIES TRUST,
COLONIAL REALTY LIMITED PARTNERSHIP
and
WILLIAM M. JOHNSON AND PHYLLIS JOHNSON
THESE SECURITIES HAVE BEEN ISSUED OR SOLD IN RELIANCE ON PARAGRAPH (13) OF CODE
SECTION 10-5-9 OF THE 'GEORGIA SECURITIES ACT OF 1973,' AND MAY NOT BE SOLD OR
TRANSFERRED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER SUCH ACT OR PURSUANT
Exhibit 10.2.11
SUPPLEMENTAL REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
THIS SUPPLEMENTAL REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this
"Agreement") is made and entered into as of November 18, 1998, by and among
COLONIAL PROPERTIES TRUST, an Alabama real estate investment trust (the
"Company"), Colonial Realty Limited Partnership, a Delaware limited partnership
(the "Operating Partnership"), and COLONIAL COMMERCIAL INVESTMENTS, INC.
("CCI").
WHEREAS, on September 29, 1993 the Company, Colonial Properties, Inc.
(of which CCI is the successor) and certain other parties entered into a
Registration Rights and Lock-up Agreement (the "Initial Agreement") pursuant to
which the Company granted to certain holders of Units (as defined in the Initial
Agreement) of the Operating Partnership certain registration rights, and such
holders agreed to certain lock-up arrangements;
WHEREAS, on July 1, 1996, CCI and certain other parties entered into a
Supplemental Registration Rights and Lock-Up Agreement pursuant to which certain
additional Units became subject to the terms and conditions of the Initial
Agreement;
WHEREAS, on July 1, 1997, CCI entered into a second Supplemental
Registration Rights and Lock-Up Agreement pursuant to which certain additional
Units became subject to the terms and conditions of the Initial Agreement;
WHEREAS, on October 7, 1998, CCI became the owner of 34,700 Units in
connection with the transfer to the Operating Partnership of a certain parcel of
land in Montgomery County, Alabama, commonly known as a portion of Montgomery
Promenade;
WHEREAS, on the date hereof, CCI is or will become the owner of 36,647
Units (such number of Units, together with the 34,700 Units described above,
shall be referred to hereinafter as the "Additional Units") in connection with
the transfer to the Operating Partnership of Research Office Park-Huntsville, an
office complex in Huntsville, Alabama; and
WHEREAS, the parties hereto have agreed that, except as stated herein,
the Additional Units shall be subject to, and the parties hereto shall be
governed by, the terms and conditions of the Initial Agreement.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, agree as follows:
1. General.
1(a) Except as otherwise defined herein, all capitalized terms
used herein shall have the meanings ascribed to them in the Initial Agreement.
1(b) Except as otherwise provided herein, CCI and the Company
shall have all of the rights and obligations with respect to the Additional
Units as are provided for in the Initial Agreement with respect to the Common
Shares and Units expressly referred to therein. Nothing in this Agreement shall
be deemed to amend, waive, supplement, or otherwise affect the terms of the
Initial Agreement.
2. Definitions.
Except as otherwise provided herein,
2(a) The Additional Units shall be deemed "Units" as that term
is defined in the Initial Agreement, and any Common Shares issued upon
redemption of Additional Units shall be deemed "Shares" as that term is defined
in the Initial Agreement. The Additional Units and any Common Shares issuable
upon redemption of Additional Units are referred to herein collectively as "New
Securities."
2(b) Any Common Shares issued upon the redemption of
Additional Units shall be deemed "Registrable Securities" as that term is
defined in the Initial Agreement.
2(c) CCI and its permitted successors and assigns shall be
deemed "Holders" as that term is defined in the Initial Agreement and shall be
referred to as Holders herein.
3. Lock-up Agreement.
3(a) Notwithstanding any other provision of this Agreement or
the Initial Agreement, the Holder hereby agrees that, except as set forth in
Section 3(b) below, for a period of one year from the respective dates of
issuance of the Additional Units (the "Lock-up Period"), without the prior
written consent of the Company, it will not offer, pledge, sell, contract to
sell, grant any options for the sale of or otherwise dispose of, directly or
indirectly (collectively, "Dispose of"), any New Securities (the "Lock-up").
3(b) The following transfers of New Securities shall not be
subject to the Lock-up set forth in Section 2(a):
(i) a Holder may Dispose of New Securities as a gift or other transfer
without consideration;
(ii) a Holder who is a natural person may Dispose of New Securities to his or
her spouse, siblings, parents or any natural or adopted children or other
descendants or to any personal trust in which such family members or such Holder
retain the entire beneficial interest; (iii) a Holder may Dispose of New
Securities to any entity that controls, is controlled by, or is under common
control with such Holder; and
(iv) a Holder may Dispose of New Securities pursuant to a pledge, grant of
security interest or other encumbrance effected in a bona fide transaction with
an unrelated and unaffiliated pledgee. In the event a Holder Disposes of New
Securities described in this Section 3(b) (except pursuant to clause (iv)
hereof), such New Securities shall remain subject to this Agreement and, as a
condition of the validity of such disposition, the transferee shall be required
to execute and deliver a counterpart of this Agreement (except that a pledgee
shall not be required to execute and deliver a counterpart of this Agreement
until it forecloses upon such New Securities). Thereafter, such transferee shall
be deemed to be a Holder for purposes of this Agreement.
4. Shelf Registration Under the Securities Act.
Beginning after the expiration of the Lock-up Period, the
Holder(s) shall be entitled to offer for sale pursuant to a Registration
Statement any Registrable Securities held by the Holder(s), subject to the terms
and conditions, and pursuant to the procedures, specified in Sections 3 and 4 of
the Initial Agreement.
5. Indemnification; Contribution.
The parties agree to indemnify and hold harmless, with respect
to any registration of Registrable Securities hereunder, to the same extent as
specified in Section 5 of the Initial Agreement.
6. Rule 144 Sales.
The Company covenants to undertake all such steps as are
specified in Section 6 of the Initial Agreement in order to enable any Holder to
sell Common Shares issued or issuable upon redemption of Additional Units
pursuant to Rule 144 under the Securities Act.
7. Miscellaneous.
7(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the written consent of the Company and the Holders of a
majority in amount of the outstanding New Securities; provided, however, that no
amendment, modification or supplement or waiver or consent to the departure with
respect to the provisions of Sections 3, 4, 5 or 6 hereof shall be effective as
against any person who is then a Holder of New Securities unless consented to in
writing by such Holder of New Securities. Notice of any amendment, modification
or supplement to this Agreement shall promptly be provided by the Company to
each Holder of New Securities.
7(b) Notices; Counterparts; Headings; Successors and Assigns;
Specific Performance; Governing Law. The parties agree to be governed with
respect to the subject matter hereof by the provisions set forth in Sections
7(b), 7(c), 7(e), 7(f), 7(g) and 7(h) of the Initial Agreement.
7(c) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement with respect to the New
Securities and is intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of the
date first written above. Address:
2101 6th Avenue North, COLONIAL PROPERTIES TRUST
Suite 750
Birmingham, Alabama 35202
By:/s/ Paul F. Earle
Name: Paul F. Earle
Title: Executive Vice President
2101 6th Avenue North, COLONIAL REALTY LIMITED
Suite 750 PARTNERSHIP
Birmingham, Alabama 35202
By: COLONIAL PROPERTIES HOLDING COMPANY, INC.,
General Partner
By: /s/ Paul F. Earle
Name: Paul F. Earle
Title: Executive Vice President
Address: COLONIAL COMMERCIAL INVESTMENTS, INC.
2000 Interstate Park Drive
Suite 400
Montgomery, AL 36109
By: /s/ James K. Lowder
James K. Lowder
President
SUPPLEMENTAL REGISTRATION RIGHTS AND LOCK-UP AGREEMENT Dated as of November 18,
1998 by and among COLONIAL PROPERTIES TRUST, COLONIAL REALTY LIMITED PARTNERSHIP
================================================================================
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
Dated as of December 29, 1994
by and among
COLONIAL PROPERTIES TRUST
and
Certain Direct and Indirect Holders of
Limited Partnership Interests
of Colonial Realty Limited Partnership
================================================================================
<PAGE>
\\\DC - 62640/2 - 0845529.01
REGISTRATION RIGHTS AND LOCK-UP AGREEMENT
THIS REGISTRATION RIGHTS AND LOCK-UP AGREEMENT (this
"Agreement") is made and entered into as of December, 29, 1994 by and among
Colonial Properties Trust, a Maryland real estate investment trust (the
"Company"), Colonial Realty Limited Partnership, a Delaware limited partnership
(the "Operating Partnership"), and the other parties who are signatories hereto
(each a "Holder" and collectively the "Holders").
WHEREAS, on the date hereof the Operating Partnership is
acquiring, among other things, certain assets of various general partnerships in
which the Holders own direct or indirect interests (the "Property Partnerships")
pursuant to merger agreements or acquisition agreements of even date herewith
(the "Contribution Agreements") by and among the Operating Partnership, certain
acquisition partnerships of which the Operating Partnership is the managing
general partner, the Property Partnerships and the Holders, and in connection
therewith the Holders will receive Class C Units of limited partnership interest
in the Operating Partnership (such Class C Units and the Class A Units of
limited partnership interest into which such Class C Units may be converted
being referred to hereinafter as the "Units");
WHEREAS, in order to induce the Property Partnerships and the
Holders to consummate the closings contemplated under the Contribution
Agreements, the Company has agreed to grant to Holders the registration rights
set forth in Section 3 hereof; and
WHEREAS, in order to induce the Operating Partnership to
consummate the closings contemplated under the Contribution Agreements, the
Holders have agreed to the Lock-up (as defined in Section 2(a) hereof).
NOW, THEREFORE, the parties hereto, in consideration of the
foregoing, the mutual covenants and agreements hereinafter set forth, and other
good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:
1. Definitions.
As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Common Shares" shall mean common shares of beneficial
interest, par value $.01 per share, in the Company.
"Company" shall have the meaning set forth in the Preamble and
also shall include the Company's successors.
"Dispose of" shall have the meaning set forth in Section 2(b)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"Holder" or "Holders" shall have the meaning set forth in the
Preamble.
"Lock-up" shall have the meaning set forth in Section 2(a)
hereof.
"Lock-up Period" shall have the meaning set forth in Section
2(a) hereof.
"NASD" shall mean the National Association of Securities
Dealers, Inc.
"Operating Partnership" shall have the meaning set forth in
the Preamble and also shall include the Operating Partnership's successors.
"Person" shall mean an individual, partnership, corporation,
trust, estate, or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" shall mean the prospectus included in a
Registration Statement, including any preliminary prospectus, and any such
prospectus as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by a Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, including post-effective amendments, and in each
case including all material incorporated by reference therein.
"Registrable Securities" shall mean the Shares, excluding (i)
Shares for which a Registration Statement relating to the sale thereof shall
have become effective under the Securities Act and which have been disposed of
under such Registration Statement or (ii) Shares sold or eligible for sale
pursuant to Section 4(1) of the Securities Act or Rule 144 thereunder.
"Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement, including, without
limitation: (i) all SEC, stock exchange or NASD registration and filing fees;
(ii) all fees and expenses incurred in connection with compliance with state
securities or "blue sky" laws (including reasonable fees and disbursements of
counsel in connection with "blue sky" qualification of any of the Registrable
Securities and the preparation of a Blue Sky Memorandum) and compliance with the
rules of the NASD; (iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, certificates and other documents relating to the
performance of and compliance with this Agreement; (iv) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Securities on any securities exchange or exchanges pursuant to Section 4(l)
hereof; and (v) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company, including the expenses of any
special audits or "cold comfort" letters required by or incident to such
performance and compliance. Registration Expenses shall specifically exclude
underwriting discounts and commissions, the fees and disbursements of counsel
representing a selling Holder, and transfer taxes, if any, relating to the sale
or disposition of Registrable Securities by a selling Holder, all of which shall
be borne by such Holder in all cases.
"Registration Notice" shall have the meaning set forth in
Section 3(a) hereof.
"Registration Statement" or "Shelf Registration Statement"
shall mean a "shelf" registration statement of the Company and any other Person
required to be a registrant with respect to such shelf registration statement
pursuant to the requirements of the Securities Act which covers the issuance or
resale of the Registrable Securities on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the SEC, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all materials incorporated by reference
therein.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended from time to time.
"Shares" shall mean any Common Shares issued or to be issued
to the Holders upon redemption of their Units.
"Shelf Registration" shall mean a registration required to be
effected pursuant to Section 3 hereof.
"Units" shall have the meaning set forth in the Preamble.
2. Lock-up Agreement.
2(a) Each Holder hereby agrees that, except as set forth in Section 2(b)
below, for one year following the date hereof (the "Lock-up Period"), it will
not, without the prior written consent of the Company, offer, pledge, sell,
contract to sell, grant any options for the sale of or otherwise dispose of,
directly or indirectly (collectively, "Dispose of"), any Units (the "Lock-up").
2(b) The following transfers of Units shall not
be subject to the Lock-up set forth in Section 2(a):
(i) a Holder may Dispose of Units to his or
her spouse, siblings, parents or any natural or
adopted children or other descendants or to any
personal trust in which such family members or such
Holder retain the entire beneficial interest;
(ii) a Holder may Dispose of Units on his or
her death to such Holder's estate, executor,
administrator or personal representative or to such
Holder's beneficiaries pursuant to a devise or
bequest or by the laws of descent and distribution;
(iii) a Holder may Dispose of Units as a
gift or other transfer without
consideration;
(iv) a Holder may Dispose of Units pursuant
to a pledge, grant of security interest or other
encumbrance effected in a bona fide transaction with
an unrelated and unaffiliated pledgee; and
(v) a Holder may Dispose of Units to
another Holder.
In the event that any Holder Disposes of Units as permitted by this Section
2(b), such Units shall remain subject to this Agreement and, as a condition of
the validity of such disposition, the transferee shall be required to execute
and deliver a counterpart of this Agreement (except that a pledgee shall not be
required to execute and deliver a counterpart of this Agreement until it
forecloses upon such Units). Thereafter, such transferee shall be deemed to be a
Holder for purposes of this Agreement.
3. Shelf Registration Under the Securities Act.
3(a) Filing of Shelf Registration Statement. Beginning after the expiration
of the Lock-up Period, each Holder shall be entitled to offer for sale pursuant
to a Registration Statement any Registrable Securities held by such Holder,
subject to the terms and conditions hereof. Upon receipt by the Company of a
written notice (a "Registration Notice") from one or more Holders that such
Holder(s) propose to make a registered offer of a specified number of
Registrable Securities (which number shall not be less than 50,000), the Company
shall cause to be filed a Shelf Registration Statement providing for the sale by
such Holder(s) of the Registrable Securities specified in such Registration
Notice in accordance with the terms hereof and will use its reasonable efforts
to cause such Shelf Registration Statement to be declared effective by the SEC
as soon as practicable. The Company agrees to use its reasonable efforts to keep
the Shelf Registration Statement continuously effective for a period expiring on
the date on which all of the Registrable Securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or have become eligible for sale pursuant to Section 4(1) of the
Securities Act or Rule 144 thereunder and, subject to Section 4(b) and Section
4(i), further agrees to supplement or amend the Shelf Registration Statement, if
and as required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration Statement or
by the Securities Act or by any other rules and regulations thereunder for shelf
registration; provided, however, that the Company shall not be deemed to have
used its reasonable efforts to keep a Registration Statement effective during
the applicable period if it voluntarily takes any action that would result in
selling Holders covered thereby not being able to sell such Registrable
Securities during that period, unless such action is required under applicable
law or the Company has filed a post-effective amendment to the Registration
Statement and the SEC has not declared it effective. Notwithstanding the
foregoing, the Company shall not be required to file a Registration Statement or
to keep a Registration Statement effective if the negotiation or consummation of
a transaction is pending or an event has occurred, which negotiation,
consummation or event would require additional disclosure by the Company in the
Registration Statement of material information which the Company has a bona fide
business purpose for keeping confidential and the nondisclosure of which in the
Registration Statement might cause the Registration Statement to fail to comply
with applicable disclosure requirements; provided, however, that the Company may
not delay, suspend or withdraw a Registration Statement for such reason for more
than 60 days or more often than twice during any period of 12 consecutive
months.
3(b) Expenses. The Company shall pay all Registration Expenses in
connection with any registration pursuant to Section 3(a). Each Holder shall pay
all underwriting discounts, if any, sales commissions, the fees and
disbursements of counsel representing such Holder, and transfer taxes, if any,
relating to the sale or disposition of such Holder's Registrable Securities
pursuant to the Shelf Registration Statement, Section 4(1) of the Securities Act
or Rule 144 thereunder.
3(c) Inclusion in Shelf Registration Statement. Any Holder who does not
timely provide the information reasonably requested by the Company in connection
with the Shelf Registration Statement shall not be entitled to have its
Registrable Securities included in the Shelf Registration Statement.
3(d) Repurchase Option. In lieu of registering Registrable Securities that
a Holder seeks to register pursuant to Section 3(a) hereof, the Company may, by
delivery of written notice to such Holder within 30 days after receipt of a
Registration Notice from such Holder, elect to repurchase such Registrable
Securities for cash, in an amount per Share equal to the average of the closing
prices of the Common Shares on the New York Stock Exchange (or on such other
exchange or in such other market as the Common Shares are then listed or traded)
on the ten trading days preceding the Company's receipt of such Registration
Notice (or, if the common shares have not traded on all ten of such trading
days, in an amount equal to the fair value of such Registrable Securities as
determined in good faith by the Board of Trustees of the Company).
4. Registration Procedures.
In connection with the obligations of the Company with respect
to the Registration Statement pursuant to Section 3 hereof, the Company shall,
to the extent applicable:
4(a) prepare and file with the SEC, within the time period set forth in
Section 3 hereof, a Shelf Registration Statement, which Shelf Registration
Statement (i) shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution by the selling
Holders thereof, and (ii) shall comply as to form in all material respects with
the requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith;
4(b) subject to the last three sentences of this Section 4(b) and Section
4(i) hereof, (i) prepare and file with the SEC such amendments and
post-effective amendments to each such Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable
period; (ii) cause each such Prospectus to be supplemented by any required
prospectus supplement, and as so supplemented to be filed pursuant to Rule 424
or any similar rule that may be adopted under the Securities Act; (iii) respond
as promptly as practicable to any comments received from the SEC with respect to
the Shelf Registration Statement, or any amendment, post-effective amendment or
supplement relating thereto; and (iv) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance with the
intended method or methods of distribution by the selling Holders thereof.
Notwithstanding anything to the contrary contained herein, the Company shall not
be required to take any of the actions described in subsections (i), (ii) or
(iii) above with respect to each particular Holder of Registrable Securities
unless and until the Company has received a Registration Notice from a Holder
that such Holder intends to make offers or sales under the Registration
Statement as specified in such Registration Notice; provided, however, that the
Company shall have 10 business days to prepare and file any such amendment or
supplement after receipt of the Registration Notice. Once a Holder has delivered
a Registration Notice to the Company, such Holder shall promptly provide to the
Company such information as the Company reasonably requests in order to identify
such Holder and the method of distribution in a post-effective amendment to the
Registration Statement or a supplement to the Prospectus. Such Holder also shall
notify the Company in writing upon completion of such offer or sale or at such
time as such Holder no longer intends to make offers or sales under the
Registration Statement;
4(c) furnish to each Holder of Registrable Securities that has delivered a
Registration Notice to the Company, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder may reasonably
request, in order to facilitate the public sale or other disposition of the
Registrable Securities; the Company consents to the use of the Prospectus,
including each preliminary Prospectus, by each such Holder of Registrable
Securities in connection with the offering and sale of the Registrable
Securities covered by the Prospectus or the preliminary Prospectus;
4(d) use its reasonable efforts to register or qualify the Registrable
Securities by the time the applicable Registration Statement is declared
effective by the SEC under all applicable state securities or "blue sky" laws of
such jurisdictions as any Holder of Registrable Securities covered by a
Registration Statement shall reasonably request in writing, keep each such
registration or qualification effective during the period such Registration
Statement is required to be kept effective or during the period offers or sales
are being made by a Holder that has delivered a Registration Notice to the
Company, whichever is shorter, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; provided, however, that the Company shall not be required to (i)
qualify generally to do business in any jurisdiction or to register as a broker
or dealer in such jurisdiction where it would not otherwise be required to
qualify but for this Section 4(d), (ii) subject itself to taxation in any such
jurisdiction, or (iii) submit to the general service of process in any such
jurisdiction;
4(e) notify each Holder of Registrable Securities that has delivered a
Registration Notice to the Company promptly and, if requested by such Holder,
confirm such advice in writing (i) when a Registration Statement has become
effective and when any post-effective amendments and supplements thereto become
effective, (ii) of the issuance by the SEC or any state securities authority of
any stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iii) if the Company receives
any notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose, and (iv) of the happening of any event during the
period a Registration Statement is effective which is of a type specified in the
last sentence of Section 3(a) hereof or as a result of which such Registration
Statement or the related Prospectus contains any untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made (in the case of the Prospectus), not misleading;
4(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
4(g) furnish to each Holder of Registrable Securities that has delivered a
Registration Notice to the Company, without charge, at least one conformed copy
of each Registration Statement and any post-effective amendment thereto (without
documents incorporated therein by reference or exhibits thereto, unless
requested);
4(h) cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any Securities Act legend; and
enable certificates for such Registrable Securities to be issued for such
numbers of Shares and registered in such names as the selling Holders may
reasonably request at least two business days prior to any sale of Registrable
Securities;
4(i) subject to the last sentence of Section 3(a) hereof and the last three
sentences of Section 4(b) hereof, upon the occurrence of any event contemplated
by Section 4(e)(iv) hereof, use its reasonable efforts promptly to prepare and
file a supplement or prepare, file and obtain effectiveness of a post-effective
amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities, such
Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
4(j) make available for inspection by representatives of the Holders of the
Registrable Securities and any counsel or accountant retained by such Holders,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the respective officers, directors and employees of the
Company to supply all information reasonably requested by any such
representative, counsel or accountant in connection with a Registration
Statement; provided, however, that such records, documents or information which
the Company determines, in good faith, to be confidential and notifies such
representatives, counsel or accountants in writing that such records, documents
or information are confidential shall not be disclosed by the representatives,
counsel or accountants unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a material misstatement or omission
in a Registration Statement, (ii) the release of such records, documents or
information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (iii) such records, documents or information have
been generally made available to the public;
4(k) a reasonable time prior to the filing of any Registration Statement,
any Prospectus, any amendment to a Registration Statement or amendment or
supplement to a Prospectus, provide copies of such document (not including any
documents incorporated by reference therein unless requested) to the Holders of
Registrable Securities that have provided a Registration Notice to the Company;
4(l) use its reasonable efforts to cause all Registrable Securities to be
listed on any securities exchange on which similar securities issued by the
Company are then listed;
4(m) provide a CUSIP number for all Registrable Securities, not later than
the effective date of a Registration Statement;
4(n) otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the SEC and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering at least 12
months which shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder; and
4(o) use its reasonable efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of the Company to enable Holders that have delivered
Registration Notices to the Company to consummate the disposition of such
Registrable Securities.
The Company may require each Holder of Registrable Securities
to furnish to the Company in writing such information regarding the proposed
distribution by such Holder of such Registrable Securities as the Company may
from time to time reasonably request in writing.
In connection with and as a condition to the Company's
obligations with respect to the Registration Statement pursuant to Section 3
hereof and this Section 4, each Holder agrees that (i) it will not offer or sell
its Registrable Securities under the Registration Statement until it has
provided a Registration Notice pursuant to Section 4(b) hereof and has received
copies of the supplemental or amended Prospectus contemplated by Section 4(b)
hereof and receives notice that any post-effective amendment has become
effective, (ii) upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 4(e)(iv) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a
Registration Statement until such Holder receives copies of the supplemented or
amended Prospectus contemplated by Section 4(i) hereof and receives notice that
any post-effective amendment has become effective, and, if so directed by the
Company, such Holder will deliver to the Company (at the expense of the Company)
all copies in its possession, other than permanent file copies then in such
Holder's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice, and (iii) all offers and sales
under the Registration Statement shall be completed within sixty (60) days after
the first date on which offers or sales can be made pursuant to clause (i)
above, and upon expiration of such sixty (60) day period the Holder will not
offer or sell its Registrable Securities under the Registration Statement until
it has again complied with the provisions of clause (i) above.
5. Indemnification; Contribution.
5(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder and its officers and directors or trustees and each
Person, if any, who controls any Holder within the meaning of Section 15 of the
Securities Act as follows:
(i) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue
statement of a material fact contained in any
Registration Statement (or any amendment thereto)
pursuant to which Registrable Securities were
registered under the Securities Act, including all
documents incorporated therein by reference, or the
omission or alleged omission therefrom of a material
fact required to be stated therein or necessary to
make the statements therein not misleading or arising
out of any untrue statement or alleged untrue
statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto),
including all documents incorporated therein by
reference, or the omission or alleged omission
therefrom of a material fact necessary in order to
make the statements therein, in the light of the
circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability,
claim, damage and expense whatsoever, as incurred, to
the extent of the aggregate amount paid in settlement
of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any
such untrue statement or omission, or any such
alleged untrue statement or omission, if such
settlement is effected with the written consent of
the Company; and
(iii) against any and all expense
whatsoever, as incurred (including reasonable fees
and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any
litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened,
in each case whether or not a party, or any claim
whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not
paid under subparagraph (i) or (ii) above;
provided, however, that the indemnity provided pursuant to this Section 5(a)
does not apply to any Holder with respect to any loss, liability, claim, damage
or expense to the extent arising out of (x) any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Holder expressly for
use in a Registration Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto) or (y) such Holder's failure to deliver an
amended or supplemental Prospectus if such loss, liability, claim, damage or
expense would not have arisen had such delivery occurred.
5(b) Indemnification by Holders. Each Holder severally agrees to indemnify
and hold harmless the Company and the other selling Holders, and each of their
respective directors and officers (including each director and officer of the
Company who signed the Registration Statement), and each Person, if any, who
controls the Company or any other selling Holder within the meaning of Section
15 of the Securities Act, to the same extent as the indemnity contained in
Section 5(a) hereof (except that any settlement described in Section 5(a)(ii)
shall be effected with the written consent of such Holder), but only insofar as
such loss, liability, claim, damage or expense arises out of or is based upon
any untrue statement or omission, or alleged untrue statements or omissions,
made in a Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such selling Holder expressly
for use in such Registration Statement (or any amendment thereto) or such
Prospectus (or any amendment or supplement thereto).
5(c) Conduct of Indemnification Proceedings. Each indemnified party shall
give reasonably prompt notice to each indemnifying party of any action or
proceeding commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party (i) shall not relieve
it from any liability which it may have under the indemnity agreement provided
in Section 5(a) or 5(b) above, unless and to the extent it did not otherwise
learn of such action and the lack of notice by the indemnified party results in
the forfeiture by the indemnifying party of substantial rights and defenses and
(ii) shall not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided under Section 5(a) or 5(b) above. If the indemnifying party so elects
within a reasonable time after receipt of such notice, the indemnifying party
may assume the defense of such action or proceeding at such indemnifying party's
own expense with counsel chosen by the indemnifying party and approved by the
indemnified parties defendant in such action or proceeding, which approval shall
not be unreasonably withheld; provided, however, that, if such indemnified party
or parties reasonably determine that a conflict of interest exists where it is
advisable for such indemnified party or parties to be represented by separate
counsel or that, upon advice of counsel, there may be legal defenses available
to them which are different from or in addition to those available to the
indemnifying party, then the indemnifying party shall not be entitled to assume
such defense and the indemnified party or parties shall be entitled to one
separate counsel at the indemnifying party's or parties' expense. If an
indemnifying party is not entitled to assume the defense of such action or
proceeding as a result of the proviso to the preceding sentence, such
indemnifying party's counsel shall be entitled to conduct such indemnifying
party's defense and counsel for the indemnified party or parties shall be
entitled to conduct the defense of such indemnified party or parties, it being
understood that both such counsel will cooperate with each other to conduct the
defense of such action or proceeding as efficiently as possible. If an
indemnifying party is not so entitled to assume the defense of such action or
does not assume such defense, after having received the notice referred to in
the first sentence of this paragraph, the indemnifying party or parties will pay
the reasonable fees and expenses of counsel for the indemnified party or
parties. In such event, however, no indemnifying party will be liable for any
settlement effected without the written consent of such indemnifying party. If
an indemnifying party is entitled to assume, and assumes, the defense of such
action or proceeding in accordance with this paragraph, such indemnifying party
shall not be liable for any fees and expenses of counsel for the indemnified
parties incurred thereafter in connection with such action or proceeding. 5(d)
Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 5 is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Company and the selling Holders shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Company and the selling Holders, in
such proportion as is appropriate to reflect the relative fault of and benefits
to the Company on the one hand and the selling Holders on the other (in such
proportions that the selling Holders are severally, not jointly, responsible for
the balance), in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or expenses, as well as any other
relevant equitable considerations. The relative benefits to the indemnifying
party and indemnified parties shall be determined by reference to, among other
things, the total proceeds received by the indemnified party and indemnified
parties in connection with the offering to which such losses, claims, damages,
liabilities or expenses relate. The relative fault of the indemnifying party and
indemnified parties shall be determined by reference to, among other things,
whether the action in question, including any untrue or alleged untrue statement
of a material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
the indemnified parties, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action.
The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 5(d) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no selling
Holder shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities of such selling Holder
were offered to the public exceeds the amount of any damages which such selling
Holder would otherwise have been required to pay by reason of such untrue
statement or omission.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5(d), each Person, if
any, who controls a Holder within the meaning of Section 15 of the Securities
Act and directors and officers of a Holder shall have the same rights to
contribution as such Holder, and each director of the Company, each officer of
the Company who signed the Registration Statement and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
shall have the same rights to contribution as the Company.
6. Rule 144 Sales.
6(a) The Company covenants that it will file the reports required to be
filed by the Company under the Securities Act and the Exchange Act so as to
enable any Holder to sell Shares pursuant to Rule 144 under the Securities Act.
6(b) In connection with any sale, transfer or other disposition by any
Holder of any Shares pursuant to Section 4(1) of the Securities Act or Rule 144
thereunder, the Company shall cooperate with such Holder to facilitate the
timely preparation and delivery of certificates representing Shares to be sold
and not bearing any Securities Act legend, and enable certificates for such
Shares to be for such number of shares and registered in such names as the
selling Holders may reasonably request at least two business days prior to any
sale of Shares.
7. Miscellaneous.
7(a) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given without the written consent of the Company and the Holders of a majority
in amount of the outstanding Registrable Securities; provided, however, that no
amendment, modification or supplement or waiver or consent to the departure with
respect to the provisions of Sections 2, 3, 5 or 6 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing by
such Holder of Registrable Securities. Notice of any amendment, modification or
supplement to this Agreement adopted in accordance with this Section 7(a) shall
be provided by the Company to each Holder of Registrable Securities at least
thirty (30) days prior to the effective date of such amendment, modification or
supplement.
7(b) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery, to the parties at their respective addresses set forth opposite their
signatures below or at such other address as a party may indicate by written
notice to the other party or parties.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; three
(3) business days after being deposited in the mail, postage prepaid, if mailed;
when answered back., if telexed; when receipt is acknowledged, if telecopied; or
at the time delivered, if delivered by an air courier guaranteeing overnight
delivery.
7(c) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
parties, including, without limitation and without the need for an express
assignment, subsequent Holders. If any successor, assignee or transferee of any
Holder shall acquire Registrable Securities, in any manner, whether by operation
of law or otherwise, such Registrable Securities shall be held subject to all of
the terms of this Agreement, and by taking and holding such Registrable
Securities such Person shall be entitled to receive the benefits hereof and
shall be conclusively deemed to have agreed to be bound by all of the terms and
provisions hereof.
7(d) [Intentionally Omitted]
7(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
7(f) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
7(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PROVISIONS THEREOF.
7(h) Specific Performance. The parties hereto acknowledge that there would
be no adequate remedy at law if any party fails to perform any of its
obligations hereunder, and accordingly agree that each party, in addition to any
other remedy to which it may be entitled at law or in equity, shall be entitled
to compel specific performance of the obligations of any other party under this
Agreement in accordance with the terms and conditions of this Agreement in any
court of the United States or any State thereof having jurisdiction.
7(i) Entire Agreement. This Agreement is intended by the parties as a final
expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has executed
this Agreement, or caused this Agreement to be duly executed on its behalf, as
of the date first written above.
Address:
2101 6th Avenue North, COLONIAL PROPERTIES TRUST
Suite 750
Birmingham, Alabama 35202 By: /s/ Thomas H. Lowder
Chairman of the Board,
President and Chief Executive
Officer
2101 6th Avenue North, COLONIAL REALTY LIMITED
Suite 750 PARTNERSHIP
Birmingham, Alabama 35202
By: COLONIAL PROPERTIES
HOLDING COMPANY, INC.,
General Partner
By: /s/ Thomas H. Lowder
Thomas H. Lowder
President
HOLDERS:
Address:
2029 King Stables Road /s/ Harold W. Ripps
-----------------------------------
Birmingham, Alabama 35242 Harold W. Ripps
<PAGE>
Address:
4752 Southlake Parkway /s/ Chester L. Parker, Jr.
Birmingham, Alabama 35244 Chester L. Parker, Jr.
2556 North Delwood Drive /s/ Herbert A. Meisler
Mobile, Alabama 36606 Herbert A. Meisler
261 Montrose Drive /s/ Irving D. Meisler
-----------------------------------
McDonough, Georgia 30253 Irving D. Meisler
BERFAN COMPANY
By: /s/ Herbert A. Meisler
Herbert A. Meisler
Title: General Partner
BAMIL INVESTMENT COMPANY
500 Robert Jemison Road By: /s/ Allen M. Meisler
Birmingham, Alabama 35209 Allen M. Meisler,
Managing Partner
AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT (this "Agreement") is made and
entered into as of the 10th day of July, 1998, among COLONIAL REALTY LIMITED
PARTNERSHIP, a Delaware limited partnership (the "Borrower"), COLONIAL
PROPERTIES TRUST, an Alabama trust ("CPT"), COLONIAL PROPERTIES HOLDING COMPANY,
INC., an Alabama corporation ("CPHC"; CPHC and CPT are collectively, known as
the "Guarantors"), SOUTHTRUST BANK, NATIONAL ASSOCIATION, a national banking
association, AMSOUTH BANK, a state banking corporation, WACHOVIA BANK, N.A., a
national banking association, FIRST NATIONAL BANK OF COMMERCE, N.A., a national
banking association, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association and PNC BANK, NATIONAL ASSOCIATION, a national banking association,
successor by merger to PNC Bank, Ohio, National Association (collectively, the
"Banks").
R E C I T A L S:
A. Borrower, Guarantors and Banks have entered into that certain Credit
Agreement dated July 10, 1997 (as so amended, the "Credit Agreement").
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Credit Agreement.
B. Borrower, Guarantors and Banks desire to amend the Credit Agreement
to increase the Aggregate Commitment from $200,000,000 to $250,000,000.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the parties hereto agree as follows:
1. Article 1 of the Credit Agreement is hereby amended by deleting the
definitions of "Agent Fee", "Aggregate Commitment", "Commitment Fee", "Facility
Fee", "Maximum Borrowing Base", "Pool", "Pool GAV", "Revolver Period",
"Stabilized Properties", and "Total Liabilities" , and by inserting in lieu
thereof the following definitions:
"Agent Fee" means $50,000.
"Aggregate Commitment" means $250,000,000 subject to being
decreased as set forth in Section 2.8.
"Commitment Fee" means a commitment fee equal to fifteen (15)
basis points of the Aggregate Commitment. Such commitment fee shall be paid to
Lenders based upon their pro rata share of the Loans.
<PAGE>
"Facility Fee" means a facility fee equal to eight (8) basis
points per annum of each Lender's average unfunded portion of such
Lender's Commitment, payable monthly in arrears. For purposes of
calculating the unfunded portion of a Lender's Commitment for any
month, such Lender's Commitment Percentage of any unexpired Letters of
Credit and any Competitive Bid Loans made by such Lender will be
considered outstanding loans. Such Competitive Bid Loans will not be
considered outstanding loans for purposes of computing the unfunded
portion of any other Lender's Commitment. Attached hereto as Schedule
1.2 is an example of the method of calculating the Facility Fee.
"Maximum Borrowing Base" means the difference between (i) Pool
GAV divided by 1.70, and (ii) Unsecured Liabilities (excluding the
outstanding principal balance of the Loans and the Reimbursement
Obligation), all as more particularly set forth on Line 14 of the
Compliance Certificate
"Pool" shall mean the Credit Parties' unencumbered asset pool
which shall consist of (i) cash from a 1031 exchange, (ii) cash or cash
equivalents held by the Credit Parties for the sole purpose of
liquidating or retiring unsecured Debt, and (iii) all Properties of
Credit Parties which meet all of the following criteria: (a) a
certificate of occupancy has been issued for the Property and remains
in full force and effect, (b) the Property has been at least fifty
percent (50%) leased (based on actual leasable square footage at the
Property) for the most immediately preceding three (3) consecutive
months based on leases wherein the tenants are paying at least the
average monthly lease payments required by the terms of such leases and
such leases are free from default by either the landlord or tenant
thereunder, (c) there is no Lien on the Property, and (d) the Credit
Parties have provided Agent with a Phase I environmental report for the
Property in form and content acceptable to Lenders. Notwithstanding the
foregoing, the amount of Non-Stabilized Properties included in the Pool
shall not exceed twenty-five percent (25%) of Pool GAV. (Any
Non-Stabilized Property included in the Pool will be removed from the
Pool if such Property fails to meet the definition of a "Stabilized
Property" within nine (9) months from the date such Property is first
included in the Pool.)
"Pool GAV" shall mean the sum of (without redundancy) (i) 100%
of Pool EBITDA from Stabilized Properties, capitalized at the
appropriate Capitalization Rate, (ii) for each Non-Stabilized Property
in the Pool, the lesser of (a) 75% of the Gross Book Value of
Non-Stabilized Properties in the Pool, or (b) Pool EBITDA of
Non-Stabilized Properties capitalized at the appropriate Capitalization
Rate, and (iii) cash from a 1031 exchange, and (iv) cash or cash
equivalents held by the credit parties for the sole purpose of
liquidating or retiring unsecured debt. Notwithstanding the foregoing,
any Properties acquired during the applicable reporting period that
qualify for Pool shall be valued at Gross Book Value.
<PAGE>
"Revolver Period" means the period of time from the Closing
Date until July 10, 2000, unless extended by Lenders in accordance with
Section 2.8. hereof.
"Stabilized Properties" shall mean any Property which meets
all of the following criteria: (i) a certificate of occupancy has been
issued for the Property and remains in full force and effect, (ii) the
Property has been at least eighty-five percent (85%) occupancy level if
multifamily, retail, or office (based on actual leasable square footage
at the property) for the most immediately preceding three (3)
consecutive months based on leases wherein the tenants are paying at
least the average monthly lease payments required by the terms of such
leases and such leases are free from default by either the landlord or
tenant thereunder, and (iii) there is no Lien on the Property. However,
if a historically Stabilized Property drops below the above listed
occupancy threshold level, such Property may again become classified as
a Stabilized Property after attaining a ninety percent (90%) occupancy
level for a monthly reporting period if such Property attains such
ninety percent (90%) occupancy level within three months of previously
being classified as a Stabilized Property.
"Total Liabilities" shall mean (without redundancy), all
mortgage debt, letters of credit, the deferred purchase price pursuant
to purchase agreements or contracts, to the extent such deferred
purchase price is required to be included in accordance with GAAP,
forward equity commitments (however, such commitments shall not be
considered debt if such commitments are required to be replaced dollar
for dollar with equity), pre-purchase deals (including all assets and
liabilities of such pre-purchase deals), unsecured debt, subordinated
debt, payables, accrued expenses, lease obligations (including ground
leases), guarantees of indebtedness and unfunded obligations, pro rata
share of non-recourse debt in an Unconsolidated Subsidiaries or joint
ventures (where the pro rata share of the asset has been included) and
any loan where any of the Credit Parties are liable for debt as a
general partner, and one hundred percent (100%) of recourse debt in an
Unconsolidated Subsidiaries or joint ventures, and one hundred percent
(100%) of recourse debt incurred by any of the Credit Parties.
2. Article 1 of the Credit Agreement is hereby amended by adding the
following definitions:
"Increase Commitment Fee" means a one-time commitment fee for
the $50,000,000 increase, which is due and payable upon execution of
this Agreement and will be calculated by multiplying $75,000 (15 basis
of the $50,000,000 increase) by a fraction, the numerator of which is
the number of days from execution of this Agreement until July 10,
1998, and the denominator of which is 365. Such increase commitment fee
shall be paid to Lenders based upon their pro rata share of the Loans.
<PAGE>
"Up-Front Fee" means a one-time up-front commitment equal to
15 basis points of the $50,000,000 increase. Such up-front fee shall be
paid to Lenders based upon their pro rata share of the Loans.
3. Section 2.4(a) of the Credit Agreement shall be amended to delete
the indented information in its entirety and by inserting in lieu thereof the
following:
Published Debt Rating Margin
- --------------------- ------
Less than BBB-/Baa3 or unrated by a Qualified Rating Agency 135
Equal to BBB-/Baa3 95
Equal to or greater than BBB/Baa2 80
4. Section 2.6 of the Credit Agreement shall be amended to delete the
first sentence of the section and insert in lieu thereof the following:
"The Borrower shall pay the Up-Front Fee, the Increase
Commitment Fee, and the Commitment Fee to Agent, for account of
Lenders, on the Closing Date of the Amendment to the Credit Agreement
and shall pay the Commitment Fee to Agent, for account of Lenders, on
each anniversary of the Closing Date."
5. Section 2.8(b) of the Credit Agreement shall be deleted in its
entirety, and the following inserted in its place:
(b) If Lenders elect not to extend the Revolver Period,
(i) by the day that is three (3) months
after the Conversion Date, Borrower shall have
reduced the aggregate outstanding principal balance
of all Loans (inclusive of the Reimbursement
Obligation) to $229,700,000 (and the maximum amount
of Competitive Bid Loans shall be reduced to
$114,850,000),
(ii) by the day that is six (6) months after the Conversion
Date, Borrower shall have reduced the
aggregate outstanding principal balance of all Loans
(inclusive of the Reimbursement Obligation) to
$209,400,000 (and the maximum amount of Competitive
Bid Loans shall be reduced to $104,700,000),
(iii) by the day that is nine (9) months
after the Conversion Date, Borrower shall have
reduced the aggregate outstanding principal balance
of all Loans (inclusive of the Reimbursement
Obligation) to $189,100,000 (and the maximum amount
of Competitive Bid Loans shall be reduced to
$94,550,000),
<PAGE>
(iv) by the day that is twelve (12) months after the
Conversion Date, Credit Parties shall have
reduced the aggregate outstanding principal balance
of all Loans (inclusive of the Reimbursement
Obligation) to $168,750,000,000 (and the maximum
amount of Competitive Bid Loans shall be reduced to
$84,375,000),
(v) by the day that is fifteen (15) months
after the Conversion Date, Borrower shall have
reduced the aggregate outstanding principal balance
of all Loans (inclusive of the Reimbursement
Obligation) to $137,500,000 (and the maximum amount
of Competitive Bid Loans shall be reduced to
$68,750,000),
(vi) by the day that is eighteen (18) months
after the Conversion Date, Borrower shall have
reduced the aggregate outstanding principal balance
of all Loans (inclusive of the Reimbursement
Obligation) to $106,250,000 (and the maximum amount
of Competitive Bid Loans shall be reduced to
$53,125,000),
(vii) by the day that is twenty-one (21) months after the
Conversion Date, Borrower shall have
reduced the aggregate outstanding principal balance
of all Loans (inclusive of the Reimbursement
Obligation) to $75,000,000 (and the maximum amount of
Competitive Bid Loans shall be reduced to
$37,500,000), and
(viii) on the Maturity Date, the outstanding principal balance
of all Loans, together with all
accrued and unpaid interest thereon shall be due and
payable.
6. The Letter of Credit Fee as set forth in Section 2A.3 shall be
reduced to from one percent (1%) to three-quarters of a percent (3/4%).
7. The Credit Agreement is amended to add the following Sections to
Article 6:
6.23. Newly formed subsidiaries of CPT as Guarantors.
CPT agrees that any newly formed subsidiaries of CPT shall
execute an agreement guarantying the prompt payment of the
Credit Party Obligations in full when due and shall assume and
agree to all conditions and terms set forth in Article 3
hereof.
6.24. Year 2000 Representations and Warranties
<PAGE>
(a) Borrower has (i) begun analyzing the operations
of Borrower and its subsidiaries and affiliates that could be
adversely affected by failure to become Year 2000 compliant
(that is, that computer applications, imbedded microchips and
other systems will be able to perform date-sensitive functions
prior to and after December 31, 1999) and; (ii) developed a
plan for becoming Year 2000 compliant in a timely manner,
implementation of which is on schedule in all material
respects. Borrower reasonably believes that it will become
Year 2000 compliant for its operations and those of its
subsidiaries and affiliates on a timely basis except to the
extent that a failure to do so could not reasonably be
expected to have a material adverse effect upon the financial
condition of Borrower.
(b) Borrower will promptly notify Lenders in the
event Borrower determines that any computer application which
is material to the operations of Borrower, its subsidiaries or
any of its material vendors or suppliers will not be fully
Year 2000 compliant on a timely basis, except to the extent
that such failure could not reasonably be expected to have a
material adverse effect upon the financial condition of
Borrower.
8. Section 7.8 shall be amended to delete subsection (g) and
insert in lieu thereof the following:
(g) the ratio of Secured Liabilities to GAV to
exceed thirty-five (35%).
9. Section 7.8 shall be amended to add the following:
(h) the ratio of total preferred stock of CPT to Total
Market Capitalization to exceed fifteen percent
(15%).
10. The Credit Agreement is hereby further amended by deleting in its
entirety Schedule 1.1 and inserting in lieu thereof Schedule 1.1 attached
hereto.
11. The Credit Agreement is hereby further amended by deleting in its
entirety Exhibit E and inserting in lieu thereof Exhibit E attached hereto.
12. Borrowers represent and warrant that all representations and
warranties set forth in Article 5 of the Credit Agreement, as amended hereby,
are true and correct on the date hereof, and that, to the best of their
knowledge, no Default or Event of Default has occurred or exists.
13. No right of any Bank with respect to the Loan Documents is or will
be in any manner released, destroyed, diminished, or otherwise adversely
affected by this Agreement.
14. All references in the Loan Documents to the Credit Agreement shall
be deemed to refer, from and after the date hereof, to the Credit Agreement as
amended hereby, and as the same may hereafter be modified or amended.
<PAGE>
15. Except as hereby expressly modified and amended, the Credit
Agreement shall remain in full force and effect, and the Credit Agreement, as
amended, is hereby ratified and affirmed in all respects. Borrowers confirm
that, to the best of their knowledge, they have no defenses or setoffs with
respect to their obligations pursuant to the Credit Agreement, as amended
hereby.
16. This Agreement shall inure to the benefit of and be binding upon
the parties hereto, and their respective successors and assigns.
17. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which, when taken together,
shall constitute one and the same instrument.
18. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWERS HEREBY WAIVE
ANY RIGHT ANY OF THEM MAY HAVE TO TRIAL BY JURY ON ANY CLAIM, COUNTERCLAIM,
SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING OUT OF OR IN ANY WAY
PERTAINING OR RELATING TO THIS AGREEMENT OR THE LOAN DOCUMENTS, OR (II) IN ANY
WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY DEALINGS OF
THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE LOAN DOCUMENTS OR IN
CONNECTION WITH THE TRANSACTIONS RELATED THERETO OR CONTEMPLATED THEREBY OR THE
EXERCISE OF EITHER PARTY'S RIGHTS AND REMEDIES THEREUNDER, IN ALL OF THE
FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE. BORROWERS AGREE THAT BANKS MAY FILE A COPY OF
THIS WAIVER WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND
BARGAINED AGREEMENT OF BORROWERS IRREVOCABLY TO WAIVE THEIR RIGHT TO TRIAL BY
JURY, AND THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR
CONTROVERSY WHATSOEVER BETWEEN BORROWERS AND BANKS SHALL INSTEAD BE TRIED IN A
COURT OF COMPETENT JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
properly executed and delivered to be effective as of the day and year first
above written.
BORROWER:
COLONIAL REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
BY: COLONIAL PROPERTIES HOLDING COMPANY, INC., an Alabama
corporation,
Its General partner
BY: /s/Thomas H. Lowder
Thomas H. Lowder
Its President and Chief Executive Officer
GUARANTORS:
COLONIAL PROPERTIES TRUST,
an Alabama trust
BY: /s/Thomas H. Lowder
Thomas H. Lowder
Its President and Chief Executive Officer
COLONIAL PROPERTIES HOLDING COMPANY, INC., an Alabama corporation
BY: /s/Thomas H. Lowder
Thomas H. Lowder
Its President and Chief Executive Officer
(Signatures Continue)
<PAGE>
Signature Page to Colonial Realty Limited
Partnership Credit Agreement
LENDERS:
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
a national banking association
By:/s/ Curtis J. Perry
Curtis J. Perry
Its Group Vice President
AMSOUTH BANK,
a state banking corporation
By:
Its
WELLS FARGO BANK, NATIONAL ASSOCIATION,
a national banking association
By:
Its
WACHOVIA BANK, N.A., a national banking association
By:
Robert A. Cancelliere
Its Assistant Vice President
PNC BANK, NATIONAL ASSOCIATION,
a national banking association,
successor by merger to PNC Bank, Ohio, National Association
By:
Its
(Signatures Continue)
<PAGE>
Signature Page to Colonial Realty
Limited Partnership Credit Agreement
FIRST NATIONAL BANK OF COMMERCE, N.A.,
a national banking association
By:/s/ Pete M. Yuan
Its Senior Vice President
AGENT:
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
a national banking association
By: /s/ Curtis J. Perry
Curtis J. Perry
Its Group Vice President
<PAGE>
SCHEDULE 1.1
Lender Commitment Commitment Percentage
SouthTrust Bank, National Association $50,000,000 20%
AmSouth Bank 50,000,000 20%
Wells Fargo Bank, National Association 50,000,000 20%
Wachovia Bank, N.A. 50,000,000 20%
PNC Bank, National Association 25,000,000 10%
First National Bank of Commerce, N.A. 25,000,000 10%
---------- --------
TOTALS $250,000,000 100%
<PAGE>
EXHIBIT E
COMPLIANCE CERTIFICATE
SouthTrust Bank, National Association,
as Agent for the Lenders
RE: Credit Agreement dated July 10, 1997 among Colonial Realty Limited
Partnership (the "Borrower") Colonial Properties Trust and Colonial Properties
Holding Company, Inc. ("Guarantors"), the Lenders, and SouthTrust Bank, National
Association, as Agent for the Lenders (as the same may hereafter be modified or
amended the "Credit Agreement")
Ladies and Gentlemen:
This Compliance Certificate is submitted pursuant to Section 6.14. of
the above-referenced Credit Agreement. The undersigned treasurer or chief
financial officer of the Borrower hereby certifies as follows:
1. No Default or Event of Default has occurred or exists
except .
-----------------------------------------------------------------
2. As of _________________________ (the last day of each fiscal
quarter for quarterly compliance certificates, or the most
recent practicable date for all other compliance
certificates):
(a) EBITDA was
------------------------------------------
(b) Pool EBITDA was
-------------------------------------
(c) GAV was
---------------------------------------------
(d) Pool GAV was
----------------------------------------
(e) Interest Expense was
--------------------------------
(f) Fixed Charges were
----------------------------------
(g) Unsecured Interest Expense was
----------------------
(h) Unsecured Liabilities were
--------------------------
(i) Debt was
--------------------------------------------
GE>
(j) Total Market Capitalization was
---------------------
(k) Total Liabilities were
------------------------------
(l) Secured Liabilities were
----------------------------
(m) CPT's distributions to shareholders were
------------
(n) CRLP's distributions to partners were
---------------
(o) Funds From Operations were
--------------------------
3. As of the date specified in 2. above:
(a) The ratio of EBITDA to Interest Expense was:
Required: Not less than 2.0 to 1.0
Actual: to 1.0
(b) The ratio of EBITDA to Fixed Charges was:
Required: Not less than 1.75 to 1.0
Actual: to 1.0
(c) The ratio of Pool EBITDA to Unsecured Interest Expense
was:
Required: Not less than 2.0 to 1.0
Actual: to 1.0
(d) The ratio of Pool GAV to Unsecured Liabilities was:
Required: Not less than 1.70 to 1.0
Actual: to 1.0
(e) The ratio of Debt to Total Market Capitalization was:
Required: Not to exceed 55%
Actual: %
(f) The ratio of Total Liabilities to GAV was:
Required: Not to exceed 55%
Actual: %
<PAGE>
(g) The ratio of Secured Liabilities to GAV was:
Required: Not to exceed 35%.
Actual: %
(h) The ratio of total preferred stock of CPT to Total Market
Capitalization was:
Required: Not to exceed 15%
Actual: %
4. As of the date specified in 2. above:
(a) CPT's distributions to shareholders were:
Required: Not to exceed 95% of Funds From Operations
Actual: % of Funds From Operations.
(b) CRLP's distributions to partners were:
Required: Not to exceed 95% of Funds From Operations.
Actual: % of Funds From Operations.
5. The following items are attached for each Pool Property:
(a) A list of all Pool Properties.
(b) Most recent fiscal year end operating statement (to the
extent not previously submitted).
(c) Most recent fiscal quarter operating statement (to the
extent not previously submitted).
(d) Certified rent roll (certifying rents in full payment).
(e) Calculation of Property EBITDA and Property GAV.
(f) Occupancy for the most recent three (3) consecutive
months (see Notes 1 and 2 below).
Note 1: Occupancy must be based on actual leasable
square footage at the property and leases wherein the tenants
are paying at least the average monthly lease payments
required by the terms of such leases and such leases must be
free from default by either the landlord or tenant thereunder.
<PAGE>
Note 2: If occupancy is less than eighty-five percent
(85%) for any month, please state the number of consecutive
months that occupancy has been below eighty-five percent
(85%):
---------------------.
6. The following items are also attached:
(a) Calculation of Pool EBITDA and Pool GAV.
(b) Calculation of EBITDA and GAV.
(c) List of Total Liabilities (Please list all Unsecured
Liabilities together and all Secured Liabilities
together by Property).
7. For each multifamily phased Property, please complete and attach the
following information:
(a) How many units included in all phases?
(b) How many units included in the Pool?
(c) Are the operating statements submitted pursuant
hereto for the Pool Property only? . If not, what
percentage is attributable to Pool Property. .
(d) Is the rent roll submitted hereto for the Pool
Property only? . If not, please specify on the rent
roll the units included in the Pool Property.
8. The current information with respect to the rating of CRLP's senior unsecured
Debt is as follows:
Rating Agency Rating Date of Rating
a.
b.
c.
d.
9. All representations and warranties contained in the Credit
Agreement and the other Credit Documents are true and correct
as though given on the date hereof except
----------------------------.
10. Credit Parties represent and warrant that each Property
described in the list provided pursuant to Section 5(a),
satisfies the conditions for inclusion in the Pool.
11. All information provided herein or attached hereto is true and correct. 1.
<PAGE>
12. Capitalized terms not defined herein shall have the meanings given to such
terms in the Credit Agreement.
13. The following Letters of Credit have been issued and are outstanding under
the Revolving Loan:
(a) Date of Letter (b) Undrawn Amount (c) Unreimbursed Draws
(d) Expiration Date
TOTAL
14. The Maximum Borrowing Base is as follows:
(1) Pool GAV / 1.70
(2) Unsecured Liabilities (excluding the outstanding
principal balance of the Swing Loan, Revolving Loan,
and Reimbursement Obligation)
(3) Difference between Line 14(a) and 14(b)
---------
(4) Lesser of $250,000,000 or Line 14(c)
---------
(5) Amount of Reimbursement Obligation
(Total of Line 13(b) and 13(c))
(6) Amount of outstanding principal balance
of Competitive Bid Loans
(7) Amount of outstanding principal balance
of Swing Loan
(8) Maximum Borrowing Base
(Line 14(d) less Line 14(e), Line 14(f),
and Line 14 (g)
Dated this ____ day of __________________, 199__.
<PAGE>
COLONIAL REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
By: Colonial Properties Holding Company, Inc., an Alabama
corporation
Its General Partner
By:/s/Howard B. Nelson Jr.
Its:Chief Financial Officer
SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Agreement") is made
and entered into as of the 21st day of August, 1998, among COLONIAL REALTY
LIMITED PARTNERSHIP, a Delaware limited partnership (the "Borrower"), COLONIAL
PROPERTIES TRUST, an Alabama trust ("CPT"), COLONIAL PROPERTIES HOLDING COMPANY,
INC., an Alabama corporation ("CPHC"; CPHC and CPT are collectively, known as
the "Guarantors"), SOUTHTRUST BANK, NATIONAL ASSOCIATION, a national banking
association, AMSOUTH BANK, a state banking corporation, WACHOVIA BANK, N.A., a
national banking association, FIRST NATIONAL BANK OF COMMERCE, N.A., a national
banking association, WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association and PNC BANK, NATIONAL ASSOCIATION, a national banking association,
successor by merger to PNC Bank, Ohio, National Association (collectively, the
"Banks").
R E C I T A L S:
A. Borrower, Guarantors and Banks have entered into that certain Credit
Agreement dated July 10, 1997, as amended by that certain Amendment to Credit
Agreement dated July 10, 1998 (as so amended, the "Credit Agreement").
Capitalized terms used herein without definition shall have the meanings
ascribed to such terms in the Credit Agreement.
B. Borrower, Guarantors and Banks desire to amend the Credit Agreement
to add and amend certain definitions contained in the Credit Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration, the parties hereto agree as follows:
1. Article 1 of the Credit Agreement is hereby amended by deleting the
definitions of "GAV" and "Stabilized Properties"and by inserting in lieu thereof
the following definitions:
<PAGE>
6
557390.3
"GAV" shall mean the sum of (without redundancy) (i) EBITDA from all
Properties which have not been acquired within the applicable reporting period,
capitalized at the appropriate Capitalization Rate, (ii) pro rata share of
EBITDA from Joint Ventures and Unconsolidated Subsidiaries which have not been
acquired within the applicable reporting period, capitalized at the appropriate
Capitalization Rate, (iii) Corporate Recurring Income less corporate general and
administrative expenses, net of the imputed management fee included in the
definition of EBITDA, all capitalized at eighteen percent (18%), (iv) Gross Book
Value of Properties acquired during the applicable reporting period, (v) pro
rata share of Gross Book Value of properties acquired by Joint Ventures and
Unconsolidated Subsidiaries during the applicable reporting period and (vi)
recorded value of land and remaining tangible assets, as determined in
accordance with GAAP.
"Stabilized Properties" shall mean any Property which meets all of the
following criteria: (i) a certificate of occupancy has been issued for the
Property and remains in full force and effect, (ii) the Property has been at
least eighty-five percent (85%) occupancy level if multifamily, retail, or
office (based on actual leasable square footage at the property) for the most
immediately preceding three (3) consecutive months based on leases wherein the
tenants are paying at least the average monthly lease payments required by the
terms of such leases and such leases are free from default by either the
landlord or tenant thereunder, and (iii) there is no Lien on the Property.
However, if a historically Stabilized Property drops below the above listed
occupancy threshold level, such Property may again become classified as a
Stabilized Property after attaining a ninety percent (90%) occupancy level for a
monthly reporting period if such Property attains such ninety percent (90%)
occupancy level within three months of previously being classified as a
Stabilized Property. Once a Property is reclassified as a Stabilized Property,
then such Property shall remain classified as a Stabilized Property if it
satisfies items (i) and (iii) above and maintains at least eighty-five percent
(85%) occupancy level for each month thereafter.
2. Article 1 of the Credit Agreement is hereby amended by adding the
following definition:
"Colonial Investments" means any investment in any Person, whether by
means of purchase or acquisition of obligations or securities of such Person,
capital contribution to such Person, loan or advance to such Person or making of
a time deposit with such Person.
"Joint Venture(s)" means any investment by any Credit Parties in a
corporation, limited liability company, limited liability partnership, tenancy
in common, and other similar entities.
3. Credit Agreement is hereby amended to add the following Article 6A:
Article 6A. Colonial Investments Covenant
Colonial Investments shall not exceed fifteen percent (15%) of GAV
("Investments Covenant"). However, if the Borrower receives a BBB/Baa3 rating
from a Qualified Rating Agency, then the Investments Covenant shall be increased
to twenty percent (20%).
4. Article 7. Negative Covenants is hereby amended to add the following
sections to the Agreement:
7.11. Loans or Advances. No Credit Party shall make loans or advances
to any Person without the prior written consent of the Lenders except
as permitted herein and except:
<PAGE>
(1) loans or advance to employees and directors not exceeding $16,000,000
in the aggregate principal amount outstanding at any time;
(2) deposits required by government agencies or public utilities;
(3) loans or advances from the Borrower to any Guarantor or from any
Guarantor to the Borrower or another Guarantor; and/or
(4) other loans and advances by any Credit Party to any Person which (x) are
evidenced by notes (and, if requested by the Agent, acting at the direction
of the Required Lenders, with such notes, together with any related
mortgage, have been assigned to and pledged with the Agent, payment for the
benefit of itself and the Lenders, as security for the payment of all
obligations of any Credit Party to the Agent and the Lenders hereunder) and
(y) are in any amount which, together with Investments permitted by clause
(vi) of Section 7.12, do not exceed fifteen percent (15%) of Gross Asset
Value as of the end of the most recent Fiscal Quarter. However, if the
Borrower receives a BBB/Baa 3 rating from a Qualified Rating Agency, then
the foregoing percentage shall be increased from fifteen percent (15%) to
twenty percent (20%).
7.12. Investments. No Credit Party shall make Colonial Investments
after the Closing Date in any Person except as permitted by Section
7.11 and except Investments in:
(1) direct obligations of the United States Government maturing within one
(1) year;
(2) certificates of deposit issued by a commercial bank whose credit is
satisfactory to the Agent;
(3) commercial paper rated A1 or the equivalent thereof
by S&P or P1 or the equivalent thereof by Moody's and
in either case maturing withing six (6) months after
the date of acquisition;
(4) tender bonds the payment of the principal of and
interest on which is fully supported by a letter of
credit issued by a United States bank whose long-term
certificates of deposit are rated at least AA or the
equivalent thereof by S&P and Aa or the equivalent
thereof by Moody's;
(5) Colonial Investments consisting of the acquisition of
all or substantially all of the assets or stock or
another Person permitted by Section 7.2; and/or
<PAGE>
(6) other Colonial Investments by Credit Parties in an
amount which together with loans and advances
permitted by clause (iv) of Section 7.11, do not
exceed fifteen percent (15%) of Gross Asset Value as
of the end of the most recent Fiscal Quarter.
However, if the Borrower receives a BBB/Baa 3 rating
from a Qualified Rating Agency, then the foregoing
percentage shall be increased from fifteen percent
(15%) to twenty percent (20%).
5. Borrowers represent and warrant that all representations and
warranties set forth in Article 5 of the Credit Agreement, as amended hereby,
are true and correct on the date hereof, and that, to the best of their
knowledge, no Default or Event of Default has occurred or exists.
6. No right of any Bank with respect to the Loan Documents is or will
be in any manner released, destroyed, diminished, or otherwise adversely
affected by this Agreement.
7. All references in the Loan Documents to the Credit Agreement shall
be deemed to refer, from and after the date hereof, to the Credit Agreement as
amended hereby, and as the same may hereafter be modified or amended.
8. Except as hereby expressly modified and amended, the Credit
Agreement shall remain in full force and effect, and the Credit Agreement, as
amended, is hereby ratified and affirmed in all respects. Borrowers confirm
that, to the best of their knowledge, they have no defenses or setoffs with
respect to their obligations pursuant to the Credit Agreement, as amended
hereby.
9. This Agreement shall inure to the benefit of and be binding upon the
parties hereto, and their respective successors and assigns.
10. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which, when taken together,
shall constitute one and the same instrument.
<PAGE>
11. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER AND GUARANTORS
HEREBY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO TRIAL BY JURY ON ANY CLAIM,
COUNTERCLAIM, SETOFF, DEMAND, ACTION OR CAUSE OF ACTION (I) ARISING OUT OF OR IN
ANY WAY PERTAINING OR RELATING TO THIS AGREEMENT OR THE LOAN DOCUMENTS, OR (II)
IN ANY WAY CONNECTED WITH OR PERTAINING OR RELATED TO OR INCIDENTAL TO ANY
DEALINGS OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE LOAN
DOCUMENTS OR IN CONNECTION WITH THE TRANSACTIONS RELATED THERETO OR CONTEMPLATED
THEREBY OR THE EXERCISE OF EITHER PARTY'S RIGHTS AND REMEDIES THEREUNDER, IN ALL
OF THE FOREGOING CASES WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE. BORROWER AND GUARANTORS AGREE THAT
LENDERS MAY FILE A COPY OF THIS WAIVER WITH ANY COURT AS WRITTEN EVIDENCE OF THE
KNOWING, VOLUNTARY AND BARGAINED AGREEMENT OF BORROWER AND GUARANTORS
IRREVOCABLY TO WAIVE THEIR RIGHT TO TRIAL BY JURY, AND THAT, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, ANY DISPUTE OR CONTROVERSY WHATSOEVER BETWEEN
BORROWER, GUARANTORS, AND LENDERS SHALL INSTEAD BE TRIED IN A COURT OF COMPETENT
JURISDICTION BY A JUDGE SITTING WITHOUT A JURY.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
properly executed and delivered to be effective as of the day and year first
above written.
BORROWER:
COLONIAL REALTY LIMITED PARTNERSHIP, a Delaware limited partnership
BY: COLONIAL PROPERTIES HOLDING COMPANY, INC., an Alabama
corporation,
Its General partner
By: /s/ Howard B. Nelson Jr.
Its: Chief Financial Officer
GUARANTORS:
COLONIAL PROPERTIES TRUST,
an Alabama trust
By: /s/ Howard B. Nelson Jr.
Its: Chief Financial Officer
COLONIAL PROPERTIES HOLDING COMPANY, INC., an Alabama corporation
By: /s/ Howard B. Nelson Jr.
Its: Chief Financial Officer
(Signatures Continue)
<PAGE>
Signature Page to Colonial Realty
Limited Partnership Credit Agreement
LENDERS:
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
a national banking association
By: /s/ Curtis J. Perry
Curtis J. Perry
Its Group Vice President
AMSOUTH BANK,
a state banking corporation
By:
Its
WELLS FARGO BANK, NATIONAL ASSOCIATION,
a national banking association
By:
Its
WACHOVIA BANK, N.A., a national banking association
By:
Its
(Signatures Continue)
<PAGE>
Signature Page to Colonial Realty
Limited Partnership Credit Agreement
PNC BANK, NATIONAL ASSOCIATION,
a national banking association,
successor by merger to PNC Bank, Ohio, National Association
By:
Its
FIRST NATIONAL BANK OF COMMERCE, N.A.,
a national banking association
By:
Its
AGENT:
SOUTHTRUST BANK, NATIONAL ASSOCIATION,
a national banking association
By: /s/ Curtis J. Perry
Curtis J. Perry
Its Group Vice President
Exhibit 10.13.1
FIRST SUPPLEMENTAL INDENTURE
This FIRST SUPPLEMENTAL INDENTURE dated as of December 31, 1998 (this
"First Supplemental Indenture") is between COLONIAL REALTY LIMITED PARTNERSHIP,
a Delaware limited partnership (the "Company") having its principal executive
office at 2101 Sixth Avenue North, Suite 750, Birmingham, Alabama 35203, and
BANKERS TRUST COMPANY, a New York banking corporation, as trustee under the
Indenture referred to below (in such capacity, the "Trustee").
WITNESSETH:
WHEREAS, the Trustee and the Company are parties to the Indenture dated
as of July 22, 1996 (the "Indenture"), pursuant to which the Company may issue
from time to time its unsecured debt securities (the "Securities") in unlimited
principal amount;
WHEREAS, in connection with the Agreement and Articles of Merger dated
as of December 31, 1998 by and between Colonial Properties Holding Company,
Inc., an Alabama corporation and the sole general partner of the Company
("CPHC"), and Colonial Properties Trust, an Alabama real estate investment trust
("Colonial"), which provides for the merger effective December 31, 1998 of CPHC
with and into Colonial, with Colonial being the surviving entity of such merger
(the "Merger"), the Company desires to supplement the Indenture in accordance
therewith to evidence Colonial's succession, through the Merger, to CPHC's
interest as the sole general partner of the Company and to conform certain
definitions used in the Indenture;
WHEREAS, Section 9.01(9) of the Indenture permits the Company and the
Trustee to cure any ambiguity or correct or supplement any provision in the
Indenture which may be defective or inconsistent with any other provision
thereof, or to make any other provisions with respect to matters or questions
arising under the Indenture which shall not be inconsistent with the provisions
of the Indenture, provided such provisions shall not adversely affect the
interests of any of the Holders (as defined in the Indenture) of Securities of
any series or any related coupons in any material respect;
WHEREAS, in the opinion of the Board of Directors of CPHC, as evidenced
by a Board Resolution delivered to the Trustee on the date hereof, the
provisions in this First Supplemental Indenture will not modify any provision of
the Indenture so as to deprive the Holders of any Security Outstanding of any
benefit provided by the Indenture or otherwise adversely affect the interests of
any of the Holders in any respect;
NOW, THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company and the Trustee
mutually covenant and agree, for the equal and proportionate benefit of all
Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS
(a) For all purposes of this First Supplemental Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
the terms defined in this Article have the meanings assigned to them in this
Article, and include the plural as well as the singular;
the words "herein," "hereof," "hereto" and "hereunder" and other words of
similar import refer to the Indenture and this First Supplemental Indenture as a
whole and not to any particular Article, Section or other subdivision; and
capitalized terms are used herein as they are defined in the Indenture.
(b) The term "Board of Directors" and the definition thereof are hereby deleted
from Section 101 of the Indenture.
(c) The term "CPHC" and the definition thereof are hereby deleted from Section
101 of the Indenture.
(d) The following defined term is hereby added to Section 101 of the Indenture:
"Board of Trustees" means the board of trustees of Colonial, the executive
committee or any committee of that board authorized to act hereunder, as the
case may be.
(e) The following capitalized, boldface terms appearing in Section 101 of the
Indenture are hereby redefined as follows:
(1) "Board Resolution" means a copy of a resolution of Colonial, certified by
the Secretary or an Assistant Secretary of Colonial to have been duly adopted by
the Board of Trustees and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
(2) "Colonial" means Colonial Properties Trust, an Alabama real estate
investment trust and the sole general partner of the Company.
(3) "Company Request" and "Company Order" mean, respectively, a written request
or order signed in the name of and on behalf of the Company by the Chairman of
the Board, the President or a Vice President, and by the Treasurer or an
Assistant Treasurer, the Secretary or an Assistant Secretary of Colonial, as
general partner of the Company, and delivered to the Trustee.
(4) "Officers' Certificate" means a certificate signed by the Chairman of the
Board, the President or a Vice President and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of Colonial, as general
partner of the Company, and delivered to the Trustee.
(5) "Opinion of Counsel" means a written opinion of counsel, who may be counsel
for the Company or who may be an employee of or other counsel for Colonial or
the Company and who shall be reasonably satisfactory to the Trustee.
SECTION 102. EFFECT OF HEADINGS AND TABLE OF CONTENTS
. The Article and Section headings herein are for convenience only and shall
not affect the construction hereof.
SECTION 103. SUCCESSORS AND ASSIGNS
. All stipulations, promises and agreements in this First Supplemental Indenture
shall bind the successors and assigns of the Company and the Trustee, whether so
expressed or not.
SECTION 104. SEPARABILITY CLAUSE
. In case any provision in this First Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 105. BENEFITS OF INDENTURE
. Nothing in this First Supplemental Indenture, express or implied, shall give
to any Person, other than the parties hereto and their successors and assigns
hereunder and the Holders of Securities, any benefit or legal or equitable
right, remedy or claim under this First Supplemental Indenture.
SECTION 106. GOVERNING LAW
. This First Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 107. EFFECTIVENESS
. This First Supplemental Indenture shall take effect at the effective time of
the Merger.
ARTICLE TWO
The first sentence of Section 111 of the Indenture is hereby amended and
restated to read as follows:
SECTION 111. NON-RECOURSE. Notwithstanding anything contained
herein to the contrary, no recourse under or upon any obligation, covenant or
agreement contained in this Indenture, in any Security or coupon appertaining
thereto, or because of any indebtedness evidenced thereby (including, without
limitation, any obligation or indebtedness relating to the principal of, or
premium or Make-Whole Amount, if any, interest or any other amounts due, or
claimed to be due, on any Security issued hereunder), or for any claim based
thereon or otherwise in respect thereof, shall be had (i) against Colonial or
any other partner in the Company, (ii) against Colonial or any other Person
which owns an interest, directly or indirectly, in any partner in the Company or
(iii) against any promoter, as such, or against any past, present or future
shareholder, officer, director or partner, as such, of the Company or Colonial
or of any successor, either directly or through the Company or Colonial or any
successor, under any rule of law, statute or constitutional provision or by the
enforcement of any assessment or by any legal or equitable proceeding or
otherwise, all such liability being expressly waived and released by the
acceptance of the Securities by the Holders thereof and as part of the
consideration for the issue of the Securities.
ARTICLE THREE
THE SECURITIES
SECTION 301. The last sentence of Section 301 of the Indenture is
hereby amended and restated to read as follows:
If any of the terms of the Securities of any series are established by action
taken pursuant to one or more Board Resolutions, a copy of an appropriate record
of such action(s) shall be certified by the Secretary or an Assistant Secretary
of Colonial on behalf of the Company and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate setting forth the terms of the
Securities of such series.
SECTION 302. The first two paragraphs of Section 303 of the Indenture are hereby
amended and restated to read as follows:
The Securities and any coupons appertaining thereto shall be executed by the
Chairman of the Board, the President or one of the Vice Presidents, and the
Chief Financial Officer of Colonial, as general partner of the Company. The
signature of any of these officers on the Securities and coupons may be manual
or facsimile signatures of the present or any future such authorized officer and
may be imprinted or otherwise reproduced on the Securities.
Securities or coupons bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of Colonial or any predecessor general
partner of the Company, including, without limitation, Colonial Properties
Holding Company, Inc., shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Securities and did not hold such offices at
the date of such Securities or coupons.
ARTICLE FOUR
THE TRUSTEE
Section 602(2) of the Indenture is hereby amended and restated to read
as follows:
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order (other than
delivery of any Security, together with any coupons appertaining thereto, to the
Trustee for authentication and delivery pursuant to Section 303 which shall be
sufficiently evidenced as provided therein) and any resolution of the Board of
Trustees may be sufficiently evidenced by a Board Resolution.
This First Supplemental Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
IN WITNESS WHEREOF, the Company and the Trustee have caused
this First Supplemental Indenture to be duly executed as of the day and year
first above written.
COLONIAL REALTY LIMITED PARTNERSHIP
By: Colonial Properties Holding Company, Inc.,
its general partner
By: /s/ Howard B. Nelson, Jr
Name: Howard B. Nelson, Jr.
Title: Chief Financial Officer and Secretary
Consent of Independent Accountants
We consent to the incorporation by reference in the registration statement of
Colonial Realty Limited Partnership on Form S-3 related to the Shelf
Registration dated December 11, 1997 (File No. 333-42049) of our report dated
January 13, 1999, except for Note 13, as to which the date is February 10, 1999,
on our audits of the consolidated financial statements and financial statement
schedules of Colonial Realty Limited Partnership as of December 31, 1998 and
1997, and for the years ended December 31, 1998, 1997, and 1996, which report is
included in this Form 10-K.
/S/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Birmingham, Alabama
March 30, 1999
Exhibit 21.1
Colonial Realty Limited Partnership
List of Subsidiaries
Ownership
Colonial Properties Services Limited Partnership 99.0% GP and LP
Colonial VRS, L.L.C. 100.0%
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 4,582
<SECURITIES> 0
<RECEIVABLES> 9,151
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,736,362
<DEPRECIATION> (169,522)
<TOTAL-ASSETS> 1,756,548
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 811,724
<TOTAL-LIABILITY-AND-EQUITY> 1,756,548
<SALES> 257,367
<TOTAL-REVENUES> 257,367
<CGS> 136,619
<TOTAL-COSTS> 136,619
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 52,063
<INCOME-PRETAX> 68,623
<INCOME-TAX> 0
<INCOME-CONTINUING> 68,623
<DISCONTINUED> 0
<EXTRAORDINARY> (401)
<CHANGES> 0
<NET-INCOME> 68,222
<EPS-PRIMARY> 1.64
<EPS-DILUTED> 1.64
</TABLE>
