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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest event reported): DECEMBER 12, 1997
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SUMMIT PROPERTIES PARTNERSHIP, L.P.
(Exact name of Registrant as specified in charter)
DELAWARE 0-22411 56-1857809
- --------------------- ------------------------ -------------------
(State or other jurisdiction (Commission file number) (IRS employer
of incorporation) identification no.)
212 SOUTH TRYON STREET, SUITE 500, CHARLOTTE, NC 28281
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(Address of principal executive offices) (Zip Code)
(704) 334-9905
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
Summit Properties Partnership, L.P. (the "Partnership") anticipates
completion of the offering of $30,000,000 aggregate principal amount of its 6
5/8% Notes due 2003 (the "Notes") on December 17, 1997. The offering of the
Notes will be made pursuant to a Prospectus Supplement dated December 12, 1997
relating to the Prospectus dated July 29, 1997 which was originally filed with
the Partnership's shelf registration statement on Form S-3 (file no.
333-25575).
The Notes will bear interest at 6 5/8% per annum and will mature on
December 15, 2003. The Notes will bear interest from December 17, 1997 or from
the immediately preceding Interest Payment Date (as defined below) to which
interest had been paid, payable semi-annually in arrears on June 15 and
December 15 of each year, commencing June 15, 1998 (each, an "Interest Payment
Date"), to the persons in whose name the Notes are registered in the security
register on the preceding June 1 or December 1, as the case may be. Interest on
the Notes will be computed on the basis of a 360-day year of twelve 30-day
months.
The Notes may be redeemed at any time at the option of the
Partnership, in whole or in part, at a redemption price equal to the sum of (i)
the principal amount of the Notes being redeemed plus accrued interest thereon
to the redemption date and (ii) the Make-Whole Amount (as defined in
Supplemental Indenture No. 2 referenced below), if any, with respect to such
Notes.
The Notes will be issued under an Indenture and Supplemental Indenture
No. 2 between the Partnership and First Union National Bank, as Trustee. The
underwriting discount for the Notes will be .625% and the price to the public
will be 99.786% of the principal amount of the Notes.
The anticipated net proceeds to the Partnership from the sale of the
Notes will be approximately $29.6 million. The Partnership intends to use the
net proceeds to repay borrowings under its unsecured credit facility.
Delivery of the Notes is expected to be made on December 17, 1997
through the facilities of The Depository Trust Company, against payment
therefor in immediately available funds.
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ITEM 7. FINANCIAL STATEMENTS
EXHIBIT NUMBER EXHIBIT
1.1 Definitive Underwriting Agreement, dated December 12, 1997,
relating to the 6 5/8% Notes due 2003.
4.1 Definitive Indenture, dated as of August 7, 1997, between
Summit Properties Partnership, L.P. and First Union National
Bank (incorporated by reference to the Form 8-K filed by
Summit Properties Partnership, L.P. on August 11, 1997).
4.2 Form of Supplemental Indenture No. 2, between Summit
Properties Partnership, L.P. and First Union National Bank,
including a form of the 6 5/8% Note due 2003.
12.1 Summit properties Partnership, L.P. Calculation of Ratios of
Earnings to Fixed Charges Nine Months ended September 30,
1997 and Years Ended December 31, 1996, 1995, 1994, 1993 and
1992.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be filed on its
behalf by the undersigned hereunto duly authorized.
SUMMIT PROPERTIES PARTNERSHIP, L.P.
By: SUMMIT PROPERTIES INC., its general
partner
Dated: December 16, 1997 By: /s/ Michael L. Schwarz
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Michael L. Schwarz
Executive Vice President
Chief Financial Officer
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EXHIBIT 1.1
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EXHIBIT 1.1
SUMMIT PROPERTIES PARTNERSHIP, L.P.
DEBT SECURITIES
Underwriting Agreement
December 12, 1997
J.P. MORGAN SECURITIES INC.
As Representative of the
Underwriters named in
Schedule II hereto
c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
Summit Properties Partnership, L.P., a Delaware limited partnership
(the "Partnership"), proposes to issue and sell to the underwriters named in
Schedule II hereto (the "Underwriters"), for whom you are acting as
representative (the "Representative"), the principal amount of its debt
securities identified in Schedule I hereto (the "Securities"), to be issued
under the indenture specified in Schedule I hereto (the "Indenture") between
the Partnership and the Trustee identified in such Schedule (the "Trustee"). If
the firm or firms listed in Schedule II hereto include only the firm or firms
listed in Schedule I hereto, then the terms "Underwriters" and
"Representative", as used herein, shall each be deemed to refer to such firm or
firms.
The Partnership and Summit Properties Inc., a Maryland corporation and
the sole general partner and the principal limited partner of the Partnership
(the "Company"), have prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Securities Act"), a registration
statement (the file number of which is set forth in Schedule I hereto) on Form
S-3, relating to, among other things, certain debt securities (the "Shelf
Securities") to be issued from time to time by the Partnership. The Partnership
and the Company also have filed with, or propose to file with, the Commission
pursuant to Rule 424 under the Securities Act a prospectus supplement
specifically relating to the Securities. The registration statement as amended
to the date of this Agreement is hereinafter referred to as the "Registration
Statement" and the related prospectus covering the Shelf Securities in the form
first used to confirm sales
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of the Securities is hereinafter referred to as the "Basic Prospectus". The
Basic Prospectus as supplemented by the prospectus supplement specifically
relating to the Securities in the form first used to confirm sales of the
Securities is hereinafter referred to as the "Prospectus". Any reference in
this Agreement to the Registration Statement, the Basic Prospectus, any
preliminary form of Prospectus (a "preliminary prospectus") previously filed
with the Commission pursuant to Rule 424 or the Prospectus shall be deemed to
refer to and include the documents incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act which were filed under the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the "Exchange Act") on or before the
date of this Agreement or the date of the Basic Prospectus, any preliminary
prospectus or the Prospectus, as the case may be; and any reference to "amend",
"amendment" or "supplement" with respect to the Registration Statement, the
Basic Prospectus, any preliminary prospectus or the Prospectus shall be deemed
to refer to and include any documents filed under the Exchange Act after the
date of this Agreement, or the date of the Basic Prospectus, any preliminary
prospectus or the Prospectus, as the case may be, which are deemed to be
incorporated by reference therein. For purposes of this Agreement, each of the
Partnership, Summit Management Company, a Maryland corporation (the "Management
Company"), Summit Apartment Builders, Inc., a Florida corporation (the
"Building Company") and any other subsidiaries (within the meaning of
Regulation S-X under the Securities Act) of the Company is deemed a
"Subsidiary" of the Company.
The Partnership hereby agrees with the Underwriters as follows:
1. The Partnership agrees to issue and sell the Securities to the
several Underwriters as hereinafter provided, and each Underwriter, on the
basis of the representations and warranties herein contained, but subject to
the conditions hereinafter stated, agrees to purchase, severally and not
jointly, from the Partnership the respective principal amount of Securities set
forth opposite such Underwriter's name in Schedule II hereto at the purchase
price set forth in Schedule I hereto plus accrued interest, if any, from the
date specified in Schedule I hereto to the date of payment and delivery.
2. The Partnership understands that the several Underwriters intend
(i) to make a public offering of their respective portions of the Securities
and (ii) initially to offer the Securities upon the terms set forth in the
Prospectus.
3. Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Partnership to the
Representative, no later than noon the Business Day (as defined below) prior to
the Closing Date (as defined below), on the date and at the time and place set
forth in Schedule I hereto (or at such other time and place on the same or such
other date, not later than the fifth Business Day (as defined below)
thereafter, as you and the Partnership may agree in
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writing). As used herein, the term "Business Day" means any day other than a
day on which banks are permitted or required to be closed in New York City. The
time and date of such payment and delivery with respect to the Securities are
referred to herein as the "Closing Date".
Payment for the Securities shall be made against delivery to the
nominee of The Depository Trust Company for the respective accounts of the
several Underwriters of the Securities of one or more global notes (the "Global
Note") representing the Securities, with any transfer taxes payable in
connection with the transfer to the Underwriters of the Securities duly paid by
the Company. The Global Note will be made available for inspection by the
Representative at the office of J.P. Morgan Securities Inc. at the address set
forth above not later than 1:00 P.M., New York City time, on the Business Day
prior to the Closing Date.
4. The Partnership and the Company each jointly and severally
represents and warrants to each Underwriter that:
(a) the Registration Statement has been declared effective by
the Commission under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or, to the knowledge
of the Partnership and/or the Company, threatened by the Commission;
and the Registration Statement and Prospectus (as amended or
supplemented if the Partnership and/or the Company shall have
furnished any amendments or supplements thereto) comply, or will
comply, as the case may be, in all material respects with the
Securities Act and the Trust Indenture Act of 1939, as amended, and
the rules and regulations of the Commission thereunder (collectively,
the "Trust Indenture Act"), and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the date of the Prospectus and any
amendment or supplement thereto, contain any untrue statement of a
material fact or omit 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, not misleading, and the
Prospectus, as amended or supplemented at the Closing Date, if
applicable, will not contain any untrue statement of a material fact
or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading; provided, however, that the foregoing representations and
warranties shall not apply to (i) that part of the Registration
Statement which constitutes the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee,
and (ii) statements or omissions in the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Partnership and/or the
Company in writing by such Underwriter through the Representative
expressly for use therein;
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(b) the documents incorporated by reference in the Prospecuts,
when they were filed with the Commission, conformed in all material
respects to the requirements of the Exchange Act, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
and any further documents so filed and incorporated by reference in
the Prospectus, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the
Exchange Act, and will not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(c) the accountants who certified the financial statements and
supporting schedules included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants as required by the Securities Act, and there have been no
disagreements with any accountants or "reportable events" (as defined
in Item 304 of Regulation S-K promulgated by the Commission) required
to be disclosed in the Prospectus or elsewhere pursuant to such Item
304;
(d) the historical financial statements of the Company and the
Partnership included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the financial position of
the Company and its consolidated Subsidiaries taken as a whole as of
the dates indicated and the results of operations for the periods
specified; except as otherwise stated in the Registration Statement
and the Prospectus, said financial statements have been prepared in
conformity with generally accepted accounting principles applied
(except, in the case of interim financial results, for the notes
thereto and ordinary year-end adjustments) on a consistent basis and
comply with the applicable accounting requirements of the Securities
Act (including, without limitation, Rule 3-14 and Rule 3-15 of
Regulation S-X promulgated by the Commission), and all adjustments
necessary for a fair presentation of the results for such periods have
been made; the supporting schedules included or incorporated by
reference in the Registration Statement and the Prospectus present
fairly the information required to be stated therein; and the selected
financial data (both historical and, if any, pro forma) included or
incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with the related financial statements
presented therein;
(e) the historical summaries of revenue and certain operating
expenses included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the revenue and those
operating expenses
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included in such summaries of the properties related thereto for the
periods specified in conformity with generally accepted accounting
principles; the pro forma consolidated financial statements included
or incorporated by reference in the Registration Statement and the
Prospectus; if any, present fairly the pro forma financial position of
the Company and its Subsidiaries taken as a whole as of the dates
indicated and the results of operations for the periods specified; and
any such pro forma financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
basis consistent with the audited financial statements of the Company
and its Subsidiaries included or incorporated by reference in the
Registration Statement and the Prospectus; the assumptions on which
such pro forma financial statements have been prepared were, when such
pro forma financial statements were prepared, reasonable and are
summarized in the notes thereto, and any such pro forma financial
statements have been prepared, and the pro forma adjustments set forth
therein have been applied, in accordance with the applicable
accounting requirements of the Securities Act (including, without
limitation, Regulation S-X promulgated by the Commission), and any
such pro forma adjustments have been properly applied to the
historical amounts in the compilation of such statements;
(f) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not occurred any material adverse change, or any development involving
a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business affairs, business prospects or
operations of the Company and its Subsidiaries taken as a whole from
that set forth in the Prospectus;
(g) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, (1) neither
the Company nor its Subsidiaries have incurred any material liability
or obligation, direct or contingent, nor entered into any material
transaction not in the ordinary course of business; (2) neither the
Company nor its Subsidiaries have purchased any of the Company's
outstanding Common Stock, $.01 par value (the "Common Stock"), nor
declared, paid or otherwise made any dividend or distribution of any
kind on the Company's Common Stock other than ordinary and customary
dividends; and (3) there has not been any material change in the
capital, Common Stock, short-term debt or long-term debt of either the
Company or its Subsidiaries, except in each case as described in or
contemplated by the Prospectus;
(h) the Partnership has been duly formed and is validly
existing as a partnership in good standing under the laws of the State
of Delaware, has the partnership power and authority to own its
property and any property proposed to be acquired by it and referred
to in the Prospectus, and conduct its business as described in the
Prospectus and is duly qualified to transact such business,
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and is in good standing under the laws of each other jurisdiction in
which the conduct of its business or its ownership, management or
leasing of property requires such qualification except to the extent
that the failure to be so qualified or be in good standing would not
have a material adverse effect on the Company and its Subsidiaries
taken as a whole, each of which jurisdiction is listed on Schedule III
attached hereto;
(i) the Agreement of Limited Partnership of the Partnership
(the "Agreement of Limited Partnership") has been duly and validly
authorized, executed and delivered by the Company, including in its
capacity as sole general partner of the Partnership, and is a valid
and binding agreement of the Company, including the Company in its
capacity as sole general partner of the Partnership, enforceable
against the Company in accordance with its terms;
(j) each of the Company, the Management Company and the
Building Company has been duly incorporated and is validly existing as
a corporation under the laws of its jurisdiction of incorporation,
with corporate power and authority to own its property and to conduct
its business as described in the Prospectus, and is duly qualified to
transact such business and is in good standing under the laws of each
jurisdiction in which the conduct of its business or its ownership,
management or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its Subsidiaries taken as a whole, each of which jurisdiction is
listed on Schedule III attached hereto; the Partnership and the
Company have the partnership and corporate power to enter into and
perform their obligations under this Agreement; and, except as
otherwise stated in the Prospectus, all of the issued and outstanding
capital stock or other ownership interests in the Management Company
and the Building Company have been validly issued and, in the case of
the Management Company, are owned by the Partnership and by William F.
Paulsen and, in the case of the Building Company, by the Management
Company, in each case, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity, except for
security interests granted in respect of indebtedness of the Company
or any of its subsidiaries and described in the Prospectus;
(k) except as disclosed in the Registration Statement, the
Company has no material subsidiaries;
(l) each of the partnership and joint venture agreements to
which the Company and any of its Subsidiaries is a party, and which
relates to real property, has been duly authorized, executed and
delivered on the part of the Company and any of such Subsidiaries by
any of them that is a party thereto and constitutes the valid
agreement thereof, enforceable in accordance with its terms, except as
limited by (a) the effect of bankruptcy, insolvency,
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reorganization, moratorium or other similar laws now or hereafter in
effect relating to or affecting the rights or remedies of creditors or
(b) the effect of general principles of equity, whether enforcement is
considered in a proceeding in equity or at law, and the discretion of
the court before which any proceeding therefor may be brought; and the
execution, delivery and performance of any of such agreements by the
Company and any of its Subsidiaries, as applicable, did not, at the
time of execution and delivery, and does not constitute a breach of,
or default under, the charter, by-laws, agreement of limited
partnership (or other organizational documents) of such party of any
material contract, lease or other instrument to which such party is a
party or by which its properties may be bound or any law,
administrative regulation or administrative or court decree;
(m) the authorized capital stock conforms as to legal matters
to the description thereof contained in the Prospectus;
(n) the Securities have been duly authorized, and, when issued,
authenticated and delivered pursuant to this Agreement and the
Indenture, will have been duly and validly executed, authenticated,
issued and delivered and will constitute valid and binding obligations
of the Partnership entitled to the benefits provided by the Indenture
and enforceable against the Partnership in accordance with their terms
except that the enforceability thereof may be limited by or subject to
(a) bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other similar laws now or hereafter existing which
affect the rights and remedies of creditors generally and (b)
equitable principles of general applicability; the Indenture has been
duly authorized and upon effectiveness of the Registration Statement
will have been duly qualified under the Trust Indenture Act and, when
executed and delivered by the Partnership and the Trustee, the
Indenture will constitute a valid and binding obligation of the
Partnership, enforceable against the Partnership in accordance with
its terms except that the enforceability thereof may be limited by or
subject to (a) bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other similar laws now or hereafter existing
which affect the rights and remedies of creditors generally and (b)
equitable principles of general applicability; and the Securities and
the Indenture will conform to the descriptions thereof in the
Prospectus;
(o) neither the Company nor any of its Subsidiaries is, or with
the giving of notice or lapse of time or both would be, in violation
of or in default under, the Articles of Incorporation or by-laws of
the Company or the Agreement of Limited Partnership of the Partnership
or any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its
Subsidiaries is a party or by which it or any of them or any of their
respective properties is bound, except for violations and defaults
which individually and in the aggregate are not material to the
Company and its
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Subsidiaries taken as a whole or to the holders of the Securities; the
issue and sale of the Securities and the performance by the
Partnership of all its obligations under the Securities and the
Indenture and the performance by each of the Partnership and the
Company of all their respective obligations under this Agreement and
the consummation of the transactions herein and therein contemplated
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which
the Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Subsidiaries is
subject, except for such conflicts, breaches or defaults which
individually or in the aggregate would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
Subsidiaries taken as a whole; nor will any such action result in any
violation of the provisions of the Articles of Incorporation or the
by-laws of the Company or the Agreement of Limited Partnership of the
Partnership or any applicable law or statute or any order, rule or
regulation of any court or governmental agency or body having
jurisdiction over the Company, its Subsidiaries or any of their
respective properties; and no consent, approval, authorization, order,
license, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities by the Partnership or the consummation of the transactions
contemplated by the Indenture by the Partnership or this Agreement by
the Partnership and the Company, except such consents, approvals,
authorizations, orders, licenses, registrations or qualifications (i)
as have been obtained under the Securities Act or the Trust Indenture
Act, (ii) as may be required under state securities or Blue Sky Laws
in connection with the purchase and distribution of the Securities by
the Underwriters or (iii) the failure of which to obtain would not
individually or in the aggregate have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs
or business prospects of the Company and its Subsidiaries taken as a
whole;
(p) with respect to all tax periods since the Company's first
taxable year ended December 31, 1994, the Company has met the
requirements for qualification as a real estate investment trust
("REIT") under Sections 856 through 860 of the Internal Revenue Code
of 1986, as amended (the "Code"), and the Company's present and
contemplated operations, assets and income continue to meet such
requirements;
(q) none of the Partnership, the Company, the Management
Company or the Building Company is and, after giving effect to the
offering and sale of the Securities, will be an "investment company"
or an entity "controlled" by an "investment company", as such terms
are defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
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(r) there are no legal or governmental proceedings pending or,
to the knowledge of the Company, threatened to which the Company or
any Subsidiary of the Company is a party or to which any of their
properties or the Communities (as that term is defined in the
Prospectus) is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required and all such contracts
required to be filed as exhibits to the Registration Statement are set
forth in Schedule IV attached hereto;
(s) the Company and its Subsidiaries own or possess any
trademarks, service marks, trade names or copyrights (collectively,
the "Intellectual Property") required in order to conduct their
respective businesses as described in the Prospectus, other than those
which the failure to posses or own would not have a material adverse
effect on the condition, financial or otherwise, or the earnings,
business affairs or business prospects of the Company and its
Subsidiaries taken as a whole;
(t) the Company and each Subsidiary has all necessary consents,
authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all federal,
state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own, lease,
license and use its properties and assets and to conduct its business
in the manner described in the Prospectus, except to the extent that
the failure to obtain or file would not have a material adverse effect
on the Company and its Subsidiaries taken as a whole; and none of the
Company or any Subsidiary has received any notice of any proceeding
relating to revocation or modification of any such license, permit,
certificate, consent, order, approval or other authorization, except
as described in the Prospectus and except, in each case, where such
revocation or modification would not, singly or in the aggregate, have
a material adverse effect on the Company and its Subsidiaries taken as
a whole; and the Company and each Subsidiary are in compliance with
all laws, rules and regulations relating to the conduct of their
respective businesses as conducted as of the date hereof, except where
noncompliance with such laws, rules or regulations would not, singly
or in the aggregate, have a material adverse effect on the Company and
its Subsidiaries taken as a whole;
(u) the Company has full right, power and authority to enter
into this Agreement and this Agreement has been duly authorized,
executed and delivered by the Company;
(v) the Partnership has full right, power and authority to
enter into this
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Agreement and this Agreement has been duly authorized, executed and
delivered by the Partnership;
(w) (i) the Company and its Subsidiaries have good and
marketable title in fee simple to all of the Communities described in
the Prospectus as owned by them in fee simple, free and clear of all
liens, in each case except such as are described in the Prospectus or
such as do not materially affect the value of such Community and do
not materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such property
by the Company and by its Subsidiaries; (ii) the construction,
management and operation of the buildings, fixtures and other
improvements located on the Communities as currently conducted or
existing are not in violation of any applicable building code, zoning
ordinance or other law or regulation except where such violation of
any applicable building code, zoning ordinance or other law or
regulation would not, singly or in the aggregate, have a material
adverse effect on the Company and its Subsidiaries taken as a whole,
(iii) neither the Company, the Partnership nor the Management Company
has received notice of any proposed material special assessment or any
proposed material change in any property tax, zoning or land use laws
or availability of water for irrigation affecting all or any portion
of the Communities; (iv) neither the Company nor the Partnership is
aware of any material delay with respect to the construction of
Communities referred to in the Prospectus as under construction, or
any material increase in the estimated cost of such construction, or
any other matter materially detrimental to the construction, or any
factor which may, through passage of time or otherwise, give rise to
such delay, cost increase or detriment; (v) there do not exist any
material violations of any declaration of covenants, conditions and
restriction (the "CC&R's") with respect to any of the Communities, nor
to the Company's knowledge is there any existing state of facts or
circumstances or condition or event which could, with the giving of
notice or passage of time, or both, constitute such a violation; and
(vi) the improvements comprising any portion of the Communities (the
"Improvements") are free of any and all material physical, mechanical,
structural, design and construction defects and the mechanical,
electrical and utility systems servicing the Improvements (including,
without limitation, all water, electric, sewer, plumbing, heating,
ventilation, gas and air conditioning) are in good condition and
proper working order and are free of material defects;
(x) immediately after any sale of Securities by the Partnership
hereunder, the aggregate amount of Securities which have been issued
and sold by the Partnership hereunder and of any securities of the
Partnership (other than the Securities) that shall have been issued
and sold pursuant to the Registration Statement will not exceed the
amount of securities registered under the Registration Statement;
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(y) no relationship, direct or indirect, exists between or
among the Company or any of its Subsidiaries on the one hand, and the
directors, officers, stockholders, customers or suppliers of the
Company or any of its Subsidiaries on the other hand, which is
required by the Securities Act to be described in the Registration
Statement and the Prospectus which is not so described;
(z) the Company and its Subsidiaries have filed all federal,
state, local and foreign tax returns which have been required to be
filed and have paid all taxes shown thereon and all assessments
received by them or any of them to the extent that such taxes have
become due and are not being contested in good faith; and, except as
disclosed in the Registration Statement and the Prospectus, there is
no tax deficiency which has been or might reasonably be expected to be
asserted or threatened against the Company or any Subsidiary;
(aa) there are no existing or, to the best knowledge of the
Partnership and/or the Company, threatened labor disputes with the
employees of the Company or any of its Subsidiaries which are likely
to have a material adverse effect on the Company and its Subsidiaries
taken as a whole;
(ab) the Partnership has an ALTA Extended Coverage Owner's
Policy of Title Insurance on all of the Communities and such title
insurance is in full force and effect;
(ac) the Company and each Subsidiary (i) is in compliance with
any and all applicable federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (iii) is in compliance with
all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, have a material
adverse effect on the Company and its Subsidiaries, taken as a whole;
(ad) there are no costs or liabilities associated with
Environmental Laws (including, without limitation, any capital or
operating expenditures required for clean-up, closure of properties or
compliance with Environmental Laws or any permit, license or approval,
any related constraints on operating activities and any potential
liabilities to third parties) that would, singly or in the aggregate,
have a material adverse effect on the Company and its Subsidiaries
taken as a whole;
<PAGE> 13
(ae) each employee benefit plan, within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as
amended, ("ERISA") that is maintained, administered or contributed to
by the Partnership, the Company or any of its affiliates for employees
or former employees of the Partnership, the Company and its affiliates
has been maintained in compliance with its terms and the requirements
of any applicable statutes, orders, rules and regulations, including
but not limited to ERISA and the Code. No prohibited transaction,
within the meaning of Section 406 of ERISA or Section 4975 of the Code
has occurred with respect to any such plan excluding transactions
effected pursuant to a statutory or administrative exemption. For each
such plan which is subject to the funding rules of Section 412 of the
Code or Section 302 of ERISA no "accumulated funding deficiency" as
defined in Section 412 of the Code has been incurred, whether or not
waived, and the fair market value of the assets of each such plan
(excluding for these purposes accrued but unpaid contributions)
exceeded the present value of all benefits accrued under such plan
determined using reasonable actuarial assumptions;
(af) the assets of the Partnership do not constitute "plan
assets" under ERISA;
(ag) the Company and its Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks
and in such amounts as are customary in the businesses in which they
are engaged; neither the Company nor any Subsidiary has been refused
any insurance coverage sought or applied for, and neither the Company
nor any Subsidiary has any reason to believe that it will not be able
to renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may be
necessary to continue its business at a cost that would not materially
and adversely affect the condition, financial or otherwise, or the
earnings, business or operations of the Company and its Subsidiaries
taken as a whole, except as described in or contemplated by the
Prospectus;
(ah) the mortgages and deeds of trust encumbering the
Communities are not cross-defaulted or cross-collateralized with any
other property not owned directly or indirectly by the Company or its
Subsidiaries; and
(ai) any certificate signed by any officer of the Company in
such capacity or as general partner of the Partnership and delivered
to you or to counsel for the Underwriters in connection with the
offering of the Securities shall be deemed a representation and
warranty by the Company or the Partnership, as the case may be, to
each Underwriter participating in such offering as to the matters
covered thereby on the date of such certificate.
5. Each of the Partnership and the Company covenants and agrees
with
<PAGE> 14
each of the several Underwriters as follows:
(a) to file the Prospectus in a form approved by you pursuant
to Rule 424 under the Securities Act not later than the Commission's
close of business on the second Business Day following the date of
determination of the offering price of the Securities or, if
applicable, such earlier time as may be required by Rule 424(b);
(b) to furnish to the Representative and counsel for the
Underwriters, at the expense of the Partnership, a conformed copy of
the Registration Statement (as originally filed) and each amendment
thereto, in each case including exhibits and documents incorporated by
reference therein and, during the period mentioned in paragraph (e)
below, to furnish each of the Underwriters as many copies of the
Prospectus (including all amendments and supplements thereto) and
documents incorporated by reference therein as you may reasonably
request;
(c) from the date hereof and prior to the Closing Date, to
furnish to you a copy of any proposed amendment or supplement to the
Registration Statement or the Prospectus, for your review, and not to
file any such proposed amendment or supplement to which you reasonably
object;
(d) to file promptly all reports and any definitive proxy or
information statements required to be filed by the Partnership and/or
the Company with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a
prospectus is required in connection with the offering or sale of the
Securities, and during such same period, to advise you promptly, and
to confirm such advice in writing, (i) when any amendment to the
Registration Statement shall have become effective, (ii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for any
additional information, (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the initiation or threatening of any proceeding for that purpose,
and (iv) of the receipt by the Partnership and/or the Company of any
notification with respect to any suspension of the qualification of
the Securities for offer and sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose; and to
use its best efforts to prevent the issuance of any such stop order or
notification and, if issued, to obtain as soon as possible the
withdrawal thereof;
(e) if, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the
Underwriters a prospectus relating to the Securities is required by
law to be delivered in connection with sales by an Underwriter or
dealer, any event shall occur as a result of which it is necessary
<PAGE> 15
to amend or supplement the Prospectus in order to make the statements
therein, in light of the circumstances when the Prospectus is
delivered to a purchaser, not misleading, or if it is necessary to
amend or supplement the Prospectus to comply with law, forthwith to
prepare and furnish, at the expense of the Partnership and the
Company, to the Underwriters and to the dealers (whose names and
addresses you will furnish to the Partnership and the Company) to
which Securities may have been sold by you on behalf of the
Underwriters and to any other dealers upon request, such amendments or
supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not,
in the light of the circumstances when the Prospectus is delivered to
a purchaser, be misleading or so that the Prospectus will comply with
law;
(f) to endeavor to qualify the Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions as you
shall reasonably request and to continue such qualification in effect
so long as reasonably required for distribution of the Securities;
provided that the Partnership and the Company shall not be required to
file a general consent to service of process in any jurisdiction;
(g) to make generally available to its security holders and to
you as soon as practicable an earnings statement which shall satisfy
the provisions of Section 11(a) of the Securities Act and Rule 158 of
the Commission promulgated thereunder covering a period of at least
twelve months beginning with the first fiscal quarter of the
Partnership and the Company occurring after the "effective date" (as
defined in Rule 158) of the Registration Statement;
(h) so long as the Securities are outstanding, to furnish to
you copies of all reports or other communications (financial or other)
furnished to holders of Securities, and copies of any reports and
financial statements furnished to or filed with the Commission or any
national securities exchange;
(i) during the period beginning on the date hereof and
continuing to and including the Business Day following the Closing
Date, not to offer, sell, contract to sell or otherwise dispose of any
debt securities of or guaranteed by the Partnership and/or the Company
which are substantially similar to the Securities;
(j) to use the net proceeds received by the Partnership from
the sale of the Securities pursuant to this Agreement in the manner
specified in the Prospectus under the caption "Use of Proceeds";
(k) whether or not the transactions contemplated in this
Agreement are consummated or this Agreement is terminated, to pay or
cause to be paid all
<PAGE> 16
costs and expenses incident to the performance of its obligations
hereunder, including without limiting the generality of the foregoing,
all costs and expenses (i) incident to the preparation, issuance,
execution, authentication and delivery of the Securities, including
any expenses of the Trustee, (ii) incident to the preparation,
printing and filing under the Securities Act of the Registration
Statement, the Prospectus and any preliminary prospectus (including in
each case all exhibits, amendments and supplements thereto), (iii)
incurred in connection with the registration or qualification and
determination of eligibility for investment of the Securities under
the laws of such jurisdictions as the Underwriters may designate
(including fees of counsel for the Underwriters and their
disbursements), (iv) related to any filing with National Association
of Securities Dealers, Inc., (v) in connection with the printing
(including word processing and duplication costs) and delivery of this
Agreement, the Indenture, the Preliminary and Supplemental Blue Sky
Memoranda and any Legal Investment Survey and the furnishing to
Underwriters and dealers of copies of the Registration Statement and
the Prospectus, including mailing and shipping, as herein provided,
(vi) payable to rating agencies in connection with the rating of the
Securities, (vii) any expenses incurred by the Partnership and the
Company in connection with a "road show" presentation to potential
investors and (viii) the cost and charges of any transfer agent.
6. The several obligations of the Underwriters hereunder shall be
subject to the following conditions:
(a) the representations and warranties of the Partnership and
the Company contained herein are true and correct on and as of the
Closing Date as if made on and as of the Closing Date and the
Partnership and the Company shall have complied with all agreements
and all conditions on their part to be performed or satisfied
hereunder at or prior to the Closing Date;
(b) the Prospectus shall have been filed with the Commission
pursuant to Rule 424 within the applicable time period prescribed for
such filing by the rules and regulations under the Securities Act; no
stop order suspending the effectiveness of the Registration Statement
shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to your satisfaction;
(c) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any
downgrading, nor shall any notice have been given of (i) any
downgrading, (ii) any intended or potential downgrading or (ii) any
review or possible change that does not indicate an improvement, in
the rating accorded any securities of or guaranteed by the Company
and/or the Partnership by any "nationally recognized statistical
rating
<PAGE> 17
organization", as such term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(d) since the respective dates as of which information is given
in the Prospectus there shall not have been any change in the capital
stock or long-term debt of the Company or any of its Subsidiaries or
any material adverse change, or any development involving a material
adverse change, in or affecting the general affairs, business,
prospects, management, financial position, stockholders' equity or
results of operations of the Company and its Subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Prospectus,
the effect of which in the judgment of the Representative makes it
impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities on the terms and in the manner
contemplated in the Prospectus; and neither the Company nor any of its
Subsidiaries shall have sustained since the date of the latest audited
financial statements included or incorporated by reference in the
Prospectus any material loss or interference with its business from
fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action,
order to decree, otherwise than as set forth or contemplated in the
Prospectus;
(e) the Representative shall have received on and as of the
Closing Date a certificate of an executive officer of the Company,
with specific knowledge about the Partnership's and the Company's
financial matters, satisfactory to you to the effect set forth in
subsections (a) through (c) (with respect to the respective
representations, warranties, agreements and conditions of the
Partnership and the Company) of this Section and to the further effect
that there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in or
affecting the general affairs, business, prospects, management,
financial position, stockholders' equity or results of operations of
the Company and its Subsidiaries taken as a whole from that set forth
or contemplated in the Registration Statement.
(f) Goodwin, Procter & Hoar LLP, counsel for the Company and
the Subsidiaries, shall have furnished to you their written opinion,
dated the Closing Date, in form and substance satisfactory to you, to
the effect that:
(i) the Partnership has been duly formed and is validly
existing as a partnership in good standing under the laws of the State
of Delaware, has the partnership power and authority to own its
property and any property proposed to be acquired by it and referred
to in the Prospectus and is duly qualified to transact such business
and is in good standing in each jurisdiction listed on Schedule III
attached hereto;
(ii) each of the Company, the Management Company and the
<PAGE> 18
the Building Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, has the corporate power and authority to own its
property and to conduct its business as described in the Prospectus
and is duly qualified to transact such business and is in good
standing in each jurisdiction listed on Schedule III attached hereto;
(iii) based solely on such counsel's review of the
Agreement of Limited Partnership and a report of a reputable
commercial search firm of the Uniform Commercial Code records of the
financing statements on file in the office of the Secretary of State
of the State of North Carolina, being the state in which the Company's
chief executive office is located and in the office of the Mecklenburg
County Recorder, the county in which such office is located, the
interests in the Partnership owned by the Company are validly issued
and owned, directly or indirectly, by the Company, free and clear of
any perfected security interest, or to such counsel's knowledge, any
other mortgage, pledge, lien, encumbrance, claim or security interest
of any kind;
(iv) this Agreement has been duly authorized, executed and
delivered by the Company;
(v) this Agreement has been duly authorized, executed and
delivered by the Partnership;
(vi) the Securities have been duly authorized and executed
by the Partnership and, when duly authenticated in accordance with the
terms of the Indenture and delivered to and paid for by the
Underwriters in accordance with the terms of this Agreement, will
constitute valid and binding obligations of the Partnership entitled
to the benefits provided by the Indenture and the Securities will be
enforceable against the Partnership in accordance with their terms,
except that the enforceability thereof may be limited by or subject to
(a) bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other similar laws now or hereafter existing which
affect the rights and remedies of creditors generally and (b)
equitable principles of general applicability. The Indenture conforms
in all material respects to all statements and descriptions related
thereto in the Prospectus. The terms of the Securities conform in all
material respects to all statements and descriptions related thereto
in the Prospectus;
(vii) the Indenture has been duly authorized, executed and
delivered by the Partnership and constitutes a valid and binding
instrument of the Partnership enforceable in accordance with its
terms,
<PAGE> 19
except that the enforceability thereof may be limited by or subject to
(a) bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium or other similar laws now or hereafter existing which
affect the rights and remedies of creditors generally and (b)
equitable principles of general applicability; and the Indenture has
been duly qualified under the Trust Indenture Act;
(viii) the execution and delivery of the Indenture by the
Partnership and this Agreement by each of the Company and the
Partnership, and the performance by the Partnership of its obligations
under the Indenture and by each of the Company and the Partnership of
its obligations under this Agreement, will not (a) contravene (i) any
provision of Applicable Law or, to the knowledge of the attorneys
listed on Schedule V which are all of the attorneys at Goodwin,
Procter & Hoar LLP who are currently working on matters for the
Company or any of its Subsidiaries, without independent investigation,
any provision of any order, rule or regulation of any court or
governmental agency having jurisdiction over the Company, its
Subsidiaries or any of their respective properties except for such
contraventions which individually or in the aggregate would not have a
material adverse effect on the condition, financial or otherwise, or
the earnings, business affairs or business prospects of the Company
and its Subsidiaries taken as a whole (a "Material Adverse Effect") or
(ii) the Articles of Incorporation or by-laws of the Company or the
Agreement of Limited Partnership or, (b) (i) conflict with or result
in a breach of any of the terms or provisions of, or constitute a
default under, any agreement or other instrument identified on
Schedule IV attached hereto except for such conflicts, breaches or
defaults which individually or in the aggregate would not have a
Material Adverse Effect; provided that such counsel need not opine as
to whether the execution and delivery of the Indenture by the
Partnership and this Agreement by each of the Company and the
Partnership, and the performance by the Partnership of its obligations
under the Indenture and by each of the Company and the Partnership of
its obligations under this Agreement will constitute a violation of or
a default under any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial ratios or
tests or any aspect of the financial condition or results of
operations of the Company or the Partnership, or (ii) contravene,
violate or conflict with, any judgment, order or decree, known to such
counsel, of any Governmental Authority or, to the knowledge of the
attorneys listed on Schedule V which are all of the attorneys at
Goodwin, Procter & Hoar LLP who are currently working on matters for
the Company or any of its Subsidiaries, without independent
investigation, any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company or any Subsidiary
except for such contraventions, violations
<PAGE> 20
or conflicts which individually or in the aggregate would not have a
Material Adverse Effect; and no consent, approval, authorization or
order of, or qualification or registration with, any Governmental
Authority or, to the knowledge of the attorneys listed on Schedule V
which are all of the attorneys at Goodwin, Procter & Hoar LLP who are
currently working on matters for the Company or any of its
Subsidiaries, without independent investigation, any court or
governmental body or agency except such consents, approvals,
authorizations or orders of, or qualifications or registrations the
failure of which to obtain would not individually or in the aggregate
have a Material Adverse Effect, is required for the issue and sale of
the Securities or the performance by each of the Company and the
Partnership of its obligations under this Agreement or by the
Partnership of its obligations
under the Indenture, except, in each case, such as have been obtained under the
Securities Act and the Trust Indenture Act and as may be required by the
securities or Blue Sky laws of the various states or the By-laws or Corporate
Financing Rule of the NASD in connection with the offer and sale of the
Securities;
(a) "Governmental Approval" means any
consent, approval, order or decree, license, authorization or
validation of, or filing with, any Governmental Authority pursuant to
Applicable Laws, (b) "Governmental Authority" shall mean any United
States or Commonwealth of Massachusetts court or legislative,
judicial, administrative or regulatory body or agency and (c)
"Applicable Laws" means the Maryland General Corporation Law and those
laws, statutes, rules and regulations of the United States of America
and the Commonwealth of Massachusetts that, in such counsel's
experience, are normally applicable to transactions of the type
contemplated by this Agreement; provided, that such counsel need
express no opinion as to (x) the "blue sky" or state securities or
real estate syndication laws of any jurisdiction or (y) municipal laws
or the laws of any agencies within any state.
(ix) each document incorporated by reference in
the Registration Statement and the Prospectus as amended or
supplemented (other than the financial statements and related
schedules therein and other financial and statistical data
included or incorporated therein, as to which such counsel
need express no opinion) complied as to form when filed with
the Commission in all material respects with the Exchange
Act, and the rules and regulations of the Commission
thereunder, and that the Registration Statement and the
Prospectus and any amendments and supplements thereto (except
for the financial statements and related schedules therein
and other financial and statistical data included or
incorporated therein, as to which such counsel need express
no opinion) comply as to form in all material respects with
the requirements of the Securities Act;
(x) the Registration Statement has been declared
effective under the Securities Act; any required filing of
the Prospectus, and any supplements thereto, pursuant to Rule
424(b) has been made in the manner and within the time period
required by Rule 424(b); and to such counsel's knowledge
based solely on a telephone conversation with the staff of
the Commission, no stop order suspending the effectiveness of
the Registration Statement has been issued under the
Securities Act and no proceedings therefor have been
initiated or threatened by the Commission;
(xi) none of the Company, the Partnership, the
Management Company, or the Building Company is an "investment
company" as such term is defined in the
<PAGE> 21
Investment Company Act of 1940, as amended;
(xii) based, in part, on representations from the
Company relating to its asset composition, source of income,
shareholder diversification, distributions, record keeping
and other requirements and assumptions relating to the
Company's continued compliance with such representations, for
its taxable years ended December 31, 1994, through December
31, 1996, the Company has been organized in conformity with
the requirements for qualification as a "real estate
investment trust" under the Code and its method of operation
has enabled it to and will enable it to continue to meet the
requirements for qualification and taxation as a real estate
investment trust under the Code;
(xiii) the statements set forth in the Prospectus
under the caption "Federal Income Tax Considerations" insofar
as such statements constitute summaries of the legal matters
referred to therein, are accurate in all material respects;
and
(xiv) the statements set forth in the Prospectus
under the captions "Description of Debt Securities",
"Description of Common Stock", "Description of Preferred
Stock", and "Restrictions on Transfer of Capital Stock", in
each case insofar as such statements constitute summaries of
the legal matters or documents referred to therein, fairly
present the information called for with respect to such legal
matters and documents and fairly summarize the matters
referred to therein.
Such counsel shall also include a statement in such
opinion to the following effect: we have participated in conferences
with officers and other representatives of the Company and the
Partnership, counsel for the Company and the Partnership,
representatives of the independent accountants of the Company and the
Partnership and you at which the contents of the Registration
Statement and related matters were discussed and on the basis of the
foregoing:
(i) No facts have come to such counsel's
attention which cause it to believe that the
Registration Statement (excluding the financial
statements and schedules and other financial and
statistical data included or incorporated therein,
as to which such counsel need express no belief), at
the time it became effective, contained an untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading; and
(ii) No facts have come to such counsel's
attention which cause it to believe that the
Prospectus (excluding the financial statements and
schedules and other financial and statistical data
included or incorporated therein, as to which such
counsel need express no belief), as of its date and
the Closing Date, contained an untrue statement of a
material fact or omitted to state a material
<PAGE> 22
fact necessary in order to make the statements
therein, in the light of the circumstances under
which they were made, not misleading.
(g) The favorable opinion, dated as of Closing Time, of
Kennedy Covington Lobdell & Hickman, special counsel for the Company
and the Subsidiaries, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(i) the Partnership is duly qualified to transact
such business and is in good standing in each jurisdiction
listed on Schedule III attached hereto and, to the knowledge
of the attorneys listed on Schedule VI which are all of the
attorneys at Kennedy Covington Lobdell & Hickman who are
currently working on matters for the Company or its
Subsidiaries, without independent investigation, is duly
qualified to transact such business and is in good standing
under the laws of each other jurisdiction in which the
conduct of its business or its ownership, management or
leasing of property requires such qualification except to the
extent that the failure to be so qualified or be in good
standing in each such jurisdiction would not have a material
adverse effect on the Company and its Subsidiaries taken as a
whole;
(ii) each of the Company, the Management Company
and the Building Company is duly qualified to transact such
business and is in good standing in each jurisdiction listed
on Schedule III attached hereto and, to the knowledge of the
attorneys listed on Schedule VI which are all of the
attorneys at Kennedy Covington Lobdell & Hickman who are
currently working on matters for the Company or its
Subsidiaries, without independent investigation, is duly
qualified to transact such business and is in good standing
under the laws of each other jurisdiction in which the
conduct of its business or its ownership, management or
leasing of property requires such qualification except to the
extent that the failure to be so qualified or be in good
standing in each such jurisdiction would not have a material
adverse effect on the Company and its Subsidiaries taken as a
whole;
(iii) the execution and delivery of the Indenture by
the Partnership and this Agreement by each of the Company and
the Partnership, and the performance by the Partnership of
its obligations under the Indenture and by each of the
Company and the Partnership of its obligations under this
Agreement, will not (a) contravene (i) any provision of
Applicable Law or, to the knowledge of the attorneys listed
on Schedule VI which are all of the attorneys at Kennedy
Covington Lobdell & Hickman who are currently working on
matters for the Company or its Subsidiaries, without
independent investigation, any provision of applicable law or
statute or any order, rule or regulation of any court or
governmental agency, body or court having jurisdiction over
the Company, its Subsidiaries or any of their respective
properties, except for such contraventions of any such
provision of applicable law or statute or any such order,
rule or regulation of any court or
<PAGE> 23
governmental agency, body or court having jurisdiction over
the Company, its Subsidiaries or any of their respective
properties which individually or in the aggregate would not
have a material adverse effect on the condition, financial or
otherwise, or the earnings, business affairs or business
prospects of the Company and its Subsidiaries taken as a
whole (a "Material Adverse Effect") or (ii) the Articles of
Incorporation or by-laws of the Company or the Agreement of
Limited Partnership or, (b) to such counsel's knowledge after
due inquiry, (i) conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under,
any agreement or other instrument identified on Schedule IV
attached hereto or, to the knowledge of the attorneys listed
on Schedule VI which are all of the attorneys at Kennedy
Covington Lobdell & Hickman who are currently working on
matters for the Company or its Subsidiaries, without
independent investigation, any agreement or other instrument
to which the Company or any of its Subsidiaries is a party or
by which the Company or any of its Subsidiaries is bound or
to which any of the property or assets of the Company or any
of its Subsidiaries is subject except for such conflicts,
breaches or defaults with respect to any such unscheduled
agreements or instruments which individually or in the
aggregate would not have a Material Adverse Effect; provided
that such counsel need not opine as to whether the execution
and delivery of the Indenture by the Partnership and this
Agreement by each of the Company and the Partnership, and the
performance by the Partnership of its obligations under the
Indenture and by each of the Company and the Partnership of
its obligations under this Agreement will constitute a
violation of or a default under any covenant, restriction or
provision with respect to financial ratios or tests or any
aspect of the financial ratios or tests or any aspect of the
financial condition or results of operations of the Company
or the Partnership, or (ii) contravene, violate or conflict
with, any judgment, order or decree, known to such counsel,
of any Governmental Authority or, to the knowledge of the
attorneys listed on Schedule VI which are all of the
attorneys at Kennedy Covington Lobdell & Hickman who are
currently working on matters for the Company or its
Subsidiaries, without independent investigation, any
judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company
or any Subsidiary except for such contraventions, violations or conflicts with
any such judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Company or any Subsidiary which individually or in
the aggregate would not have a Material Adverse Effect;
(a) "Governmental Approval" means any
consent, approval, order or decree, license, authorization or
validation of, or filing with, any Governmental Authority
pursuant to Applicable Laws, (b) "Governmental Authority"
shall mean any United States
<PAGE> 24
or State of North Carolina court or legislative, judicial,
administrative or regulatory body or agency and (c)
"Applicable Laws" means the Maryland General Corporation Law
and those laws, statutes, rules and regulations of the United
States of America and the State of North Carolina that, in
such counsel's experience, are normally applicable to
transactions of the type contemplated by this Agreement;
provided, that such counsel need express no opinion as to (x)
the "blue sky" or state securities or real estate syndication
laws of any jurisdiction or (y) municipal laws or the laws of
any agencies within any state.
(iv) To their knowledge after due inquiry, there
are no legal or governmental proceedings pending or
threatened to which the Company or any Subsidiary or any
Affiliate of the Company is a party or to which any of their
properties or the Communities is subject that are required to
be described in the Registration Statement or the Prospectus
and are not so described or any statutes, regulations,
contracts or other documents that are required to be
described in the Registration Statement that are not
described or filed as required;
(v) The Company and each Subsidiary has all
necessary consents, authorizations, approvals, orders,
certificates and permits of and from, and has made all
declarations and filings with, all federal, state, local and
other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, to own,
lease, license and use its properties and assets and to
conduct its business in the manner described in the
Prospectus, except to the extent that the failure to obtain
or file would not have a Material Adverse Effect; and neither
the Company nor any such Subsidiary has received any actual
notice of any proceeding relating to revocation or
modification of any Governmental Approval or, to the
knowledge of the attorneys listed on Schedule VI which are
all of the attorneys at Kennedy Covington Lobdell & Hickman
who are currently working on matters for the Company or its
Subsidiaries, without independent investigation, any such
license, permit, certificate, consent, order, approval or
other authorization except for such revocations or
modifications of any such licenses, permits, certificates,
consents, orders, approvals or other authorizations which
individually or in the aggregate would not have a Material
Adverse Effect, in each case, except as described in the
Registration Statement and the Prospectus; and each of the
Company or its Subsidiaries is in compliance with all
Applicable Laws and, to the knowledge of the attorneys listed
on Schedule VI which are all of the attorneys at Kennedy
Covington Lobdell & Hickman who are currently working on
matters for the Company or its Subsidiaries, without
independent investigation, all laws and regulations except to
the extent that failure to so comply with all such laws and
regulations would not have a Material Adverse Effect, in each
case, relating to the conduct of its business as conducted as
of the date of the Prospectus; and
(vi) The Company and each Subsidiary (1) is in
compliance with any and all applicable federal, state and
local laws and regulations relating to the protection of
human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (2) has received all permits,
licenses or other approvals required of them under applicable
Environmental Laws to conduct their businesses and (3) is in
compliance with all terms and conditions of any such permit,
license or approval, except where such non-compliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the
terms and conditions of such permits, licenses or approvals
are otherwise
<PAGE> 25
disclosed in the Prospectus or would not, singly or in the
aggregate, have a material adverse effect on the Company and
its Subsidiaries, taken as a whole.
Such counsel shall also include a statement in such opinion
to the following effect: we have reviewed the Registration Statement and the
Prospectus and participated in conferences with officers and other
representatives of the Company and the Partnership and counsel for the Company
and the Partnership at which the contents of the Registration Statement and
related matters were discussed and on the basis of the foregoing:
(i) No facts have come to such counsel's attention
which cause it to believe that the Registration Statement
(excluding the financial statements and schedules and other
financial and statistical data included or incorporated
therein, as to which such counsel need express no belief), at
the time it became effective, contained an untrue statement
of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the
statements therein not misleading; and
(ii) No facts have come to such counsel's attention
which cause it to believe that the Prospectus (excluding the
financial statements and schedules and other financial and
statistical data included or incorporated therein, as to
which such counsel need express no belief), as of its date
and the Closing Date contained an untrue statement 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.
In rendering such opinions, such counsel may rely (A) as to matters
involving the application of laws other than the laws of the United States and
the State of Maryland, to the extent such counsel deems proper and to the
extent specified in such opinion, if at all, upon an opinion or opinions (in
form and substance reasonably satisfactory to Underwriters' counsel) of other
counsel reasonably acceptable to the Underwriters' counsel, familiar with the
applicable laws; (B) as to matters of fact, to the extent such counsel deems
proper, on certificates of responsible officers of the Partnership and the
Company and certificates or other written statements of officials of
jurisdictions having custody of documents respecting the corporate existence or
good standing of the Partnership and the Company. The opinion of such counsel
for the Partnership and the Company shall state that the opinion of any such
other counsel upon which they relied is in form satisfactory to such counsel
and, in such counsel's opinion, the Underwriters and they are justified in
relying thereon. With respect to the matters to be covered in the last
paragraph of subparagraph (f) and subparagraph (h)(iv) above counsel may state
their opinion and belief is based upon their participation in the preparation
of the Registration Statement and the Prospectus and any amendment or
supplement thereto but is without independent check or verification except as
specified.
<PAGE> 26
The opinion of Goodwin, Procter & Hoar LLP described above shall be
rendered to the Underwriters at the request of the Partnership and the Company
and shall so state therein.
(h) on the date hereof and on the Closing Date, Deloitte & Touche
LLP, Arthur Andersen LLP and Reznick Fedder & Silverman shall have furnished to
you letters, dated such date, in form and substance satisfactory to you,
containing statements and information of the type customarily included in
accountants "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus;
(i) you shall have received on and as of the Closing Date an opinion
of Skadden, Arps, Slate, Meagher & Flom LLP, counsel to the Underwriters, with
respect to the validity of the Indenture and the Securities, the Registration
Statement, the Prospectus and other related matters as the Representative may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters; and
(j) on or prior to the Closing Date, the Company shall have
furnished to the Representative such further certificates and documents as the
Representative shall reasonably request.
7. The Partnership and the Company, jointly and severally, hereby
agree to indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including without limitation the legal
fees and other expenses incurred in connection with any suit, action or
proceeding or any claim asserted) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Partnership and the Company
shall have furnished any amendments or supplements thereto) or any preliminary
prospectus, or caused by 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, except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Partnership and/or the Company in
writing by such Underwriter through the Representative expressly for use
therein; provided, however, that the foregoing indemnity with respect to any
preliminary prospectus shall not inure to the benefit of any Underwriter (or to
the benefit of the person controlling such Underwriter) from whom the person
asserting any such losses, claims, damages or liabilities purchased Securities
if such untrue statement or omission or alleged untrue statement or omission
made in such preliminary prospectus is eliminated or remedied in
<PAGE> 27
the Prospectus (as amended or supplemented if the Company shall have furnished
any amendments or supplements thereto) and, if required by law, a copy of the
Prospectus (as so amended or supplemented) shall not have been furnished to
such person at or prior to the written confirmation of the sale of such
Securities to such person.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Partnership, the Company and its directors, each of the
officers who sign the Registration Statement and each person who controls the
Company or the Partnership within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, to the same extent as the foregoing
indemnity from the Partnership and the Company to each Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Partnership or the Company in writing by such Underwriter through the
Representative expressly for use in the Registration Statement, the Prospectus,
any amendment or supplement thereto, or any preliminary prospectus. For
purposes of this Section 7 and Sections 4(a) and 4(b), the only written
information furnished by the Underwriters to the Company expressly for use in
the Registration Statement and the Prospectus is (a) the information in the
last paragraph on the cover page of the Prospectus specifically relating to the
Securities, (b) the information regarding stabilization on the inside front
cover page of the Prospectus specifically relating to the Securities, and (c)
the information in the third paragraph and the second sentence of the fourth
paragraph, under the caption "Underwriting" in the Prospectus.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of
the two preceding paragraphs, such person (the "Indemnified Person") shall
promptly notify the person against whom such indemnity may be sought (the
"Indemnifying Person") in writing, and the Indemnifying Person, upon request of
the Indemnified Person, shall retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding,
any Indemnified Person shall have the right to retain its own counsel, but the
fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i) the Indemnifying Person and the Indemnified Person shall have
mutually agreed to the contrary, (ii) the Indemnifying Person has failed within
a reasonable time to retain counsel reasonably satisfactory to the Indemnified
Person or (iii) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. It
is understood that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred. Any such separate firm for the Underwriters
and such
<PAGE> 28
control persons of Underwriters shall be designated in writing by the named
Representative on Schedule I hereto and any such separate firm for the
Partnership or the Company, its directors, its officers who sign the
Registration Statement and such control persons of the Partnership or the
Company or authorized representatives shall be designated in writing by the
Partnership or the Company. The Indemnifying Person shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff,
the Indemnifying Person agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an Indemnified Person
shall have requested an Indemnifying Person to reimburse the Indemnified Person
for fees and expenses of counsel as contemplated by the third sentence of this
paragraph, the Indemnifying Person agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such Indemnifying
Person of the aforesaid request and (ii) such Indemnifying Person shall not
have reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement. However, if it is ultimately determined that an
Indemnified Person was not entitled to indemnification hereunder, such
Indemnified Person shall be responsible for repaying or reimbursing the
Indemnifying Person for all amounts so paid or incurred by such Indemnifying
Person pursuant to this paragraph. No Indemnifying Person shall, without the
prior written consent of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any Indemnified Person is
or could have been a party and indemnity could have been sought hereunder by
such Indemnified Person, unless such settlement includes an unconditional
release of such Indemnified Person from all liability on claims that are the
subject matter of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this Section 7 is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable
by such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Partnership and the Company on the one hand and the
Underwriters on the other hand from the offering of the Securities or (ii) if
the allocation provided by clause (i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Partnership
and the Company on the one hand and the Underwriters on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Partnership and the Company on the one hand
and the Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering of such Securities (before
deducting expenses) received by the Partnership and the total underwriting
discounts and the commissions received by the Underwriters bear to the
aggregate public offering price of the Securities. The relative fault of the
Partnership and the Company on the one hand and the Underwriters on the other
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 relates to information supplied by the Partnership or
the Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Partnership, the Company and the Underwriters agree that it would
not be
<PAGE> 29
just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. 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. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective principal amount of the Securities set forth opposite their
names in Schedule II hereto, and not joint.
The remedies provided for in this Section 7 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 7
and the representations and warranties of the Partnership and the Company set
forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation
made by or on behalf of any Underwriter or any person controlling any
Underwriter or by or on behalf of the Partnership, the Company, its officers or
directors or any other person controlling the Company and (iii) acceptance of
and payment for any of the Securities.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representative, by notice given to
the Partnership and the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago
Mercantile Exchange or the Chicago Board of Trade, (ii) trading of any
securities of or guaranteed by the Company or the Partnership shall have been
suspended on any exchange or in any over-the-counter market, (iii) a general
moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, or (iv) there shall
have occurred any outbreak or escalation of hostilities or any change in
financial
<PAGE> 30
markets or any calamity or crisis that, in the judgment of the Representative,
is material and adverse and which, in the judgment of the Representative, makes
it impracticable to market the Securities on the terms and in the manner
contemplated in the Prospectus.
9. If, on the Closing Date, any one or more of the Underwriters
shall fail or refuse to purchase Securities which it or they have agreed to
purchase under this Agreement, and the aggregate principal amount of Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase is not more than one-tenth of the aggregate principal amount of the
Securities, the other Underwriters shall be obligated severally in the
proportions that the principal amount of Securities set forth opposite their
respective names in Schedule II hereto bears to the aggregate principal amount
of Securities set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representative may specify,
to purchase the Securities which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase on such date; provided that in no
event shall the principal amount of Securities that any Underwriter has agreed
to purchase pursuant to Section 1 be increased pursuant to this Section 9 by an
amount in excess of one-tenth of such principal amount of Securities without
the written consent of such Underwriter. If, on the Closing Date, any
Underwriter or Underwriters shall fail or refuse to purchase Securities and the
aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities
to be purchased, and arrangements satisfactory to you and the Partnership and
the Company for the purchase of such Securities are not made within 36 hours
after such default, this Agreement shall terminate without liability on the
part of any non-defaulting Underwriter or the Partnership and the Company. In
any such case either you or the Partnership shall have the right to postpone
the Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus
or in any other documents or arrangements may be effected. Any action taken
under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. If this Agreement shall be terminated by the Underwriters, or
any of them, because of any failure or refusal on the part of the Partnership
or the Company to comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason the Partnership or the Company shall be
unable to perform their obligations under this Agreement or any condition of
the Underwriters' obligations cannot be fulfilled, the Partnership and the
Company agree to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering of Securities.
<PAGE> 31
11. This Agreement shall inure to the benefit of and be binding upon
the Partnership, the Company, the Underwriters, any controlling persons
referred to herein and their respective successors and assigns. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any other person, firm or corporation any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. No purchaser of Securities from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
12. Any action by the Underwriters hereunder may be taken by you
jointly or by the named Representative set forth in Schedule I hereto alone on
behalf of the Underwriters, and any such action taken by you jointly or by the
named Representative set forth in Schedule I hereto alone shall be binding upon
the Underwriters. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
given at the address set forth in Schedule II hereto. Notices to the
Partnership and the Company shall be given to it at 212 South Tryon Street,
Suite 500, Charlotte, North Carolina 28211, (telex: (704) 333-8340); Attention:
Mr. William F. Paulsen, President and Chief Executive Officer.
13. This Agreement may be signed in counterparts, each of which
shall be an original and all of which together shall constitute one and
the same instrument.
<PAGE> 32
14. 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 laws provisions thereof.
Very truly yours,
SUMMIT PROPERTIES PARTNERSHIP, L.P.
By: Summit Properties Inc., its general partner
By: /s/ Michael L. Schwarz
--------------------------------------------
Name: Michael L. Schwarz
Title: Executive Vice President and
Chief Financial Officer
SUMMIT PROPERTIES INC.
By: /s/ Michael L. Schwarz
--------------------------------------------
Name: Michael L. Schwarz
Title: Executive Vice President and
Chief Financial Officer
Accepted: December 12, 1997
J.P. MORGAN SECURITIES INC.
Acting severally on behalf of themselves and the several
Underwriters listed in Schedule II hereto.
By: J.P. MORGAN SECURITIES INC.
By: /s/ Keysha Bailey
-----------------------------
Name: Keysha Bailey
Title: Vice President
<PAGE> 33
SCHEDULE I
Representative: J.P. Morgan Securities Inc.
Underwriting Agreement
dated: December 12, 1997
Registration Statement
No.: 333-25575
Title of Securities: 6-5/8% Notes Due 2003 (the "Notes")
Aggregate principal
amount: $30,000,000 of Notes
Price to Public: 99.786% of the principal amount of the Notes, plus
accrued interest, if any, from December 17, 1997
Indenture: Indenture dated as of August 7, 1997 and the
Supplemental Indenture to be dated as of December
17, 1997, both between the Partnership and First
Union National Bank as Trustee
Maturity: December 15, 2003 with respect to the Notes
Interest Rate: 6.625% with respect to the Notes
Interest Payment Dates: June 15 and December 15, commencing June 15, 1998
Optional Redemption
Provisions: The Notes are redeemable at any time at the option
of the Partnership, in whole or in part, at a
redemption price equal to the sum of (i) the
principal amount of the Notes being redeemed plus
accrued interest thereon to the redemption date and
(ii) the Make-Whole Amount (as defined in the
Prospectus Supplement
<PAGE> 34
relating to the Notes dated December 12, 1997), if
any
Sinking Fund Provisions: None
Closing Date and
Time of Delivery: The Closing will be held at 10:00 a.m. (E.S.T.) on
December 17, 1997, with the Notes being delivered
through the book-entry facilities of The Depository
Trust Company ("DTC") and made available for
checking by DTC and the Trustee at least 24 hours
prior to the Closing Date
Closing Location: Skadden, Arps, Slate, Meagher & Flom LLP
19 Third Avenue
New York, NY 10022
Address for Notices
to Underwriters: c/o J.P. Morgan Securities Inc.
60 Wall Street
New York, New York 10260
<PAGE> 35
SCHEDULE II
Principal Amount
of Notes to be Purchased
Underwriter
J.P. Morgan Securities Inc. 30,000,000
Total 30,000,000
<PAGE> 36
SCHEDULE III
Foreign Qualifications
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
COMPANY STATE OF ORGANIZATION STATES OF FOREIGN
QUALIFICATION
- -------------------------------------------------------------------------------
<S> <C> <C>
Summit Properties Inc. - Maryland - Alabama
- Florida
- Georgia
- Indiana
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- Tennessee
- Virginia
- -------------------------------------------------------------------------------
Summit Properties - Delaware - Alabama
Partnership, L.P. - Florida
- Georgia
- Indiana
- Maryland
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- Tennessee
- Virginia
- -------------------------------------------------------------------------------
Summit Management - Maryland - Alabama
Company - Delaware
- Florida
- Georgia
- Indiana
- North Carolina
- Ohio
- Pennsylvania
- South Carolina
- Tennessee
- Virginia
- -------------------------------------------------------------------------------
Summit Apartment Builders, - Florida - North Carolina
Inc.
- -------------------------------------------------------------------------------
</TABLE>
<PAGE> 37
SCHEDULE IV
Material Contracts
1. Articles of Incorporation of Summit Management Company. (Incorporated
by reference to Exhibit 10.3 to the Annual Report on Form 10-K of
Summit Properties Inc. for the fiscal year ended December 31, 1993,
File No. 001-12792.)
2. Bylaws of Summit Management Company. (Incorporated by reference to
Exhibit 10.4 to the Annual Report on Form 10-K of Summit Properties
Inc. for the fiscal year ended December 31, 1993, File No. 001-12792.)
3. Indemnification Agreement, dated January 29, 1994, among Summit
Properties Inc., Summit Properties Partnership, L.P. and the
individuals named therein. (Incorporated by reference to Exhibit 10.16
to the Annual Report on Form 10-K of Summit Properties Inc. for the
fiscal year ended December 31, 1993, File No. 001-12792.)
4. Lock-Up Agreement, dated February 8, 1994, between Summit Properties
Inc., Morgan Stanley & Co. Incorporated, Prudential Securities
Incorporated, The Robinson-Humphrey Company, Inc., Interstate/Johnson
Lane Corporation, Morgan Stanley International, Prudential-Bache
Securities, The Robinson-Humphrey Company, Inc. and Interstate/Johnson
Lane Corporation and the shareholders named therein. (Incorporated by
reference to Exhibit 10.20 to the Annual Report on Form 10-K of Summit
Properties Inc. for the fiscal year ended December 31, 1993, File No.
001-12792.)
5. Waiver of Rescission Rights and Contribution Agreement, dated January
18, 1994, between Summit Properties Inc. and Street Real Estate
Company. (Incorporated by reference to Exhibit 10.23 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
6. Omnibus Option Agreement, dated as of December 1, 1993, among Summit
Properties and the Grantors named therein. (Incorporated by reference
to Exhibit 10.14 to the Annual Report on Form 10-K of Summit
Properties Inc. for the fiscal year ended December 31, 1993, File No.
001-12792.)
7. Assignment, Assumption and Option Agreement for Henderson
Place/McGuire Partners Limited Partnership, dated February 8, 1994,
between Summit Properties Partnership, L.P. and the grantors named
therein. (Incorporated by reference to Exhibit 10.21 to the Annual
Report on Form 10-K of Summit
<PAGE> 38
Properties Inc. for the fiscal year ended December 31, 1993, File No.
001-12792.)
8. Option Agreement, dated January 19, 1994, between Summit Properties
Partnership, L.P. and LMES Limited Partnership. (Incorporated by
reference to Exhibit 10.22 to the Annual Report on Form 10-K of Summit
Properties Inc. for the fiscal year ended December 31, 1993, File No.
001-12792.)
9. Form of Option and Transfer Agreement, among Summit Management
Company, William F. Paulsen and Summit Properties Partnership, L.P.
(Incorporated by reference to Exhibit 10.6 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
10. Summit Properties Inc. 1994 Stock Option and Incentive Plan.
(Incorporated by reference to Exhibit 10.6 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
11. Summit Properties Inc. 1996 Non-Qualified Employee Stock Purchase
Plan. (Incorporated by reference to Exhibit 10.5 to the Registration
Statement of Form S-8, of Summit Properties Inc., Registration No.
333-00078.)
12. Employment Agreement between Summit Properties Inc. and William F.
Paulsen. (Incorporated by reference to Exhibit 10.7 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
13. Employment Agreement between Summit Properties Inc. and William B.
McGuire, Jr. (Incorporated by reference to Exhibit 10.8 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
14. Employment Agreement between Summit Properties Inc. and Raymond V.
Jones. (Incorporated by reference to Exhibit 10.9 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
15. Employment Agreement between Summit Properties Inc. and David F.
Tufaro. (Incorporated by reference to Exhibit 10.11 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
16. Employment Agreement between Summit Properties Inc. and John C. Moore.
(Incorporated by reference to Exhibit 10.12 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
17. Employment Agreement between Summit Properties Inc. and Michael G.
Malone. (Incorporated by reference to Exhibit 10.12.1 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
<PAGE> 39
18. Employment Agreement between Summit Properties Inc. and Keith L.
Downey. (Incorporated by - reference to Exhibit 10.12.3 to the Annual
Report on Form 10-K of Summit Properties Inc. for the fiscal year
ended December 31, 1993, File No. 001-12792.)
19. Employment Agreement between Summit Properties Inc. and Christopher A.
Hughes. (Incorporated by reference to Exhibit 10.12.4 to the Annual
Report on Form 10-K of Summit Properties Inc. for the fiscal year
ended December 31, 1993, File No. 001-12792.)
20. Employment Agreement between Summit Properties Inc. and William B.
Hamilton. (Incorporated by reference to Exhibit 10.36 to the Annual
Report on Form 10-K of Summit Properties Inc. for the fiscal year
ended December 31, 1996, file No. 001-12792.)
21. Noncompetition Agreement between Summit Properties Inc. and William F.
Paulsen. (Incorporated by reference to Exhibit 10.24 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
22. Noncompetition Agreement between Summit Properties Inc. and William B.
McGuire, Jr. (Incorporated by reference to Exhibit 10.25 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
23. Noncompetition Agreement between Summit Properties Inc. and Raymond V.
Jones. (Incorporated by reference to Exhibit 10.26 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
24. Noncompetition Agreement between Summit Properties Inc. and Keith H.
Kuhlman. (Incorporated by reference to Exhibit 10.27 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
25. Noncompetition Agreement between summit Properties Inc. and David F.
Tufaro. (Incorporated by reference to Exhibit 10.28 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.)
26. Noncompetition Agreement between Summit Properties Inc. and John T.
Gray. (Incorporated by reference to Exhibit 10.29 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
27. Noncompetition Agreement between Summit Properties Inc. and John C.
Moore. (Incorporated by reference to Exhibit 10.30 to the Registration
Statement on Form S-11 of Summit Properties Inc., Registration No.
33-90706.)
<PAGE> 40
28. Noncompetition Agreement between Summit Properties Inc. and Michael
G. Malone. (Incorporated by reference to Exhibit 10.31 to the
Registration Statement on Form S-11 of Summit Properties Inc.,
Registration No. 33-90706.) 29. Noncompetition Agreement between
Summit Properties Inc. and William B. Hamilton. (Incorporated by
reference to Exhibit 10.37 to the Annual Report on Form 10-K of Summit
Properties Inc. for the fiscal year ended December 31, 1996, file No.
001-12792.)
30. Form of Agreement to Purchase Partnership Interests. (Incorporated by
reference to Exhibit 10.13 to the Registration Statement on Form S-11
of Summit Properties Inc., Registration No. 33-90706.)
31. Acquisition Agreement, dated December 29, 1993, between Stony Point
Limited Partnership and Summit Management Company. (Incorporated by
reference to Exhibit 10.15 to the Registration Statement on Form S-11
of Summit Properties Inc., Registration No. 33-90706.)
32. $2,500,000 Promissory Note, dated February 15, 1994 and maturing on
February 15, 2004, from Summit Management Company to Old Summit
Management Company. (Incorporated by reference to Exhibit 10.17 to the
Annual Report on Form 10-K of Summit Properties Inc. for the fiscal
year ended December 31, 1993, File No. 001-12792.)
33. $125,000,000 Promissory Note, dated February 15, 1994 and maturing on
February 15, 2001, from Summit Properties Inc. to Northwestern Mutual
Life Insurance Company. (Incorporated by reference to Exhibit 10.18.1
to the Annual Report on Form 10-K of Summit Properties Inc. for the
fiscal year ended December 31, 1993, File No. 001-12792.)
34. Mortgage and Security Agreement and Financing Statement, dated
February 15, 1994, between Summit Properties Inc. and Northwestern
Mutual Life Insurance Company. (Incorporated by reference to Exhibit
10.18.2 to the Annual Report on Form 10-K of Summit Properties Inc.
for the fiscal year ended December 31, 1993, File No. 001-12792.)
35. $31,000,000 Loan Agreement, dated July 31, 1996, between Summit
Properties Partnership, L.P. and Wachovia Bank of North Carolina, N.A.
(Incorporated by reference to Exhibit 10.34 to the Quarterly Report on
Form 10-Q of Summit Properties Inc. for the fiscal quarter ended
September 30, 1996, File No. 001-12792.)
36. $150,000,000 Credit Agreement, dated November 18, 1996, among Summit
Properties Partnership, L.P., First Union National Bank of North
Carolina and
<PAGE> 41
Wachovia Bank of North Carolina, N.A. (Incorporated by reference to
Exhibit 10.35 to the Annual Report on Form 10-K of Summit Properties
Inc. for the fiscal year ended December 31, 1996, file No. 001-12792.)
37. Registration Rights Agreement, dated December 11, 1995, between Summit
Properties Inc. and Bissell Ballantyne, LLC. (Incorporated by
reference to Exhibit 10.2 to the Registration Statement on Form S-3 of
Summit Properties Inc., Registration No. 333-24669.)
38. Registration Rights Agreement, dated January 10, 1996, among Summit
Properties Inc., Joseph H. Call and Gary S. Cangelosi. (Incorporated
by reference to Exhibit 10.2 to the Registration Statement on Form S-3
of Summit Properties Inc., Registration No. 333-24669.)
39. Registration Rights Agreement, dated February 20, 1997, among Summit
Properties Inc., The Northwestern Mutual Life Insurance Company, J.
Ronald Terwelleger, J. Ronald Terwilliger Grantor Trust, Crow
Residential Realty Investors, L.P., Douglas A. Hoeksema, Randy J.
Pace, Clifford A. Breining, TCF Residential Partnership, Ltd. and
Trammell S. Crow. (Incorporated by reference to Exhibit 10.2 to the
Registration Statement on Form S-3 of Summit Properties Inc.,
Registration No. 333-24669.)
40. Registration Rights Agreement, dated February 8, 1994, between Summit
Properties Inc. and the Continuing Investors named therein.
(Incorporated by reference to Exhibit 10.2 to the Annual Report on Form
10-K of Summit Properties Inc. for the fiscal year ended December 31,
1993, File No. 001-12792.)
41. Agreement to Contribute between Summit Properties Partnership, L.P.
and Summit Properties Incorporated listed owners and Crosland
Partnerships (as listed), dated February 13, 1995. (Exhibit to Form
8-K, dated May 17, 1995).
42. Registration Rights Agreement between Summit Properties Incorporated
listed recipients of Summit Properties Partnership, L.P. dated May 16,
1995 (Exhibit to Form 8-K, dated May 17, 1995).
43. Underwriting Agreement, between Summit Properties Incorporated and
Morgan Stanley, dated February 8, 1994. (Exhibit to Amendment No. 2 to
Form S-11 filed by Summit Properties Incorporated on February 3, 1994).
44. Underwriting Agreement between Summit Properties Incorporated and
Merrill Lynch, dated August 1, 1996, entered into in connection with
shelf registration of common and preferred stock.
45. First Amendment to $150,000,000 Credit Agreement dated July 24, 1997,
<PAGE> 42
among Summit Properties Partnership, L.P., First Union National Bank of
North Carolina and Wachovia Bank of North Carolina, N.A. (Exhibit 10.1
to the Quarterly Report on Form 10-Q of Summit Properties Partnership,
L.P. for the fiscal quarter ended September 30, 1997, file No.
000-22411.).
46. Executive Severance Agreements by and between Summit Properties Inc.
and certain executive officers of Summit Properties Inc. and schedule
of Officers who have entered into such Agreement. (Exhibit 10.2 to the
Quarterly Rejport on Form 10-Q of Summit Properties Partnership, L.P.
for the fiscal quarter ended September 30, 1997, file No. 000-22411.).
<PAGE> 43
SCHEDULE V
List of all of the attorneys at Goodwin, Procter & Hoar LLP who are
currently working on matters for the Company or any of its Subsidiaries.
Edward L. Glazer, P.C.
Gilbert G. Menna, P.C.
David W. Watson
Stephen G. Charkoudian
Diana McKearney
Jennifer H. Weiss
<PAGE> 44
SCHEDULE VI
List of all of the attorneys at Kennedy Covington Lobdell & Hickman which
are currently working on matters for the Company or any of its Subsidiaries.
David H. Jones
William C. Livingston
Maynard E. Tipps
Raymond E. Owens
Alice C. Richey
Joseph W. Moss
John Nicholas Suhr, Jr.
John H. Culver, III
Felicia A. Washington
Alan H. Peterson
Michael R. Thornton
<PAGE> 1
EXHIBIT 4.2
<PAGE> 2
EXHIBIT 4.2
- -------------------------------------------------------------------------------
SUMMIT PROPERTIES PARTNERSHIP, L.P.
Issuer
------
to
FIRST UNION NATIONAL BANK
Trustee
-------
-------------------------
Form of Supplemental Indenture No. 2
Dated as of December __, 1997
-------------------------
$30,000,000
of
6 5/8% Notes due 2003
- -------------------------------------------------------------------------------
<PAGE> 3
SUPPLEMENTAL INDENTURE NO. 2, dated as of December __, 1997
(the "Supplemental Indenture"), between SUMMIT PROPERTIES PARTNERSHIP, L.P., a
limited partnership organized under the laws of the State of Delaware (herein
called the "Partnership"), and First Union National Bank, a national banking
association organized under the laws of the United States of America, as
Trustee (herein called the "Trustee").
RECITALS OF THE PARTNERSHIP
The Partnership has heretofore delivered to the Trustee an
Indenture dated as of August 7, 1997 (the "Senior Indenture"), a form of which
has been filed with the Securities and Exchange Commission under the Securities
Act of 1933, as amended, as an exhibit to the Partnership's Registration
Statement on Form S-3 (Registration No. 333-25575), providing for the issuance
from time to time of Senior Debt Securities of the Partnership (the
"Securities").
Section 301 of the Senior Indenture provides for various
matters with respect to any series of Securities issued under the Senior
Indenture to be established in an indenture supplemental to the Senior
Indenture.
Section 901(7) of the Senior Indenture provides for the
Partnership and the Trustee to enter into an indenture supplemental to the
Senior Indenture to establish the form or terms of Securities of any series as
provided by Sections 201 and 301 of the Senior Indenture.
The Board of Directors of Summit Properties Inc., the general
partner of the Partnership, has duly adopted resolutions authorizing the
Partnership to execute and deliver this Supplemental Indenture.
All the conditions and requirements necessary to make this
Supplemental Indenture, when duly executed and delivered, a valid and binding
agreement in accordance with its terms and for the purposes herein expressed,
have been performed and fulfilled.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
each of the series of Securities provided for herein by the Holders thereof, it
is mutually covenanted and agreed, for the equal and proportionate benefit of
all Holders of the Notes or of either series thereof, as follows:
ARTICLE ONE
RELATION TO SENIOR INDENTURE; DEFINITIONS
SECTION 1.1. Relation to Senior Indenture .
This Supplemental Indenture constitutes an integral part of
the Senior Indenture.
<PAGE> 4
SECTION 1.2. Definitions.
For all purposes of this Supplemental Indenture, except as
otherwise expressly provided for or unless the context otherwise requires:
(1) Capitalized terms used but not defined
herein shall have the respective meanings assigned to them in
the Senior Indenture; and
(2) All references herein to Articles and
Sections, unless otherwise specified, refer to the
corresponding Articles and Sections of this Supplemental
Indenture.
"Acquired Indebtedness" means Indebtedness of a Person (i)
existing at the time such Person becomes a Subsidiary or (ii) assumed in
connection with the acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such
Person becoming a Subsidiary or such acquisition. Acquired Indebtedness shall
be deemed to be incurred on the date of the related acquisition of assets from
any Person or the date the acquired Person becomes a Subsidiary.
"Annual Service Charge" for any period means the aggregate
interest expense for such period in respect of, and the amortization during
such period of any original issue discount of, Indebtedness of the Partnership
and its Subsidiaries and the amount of dividends which are payable during such
period in respect of any Disqualified Stock.
"Business Day" means any day, other than a Saturday or
Sunday, that is neither a legal holiday nor a day on which banking institutions
in the City of New York or in the City of Charlotte are authorized or required
by law, regulation or executive order to close.
"Capital Stock" means, with respect to any Person, any
capital stock (including preferred stock), shares, interests, participations or
other ownership interests (however designated) of such Person and any rights
(other than debt securities convertible into or exchangeable for corporate
stock), warrants or options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any
period means Earnings from Operations of the Partnership and its Subsidiaries
plus amounts which have been deducted, and minus amounts which have been added,
for the following (without duplication): (i) interest on Indebtedness of the
Partnership and its Subsidiaries, (ii) provision for taxes of the Partnership
and its Subsidiaries based on income, (iii) amortization of debt discount, (iv)
provisions for gains and losses on properties and property depreciation and
amortization, (v) the effect of any noncash charge resulting from a change in
accounting principles in determining Earnings from Operations for such period
and (vi) amortization of deferred charges.
"Corporate Trust Office", including for purposes of the Place
of Payment provisions of Sections 305 and 1002 of the Senior Indenture, means
the office of the Trustee at which, at any particular time, its corporate trust
business shall be principally
2
<PAGE> 5
administered, which office at the date hereof is located at 230 South Tryon
Street, 9th floor, Charlotte, North Carolina 28288-1179.
"Disqualified Stock" means, with respect to any Person, any
Capital Stock of such Person which by the terms of such Capital Stock (or by
the terms of any security into which it is convertible or for which it is
exchangeable or exercisable), upon the happening of any event or otherwise (i)
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise (other than Capital Stock which is redeemable solely in exchange for
common stock), (ii) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part (other than Capital Stock which is
redeemable solely in exchange for Capital Stock which is not Disqualified Stock
or the redemption price of which may, at the option of such Person, be paid in
Capital Stock which is not Disqualified Stock), in each case on or prior to the
Stated Maturity of the Notes.
"Earnings from Operations" for any period means net earnings
excluding gains and losses on sales of investments, extraordinary items, and
property valuation losses, net as reflected in the financial statements of the
Partnership and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or
security interest of any kind.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder by the
Commission.
"GAAP" means generally accepted accounting principles as used
in the United States applied on a consistent basis as in effect from time to
time; provided that solely for purposes of any calculation required by the
financial covenants contained herein, "GAAP" shall mean generally accepted
accounting principles as used in the United States on the date hereof, applied
on a consistent basis.
"Indebtedness" of the Partnership or any Subsidiary means any
indebtedness of the Partnership or any Subsidiary, whether or not contingent,
in respect of (i) borrowed money or evidenced by bonds, notes, debentures or
similar instruments whether or not such indebtedness is secured by any
Encumbrance existing on property owned by the Partnership or any Subsidiary,
(ii) indebtedness for borrowed money of a Person other than the Partnership or
a Subsidiary which is secured by any Encumbrance existing on property owned by
the Partnership or any Subsidiary, to the extent of the lesser of (x) the
amount of indebtedness so secured and (y) the fair market value of the property
subject to such Encumbrance, (iii) the reimbursement obligations, contingent or
otherwise, in connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or obligations
under any title retention agreement, (iv) the principal amount of all
obligations of the Partnership or any Subsidiary with respect to redemption,
repayment or other repurchase of any Disqualified Stock, (v) any lease of
property by the Partnership or any Subsidiary as lessee which is reflected on
the Partnership's consolidated balance sheet as a capitalized lease in
accordance with GAAP, or (vi) interest rate swaps, caps or
3
<PAGE> 6
similar agreements and foreign exchange contracts, currency swaps or similar
agreements, to the extent, in the case of items of indebtedness under (i)
through (iii) above, that any such items (other than letters of credit) would
appear as a liability on the Partnership's consolidated balance sheet in
accordance with GAAP, and also includes, to the extent not otherwise included,
any obligations by the Partnership or any Subsidiary to be liable for, or to
pay, as obligor, guarantor or otherwise (other than for purposes of collection
in the ordinary course of business), Indebtedness of another Person (other than
the Partnership or any Subsidiary) (it being understood that Indebtedness shall
be deemed to be incurred by the Partnership or any Subsidiary whenever the
Partnership or such Subsidiary shall create, assume, guarantee or otherwise
become liable in respect thereof).
"Make-Whole Amount" means, in connection with any optional
redemption or accelerated payment of any Note, the excess, if any, of (i) the
aggregate present value as of the date of such redemption or accelerated
payment of each dollar of principal being redeemed or paid and the amount of
interest (exclusive of interest accrued to the date of redemption or
accelerated payment) that would have been payable in respect of such dollar if
such redemption or accelerated payment had not been made, determined by
discounting, on a semi-annual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date such
notice of redemption is given or declaration of acceleration is made) from the
respective dates on which such principal and interest would have been payable
if such redemption or accelerated payment had not been made, over (ii) the
aggregate principal amount of the Note being redeemed or paid.
"Notes" has the meaning specified in Section 2.1 hereof.
"Reinvestment Rate" means .25% (twenty-five one hundredths of
one percent) plus the arithmetic mean of the yields under the respective
headings "This Week" and "Last Week" published in the Statistical Release under
the caption "Treasury Constant Maturities" for the maturity (rounded to the
nearest month) corresponding to the remaining life to maturity, as of the
payment date of the principal being redeemed or paid. If no maturity exactly
corresponds to such maturity, yields for the two published maturities most
closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For such purposes of calculating
the Reinvestment Rate, the most recent Statistical Release published prior to
the date of determination of the Make-Whole Amount shall be used.
"Statistical Release" means the statistical release
designated "H.15(519)" or any successor publication which is published weekly
by the Federal Reserve System and which establishes yields on actively traded
United States government securities adjusted to constant maturities or, if such
statistical release is not published at the time of any determination of the
Make-Whole Amount, then such other reasonably comparable index which shall be
designated by the Partnership.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which a majority of (i) the voting power of the
voting equity securities or (ii) the outstanding equity interests of which are
owned, directly or indirectly, by such Person.
4
<PAGE> 7
For the purposes of this definition, "voting equity securities" means equity
securities having voting power for the election of directors, whether at all
times or only so long as no senior class of security has such voting power by
reason of any contingency.
"Total Assets" as of any date means the sum of (i) the
Undepreciated Real Estate Assets and (ii) all other assets of the Partnership
and its Subsidiaries determined in accordance with GAAP (but excluding accounts
receivable and intangibles).
"Total Unencumbered Assets" means the sum of (i) those
Undepreciated Real Estate Assets not subject to an Encumbrance for borrowed
money and (ii) all other assets of the Partnership and its Subsidiaries not
subject to an Encumbrance for borrowed money, determined in accordance with
GAAP (but excluding accounts receivable and intangibles).
"Undepreciated Real Estate Assets" as of any date means the
cost (original cost plus capital improvements) of real estate assets of the
Partnership and its Subsidiaries on such date, before depreciation and
amortization, determined on a consolidated basis in accordance with GAAP.
"Unsecured Indebtedness" means Indebtedness which is not
secured by any Encumbrance upon any of the properties of the Partnership or any
Subsidiary.
ARTICLE TWO
THE SERIES OF NOTES
SECTION 2.1. Title of the Securities.
There shall be a series of Securities designated the "6 5/8%
Notes due 2003" (the "Notes").
SECTION 2.2. Limitation on Aggregate Principal Amount.
The aggregate principal amount of the Notes shall be limited
to $30,000,000, and, except as provided in this Section and in Section 306 of
the Senior Indenture, the Partnership shall not execute and the Trustee shall
not authenticate or deliver Notes in excess of such aggregate principal amount.
Nothing contained in this Section 2.2 or elsewhere in this
Supplemental Indenture, or in the Notes, is intended to or shall limit
execution by the Partnership or authentication or delivery by the Trustee of
Notes under the circumstances contemplated by Sections 303, 304, 305, 306, 906,
1107 and 1305 of the Senior Indenture.
SECTION 2.3. Interest and Interest Rates; Maturity Date of
Notes.
The Notes will bear interest at a rate of 6 % per annum from
December 17, 1997 or from the immediately preceding Interest Payment Date to
which interest has been paid or duly provided for, payable semi-annually in
arrears on June 15 and Decem-
5
<PAGE> 8
ber 15 of each year, commencing June 15, 1998 (each, an "Interest Payment
Date"), to the Person in whose name such Note is registered at the close of
business on June 1 or December 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date (each, a "Regular Record
Date"). Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months. The interest so payable on any Note which is not
punctually paid or duly provided for on any Interest Payment Date shall
forthwith cease to be payable to the Person in whose name such Note is
registered on the relevant Regular Record Date, and such defaulted interest
shall instead be payable to the Person in whose name such Note is registered on
the Special Record Date or other specified date determined in accordance with
the Senior Indenture.
If any Interest Payment Date or Maturity falls on a day that
is not a Business Day, the required payment shall be made on the next Business
Day as if it were made on the date such payment was due and no interest shall
accrue on the amount so payable for the period from and after such Interest
Payment Date or Maturity, as the case may be.
The Notes will mature on December 15, 2003.
SECTION 2.4. Limitations on Incurrence of Indebtedness .
(a) The Partnership will not, and will not permit any
Subsidiary to, incur any Indebtedness if, immediately after giving effect to
the incurrence of such additional Indebtedness and the application of the
proceeds thereof, the aggregate principal amount of all outstanding
Indebtedness of the Partnership and its Subsidiaries on a consolidated basis
determined in accordance with GAAP is greater than 60% of the sum of (without
duplication) (i) the Total Assets of the Partnership and its Subsidiaries as of
the end of the calendar quarter covered in the Partnership's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not permitted under the
Exchange Act, with the Trustee) prior to the incurrence of such additional
Indebtedness and (ii) the purchase price of any real estate assets or mortgages
receivable acquired, and the amount of any securities offering proceeds
received (to the extent such proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Indebtedness), by the
Partnership or any Subsidiary since the end of such calendar quarter, including
those proceeds obtained in connection with the incurrence of such additional
Indebtedness.
(b) In addition to the limitation set forth in subsection
(a) of this Section 2.4, the Partnership will not, and will not permit any
Subsidiary to, incur any Indebtedness if the ratio of Consolidated Income
Available for Debt Service to the Annual Service Charge for the four
consecutive fiscal quarters most recently ended prior to the date on which such
additional Indebtedness is to be incurred shall have been less than 1.5:1, on a
pro forma basis after giving effect thereto and to the application of the
proceeds therefrom, and calculated on the assumption that (i) such Indebtedness
and any other Indebtedness incurred by the Partnership and its Subsidiaries
since the first day of such four-quarter period and the application of the
proceeds therefrom, including to refinance other Indebtedness, had occurred at
the beginning of such period; (ii) the repayment or retirement of any other
Indebtedness by the Partnership and its Subsidiaries since the first day of
such four-quarter period had been repaid or retired at the beginning
6
<PAGE> 9
of such period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall be computed based upon
the average daily balance of such Indebtedness during such period); (iii) in
the case of Acquired Indebtedness or Indebtedness incurred in connection with
any acquisition since the first day of such four-quarter period, the related
acquisition had occurred as of the first day of such period with the
appropriate adjustments with respect to such acquisition being included in such
pro forma calculation; and (iv) in the case of any acquisition or disposition
by the Partnership or its Subsidiaries of any asset or group of assets since
the first day of such four-quarter period, whether by merger, stock purchase or
sale, or asset purchase or sale, such acquisition or disposition or any related
repayment of Indebtedness had occurred as of the first day of such period with
the appropriate adjustments with respect to such acquisition or disposition
being included in such pro forma calculation.
(c) In addition to the limitations set forth in
subsections (a) and (b) of this Section 2.4, the Partnership will not, and will
not permit any Subsidiary to, incur any Indebtedness secured by any Encumbrance
upon any of the property of the Partnership or any Subsidiary if, immediately
after giving effect to the incurrence of such additional Indebtedness and the
application of the proceeds thereof, the aggregate principal amount of all
outstanding Indebtedness of the Partnership and its Subsidiaries on a
consolidated basis which is secured by any Encumbrance on property of the
Partnership or any Subsidiary is greater than 40% of the sum of (without
duplication) (i) the Total Assets of the Partnership and its Subsidiaries as of
the end of the calendar quarter covered in the Partnership's Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, most recently
filed with the Commission (or, if such filing is not permitted under the
Exchange Act, with the Trustee) prior to the incurrence of such additional
Indebtedness and (ii) the purchase price of any real estate assets or mortgages
receivable acquired, and the amount of any securities offering proceeds
received (to the extent that such proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Indebtedness), by the
Partnership or any Subsidiary since the end of such calendar quarter, including
those proceeds obtained in connection with the incurrence of such additional
Indebtedness.
(d) The Partnership and its Subsidiaries may not at any
time own Total Unencumbered Assets equal to less than 150% of the aggregate
outstanding principal amount of the Unsecured Indebtedness of the Partnership
and its Subsidiaries on a consolidated basis.
(e) For purposes of this Section 2.4, Indebtedness shall
be deemed to be "incurred" by the Partnership or a Subsidiary whenever the
Partnership or such Subsidiary shall create, assume, guarantee or otherwise
become liable in respect thereof.
SECTION 2.5. Redemption.
The Notes may be redeemed at any time at the option of the
Partnership, in whole or in part, at a redemption price equal to the sum of (i)
the principal amount of the Notes being redeemed plus accrued interest thereon
to the Redemption Date and (ii) the Make-Whole Amount, if any, with respect to
such Notes (the "Redemption Price").
7
<PAGE> 10
SECTION 2.6. Places of Payment.
The Places of Payment where the Notes may be presented or
surrendered for payment, where the Notes may be surrendered for registration of
transfer or exchange and where notices and demands to and upon the Partnership
in respect of the Notes and the Senior Indenture may be served shall be in the
City of Charlotte, North Carolina and the office or agency for such purpose
shall initially be located at c/o First Union National Bank, Corporate Trust
Department, 230 South Tryon Street, 9th floor, Charlotte, North Carolina
28288-1179.
SECTION 2.7. Method of Payment.
Payment of the principal of and interest on the Notes will be
made at the office or agency of the Partnership maintained for that purpose in
the City of Charlotte, North Carolina (which shall initially be an office or
agency of the Trustee), in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Partnership,
payments of principal and interest on the Notes (other than payments of
principal and interest due at Maturity) may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer to an account maintained by the
Person entitled thereto located within the United States.
SECTION 2.8. Currency.
Principal and interest on the Notes shall be payable in
Dollars.
SECTION 2.9. Registered Securities; Global Form.
The Notes shall be issuable and transferable in fully
registered form as Registered Securities, without coupons. The Notes shall be
issued in the form of one or more permanent Global Securities. The depository
for the Notes shall be The Depository Trust Partnership ("DTC"). The Notes
shall not be issuable in definitive form except as provided in Section 305 of
the Senior Indenture.
SECTION 2.10. Form of Notes.
The Notes shall be substantially in the form attached as
Exhibit A hereto.
SECTION 2.11. Registrar and Paying Agent.
The Trustee shall initially serve as Security Registrar and
Paying Agent for the Notes.
8
<PAGE> 11
SECTION 2.12. Defeasance.
The provisions of Sections 1402 and 1403 of the Senior
Indenture, together with the other provisions of Article Fourteen of the Senior
Indenture, shall be applicable to the Notes. The provisions of Section 1403 of
the Senior Indenture shall apply to the covenants set forth in Sections 2.4 and
2.15 of this Supplemental Indenture and to those covenants specified in Section
1403 of the Senior Indenture.
SECTION 2.13. Events of Default
The provisions of clause (5) of Section 501 of the Senior
Indenture as applicable with respect to the Notes shall be deemed to be amended
and restated in their entirety to read as follows:
(5) default under any bond, debenture, note, mortgage,
indenture or instrument under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by the Partnership
(or by any Subsidiary, the repayment of which the Partnership has guaranteed or
for which the Partnership is directly responsible or liable as obligor or
guarantor), having an aggregate principal amount outstanding of at least
$10,000,000, whether such indebtedness now exists or shall hereafter be
created, which default shall have resulted in such indebtedness becoming or
being declared due and payable prior to the date on which it would otherwise
have become due and payable, without such indebtedness having been discharged,
or such acceleration having been rescinded or annulled, within a period of 10
days after there shall have been given written notice, by registered or
certified mail, to the Partnership by the Trustee or to the Partnership and the
Trustee by the Holders of at least 10% in principal amount of the Outstanding
Securities of that series a written notice specifying such default and
requiring the Partnership to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; or
The provisions of Section 501 of the Senior Indenture as
applicable with respect to the Notes shall be further deemed to be amended by
renumbering existing clause (8) to be clause (9) and by adding the following
new clause (8):
(8) the entry by a court of competent jurisdiction of one or
more judgments, orders or decrees against the Partnership or any of its
Subsidiaries in an aggregate amount (excluding amounts covered by insurance) in
excess of $10,000,000 and such judgements, orders or decrees remain
undischarged, unstayed and unsatisfied in an aggregate amount (excluding
amounts covered by insurance) in excess of $10,000,000 for a period of 30
consecutive days; or
SECTION 2.14. Acceleration of Maturity; Rescission and
Annulment.
The provisions of the first paragraph of Section 502 of the
Senior Indenture as applicable with respect to the Notes shall be deemed to be
amended and restated in their entirety to read as follows:
If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then in every such
case the Trustee or the Holders
9
<PAGE> 12
of not less than 25% in principal amount of the Outstanding Securities of that
series may declare the principal (or, if any Securities are Original Issue
Discount Securities or Indexed Securities, such portion of the principal as may
be specified in the terms thereof) of, and the Make-Whole Amount, if any, on,
all the Securities of that series to be due and payable immediately, by a
notice in writing to the Partnership (and to the Trustee if given by the
Holders), plus accrued interest to the date the Securities of that series are
paid, and upon any such declaration such principal or specified portion thereof
shall become immediately due and payable. With respect to the Securities of any
series, if an Event of Default set forth in Section 501(6) of the Senior
Indenture occurs and is continuing, then in every such case all the Securities
of that series shall become immediately due and payable, without notice to the
Partnership, at the principal amount thereof (or, if any Securities are
Original Issue Discount Securities or Indexed Securities, such portion of the
principal as may be specified in the terms thereof) plus accrued interest to
the date the Securities of that series are paid plus the Make-Whole Amount, if
any, on the Securities of that series.
SECTION 2.15. Provision of Financial Information.
Whether or not the Partnership is subject to Section 13 or
15(d) of the Exchange Act, the Partnership will, to the extent permitted under
the Exchange Act, file with the Commission the annual reports, quarterly
reports and other documents which the Partnership would have been required to
file with the Commission pursuant to such Section 13 or 15(d) if the
Partnership were so subject, such documents to be filed with the Commission on
or prior to the respective dates (the "Required Filing Dates") by which the
Partnership would have been required so to file such documents if the
Partnership were so subject.
The Partnership will also in any event (x) within 15 days of
each Required Filing Date (i) if the Partnership is not then subject to Section
13 or 15(d) of the Exchange Act, transmit by mail to all Holders, as their
names and addresses appear in the Security Register, without cost to such
Holders, copies of the annual reports and quarterly reports which the
Partnership would have been required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act if the Partnership were subject to such
Sections, and (ii) file with the Trustee copies of annual reports, quarterly
reports and other documents which the Partnership would have been required to
file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if
the Partnership were subject to such Sections and (y) if filing such documents
by the Partnership with the Commission is not permitted under the Exchange Act,
promptly upon written request and payment of the reasonable cost of duplication
and delivery, supply copies of such documents to any prospective Holder.
SECTION 2.16. Waiver of Certain Covenants.
Notwithstanding the provisions of Section 1010 of the Senior
Indenture, the Partnership may omit in any particular instance to comply with
any term, provision or condition set forth in Sections 1004 to 1007, inclusive,
of the Senior Indenture, with Sections 2.4 and 2.15 of this Supplemental
Indenture and with any other term, provision or condition with respect to the
Notes or either series thereof (except any such term, provision or condition
which could not be amended without the consent of all Holders of
10
<PAGE> 13
the Notes or such series thereof, as applicable), if before or after the time
for such compliance the Holders of at least a majority in principal amount of
all outstanding Notes or such series thereof, as applicable, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition. Except to the extent so expressly
waived, and until such waiver shall become effective, the obligations of the
Partnership and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
ARTICLE THREE
MISCELLANEOUS PROVISIONS
SECTION 3.1. Ratification of Senior Indenture.
Except as expressly modified or amended hereby, the Senior
Indenture continues in full force and effect and is in all respects confirmed
and preserved.
SECTION 3.2. Governing Law.
This Supplemental Indenture and each Note shall be governed
by and construed in accordance with the laws of the State of New York. This
Supplemental Indenture is subject to the provisions of the Trust Indenture Act
of 1939, as amended, and shall, to the extent applicable, be governed by such
provisions.
SECTION 3.3. Counterparts.
This 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.
11
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed by their respective officers
hereunto duly authorized, all as of the day and year first written above.
SUMMIT PROPERTIES PARTNERSHIP, L.P.
By: Summit Properties, Inc.,
its general partner
By:
----------------------------------
Michael L. Schwarz
Executive Vice President and
Chief Financial Officer
FIRST UNION NATIONAL BANK,
as Trustee
By:
----------------------------------
Terry W. Baker
Vice President
12
<PAGE> 15
EXHIBIT A
FORM OF SENIOR SECURITY
[Face of Security]
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY ("DTC"), 55 WATER STREET, NEW YORK, NEW YORK TO THE
ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND SUCH
SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO., OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING SET FORTH IN THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF DTC OR A
NOMINEE OF DTC. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE
NAME OF A PERSON OTHER THAN DTC OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY DTC TO A NOMINEE OF DTC OR BY A NOMINEE OF DTC TO DTC OR ANOTHER
NOMINEE OF DTC OR BY DTC OR ITS NOMINEE TO A SUCCESSOR DEPOSITORY OR ITS
NOMINEE.
SUMMIT PROPERTIES PARTNERSHIP, L.P.
6 5/8% Notes Due 2003
Register No. 1 Principal Amount
CUSIP No. 866WAD7 $30,000,000
SUMMIT PROPERTIES PARTNERSHIP, L.P., a Delaware limited partnership (herein
referred to as the "Partnership", which term includes any successor entity
under the Indenture referred to on the reverse hereof), for value received,
hereby promises to pay to Cede & Co. or registered assigns the principal sum of
$30,000,000 Dollars on December 15, 2003 (the "Stated Maturity Date") or
earlier at the option of the Partnership (the "Redemption Date", and together
with the Stated Maturity Date with respect to principal repayable on such date,
the "Maturity Date") and to pay interest thereon from December 17, 1997 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on June 15 and December 15 in each year (each, an
"Interest Payment Date"), commencing June 15, 1998, at the rate of 6.63% per
annum, until the
A-1
<PAGE> 16
principal hereof is paid or duly provided for. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Holder in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest, which shall be the June 1 or
December 1 (whether or not a Business Day), as the case may be, next preceding
such Interest Payment Date at the office or agency of the Partnership
maintained for such purpose; provided, however, that such interest may be paid,
at the Partnership's option, by mailing a check to such Holder at its
registered address or by wire transfer of funds to an account maintained by
such Holder within the United States. Any such interest not so punctually paid
or duly provided for shall forthwith cease to be payable to the Holder on such
Regular Record Date, and may be paid to the Holder in whose name this Security
(or one or more Predecessor Securities) is registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest to be fixed
by the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or may be paid
at any time in any other lawful manner not inconsistent with the requirements
of any securities exchange on which the Securities of this series may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
The principal of this Security payable on the Stated Maturity Date or the
principal of, Make-Whole Amount, if any, and, if the Redemption Date is not an
Interest Payment Date, interest on this Security payable on the Redemption Date
will be paid against presentation of this Security at the office or agency of
the Partnership maintained for that purpose in the City of Charlotte, North
Carolina, in such coin or currency of the United States of America as at the
time of payment is legal tender for the payment of public and private debts.
Interest payable on this Security on any Interest Payment Date and on the
Stated Maturity Date or Redemption Date, as the case may be, will include
interest accrued from and including the next preceding Interest Payment Date in
respect of which interest has been paid or duly provided for (or from and
including December 17, 1997, if no interest has been paid on this Security) to
but excluding such Interest Payment Date or the Stated Maturity Date or
Redemption Date, as the case may be. If any Interest Payment Date or the Stated
Maturity Date or Redemption Date falls on a day that is not a Business Day, as
defined below, principal, Make-Whole Amount, if any, and/or interest payable
with respect to such Interest Payment Date or Stated Maturity or Redemption
Date, as the case may be, will be paid on the next succeeding Business Day with
the same force and effect as if it were paid on the date such payment was due,
and no interest shall accrue on the amount so payable for the period from and
after such Interest Payment Date or Stated Maturity Date or Redemption Date, as
the case may be. "Business Day" means any
A-2
<PAGE> 17
day, other than a Saturday or Sunday, that is neither a legal holiday nor a day
on which banking institutions in the City of New York or in the City of
Charlotte are authorized by law, regulation or executive order to close.
All payments of principal, Make-Whole Amount, if any, and interest in respect
of this Security will be made by the Partnership in immediately available
funds.
Reference is hereby made to the further provisions of this Security set forth
on the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place.
Pursuant to a recommendation promulgated by the Committee on Uniform Security
Identification Procedures, the Partnership has caused "CUSIP" numbers to be
printed on the Securities of this series as a convenience to the Holders of
such Securities. No representation is made as to the correctness or accuracy of
such CUSIP numbers as printed on the Securities, and reliance may be placed
only on the other identification numbers printed hereon.
Unless the Certificate of Authentication hereon has been executed by the
Trustee by manual signature of one of its authorized signatories, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
A-3
<PAGE> 18
IN WITNESS WHEREOF, the Partnership has caused this instrument to be duly
executed under the facsimile corporate seal of its general partner.
Dated: December __, 1997 SUMMIT PROPERTIES
PARTNERSHIP, L.P.
By: Summit Properties Inc., as General
Partner
By:
--------------------------------
Michael L. Schwarz
Executive Vice President and
Chief Financial Officer
Attest:
- -----------------------------------
Michael G. Malone
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
FIRST UNION NATIONAL BANK,
as Trustee
By:
------------------------------------
Authorized Signatory
A-4
<PAGE> 19
[Reverse of Security]
SUMMIT PROPERTIES PARTNERSHIP, L.P.
This Security is one of a duly authorized issue of securities of the
Partnership (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of August 7, 1997, as supplemented by
Supplemental Indenture No. 2, dated as of December 17, 1997 (as so
supplemented, herein called the "Indenture") between the Partnership and First
Union National Bank, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture with respect to the series
of which this Security is a part), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the
Partnership, the Trustee and the Holders of the Securities, and of the terms
upon which the Securities are, and are to be, authenticated and delivered. This
Security is one of the duly authorized series of Securities designated on the
face hereof (collectively, the "Securities"), and the aggregate principal
amount of the Securities to be issued under such series as limited to
$30,000,000 (except for Securities authenticated and delivered upon transfer
of, or in exchange for, or in lieu of other Securities). All capitalized terms
used in this Security which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
If an Event of Default with respect to the Securities, as defined in the
Indenture, shall occur and be continuing, the principal of the Securities of
this series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Securities are subject to redemption at any time, as a whole or in part, at
the election of the Partnership, at a Redemption Price equal to the sum of (i)
the principal amount of the Securities being redeemed plus accrued interest
thereon to the Redemption Date and (ii) the Make-Whole Amount, if any, with
respect to such Securities.
Notice of redemption will be given by mail to Holders of Securities, not less
than 30 nor more than 60 days prior to the Redemption Date, all as provided in
the Indenture.
The Indenture contains provisions for defeasance at any time of (a) the entire
indebtedness of the Partnership on this Security and (b) certain restrictive
covenants and the related defaults and Events of Default applicable to the
Partnership, in each case, upon compliance by the Partnership with certain
conditions set forth in the Indenture, which provisions apply to this Security.
A-5
<PAGE> 20
In the event of redemption of this Security in part only, a new Security or
Securities for the unredeemed portion hereof shall be issued in the name of the
Holder hereof upon the cancellation hereof.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Partnership and the rights of the Holders of the Securities under the Indenture
at any time by the Partnership and the Trustee with the consent of the Holders
of not less than a majority of the aggregate principal amount of all Securities
issued under the Indenture at the time Outstanding and affected thereby. The
Indenture also contains provisions permitting the Holders of not less than a
majority of the aggregate principal amount of the Outstanding Securities, on
behalf of the Holders of all such Securities, to waive compliance by the
Partnership with certain provisions of the Indenture. Furthermore, provisions
in the Indenture permit the Holders of not less than a majority of the
aggregate principal amount, in certain instances, of the Outstanding Securities
of any series to waive, on behalf of all of the Holders of Securities of such
series, certain past defaults under the Indenture and their consequences. Any
such consent or waiver by the Holder of this Security shall be conclusive and
binding upon such Holder and upon all future Holders of this Security and other
Securities issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof, whether or not notation of such consent or waiver is
made upon this Security.
No reference herein to the Indenture and no provision of this Security or of
the Indenture shall alter or impair the obligation of the Partnership, which is
absolute and unconditional, to pay the principal of (and Make-Whole Amount, if
any) and interest on this Security at the times, places and rate, and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registrable in the Security Register of
the Partnership upon surrender of this Security for registration of transfer at
the office or agency of the Partnership in any place where the principal of
(and Make-Whole Amount, if any) and interest on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Partnership and the Security Registrar duly executed by,
the Holder hereof or by his attorney duly authorized in writing, and thereupon
one or more new Securities, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
As provided in the Indenture and subject to certain limitations therein set
forth, this Security is exchangeable for a like aggregate principal amount of
Securities of different authorized denominations but otherwise having the same
terms and conditions, as requested by the Holder hereof surrendering the same.
A-6
<PAGE> 21
The Securities of this series are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof.
No service charge shall be made for any such registration of transfer or
exchange, but the Partnership may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer, the
Partnership, the Trustee and any agent of the Partnership or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Partnership, the Trustee nor any such agent shall be affected by notice to the
contrary.
Notwithstanding anything contained herein to the contrary, no recourse under or
upon any obligation, covenant or agreement contained in the Indenture or in
this Security, or because of any indebtedness evidenced hereby or thereby, or
for any claim based thereon or otherwise in respect hereof, shall be had for
the payment of the principal of or Make-Whole Amount, if any, or the interest
on this Security, or for any claim based hereon, or otherwise in respect
hereof, or based on or in respect of the Indenture or any indenture
supplemental thereto, against (i) the Company or any other past, present or
future partner in the Partnership, (ii) against any other Person which owns an
interest, directly or indirectly, in any partner of the Partnership or (iii)
against any past, present or future stockholder, employee, officer or director,
as such, of the Company, or of any successor, either directly or through the
Partnership or the Company 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, by the
acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
The Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements made
and to be performed entirely in such State.
A-7
<PAGE> 22
ASSIGNMENT FORM
FOR VALUE RECEIVED, the undersigned hereby
sells, assigns and transfers unto
PLEASE INSERT SOCIAL
SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE
[ ] ..............................................
...............................................................................
(Please Print or Typewrite Name and Address including
Zip Code of Assignee)
...............................................................................
the within Security of Summit Properties Partnership, L.P. and hereby does
irrevocably constitute and appoint
Attorney
.....................................................................
to transfer said Security on the books of the within-named Partnership with
full power of substitution in the premises.
Dated:
.......................... .......................................
.......................................
NOTICE: The signature to this assignment must correspond with the name as it
appears on the first page of the within Security in every particular, without
alteration or enlargement or any change whatever.
A-8
<PAGE> 1
EXHIBIT 12.1
SUMMIT PROPERTIES PARTNERSHIP, L.P.
CALCULATION OF RATIOS OF EARNINGS TO FIXED CHARGES
(Dollars In Thousands)
<TABLE>
<CAPTION>
Nine Months
Ended Years Ended December 31,
September 30, -------------------------------------------------------------
1997 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Funds from operations before fixed charges:
Income (loss) before extraordinary items $25,098 $21,187 $15,051 $ 8,527 $(5,858) $(9,802)
Interest:
Expense incurred 14,621 16,213 13,715 13,006 25,286 24,834
Amortization of deferred financing costs 761 1,025 1,087 1,061 1,114 1,091
------- ------- ------- ------- ------- -------
Total $40,480 $38,426 $29,853 $22,594 $20,542 $16,123
======= ======= ======= ======= ======= =======
Fixed charges:
Interest expense $14,621 $16,213 $13,715 $13,006 $25,286 $24,834
Interest capitalized 4,528 4,266 3,110 686 0 136
Rental fixed charges 93 124 134 124 123 125
Amortization of deferred financing costs 761 1,025 1,087 1,061 1,114 1,081
------- ------- ------- ------- ------- -------
Total $20,003 $21,628 $18,046 $14,877 $26,523 $26,186
======= ======= ======= ======= ======= =======
Ratio of earnings to fixed charges 2.02 1.76 1.85 1.52 0.77 0.62
======= ======= ======= ======= ======= =======
</TABLE>
